My take on the Senate Health Bill

Surprise surprise: I'm not happy that the Senate health bill passed the House and is about to be signed into law. Friends and family have tried to couch it in terms that "well, it's better than nothing." No, in fact, it's not.

Let's say you have a chronic disease that can be fatal if left untreated. Let's call it, "Debtis Entitlementitis." You have another problem we'll call "Healthus Carus" that you need to solve. If you take the wrong medication for Healthus Carus, it can make you forget about your Debtis Entitlementitis in the short term, but it will actually cripple you in 5-10 years by exacerbating every problem you have including Healthus Carus, Oldus Takecareofus, Roadus Paveus, Poorus Cantaffordus,  Pleasa Dontkillus, etc.

This is what Congress just did. Sure, a lot of people can feel better--but the underlying condition of debt has been made worse and, consequently, Congress and Obama made the problem more intractable than it already was.

It's not conjecture and it's not partisan: it's math. We have committed ourselves to spending much more money that we have. Indeed, according to GAO estimates in the 2008 Financial Report of the United States, our entitlement spending in the infinite horizon--that is, everything we've promised to pay so far--is $101.8 trillion. Yes, that's trillion. (cf. Table 6, pdf page 143; report page 137)

That's seven times the economic output of the entire United States in a given year. No, not our tax revenue--our entire economic output. To call this situation "unsustainable" is to understate the case to tragicomic levels.

Blame Bush. Blame FDR. Blame whomever you like--but the fact of the matter is our entitlement spending is going to bankrupt us. We can either address it like adults and treat the problem, or we can act like children and foolishly pretend the problem will go away by itself without ever having to face the consequences.

I.R.S. Plans a Deduction for Madoff Victims

Really?

The Internal Revenue Service will allow victims of Bernard L. Madoff’s investment fraud to claim a tax deduction related to the bulk of their losses, the I.R.S. commissioner told the Senate Finance Committee on Tuesday.

The commissioner, Douglas H. Shulman, told lawmakers that the agency was offering guidelines for taxpayers who are victims of losses from Ponzi schemes like Mr. Madoff’s.

For those not familiar yet, a "Ponzi" scheme is a type of scam where a hustler takes money from investors and returns money at rates at a much higher return than what would normally be earned. The way to do this is to keep drawing investors in with the promise of huge returns and paying off initial investors' dividends and withdrawals with newly invested money. As long as the operator can count on more money invested than withdrawn, the fraud can go on in perpetuity. However, when a large number of people make withdrawals and/or he runs out of investors, there is a catastrophic amount of debt and the scheme is exposed for the fraud that it is. Bernie Madoff will spend the rest of his life behind bars, with good reason, for this crime.

You see, I too have been a victim of a "Ponzi" scheme. I have been paying into this mess my entire adult life. This ridiculous scam has cost me thousands of dollars over the past 16 years. I pay money in and they tell me that I can expect a return in the future, even though I know my money goes to direct payments to others. And soon, I know the "fund" is going to be insolvent just like Madoff's and there will be no one to bail me out.

It's called Social Security.

I've been hosed by a Ponzi scheme too, damnit. I want my money back.

This year, I'm writing off FICA.