Attention cities and towns. Here is the explanation of why your health costs are destroying your budgets.
In Paul Ryan’s video on his Medicare plan, he graphically illustrates the growth in per household healthcare spending from $540 in 1960 to a projected $25,300 in 2012.
One interesting thing to do if you are aware of what our economy was like with the dollar-gold link, is to compare costs not in terms of dollars but in terms of ounces of gold. At one time, in fact during the history of the world pre-1972, the major currency of the civilized world was denominated in terms of gold. In 1960, one ounce of gold was worth $35. (The Treasury accomplished this essentially not by fixing the price of gold, but by adjusting the money supply so that the price remained fixed.)
In any case here are the comparisons:
1960: $540/$35 = 15.4 ounces of gold
2012: $25300/$1500 = 16.8 ounces of gold.
By this calculation, the per household spending on healthcare has increased since 1960 by 110%. Wouldn’t that be easier to plan for in your municipal budget?
Now to be fair, because gold reflects the new value of the dollar first, we don’t know where we truly are as far as the cost of healthcare and its relationship to the new value of the dollar. Gold goes up or down first, and other goods follow according to their own schedules of supply and demand. But Ryan’s numbers show that the real explosion in the dollar cost of healthcare has come not from some moral collapse into an entitlement mentality, but from a collapse of the value of the dollar. If cities and towns would like to keep this from proceeding apace, I recommend that they urge their federal officials to vote to relink the dollar with gold.