A good investment choice.

The 11 companies that make up the Fortune 500 drug industry category enjoyed an 18.6 percent return on revenues and a 17.7 percent return on assets. By comparison, the median for all Fortune 500 industries was 4.9 percent and 3.9 percent, respectively. In all, Fortune 500 drug companies saw their return on revenue increase 15 percent from 1999 (see Table 1). That success came at a time when the American economy saw overall profit growth drop from 29 percent in 1999 to 8 percent last year.

One of the many reasons the US has the highest health care costs in the world with mediocre quality of care and a substantial number of Americans without health care. The sheer number of Babyboomers and their health care requirements through the Medicare prescription program putting tremendous financial pressure on Medicare will prompt legislation overturning big pharmos monopolistic pricing structures which penalize Americans.

Interestingly enough, I believe Medicare is legally prohibited from engaging in national-scale negotiations with pharmaceutical companies for annual purchase contracts (volume discount purchases).

This is how the Canadian healthcare system drives down the price of pharmaceuticals. In the vast majority of cases, these are the identical brand name products available in Canada at a significantly lower price than they are sold in the USA for.

Correct. There are pending bills in both the house and senate to remedy that circumstance, but Republicans have said they would filibuster any such attempt on the moronic grounds that no cost savings would be available. The truth of the matter is a needed correction would put Medicare prescription drugs on a competitive level with private health care plans and that's not what current administration nor big pharmo or the health insurance industry lobbyists wanted when it forced the Medicare prescription drugs plan. Again, the sheer numbers of Babyboomers and that cost will force what's currently a backroom deal into the public view and the largest voting block in the US always wins.

In 2002, Americans paid 67 percent more than Canadians did for identical patented drug products. Mexico has the same low cost and that's spawned an industry in border towns of busing seniors across the border to have their
prescriptions filled. Rather pathetic but effective.

*waves to americano*

a final note matey.

not all the beneficiaries of "big pharmo" are its CEOs and fat cats living on 1000 acre plots in mansions.

me mum was one 'o the lead researchers on the team that gave the world mevacor, the world's first cholesterol lowering drug. our fambly is not rich, i 'spose you'd call it upper-middle class. part 'o our fambly's stock portfolio is made up 'o merck stock.

i now live in the southern part 'o the united states and i never before in all me life seen so many fat peoples. its companies like Merck that makes it possible for americans to have such bizarre eatin' habits...to gorge themselves on fried chicken, biscuits and gravy, and not keel over from a heart attack.

think 'bout that next time you sink yer teeth into a big mac, enjoy the crunch of kentucky fried chickens, and recline into yer lazy boy with a big bowl of buttered popcorn in one hand with yer tv remote control welded in yer other hand.

big pharmo, in many cases, is what makes it possible to continue our gluttonous american lifestyle!

(by using the pronoun "you", i wasn't specifically speakin' to you, americano).

*bows*

MeadHallPirate


p.s. - all 'o this is a little off topic, mate, and i apologize to the TS for wandering so far afield. in terms 'o social security, do away with it and SAVE, me fellow americans! you may want to live like there is no tomorrow, but then don't come cryin' to the rest of us when tomorrow comes and ye haven't been saving diligently.

I grew up in Texas, lived in the South as an adult and those people have been gorging themselves on fried foods without heart attacks or cholesterol lowering drugs for centuries.

Incidentally, US savings have been negative for a few years. If you look at studies of Babyboomer assets, the majority of them will be unable to retire on the limited assets they've acquired. The current generation gambling on managed equity funds for retirement while ignoring little man historical market returns won't be much better off. I'd rather continue paying them enough for Alpo than have them trying to eat my shrubbery and crapping on my grounds. I look at it as inexpensive retention of social order, far less expensive than fielding my own protection.

Yes, this is the ultimate justification for Social Security and Welfare policies. Self-serving self-interest of the upper middle class and the rich. Taxes are a small price to pay when the alternative is a mob of several thousand beggers storming your house.

Yes, I'm serious. No, this isn't sarcasm or satire. I've made this argument a dozen times previously.

arg.

i have no rebuttal here, to either you or mr americano, sir rabbit!

i guess if giving the folks who haven't saved for their old age a few copper pieces here and there will keep'm at bay down the road when their lifestyle comes home to roost, well.... i can't mount much of an arguement to that. i don't want them eating my shrubs either.

it still makes me uphappy, but i can't deny the common-sense aspect of both yer answers.

well said mates!

-meadhallpirate

I think anyone who recognizes and understands the reality of how society is actually composed understands the responsibility and benefits of providing for the disadvantaged, be it through personal efforts or taxation. That's actually a traditional conservative value most often ignored by the current crop of pseudo-conservatives.

Okay, then, I apologize for not explicitly arguing the real point of contention - an underlying premise. You're looking at SS in a vaccuum. In that vaccuum, yes, SS is solvent for many years to come because of the SS trust fund. I look at SS in the context of the overall Federal budget and/or US economy; in that context, the SS trust fund is really the SS slush fund because it has all been spent. Thus unless the tooth fairy pays back the SS slush/trust fund, SS effectively becomes insolvent as soon as payouts surpass receipts in 2018 or so, and even starts having a negative impact next year when there will gradually be less and less annual slush fund surplus available to prop up other Federal spending.

