Wednesday, March 31, 2010

The Impact of Federalizing Student Loans

Up until Obama signed the health care reform act into law, college student loans were primarily handled by the private sector. Now, they will be the responsibility of the Federal government. Obama claims that $68 billion will be saved by "eliminating the middle man" (meaning the banks). However, if all the factors are taken into consideration, this will be another losing Federal operation that was best served in the private sector.

What has just happened with Obama's signature into law is that a tax generating activity, the student loan business, has been moved completely into the category of a Federal expense that must "now" be fully funded by the taxpayers of America and, probably, at a much higher administrative cost than it was when this activity was in the private sector. That's because private sector workers will be replaced with Federal workers who are unionized. They will get salaries that are 75 to 80% higher and their health care costs and retirement benefits are typically higher than that of any private sector job.

My guess is that the quality of administering those student loans will also suffer. Students will find themselves in long lines at some federal office trying to apply for or straighten out any problems with their loans. There will definitely be problems, as is always the case when the Federal government gets its hands on something.

In summary, once again, we will lose tax revenues and it is you and I that will have to fund another poorly managed and poorly run Federal operation whose costs will far exceed its operational cost when it was a part of the private sector. This is another example of the Democrats and Obama finding ways to grow the deficit: both by increased spending and by elimination of a reliable source of tax revenues. The Federal government has never been known to be the low cost provider of anything and this will be another case of that.

Tuesday, March 30, 2010

Another Worthless Frank Rich Hit Job

According to Frank Rich, an editorial writer for the New York Times, you are a racist if you object to ObamaCare. However, Frank apparently doesn't understand that ObamaCare is a fully color-blind system. Black or white, Hispanic or Asian, it will ultimately screw people over equally, by financial, and not racial, classes. Surely, the poorer of our society will benefit the most and, typically, these are minorities. However, the middle class and above, no matter what their race, will suffer greatly under the heavy hand of ObamaCare. They will suffer financially in higher premiums, taxes, and what they will have to pay for consumer products and, most importantly, in the quality of care that they receive. Those that are complaining know this to be true and they absolutely know where ObamaCare is taking this country. If they are mostly white, then its because whites make up 75% of our society.

However, what Frank doesn't seem to understand is that Obama had a near 70% approval rating when he took office and, at that same time, more than 65% of Americans wanted "change" to our health care system. Obviously, now, the tables have turned with most people viewing both him and his health care reform unfavorably. It's hard to believe that 30 to 40% of Americans suddenly became racists because they now hate ObamaCare. I think Frank would be better served looking at the true rationale for anger against ObamaCare and not quickly blame racial motives. Like Janeane Garofalo against the Tea Party movement, Frank is using race as an argument because he has no other rational way to defend this health care legislation. As I have stated before, racism is always the easy out when no one buys their B.S. But, like crying wolf, I think America is getting up to "here" with it. To Frank and other Democrats who constantly play the race card, I have to say that using race in this way is, in itself, racist.

Monday, March 29, 2010

The Census Job Distortion?

On Friday, the Department of Labor will release the unemployment report for March. Estimates are that between 100,000 and 300,000 jobs will have been created; reversing the loss of jobs that we have been living with since late 2007.

However, this number will be skewed by the amount of Census workers who will have joined the Federal Government on a temporary basis. It is important that you read below the headlines to see what has actually happened. If, for example, the nation's payrolls added 100,000 jobs in March but that number included 300,000 census workers, that's not really job creation. Even so, Biden and Obama will use this distortion to hype their Stimulus package as creating jobs. However, all those Census workers are merely part-time and most are scheduled to be back in the unemployment lines in just 6 months.

Sunday, March 28, 2010

The Good, The Bad, And The Ugly....Of Health Care Reform

Now that the Senate version of the health care reform bill has been passed and signed into law, you can expect that the Democrats will spend from now until the Fall elections hyping all of its good points. Also, don't ever expect them to say "health care reform" again. Instead, they are now using "health insurance reform" in an attempt to win support for the bill as a reform of all those bad insurance companies that people hate so much.

Expect the Dems to hit the campaign trail hard by saying that 32 million uninsured will now get insurance because of them. They will tell you that if you or any of your children have a pre-existing condition, you can't be refused insurance; and, the cost must be the same as the other insured. They will also hype the fact that this law will remove lifetime caps on the amount of money that insurance companies will pay out for illnesses. Also, if you get sick, an insurance company can't drop you. They will tell you that your children, if they elect to go on to college, can be covered as part of your insurance policy until they reach age 26. Small businesses will get a 36% tax credit for providing health insurance to its employees (albeit a small benefit in comparison to the actual cost of the insurance). We will all be protected by a Patient's Bill of Rights. That any and all preventative care (ie. semi-annual and annual doctor visits and test) must be for free. That families making less than $88,000 will receive tax credits to help pay for their insurance. That the drug prescription donut hole in medicare coverage has been closed. Lastly, expect many of those campaigning Democrats to actually say that American families will see a $2500 reduction in their health insurance bills; even though this is a flat out lie that even Obama keeps repeating.

Certainly, all those things (if true) are the good. But, all of those things will come with a very high price; and, it is all the costs and expected reduced care that are the bad and the ugly that comes along with the package.

