Around The World, And Healthcare Non-Reform?

In world news, Germany faces energy decisions that are changing power lines (pun intended). Due to be phased out by 2022 after the Greens passed legislation in 2000, the Christian Democratic Union (CDU) is trying to revamp and start construction again. Despite the expense of building nuclear plants, they are cheap to run. And, with oil prices still around $70 a barrel, and solar plants still only providing a small portion of power, the attractiveness of cheap power will be hard to ignore. It could also mean Germany misses the greenhouse gas targets it has to achieve. These same issues face Americans, as well. Is there room for solar fields to generate power? Is it possible for America to make a real difference in pollution emissions, besides the new tax structure of the cap-and-trade system currently making it’s way to the Senate?

Closer to home, Russia is financing arms for Hugo Chavez. This time the amount is $2.2 billion, bringing the total value of Russian weapons contracts to almost $4 billion. Chavez is claiming he needs them for “self-defense” against American attacks, now that the US has access to Columbian military bases. Many conservatives in America thought that with President Obama’s election and the power of the Left emerging that there would be a reduction in Chavez’s anti-US rhetoric. Obviously that has not been the case. More distrurbing than the weapons contracts is news that the Venezuelan leader is going to use Russian aid to develop nuclear power. This could easily lead to an Iran like standoff in the west.

Here at home, the big issue is healthcare reform, followed closely by financial reform. Both are high on Obama’s agenda, as well as Democrats in general. Shawn Tully has a series of articles that grade the proposed healthcare reforms. The 8th in the series covers Obama’s latest speech. Tulley’s overall picture paints something along the lines of no improvement, other than more government control through subsidies, giving non-profits and government agencies a huge leg up on private insurers. This follows on the heels of reports indicating that reform won’t reduce cost of healthcare. Now, there are two goals to healthcare reform. The first is to provide healthcare to the uninsured. The second is to cut down on the rising cost of healthcare, which is a major reason so many are uninsured. IF the legislation goes through without reducing costs, what is gained beyond more government domination of private industry? Couple that with the necessity of raising taxes to pay for it, and it’s a wonder so many Americans are in favor of it. What legislation actually comes out of Washington remains to be seen, with much debate about whether a public option will actually be available. But, it will be very important to watch where and how the costs are covered—if they can be.

More Unkept Promises...

Did anyone see the latest ideas from Congress on limits to healthcare? Yep. This makes good stuff available to those UNDER 25, but not over.

The measure -- offered by Senate Finance Committee Chairman Max Baucus, D-Mont. -- would impose new fees on some healthcare industry segments to help offset the estimated $880 billion in initial costs over 10 years, The New York Times reported Tuesday.

The plan would provide a lower-cost insurance plan for catastrophic coverage only to people up to age 25, people familiar with the outline said. It also would expand less comprehensive Medicaid coverage to millions of low-income people who now are ineligible.

With Medicaid losing money, how is this going to be funded? The question still waits a full answer.

A related article at the NYTimes adds a bit more detail about Baucus’ proposal:

To help finance the legislation, Mr. Baucus is expected to propose a new tax on insurance companies selling policies with premiums far exceeding the national average, roughly $13,000 a year for family coverage.

Government healthcare is no longer a government program, apparently. It is a commercial industry killing plan. Risk management implies that higher risk has higher costs…but not according to the government’s coming “guidelines.”

Meanwhile, there is a petition circulating to drum up support for House Bill HR676 to make establishing health care a civil right, giving it equal status with race, sex, and creed. The petition specifically states the Bill

Whereas HR676 provides for Medicare for All, a universal, single payer, not-for-profit health care system which means the end of premiums, copays and deductibles; and

Whereas we are already paying for a universal standard of care but are not getting it because one of every three dollars in the health care system goes to the activities of the for-profit insurance system…

In short, this Bill and the petition openly state the goal is to replace or eliminate the insurance industry. That should do wonders for the deficit effects of the healthcare plan, already planned to be partially funded by money from the insurance industry. (…not to mention Democrats have openly said that is not what they are doing or have planned…)
But, those are not as concerning as the latest changes from President Obama himself. There was a short fact check on some points from his latest speech to Congress. Gone are guarantees about personal choice. Gone is the refusal to require everyone to be insured. Gone as well is his promise to “not increase the deficit by one dime.” Why? Government accounting that lets them say what they want it to say. The article states:

House Democrats offered a bill that the Congressional Budget Office said would add $220 billion to the deficit over 10 years. But Democrats and Obama administration officials claimed the bill was actually deficit-neutral. They said they simply didn't have to count $245 billion of it — the cost of adjusting Medicare reimbursement rates so physicians don't face big annual pay cuts.

