The United States is heading toward a significant financial crisis. This realization is hardly novel; the impending tragedy has been brewing for decades. Anyone with a hint of inquisitiveness can see the situation unfolding.
As reported by the U.S. Census Bureau’s population clock, the U.S. population has surpassed 334 million. This represents a considerable number of mouths to feed and bodies to clothe and house. But there’s more to consider.
Many of these individuals require medical care at various points throughout the year. Some may experience a broken arm, others could face a burst appendix or cardiac arrest, and there are severe medical emergencies stemming from car accidents or other unforeseen events.
In a society rooted in limited government and individual liberty, people work to support themselves. They earn their means to address these needs through their labor. Minors rely on their families until they can provide for themselves, while the elderly may depend on their children should they not have saved adequately during their working years.
Conversely, in a centrally planned economy, this self-sufficiency is significantly diminished. A large portion of the population relies on government programs for their daily bread, depending on the state’s benevolence to cover their medical expenses.
Over the past century, the U.S. has transitioned from a nation of self-sufficient individuals to one of collective dependents. Currently, the country is approaching a notable milestone.
Just days before the Ides of March, 100 million people—or about 30 percent of the population—will be reliant on Medicaid. Can you fathom that?
Forced Philanthropy
A Florida-based organization, the Foundation for Government Accountability (FGA), even maintains a dedicated website with a countdown clock to track this impending moment. They predict that Medicaid enrollment will reach the 100 million mark sometime between the evening of March 12 and the early morning of March 13.
Will you celebrate this milestone with a toast?
The significance of reaching 100 million lies primarily in the enormity of the number itself. It’s both large and rounded, prompting us to pause and consider the implications of what has transpired.
How did 100 million Americans find themselves on Medicaid? Will the entire country eventually be ensnared by this program’s wide net? And what becomes of the quality of medical care when reimbursements for services are funneled through an enormous government entity?
Generally speaking, politicians are enamored with transfer payment programs. While some may genuinely believe they are improving lives through their well-intentioned initiatives, others delight in exerting central control over the populace.
“The way to Hell is paved with good intentions,” remarked Karl Marx in Das Kapital. Ironically, he criticized capitalists for daring to use their own money to generate more wealth.
Marx, often misguided, overlooked the plethora of factors contributing to societal issues. The road to ruin comprises far more than just noble intentions; it is also littered with fraud, corruption, and deception—much of which is glossed over with good intentions.
Government Scam
Medicaid may have been founded with good intentions when it was introduced under the Social Security Amendments of 1965. Who, after all, could oppose providing medical assistance to those in need?
However, what many may not realize is that Medicaid as it currently exists is essentially a government scam. Strings from the coronavirus pandemic have entangled the program, leaving state governments reliant on federal funding. The FGA elucidates this concerning trend:
“The sharp rise in enrollment is largely due to the federal government’s continued extension of the COVID-19 public health emergency, which entraps states in ‘Medicaid Handcuffs.’ During this emergency, states receive increased Medicaid funding under the condition that all enrolled individuals remain tethered to the program. This has resulted in an additional 24 million enrollees, over 21 million of whom would have previously been ineligible due to income thresholds or other criteria.”
This influx of 21 million ineligible Medicaid participants incurs a hefty price tag of $16 billion monthly, or $192 billion annually. The burden falls on taxpayers—you.
To appreciate the scale of 21 million ineligible individuals, consider Florida, which is home to 22 million people. Nearly the entire population of Florida is illegitimately on Medicaid.
Reflect on this as you wake up Monday morning to face another week of work. Contemplate it when you glance at your paycheck and notice the significant federal income tax deductions being taken from your earnings.
How many other government schemes are you unwittingly funding?
The actual costs associated with the fraudulent aspect of Medicaid exceed $16 billion monthly. The FGA notes that as welfare enrollment—including Medicaid—rises, labor force participation declines. This diminishes the economy’s ability to finance Medicaid and other government programs.
Yet the absurdity continues. Washington’s policies are binding individuals to reliance on programs for which they are ineligible, and they’re doing this at the most inopportune time.
Will You Beat Uncle Sam’s Relentless Pursuit of Your Wealth?
Currently, the U.S. national debt stands at over $31.4 trillion. When you include unfunded liabilities—like Social Security, Medicare parts A, B, and D, public federal debt, and benefits for federal employees and veterans—the number skyrockets to $173.5 trillion. This equates to over $519,000 for each citizen.
These debts will not vanish into thin air. However, they won’t be paid off directly either; simple math makes that impossible. Nevertheless, payment will come.
You will pay with your time and effort. You will pay with a lower standard of living. In truth, you are already paying.
This week, the Bureau of Labor Statistics announced the latest inflation figures. According to the government’s composite data, consumer prices, as measured by the Consumer Price Index (CPI), increased at an annual rate of 6.5 percent in December. After peaking at 9.1 percent in June 2022, inflation has been steadily decreasing.
Should you feel relieved that your purchasing power is being eroded at a rate of 6.5 percent annually instead of 9.1 percent?
Keep in mind that at an ‘official’ inflation rate of 6.5 percent, it takes only 11 years for your savings’ purchasing power to be halved. And in the grand scheme of a person’s working life, this could happen four times.
Wage increases might cushion the blow, but they won’t keep pace with government-driven inflation. In fact, real wages have diminished for 21 consecutive months.
And what will happen during retirement when employment income ceases? Here, retirees might expect their savings’ purchasing power to be halved at least once, if not twice.
This illustrates how you will ultimately bear the weight of Washington’s spiraling debts and unfunded liabilities. The Medicaid debacle is just one instance of the enslavement to which you’re bound.
Given this reality, saving and investing your income and wealth has never been more crucial. Through hard work, perseverance, and a bit of luck, you can maintain your independence and lifestyle amid Uncle Sam’s unyielding quest for your wealth.
The challenge is formidable. The stakes are high.
[Editor’s note: This is indeed a challenging period for investors. Inflation, deflation, and recession loom large. However, within this turbulence lies the potential for the next significant wave of wealth over the coming decade. We intend to navigate this journey together. If you’re interested, consider exploring my Financial First Aid Kit. Inside, you’ll discover everything needed to thrive and safeguard your privacy as the global economy descends into a potential depression.]
Sincerely,
MN Gordon
for Economic Prism
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