Myth-conceptions About Government and Finance

For those who want to know how complex some of the labor and retirement laws are, check this out: Participants and Advisors Are Hurt By High 401K Fees. Apparently the retirement plans have high fees the advisors never get any part of, and may not be aware of. But, that's not the kicker. To find out what those fees are, you have to file a US Department of Labor form. In other words, we are being fleeced by our retirement plans, the government is aware of it—and has made it more difficult for us to find out (kind of like the Freedom of Information Act filing requirements). And, we trust Washington to straighten this whole thing out with more rules and regulations? Hmmm...

Then there is the explosion over the insurance industry report indicating health care insurance costs will rise if the government plan is enacted. No surprise, the Democrats are claiming it's self serving of the industry to publish the report, according to a Reuters news report. This after an AP report that Democrats were scrambling because of the report.

But, let's consider what may be false assumptions by the Democrats. Apparently, savings from cheaper insurance plans are begin considered in the cost-benefit calculations by the Democrats:

Critics of the study said it tilted those assumptions too far toward a worst case, ignoring the bill's potential to curb costs.

For example, the tax on high-cost health insurance that Baucus is proposing could lead employers and individuals to switch to lower-cost plans and avoid the levy. If that happens, there would be no additional costs to pass on to consumers.

Now, I am not a whiz at this. But, a couple of things become quickly apparent from this. First, does anyone else believe that a tax is supposed to lower costs? In business terms taxes are costs, and they get factored into price. Second, cheaper insurance plans also means higher out of pocket expenses. How does that translate to savings? When insurance premiums are factored, they are based on the likelihood of payout. Escalating risk by forcing absolute coverage increases payouts. If you don't believe me, consider the insurance cost and premium escalation for coastal home owners. Does anyone really believe it would be different for health insurance?

As far as I can tell, the plan does not limit costs, despite all the rhetoric. It adds them, through taxation and increased business risk. Previous reports from CNN indicate that at best the plan will decrease rate of cost increase by about a third of what it needs to reduce it by. That type of change will merely prolong the problem, while increasing the deficit. And, one important thing to remember: government reports of deficit control are almost always wrong when it includes spending increases. Instead it merely prolongs it.

Democrats and liberals are selling us a bigger bill of goods. And, unfortunately, this is a huge social hot button. With the volume of public support and demand for this, government is likely to win. Which means, we the American public are buying that bill of goods.

Global Warming, Unemployment, and History Repeats

In the latest salvo by global warming alarmists, it is being claimed that the economic downturn is an opportunity to build a low carbon future. China and others are angry that western nations are trying to keep the emission targets from being legally binding. But, those same nations come uder no real threat from the plans, which has frustrated industrialized nations such as the US.

Developed countries, which it defines as those in the OECD and/or EU, will have to slash energy-related emissions by 17% in the next 11 years and by 50% by 2030.

Other major emitters such as China, India and Brazil would have to keep the rise in their emissions to 14% above current levels by 2030.

Countries in earlier stages of development would be able to increase their greenhouse gas output.

Now, I understand the idea is top make it economically feasible for developing countries to develop, without stifling them through the high costs of limiting carbon emmissions. But, the idea is flawed. At what point do those nations suddenly become accountable for these standards? And, what will the cost be at that point to convert their industries? Certainly it won't be cheaper than it is to set them up now. Or should we consider that China and Idia are now the greatest carbon polluters on the planet? Yet, we will make the industrialized nations pay for all of their growth. At what cost to them? No noe seems to care. This type of couble standard is why many opponents scoff at such plans.

Meanwhile, the Obama adminstration and the press keep telling us things are getting better. And, many Americans believe them. But, at the same time, there are other stories that are slowly planting the seeds things are not so good. Time Magazine had an article on unemployment last month. The title ON THE COVER says it all: Why Double Digit UnemploymentMay Be Here To Stay. America has been conditioned to trust the media, who only reports certain things by the way, and reports them in certain ways. It's kind of like the Townhall meetings on Healthcare Reform--every question was prescripted. If you are wondering how it is done, how people are being convinced out their firm beliefs of ethics, religion, or whatever, you should go read the 2006 book Influencer: the Power to Change Anything. It's very informative and eye opening.

You should also learn to pay attention to legislative history in new ways. In case you missed it a couple weeks ago, there was an indication of things to come in the news. It seems French President Nicolas Sarkozy wants to tax bank financial transactions. Now, the goal is to limit risky behavior. And, other EU officials say there is "less than minimal" chances of it happening. But, when it comes to government, if it gets proposed sooner or later something like it goes into law. After all, this particular tax was first proposed in the US during the 1970s.

9/11 Morning Report

Today is mostly a day of remembrance. When i first started this blog, I wrote something on 9-11. Those thoughts apply today, just as much as they did in 2006. So, before going on to current events, I ask you once again: Where Were you?

There was a pretty good article by Robert Tracinski yesterday about what President Obama is saying, and has said, regarding healthcare legislation. I would behoove us all to pay attention to what has been said, what is being said, and how it has changed during the so far short length of his administration. For example:

he assures us that "My guiding principle is, and always has been, that consumers do better when there is choice and competition." So how is it that he was recorded only six years ago describing himself as an advocate of a Canadian style "single payer" system — the very opposite of "choice and competition"?

