[Rhodes22-list] Economics and Health Care

[Rob Lowe]

Herb,
My point is if Moody's is going to suggest that the credit rating of the US
is in danger of being lowered due to an imbalance of current and perceived
incomes vs. outgoes, then say so.  While health care costs have and are
rising, so is the Pentagon's budget and the wars have cost a trillion
dollars so far.  If they are worried about the credit worthiness of the US,
just say so and let the politicians solve the problem (not that they will).

----- Original Message ----- 
From: "Herb Parsons" <hparsons at parsonsys.com>
To: "The Rhodes 22 mail list" <rhodes22-list at rhodes22.org>
Sent: Friday, January 11, 2008 11:47 AM
Subject: Re: [Rhodes22-list] Economics and Health Care


> I want to see if I understand your point correctly - when reporting the
> news that the Moody credit rating was risked being lowered because of
> their (Moody's) concern over the costs of Medicare and Medicaid, that
> the reporter should have also inserted concerns (that Moody didn't
> state) about two wars, borrowing money to pay for them, interest on the
> national debt, etc?
>
> Or is it your point that reporting Moody's concerns was "one sided
> conservative press"?
>
> Rob Lowe wrote:
> > Man, talk about a one sided conservative press.  No mention of all about
> > starting two wars and paying for them by borrowing money.  No mention of
tax
> > cuts (mostly for the rich) paid for with borrowed money.  No mention of
the
> > interest on the national debt eating up all discretionary spending in
> > another decade.  No mention that most of the national debt occurred
during
> > the Regan and Bush years.  Sure health care spending is a problem.  But
tell
> > the whole story. - rob
> >
> >
> > ----- Original Message ----- 
> > From: "Brad Haslett" <flybrad at gmail.com>
> > To: "The Rhodes 22 mail list" <rhodes22-list at rhodes22.org>
> > Sent: Friday, January 11, 2008 8:46 AM
> > Subject: [Rhodes22-list] Economics and Health Care
> >
> >
> >
> >> Here is the 900 pound elephant in the room that refuses to go away.
> >> "Elephant?  What elephant?" When a candidate promises you a new
benefit,
> >>
> > the
> >
> >> question you should be asking is, "how are we going to pay for that
when
> >>
> > we
> >
> >> can't pay for what we've already promised?" Happy talk and wishful
> >>
> > thinking
> >
> >> is not going to solve this!  Brad
> >>
> >> --------------------------------
> >>
> >> from the Financial Times
> >>
> >> US's triple-A credit rating 'under threat'
> >>
> >> By Francesco Guerrera, Aline van Duyn and Daniel Pimlott,in New York
> >>
> >> Published: January 11 2008 02:00 | Last updated: January 11 2008 02:00
> >>
> >> The US is at risk of losing its top-notch triple-A credit rating within
a
> >> decade unless it takes radical action to curb soaring healthcare and
> >>
> > social
> >
> >> security spending, Moody's, the credit rating agency, said yesterday.
> >>
> >> The warning over the future of the triple-A rating - granted to US
> >> government debt since it was first assessed in 1917 - reflects growing
> >> concerns over the country's ability to retain its financial and
economic
> >> supremacy.
> >>
> >> It could also put further pressure on candidates from both the
Republican
> >> and Democratic parties to sharpen their focus on healthcare and
pensions
> >>
> > in
> >
> >> the run-up to November's presidential election.
> >>
> >> Most analysts expect future administrations to deal with the costs of
> >> healthcare and social security and there is no reflection of any
long-term
> >> concern about the US's financial health in the value of its debt.
> >>
> >> But Moody's warning comes at a time when US confidence in its economic
> >> prowess has been challenged by the rising threat of a recession, a weak
> >> dollar and the credit crunch.
> >>
> >> In its annual report on the US, Moody's signalled increased concern
that
> >> rapid rises in Medicare and Medicaid - the government-funded healthcare
> >> programmes for the old and the poor - would "cause major fiscal
pressures"
> >> in years to come.
> >>
> >> Unlike Moody's previous assessment of US government debt in 2005,
> >> yesterday's report specifically links rises in healthcare and social
> >> security spending to the credit rating.
> >>
> >> "The combination of the medical programmes and social security is the
most
> >> important threat to the triple-A rating over the long term," it said.
> >>
> >> Steven Hess, Moody's lead analyst for the US, told the Financial Times
> >>
> > that
> >
> >> in order to protect the country's top rating, future administrations
would
> >> have to rein in healthcare and social security costs.
> >>
> >> "If no policy changes are made, in 10 years from now we would have to
look
> >> very seriously at whether the US is still a triple-A credit," he said.
> >>
> >> Mr Hess said any downgrade in the US rating would have serious
> >>
> > consequences
> >
> >> for the global economy. "The US rating is the anchor of the world's
> >> financial system. If you have a downgrade, you have a problem," he
said.
> >>
> >> Moody's did once threaten to cut the rating of some of the US
Treasury's
> >> debt when Congress refused to pass the president's budget in the
> >>
> > mid-1990s.
> >
> >> Other large economies, notably Japan in the 1990s, have had to suffer
the
> >> symbolic blow of losing their top-notch credit rating.
> >>
> >> Last year, David Walker, comptroller general of the US, caused
controversy
> >> when he compared America's current situation with the dying days of the
> >> Roman empire and warned the country was on "a burning platform" of
> >> unsustainable policies.
> >>
> >> Medicare and Medicaid spending, which has risen sharply over the past
few
> >> decades and now accounts for about 45 per cent of total federal
spending,
> >>
> > up
> >
> >> from about 25 per cent in 1975, has long been a source of concern.
> >>
> >> Last month, Peter Orszag, director of the Congressional Budget Office,
> >>
> > which
> >
> >> advises Congress on the federal budget, said the issue was "the central
> >> fiscal challenge" facing the US.
> >>
> >> Most presidential candidates have vowed to reform the healthcare system
> >>
> > but
> >
> >> many of them, especially on the Democratic side, have focused on
extending
> >> coverage to the 40m-plus uninsured Americans rather than on cutting
costs
> >> __________________________________________________
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> >>
> >
> >
> > __________________________________________________
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> >
> >
> >
> >
>
> -- 
> Herb Parsons
> S/V O'Jure - O'Day 25
> S/V Reve de Pappa - Coronado 35
>
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