Substantive discussion requires some compatible underlying premises. So, are we discussing things in some on-paper accounting fantasyland, or in real life? I'll easily concede that SS isn't Too bad on paper, but in real life, there are significant issues to be addressed.

__________________
Today's forecast: Government corruption.

Tomorrow's forecast: 100% chance of more 'politics as usual'

Maybe it's finally time to vote Libertarian

I will grant that.

Your point is an entirely different one. It actually doesn't interest me because it appears to be just a word game.

Canada has been playing the exact same asset/debt shuffle game with pension 'reserves' for just as long as the USA. I don't see this as actually impinging upon the financing situation at all since this process has been used for many different government programs for many decades. A T-bill is a t-bill regardless of who is holding it.

Adding another round of t-bill rollovers doesn't seem significant to me. Overall US debt levels are comparatively quite low (much less than the majority of EU nations).

I'm not into conspiracy theories that hold that the US government is planning on reneging on T-bills within 10 years from now which is what your argument amounts to.

Ah, but traditionally, the poor were kept poor but not Too poor, such that rebellion was suppressed and their subsidized livelihoods helped stave off disease etc so they maintained a decent-sized cheap labor pool. In the modern US, the poor aren't content with 'not Too poor' and continually demand more, including health coverage and other benefits so that disease etc are no longer effectively keeping their numbers in check. Unless a better solution is found than simply throwing money at them, we're going to end up with the aforementioned 'thousands of beggars storming the house' regardless of any self-serving generosity.


That was not my intended implication, and I agree, while debt rollover is an annoyingly poor use of money, it is no cause for alarm.

What Is cause for concern is that in the next decade or so we are faced with one or more of 1) the aforementioned unlikely default, 2) significant cuts to government programs without offsetting tax cuts, 3) significant increases in taxes, or 4) significantly rising public debt, in increasing order of probability IMO. None of these are good for social stability or economic health.

All houses eventually fall, but one built on the shifting sands of excessive debt will fall sooner and harder, something I'd think most Americans would want to avoid. Yes, US debt has had a definite upward trend over the years, but always with some possibility of occasional dips like Clinton had rather than there not being a chance in a handbasket of the debt going down. The latter should hurt our 'credit rating' and/or hasten the eventual bubble bursting.

__________________
Today's forecast: Government corruption.

Tomorrow's forecast: 100% chance of more 'politics as usual'

Maybe it's finally time to vote Libertarian

Maybe the flaw is in the necessary requirement of 'cheap labor' ?

People have an annoying habit of not going along with being the cannon fodder that they are assigned to be by other people. Can't say I blame them.

Agreed. #3 and #4 are the most likely given past US political behavior.

As most reputable studies show, the sooner that any given required tax increase is passed (or any required benefit reduction is phased in) the better. The longer one puts off either choice, the larger the impact that choice will have, once it is made.

I understand that an increase of 16% of the present Social Security payroll taxes would solve the problem entirely, if the tax is passed sooner rather than later (I don't have a source off-hand for this - I'm citing from memory, I could be mistaken on the precise figure).

Given that the USA has the lowest level of taxes of any western nation, there is no substantive danger that such a tax increase would make the USA comparatively uncompetitive with the USA's major trading partners as the USA would remain the lowest tax jurisdiction even with such an increase.

It is also to be noted that many other western nations are extremely competitive trading partners with the USA despite paying significantly higher tax rates. Indeed, the USA keeps losing trade ground to these higher tax jurisdictions. Canada for example has increased its market penetration of almost every class of exported product to the USA over the last 20 years (and has higher taxes every step of the way).

I agree most national taxation rates generally aren't a factor in trade competition but often wonder about the official US tax position. When I retired I had a friend at one of the big accounting/consulting firms pull their cost of living data by state and county. Some states/counties have take-your-breath away tax structures that when combined exceed anything published for mid-range EU countries.

I live in an area where wood products once provided the bulk of economic contribution and there are people here who hate Canadian wood products based solely on the fact that they consider them government subsidized by the Canadian national health program. When US government subsidized food exports such as grain are mentioned, 'that's a different story' is the standard retort. Canada faces some substantial US isolationist policy tariffs on virtually every product they export to the US in spite of NAFTA in US attempts to protect inefficient US industry and a higher internal Canadian tax structure and still continues to post impressive market share gains year after year.

Do we have any consensus on this point?

If the USA could just increase the Social Security taxes (payroll taxes or otherwise) sufficiently within the next few years, there would not be any substantive danger of any Social Security defaults, projecting up to 75 years forward.

Any such increase in Social Security taxes would still keep the USA as the lowest tax jurisdiction in the western world, thus negating any theoretical arguments about increasing economic uncompetitiveness in trade relations.

Does anyone substantially disagree with this?

I'm in agreement with a couple of provisos:

1. That 'surplus' trust collections for future payouts not be invested in internal debt or equity market investments. The Fed and US Treasury department have already proved themselves to be Wall Street bitches. Under current government approved public trust fund raiding techniques any 'surplus' collections from tax increases would merely continue flowing into the general fund and incur internal debt.

2. Independent actuary (not self-serving government drones) analysis of population life expectancies every five years(?) to furnish a basis for projecting payout requirements.