This goes nicely with a great ironic little cartoon yesterday:




You can hear a lot of dissenting voices on what Obama did and did not say at the NYTimes article ”What was missing from Obama’s speech”. But, it merely echoes what I said the other day. The plan throws more money at the symptoms, but does nothing to actually control costs. Put another way, it makes great political hoopla, but actually doesn’t accomplish the goal. And,that basically means the conservative claims of merely being about government control and taxation could be the real truth of what is going on.


Meanwhile, there is the war effort going on in Afghanistan. And, thanks to so many months and years of anti-Iraq involvement, House Speaker Nancy Pelosi can truly say there is little support for increased involvement. That is sad. The U.S. has once again entered into Afghan life, and once again—this time because of Democrats—is deciding to run away before the full requirement is complete. The U.S. did it under Regan after the Russians gave up, and that let the Taliban take over. I wonder what will happen if the U.S. walks out this time? And how the Democrats will save their face. You should consider the sobering conclusions and thoughts of Michael Yon. He started recognizing the problems and potentials in Afghanistan before the pundits and politicians—just as he did in Iraq.

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.

The Benefit of Government Healthcare...and related lies...

Isn’t it interesting that since the Youtube video where Democrats announced they were out to eliminate the private insurance industry, the Democrats and the media are going to great lengths to make Americans believe otherwise? In their latest move, Democrats are faulting CBO calculations that government healthcare would eliminate private coverage for 23 million Americans. Always quick to cite Congressional Budget Office figures against Republican opponents, Dems are slighting the office for it’s work on this. Among other things, the CBO has determined the Kennedy heathcare legislation—which is not as broad as the one Obama is pushing--will also increase the federal deficit.

Enacting the Kennedy plan, nonetheless, “would result in a net increase in the federal budget deficits of about $1 trillion," says the CBO. "That estimate primarily reflects the subsidies that would be provided to purchase coverage through the new insurance exchanges, which would amount to nearly $1.3 trillion in that period.”

The CBO also noted this would break a key promise of the Obama platform that those with existing coverage would get to keep it. The NY Times had this comment in their article:

Senator Orrin G. Hatch of Utah, a senior Republican on both committees drafting health legislation, said he found the office’s numbers stunning. He calculated that the Kennedy bill would cost taxpayers $62,500 per uninsured person over the 10 years.

Even at Sen. Hatch’s numbers, that is a huge expense—and Congress knew about that number.

I only have one question. Government is taking over business. Government is saying how and who can be insured. And, it has been said by one Senator that the elderly will have to do without some levels of healthcare. At what point do stop believing the media and our government when it says socialism, or even communism, is not taking over America?

Smoke and Mirrors from Obama and the Swine Flu

So much for President Obama’s “tax credit for all” package. The way it was written, it is actually creating tax liabilities for the poor. And, more importantly, nothing is being done to let people know.

At-risk taxpayers include a broad swath of the public: married couples in which both spouses work; workers with more than one job; retirees who have federal income taxes withheld from their pension payments and Social Security recipients with jobs that provide taxable income.

The Internal Revenue Service acknowledges problems with the withholding tables but has done little to warn average taxpayers.

Retirees get the latest $250 SSN check deducted from their eligible “refund. College students may not get to claim it at all. Yet, this was hailed as a package that would provide for these very people.

Now, I am smart enough to realize people need to keep up with their own tax issues. But, the whole thing smells like a cheap public relations stunt. That is especially true since the government is saying nothing even though they knew in advance this would happen. So, how come no one is saying “Obama lied and ripped us off again.”

(…tell me again why people believe the Liberals really care about the poor…???...)

And, in the continuing stories showing the stupidity over the Swine Flu, Mexico is reporting a drop in reported cases THE DAY AFTER closing businesses and offices.

Mexico started a five-day shutdown of most offices and businesses on Friday to try to halt the spread of a deadly flu strain, and officials said they were encouraged by signs the number of new cases was dropping.

Does anyone really believe that a single day of closings brought an immediate drop to the number of cases? That’s as crazy closing schools in Texas in hopes of keeping disease from spreading. The kids will go to malls and daycare centers while their parents work. That is not the type of isolation required to stop the spread of a dangerous disease. The WHO (World Health Organization)…

said on Friday that no meeting of its emergency committee was scheduled, meaning there was no immediate likelihood of the current level 5 alert being raised to a full 'phase 6' pandemic alert.

In fact, only mild cases have occurred anywhere outside of Mexico, indicating the spread is relatively limited. According to this article, the number of new cases being reported by hospitals in Mexico in the last 10 days has dropped by some 75%. And, while 176 deaths so far is a lot, 13,00 flu deaths occur in the US each year. This is a very far cry from a lethal pandemic.

(…do I really want to ask how dumb the media and government think we are…)

The problem this type of media hype could create is horrifying. consider all the false warnings the media gives...on an ever increasing basis. As time goes on, people will probably pay less and less attention. And, then, one day, the media will get one right but no one will pay attention. People will probably blame God for the problems. But, in fact, they were created by men and God simply let us have what we created and did not bother to fix. I pity the millions who will probably die in those days. I also pity the punishment that awaits those who brought it on.