Mish's Global Economic Trend Analysis

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Medicaid Annual Spending in 1965 $1 Billion, Today $450 Billion, Projected $900 Billion by 2019; Three Things to Fix Medicaid Posted: 29 Jun 2011 05:52 PM PDT Medicaid was created in 1965 as a supposedly small program with expenditures of $1 billion. It has since ballooned to $450 billion and now the Department of Health and Human Services projects Medicaid will cost $900 billion by 2019. The solution is simple. Abolish Medicaid and give states block grants so they have the flexibility to figure out how best provide healthcare for their citizens. Two Perverse Elements of Current System States have an incentive to spend more money to get matching funds Consumers do not care about costs with government footing the bill Three Proposals to Fix Medicaid Cap Medicaid Spending Give Block Grants to States Allow states Full Flexibility to Define Eligibility and Benefits Congressman Paul Ryan and Alice Rivlin former Director of the White House Office of Management and Budget under President Bill Clinton have teamed up to propose a block grant program. Rivlin was also appointed by President Obama to his National Commission on Fiscal Responsibility and Reform. Paul Ryan - Alice Rivlin Proposal If you agree with the approach outlined above, please contact your congressional representative and urge them to cap Medicaid and replace it with block grants. Click Here For Congresional Phone And Fax Numbers Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Uneven Aging of America; Cultural Shift Coming; Competition for Resources Between Young and Old Will Be Intense Posted: 29 Jun 2011 12:14 AM PDT William H. Frey, Senior Fellow, at the Brookings Institution discusses the Uneven Aging and "Younging" of America as noted in the 2010 census. America is beginning to show its age as the baby boom generation advances toward full-fledged senior-hood. But the pace of this aging will vary widely across the national landscape due to noticeable geographic shifts in the younger population, with implications for health care, transportation, and housing, and possible impacts upon our ability to forge societal consensus. An analysis of data from the 1990, 2000, and 2010 decennial censuses reveals that: Due to baby boomers "aging in place," the population age 45 and over grew 18 times as fast as the population under age 45 between 2000 and 2010. Although all parts of the nation are aging, there is a growing divide between areas that are experiencing gains or losses in their younger populations. Suburbs are aging more rapidly than cities with higher growth rates for their age-45-and-above populations and larger shares of seniors. People age 45 and older represent 40 percent of suburban residents, compared to 35 percent of city residents. There are far more charts, graphs, and analysis, in the Complete PDF The Uneven Aging and 'Younging' of America: State and Metropolitan Trends in the 2010 Census. The excerpts above were from a summary. Cultural Shift Coming The Washington Post discusses demographic changes in If baby boomers stay in suburbia, analysts predict cultural shift During the past decade, the ranks of people who are middle-aged and older grew 18 times as fast as the population younger than 45, according to Brookings Institution demographer William Frey, who analyzed the 2010 Census data on age for his report, "The Uneven Aging and 'Younging' of America." For the first time, they represent a majority of the nation's voting-age population. The political ramifications could be huge as older voters compete for resources with younger generations. "When people think of suburban voters, it's going to be different than it was years ago," Frey said. "They used to be people worried about schools and kids. Now they're more concerned about their own well-being." The nation's baby boomers — 76 million people born between 1946 and 1964 — were the first generation to grow up in suburbia, and the suburbs is where many chose to rear their own children. Now, as the oldest boomers turn 65, demographers and local planners predict that most of them will not move to retirement areas such as Florida and Arizona. They will stay put. "If you ask younger boomers, who are 45-ish, a lot say they expect to move and retire elsewhere," said John Kenney, chief of aging and disability services with the Montgomery County health department. "But as people get to 65 and 70, whether because of choice or default, they end up staying. We are planning on people being here." "Retirement used to be the golden years," said Kenney. "No more." Local governments are starting to grapple with the implications. "Clearly, the age wave is coming," said Pat Herrity (R-Springfield), a county supervisor who heads the 50-plus committee. Although Florida and Arizona remain retirement magnets, 17 of the 25 states with the highest concentrations of senior citizens are cold-weather states. Older Americans now represent 53 percent of voting-age adults. "The political clout of older Americans will be even more magnified if the traditional higher turnout of this group continues, and as the competition for resources between the young and the old becomes more intense," Frey writes. Retirement No Longer Golden Years I have been discussing social trends and changing social attitudes for quite some time. Here is a snip from May 2008 on Demographics Of Jobless Claims Structural Demographics Poor Structural demographic effects imply that prospects in the full-time labor market will be poor for those over age 50-55 and workers under age 30. Teen and college-age employment could suffer a great deal from (1) a dramatic slowdown in discretionary spending and (2) part-time Boomer reentrants into the low-paying service sector; workers who will be competing with younger workers. Ironically, older part-time workers remaining in or reentering the labor force will be cheaper to hire in many cases than younger workers. The reason is Boomers 65 and older will be covered by Medicare (as long as it lasts) and will not require as many benefits as will younger workers, especially those with families. In effect, Boomers will be competing with their children and grandchildren for jobs that in many cases do not pay living wages. One of the many consequences of boomer demographics is the longer the US opus of reform of Medicare, and Social Security, the more difficult it will become because of voting demographics. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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