It all starts by adding those 32 million uninsured to the health care system.

First, most of those 32 million will be low income family members and will be added to the existing Medicaid system. The cost for insurance under Medicaid is shared equally by the states and the federal government. With a mandated fixed cost of $6,000 per Medicaid insured, this means that the state governments will have an unfunded mandate to pay close to $100 billion dollars a year for those new Medicaid patients. Many states are already in the red financially and this will just make things worse. For example, near-bankrupt California, with 12% of the country's population and assuming that they will have a representative share of the new Medicaid patients, will have an additional $12 billion in expenses per year thrown at them because of the new health care law. Eventually, that $100 billion in new expenses will show up on our doorsteps as some kind of new state income or sales tax.

I also believe that 32 million uninsured to be a stale number. 8 million people have lost their jobs and their insurance over the last 3 years. Even if some of them did find work, it was more than likely the kind of work that is likely to not have employer-based health insurance; such as temporary employment. Further, Obama and the Democrats next big project appears to give legal status to illegal aliens. If that is done some 7 to 8 million, low income aliens will be eligible for Medicaid assistance. I think if you add it all up, you are probably looking at 45 to 50 million people being added to Medicaid at a cost to the states upwards of $150 billion dollars a year.

The 32 million now or possibly 50 million new Medicaid patients later are going to put a further strain on an already strained medical system. While it is true that our emergency rooms will be freed up as a result of converting these people to an insured status, the family practitioners will now become swamped for a variety of reasons. First, the number of family doctors has been falling for years. So, now, the dwindling pool of primary care physicians will be charged with as much as 20% more patients than they have now; and, that simply means longer lines for care with less time spent with a doctor. Also, when those people were uninsured, they only went to the emergency rooms when they were seriously ill. We know from statistics that once people have insurance they see doctors more frequently for even minor injuries or illness. Additionally, ObamaCare mandates that there be preventative care which means those 32 million plus will get free semi-annual office visits and blood tests. That alone will add a tremendous burden on the primary care system in this country. But, worse than that, that mandate will also include the entire 300 million people of America; many of which, today, don't even see a doctor unless they are very ill.

Then there's the underpayment of costs by Medicare and Medicaid. Health care givers only get about 75 cents on every dollar from Medicare and Medicaid for the services they provide. That shortfall is then passed on to all the other non-Medicaid and non-Medicare patients receiving care and that means we will all pay more in higher insurance premiums; not lower premiums as this President keeps hyping. Additionally, it is the intent of this new reform law to reduce Medicare costs by more than $50 billion a year. Once again, this will force higher costs on the privately insured of this country.

Also, several mandates of this legislation will automatically force higher insurance rates. The inclusion of highly expensive pre-existing conditions will force all insurance premiums up. The so-called "free" preventative care" isn't going to be free. The care givers and health insurance companies aren't going to "pro bono" this kind of care. Instead, other services will have to be padded to cover the cost. Again, it means insurance rates will go up.

Additionally, the Secretary of Heath and Human Services (HHS) is charged with determining what level of insurance can be offered. Don't expect HHS to be judicious in what they mandate. Expect their definition of what basic insurance is to be higher than what, probably, 50% of us have in our existing insurance policies. As a result, you can expect that most of us will see our premiums go up in order to meet the new norms being established by HHS.

As I have noted before, expect the corporate cost to provide health care insurance to go up substantially. When that happens, that will reduce the amount of income taxes that the state and federal governments will receive. In just the last week several corporations have already noted how much ObamaCare is going to cost them; with AT&T leading the pack at a price tag of a billion dollars a year in new expenses. In many cases, corporations will probably raise prices to cover their costs. That, then, means that we all will pay in the form of higher costs.

Lastly, the fines being levied under this legislation are going to be an incentive not to have insurance. Why would anyone buy an $8,000 a year insurance policies if in fact they can pay the fine at a 1/3 of those costs and, then, when they do get sick just immediately sign up for insurance. After all, under this new law, no insurance company can refuse you for any pre-existing conditions. Expect people to game this weakness in the law by going in and out of insurance as necessary and sticking insurance companies with all the costs and little or no revenues in terms of consistent monthly premiums. This, again, will force insurance companies to jack up the rates on the rest of us who have policies and pay for them on a consistent basis.

In conclusion, and in light of all of the above, I believe that ultimately costs will go up and quality of service will go down. In fact, I suspect the end result will be a health care system that is in complete ruin after the full effects of this law are in place by 2018. The elderly of this nation will be herded into clinical environments and they will lose any guarantee of having a dedicated primary physician because many doctors and some hospitals will refuse to treat Medicare and Medicaid patients. Expect less insured than more, as more and more people figure out that they can game the system. As with Social Security and today's Medicare/Medicaid, you will see nothing but waste, fraud, and corruption, and the supposed cost controls of health care won't ever materialize. Instead, my guess is that costs will skyrocket. This entire legislation is purposely intended to force insurance companies to keep raising premiums, lose participants, and, ultimately, force lawmakers into the only option left: A public option.In my opinion, what the Democrats will be hyping on the campaign trail could have been done much more easily and without dismantling the entire system. But, their goal was a takeover; not any improvement in the care that Americans get. