Gino Piroli – 3/21/05

This page was last updated on March 25, 2005.

Saving Medicare more important; Gino Piroli; Beaver County Times; March 21, 2005.

Below is a critique of the relevant portion of the subject column.

“It’s disturbing that the debate over preserving Social Security has turned into a partisan battle with both sides taking hard-line positions that seem based on party line rather than attempts to keep the program solvent for years to come.”

[RWC] Mr. Piroli is disturbed the Socialist Security issue “has turned into a partisan battle?” Whom does he believe he is kidding? Every economics- and politics-oriented column Mr. Piroli writes is a partisan, name-calling screed devoid of fact from credible sources. Oops, I’m sure Mr. Piroli will consider this to be another alleged “personal attack.”

“The administration is pushing private accounts for younger workers, although no definitive plan to do this has been displayed.”

[RWC] Mr. Piroli fails to note the bipartisan Commission to Strengthen Social Security also recommended personal accounts as one of several actions to help Socialist Security.

“The opponents say there is no crisis, citing a General Accounting Office report that the system is not in trouble and can survive through 2042 and 2052.”

[RWC] This date range is when the Socialist Security “surplus” that has built up is exhausted assuming no change in benefits or SS tax rates. The amount SS will pay out in benefits will exceed the SS tax collected in about 2018 according to the Socialist Security Administration actuaries.

Regarding use of the word “crisis,” I like how Art Linkletter addressed the issue. Linkletter said, “If your doctor told you that the colonoscopy you just had revealed a small cancer which is going to kill you in 25 years, I’ll bet you’d consider yourself in crisis right now, wouldn’t you?”

“I’m not really concerned with who’s right or wrong. All I would hope for is that they get together and keep a program alive that has been beneficial to many seniors and other qualifying persons.”

[RWC] Mr. Piroli isn’t “really concerned with who’s right or wrong?” Anyone who reads Mr. Piroli’s columns knows that by definition, Democrats are right and Republicans are wrong.

Can Mr. Piroli support his opinion that SS “has been beneficial to many seniors and other qualifying persons?” Can he prove the overall senior population would not have been better off if they had planned and saved for retirement on their own?

Mr. Piroli also ignores the fact that previous and many current seniors are on the front end of a Ponzi scheme. In a Ponzi scheme, the early participants regularly make out OK. It’s those who follow who get hosed. Consider the first person to receive a monthly SS retirement check. According to the SSA web site, “Ida May Fuller worked for three years under the Social Security program. The accumulated taxes on her salary during those three years was a total of $24.75. Her initial monthly check was $22.54. During her lifetime she collected a total of $22,888.92 in Social Security benefits.” I doubt those of us who paid 12.4% of our wages in SS taxes for 45+ years of a working life will make out as well.

The same situation exists for Medicare, only worse. For example, my father was fully covered by Medicare even though he retired only six years after it went into effect. That meant he paid only six years of Medicare taxes yet received 21 years of benefits. For my Dad, it was a great deal. Will it be a good deal for those workers who had to pay Medicare taxes (2.9% with no earnings cap) for their entire working life?

Why did I write Medicare was worse? SS benefits are based to a degree on how much you paid in SS taxes during your working life. That is, the more you paid the more you get. A “rich” worker pays more in SS taxes than a minimum wage worker so he receives more in benefits. That’s not the case for Medicare. Though they will pay vastly different amounts of Medicare taxes during their working lives, a minimum wage worker will receive exactly the same benefits as a high-end worker.

“The greatest problem in addressing the needs of the coming generations is not Social Security, because few can live solely on that source of income.

“The most important benefit for those eligible is Medicare. It has provided health care for seniors that extended the life expectancy of past and present recipients.”

[RWC] Using a current Democrat tactic – just as his Times handlers – Mr. Piroli wants us to believe Medicare is a problem but Socialist Security is not. If President Bush had decided to focus on Medicare instead, does anyone doubt Mr. Piroli would be claiming Socialist Security was the real problem? Both programs are failures. Medicare also has the distinction – along with Medicaid and “employer subsidized” health insurance – of contributing to the high price of healthcare.

“I mentioned previously that my 11-day hospital stay cost $123,000, and a deceased friend of mine incurred medical expenses of $1.2 million, all paid for by Medicare.”

[RWC] At the risk of sounding mean, were the expenditures worth the result? Here’s an example of what I mean.

Let’s assume Medicare didn’t exist and Mr. Piroli and his friend could have afforded to pay their bills with their own money. Would they still have chosen their medical treatments? Would Mr. Piroli’s friend have chosen to use his $1.2 million to extend his life a little bit, or would he have chosen to pass the money to his heirs or some charities?

We make these decisions everyday. For example, we know cars aren’t perfectly safe, yet we drive them because we would refuse to pay the price for a perfectly safe car if one could be built.

“No average citizen could cover either expense. It is hoped that politics will be set aside and solutions to both these problems can be found and made available for those generations to come, even those critical of any entitlement programs.”

[RWC] No average citizen could pay these expenses out of pocket, but that’s why there’s insurance. If we didn’t have Medicare, private market-driven healthcare insurance would be available if the government didn’t interfere.