Let’s see…Broken promises…Rising deficits…A not recovering economy…Sounds like Bush all over again…doesn’t it? Or at least that’s what the media and the Left used to accuse him of. Think they might accuse their Golden Boy Obama of the same thing?

Still, all of this legislation aimed at providing healthcare to all fails to address the real problem: rising healthcare costs. None of the legislation as far as I know does anything to reign in costs. It just throws more money into the healthcare system. As education has proven, more money does not solve the problem. The United States spends more per student on education than other countries, but we have a lower student success rate. More money is not a solution to cost control issues. Basic economics says that if more money chases the same amount of goods, the price goes up. So, why do we believe more money is the solution for healthcare when the problem is costs? As the debate and clamor for this legislation goes on, let’s remember that the real problem still remains unaddressed.

Obama And the Ever Increasing Deficit

The AP article headline reads White House, Congress projects record deficits. Honestly, does this surprise anyone?

Both the White House Office of Management and Budget and the nonpartisan Congressional Budget Office predicted the budget deficit this year would swell to nearly $1.6 trillion, a record, and far above the then-record 2008 budget deficit of $455 billion.

Most of that increase is from stimulus spending. And, many are still arguing over whether the stimulus is actually accomplishing what it was supposed to do: job creation.

Meanwhile, there is a very important, and very over-looked, point in all of this:

Both see the national debt — the accumulation of annual budget deficits — as nearly doubling over the next day. The total national debt, made up of amounts the government owes to the public, including foreign governments, as well as money it has borrowed from itself, stood Tuesday at a staggering $11.7 trillion.

How many people realize the government has been borrowing from itself? This is one reason why Social Security is nearly broke. But, in the double entry world of accounting that becomes OK. I have money, I loan it to myself at interst, and that creates an asset to counter balance the liability. The problem is, in effective reality, the government is now out the money twice...and still can't pay it back.

And, the fiscal responsibility mud should get slung both ways. As much as the Democrats and the media slung it at Bush and the Republicans, we should expect to see it fly the other way. But, the media is already hiding things in these articles to gloss things over. For example, this article ends by saying:

The Obama administration did tout one number in its budget review: The 2009 deficit is now expected to be $1.58 trillion, $263 billion less than projected by the White House in May. That's largely because the White House removed a $250 billion item that it had inserted as a "place holder" in case banks needed another bailout.

The effect of ending on such a note is to say "Obama did good, so everything is OK." Which basically means the media will gloss over this. And, the American public will be hoodwinked again.

Oh! Haven't you realized? The media and government is playing the same games it did over the Vietnam War protests and 60s economy. Only this time, it's the liberals in control of what's being fed to the public.

(...my how the times they are a-changin...)

Revealing Leftism and Healthcare Lies In the Media

For those who wonder just how leftist the media and the country are going, take a look at this CNBC discussion of the second round of AIG bonuses. Kindly notice that Leslie Marshall (from national Radio) and Tanya Acker (from the Huffington Post) are in favor of throwing legal obligations to the wind based on the income or situation of the average American. In other words, what is right by law has nothing to with what is right from a socialistic viewpoint. What that boils down to, ladies and gentlemen, is that your contract can be voided if it does not meet the social norm, or average, in terms of benefits, salary, and so forth. And, if you don’t think that’s important, look how successfully they were allowed to out-voice the more business minded speakers (leftist though they are).


On the subject of leftists taking over with media help, have you been paying attention to what it will cost for the government to get back to fiscal responsibility? According to an article at CNNMoney last week:

Under Obama's budget, Gale and Auerbach (Urban-Brookings Tax Policy Center) estimate the fiscal gap would be 9% of GDP. Conceptually, that means to restore fiscal balance over the long-term the federal government would need to increase taxes by 9% of GDP or cut spending by that amount starting now and lasting "until the end of time," Gale said.

They go on to note that neither the Republican (“no new taxes”) or Democrat (“only tax the rich”) stance on taxes has any fiscal responsibility.

That article is actually about the cost of healthcare legislation. But, there are interesting points on other items, too. But, on the healthcare point:

Gale and Auerbach (Urban-Brookings Tax Policy Center) estimate that for health cost savings alone to stabilize the debt-to-GDP ratio over time, the growth rate in health costs would need to be slowed by 3 percentage points a year -- for 75 years.

