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John Mauldin's Outside the Box

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  • Entitlement Bandits

    This week’s Outside the Box is guaranteed to upset you. It is about Medicare fraud. Warning: it was written by a very conservative analyst and is “pro” the Ryan plan. I want you to read it not because I am trying to get you to support the Ryan plan but to get a handle on the size of Medicare and Medicaid fraud and just how easy it is to perpetrate.

    There may well be better ways than the Ryan plan as advocated here, but something must be done. Want to cut spending by $1 trillion in ten years? Eliminate the fraud. If American Express can hold fraud to 0.3%, maybe we should outsource our Medicare fraud detection to them. I say that only slightly tongue in cheek.

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  • O Canada!

    There are those who say the US is doomed, that there is no way out from our problems with deficits, future entitlement promises, and a dysfunctional political system. And in my darker moments I worry that they are right.

    I get the problems, probably more than most. But there is a way out. Hopefully, it does not entail collapse first, as some suggest. But it will require a lot of hard decisions. Some will be very hard.

    For example, many point to the unfunded Medicare liabilities of some $70 trillion. I don’t worry about them so much, as they will never be paid, at least not under the current system. LONG before we get to that point, there will be a crisis that will force us to deal with the issues. Rule: if something can’t happen, then it won’t. We can’t pay the Medicare bill, so it won’t happen. Something else will happen in the meantime. It may not be good or pleasant, but something will come along to change the rules. More taxes? Fewer benefits? That is up in the air. But the system as it currently stands will not be allowed to prevail. Ask Greece how that is working out for them.

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