Paul Krugman loves JFK's America and its vibrant economies...

[Frediano]

JFK's America.

JFK spent $100B in federal spending, over half of which was for defense at the peak of the Cold War. $52B out of his $100B was for defense, in a nation of 180 million people.

180 million vs. today's 330 million is a factor of about 1.83. Let's be generous and call it 2.0 to make the math easy...

Inflation between 1962 and 2012? About x 7.5.

So we can generously adjust JFK's $100B in total federal spending to about $1500B today, and compare that to our actual $3800B/yr in federal spending. That is 253% of JFK's fully adjusted federal spending.

The GOP was just roundly chastised for raising Obama's defense request to $554B. If we were to adjust JFK's $52B by that same factor of x 15, it would be $780B today. Of course, we are not at the peak of the Cold War, so the GOP raised defense to 71% of JFK's adjusted number from Obama's 70%. And yet... total federal spending is at 253% of JFK's adjusted number. If defense is at 71%, then how does total spending end up at 253%?

JFK's America funded SS (at reasonable benefit levels, not politically defined benefit levels.)

JFK's America paid a 3%/3% payroll tax on a much lower ceiling.

JFK's America built the Interstates.

JFK's America righted old civil rights wrongs.

JFK's America lead the world to the Moon.

JFK's America sent the graduating class of 1962 out into vibrant economies filled with hope, energy, enthusiasm, and by the way, jobs.

JFK's America, before MEDICARE, was not characterized by citizens stepping over the bodies of elderly sick people in the gutters outside of hospitals.

...and JFK's America did that with a federal givernment overburden on the economies of only $100B/yr ($1500B/yr today), vs. the current $3800B/yr...

The factor of x2 adjustment for population was way generous, and assumes a zero% increase in the efficiency of government over 50 yrs relative to a government that existed 3 years before IBM introduced the 029 keypunch...

And yet, the % of GDP is near 25% today, even as JFK's America spent less thatn 20% on federal public spending.

GDP is a terrible way to normalize federal spending; the indication of an efficient government is not a constant % of GDP, but an ever decreasing % of GDP. And we wish, because ours is growing, not shrinking.

When MEDICARE started in 1966, it was funded at $3B/yr. That adjusts to maybe $45B/yr today...and we are spending over ten times that adjusted number. (Nearly 19 times that number if we include MEDICAID.)

In 2012...are we really that much sicker and more frail than JFK's America? Almost 20 times more frail and sick?

Cryonic preservation (deep freeze suspension via cryogenics) is an exotic expensive technology that promises a chance at longevity beyond current medical science. When there is nothing more that can be done, wealthy individuals have the choice to select this technology if they can afford it. Is it a universal right, paid for by MEDICARE? Not yet. So, what is the justification for other expensive medical technology? How did our grandparents generationhandle end of life issues prior to MEDICARE?

The problem with MEDICARE is not the 30 years of normal medical care after retirement; the problem with MEDICARE, currently, is the futile procedures and trip to the MEDICARE rehab mills for a final does of C-DIFF on the way out the ineivtable door. It is the futile procedures enabled in the last 4-6 months of life, in which a distraught family, even with a written legal Advanced Medical Directive firmly in hand, must literally wrestle their failing loved ones from a system that can yet use them in their final days as barely yet breathing billable, even when all they want at most is morphine in bed and a dignified end at home in their bed. You don't learn this truth about MEDICARE until you tend to your elderly parent's passing. You go throught that once, and then it is too late, and when you go through it, you will be in no condition to deal with it.

In JFK's AMerica, you were billed by the hospital or doctor directly. If you had insurance, you went home, sat at your desk, looked at your bill for services, filled out a claim form and sent it to your insurer for reimbursement. You then paid your bill. That was called 'commerce,' and it controlled costs.

When MEDICARE came out, the ring-a-round-the -rosy started. Doctors and hospitals had to change their backoffice procedures to deal with third party payer MEDICARE. Company's like Perot's EDS and Perot Systems made their money automating government MEDICARE processing(and few even questioned why Perot entered the race in 1992 and all but won it for Clinton; that 50 million investment almost paid off bigtime.) A gets services from B who bills C who charges D for the insurance... not a single instance of commerce in sight.

And when that happened, private insurance companies got sucked into the wake, and ring around the rosy commerce became the norm. THIS IS NOT A BILL has been piling up, unopened, in the trash ever since.

DIdn't have to be that way, even with MEDICARE; the old model could have remained, with the only difference being, those covered by MEDICARE sent their claims to MEDICARE for reimbursement. This would have kept commerce in the marketplace, even with MEDICARE recipients, staring at their own bills and submitting their own claim forms, just like in JFK's America...before the current crisis.

We did this to ourselves, and continue to do it to ourselves.

And Krugman had a lot of balls bringing up JFK's vibrant economies; he wanted to cherry pick the six guys with lousy accountants who paid the highest marginal tax rates and ignore the rest...