08.31.09
For Financial Market Hypochondriacs with a Splash of Health Care
Good story from Bloomberg about the state of financial and economic affairs. Basically they report that stock market investors are more sanguine about recovery than bond investors, and why. The WSJ reports a couple of days ago that stock market investors need to slow down — investors are piling back into the market, pushing up PE ratios above historic averages, and may be repeating some past mistakes. See August 29th’s “Why Investors Need to Slow Down and See the Light.”
In other interesting bits relating to health care, our health care reform-seeking government put out a report about/for “seniors” and Medicare. First of all, I dislike the word seniors, it’s so last century, slightly insulting, and actually about three decades out-of-date. While they give many pertinent statistics about Medicare’s looming insolvency and why, it’s really not the whole story on Medicare. Benefit growth in Medicare is more about perverse economic incentives and abuse of the system than anything they describe. They do make reference to the fraud they have identified and dealt with, and hurray for them. There’s just a lot more to go, and overall health care reform will only go a small step toward fixing what ails Medicare — escalating costs from ever-expanding benefits (many of which are abused and worked around) and increasing numbers of beneficiaries. In 2010, when the baby boomers enter Medicare’s rolls, watch the spending explode. Some real solutions have been posed but politics is trumping real reform of a program that is an entitlement, and one that all taxpayers and beneficiaries need to watch more carefully.