In other words, Obama’s healthcare savings, without major tax increases, are a fiction. Of course, this goes along with the CBO report that the healthcare legislation will actually increase the deficit by $1 trillion. Liberals were quick to change that verbiage to “increase the cost”, but the report specifically said it would increase the deficit. (…make sure you pay attention to how things are said…)

We also need to remember that all the projections on budgets are based on economic growth and output. Tax increases equal to 9% of Gross Domestic Product is based on the projected economy. For those who don’t know, 9% of GDP is A LOT! So, what if the economy continues to crater, instead of responding to the first (and expected second) stimulus?

It is, after all, a real possibility. There are many who say the market increases are not backed by real economic activity to match it. Unemployment projections during the campaign and early days of the administration said it would not reach these levels, and now Obama is projecting double-digit unemployment. And, several prominent economists are now saying no economic recovery in the second half of 2009.

Over spending got the world into this mess. And, government wants you to believe that increased borrowing will solve the problem of overspending. Congress, specifically the banking committees chaired by Democrats, allowed this mess to happen in the US. Deregulation may have played a part, but it was not the whole story.

I know this goes contrary to what the media and Liberal leaders are telling Americans. So, take some action. Hold the media accountable. Hold your Congressmen and Senators accountable. Let your voice be heard.

My Rant On Debt, Debt and More Debt

Debt is scourge on the American people. According to America’s Total Debt Report, 2008 debt was $186,740 per man, woman and child - - 6.4 times higher per capita than in 1957. The report also shows that higher debt reduces the level of real national income while adding little to the economy. In fact, according to the report, every dollar of economic growth requires more debt per dollar than ever before. Consider this:

Household debt is made up of consumer debt plus mortgage debt. The Family Income Report shows real median family incomes stopped growing in 1970, and thereafter families tried to keep up by going deeper and deeper into debt ever since - at near 3x the rate of national economic growth - to an all-time high today. Consumer debt payments % disposable income are at historic highs. The Family Income Report cites the reason, with dramatic pictures.

This is just to give you an idea of what lies below the surface. There is a lot more in the entire Grandfather Economic Report series. You should go read it for yourself. All of his debt information is supplied from Federal sources, by the way.

Here is the question Americans, and even those abroad, must answer. If debt got us all into this economic mess, why do we believe more debt will get us out? Everyone should know that you can only leverage your earnings so far before you produce a diminishing return due to interest requirements. According to another source, “In 1946 the debt hit 121.7% of the GDP due to WWII, it's currently (as of 2003) at 62.4%.” These figures are referring to total debt—business, household, government, etc. What does that mean in real terms for today? According to a March 3, 2009 MSN Money article:

Consumer credit ranged between 12% and 14% of the GDP from 1965 through 1995. It currently stands at 18%. With the GDP at $14 trillion, the American consumer will have to shed $600 billion of debt to achieve a 14% level. It will take years of debt reduction and GDP growth to rebalance the economy.

Put in perspective, that means almost $1 of every $5 earned is paying for debt, rather than producing anything meaningful.

So, I repeat my question. If creating so much debt, which actually reduced economic growth despite driving industrial production, got the world into this economic mess, why do the powers that be believe more debt will get us out? Simply put, debt allows more goods to be purchased, thereby maintaining economic output, if not increasing it. So, in order to keep producing goods and everyone have a job, more debt must be created. But debt actually reduces economic gain after it reaches a certain size. That’s one reason why the US dollar keeps dropping in value as we create more federal debt.

The result of the banking and financial mess was the cessation of the flow of credit. No money is reaching the market. This causes people to be unemployed, because goods are not being produced, which causes a further drop in spending, creating a further reduction in spending, and more goods left on the shelves. In order to counter that, prices would have to fall. This is something called deflation. So, the Federal government is working to cause credit to flow again, by creating more debt. The result being that the viscious cycle just continues.

The one way to guarantee the cycle stops is to cease the increase of debt. But, that would mean 10s of millions of Americans, hundreds of millions of people world wide, would suffer catastrophically. And that is political suicide for anyone in a public office. It is, or should be, morally repugnant to most people. The alternative method is to limit debt, that is place restrictions on the ability to borrow—perhaps using long abandoned security requirements (such as 20% down for mortgages). Unfortunately, that would probably have the same result, just to a lesser degree depending on how limited credit actually becomes

The simple truth is Americans cannot continue to let debt continue to get out of control. We need to stop being the selfish cretins we have become, demanding government bail us out of the messes we create. And, we need to take responsibility for our own actions. I fear, however, that we have forgotten how.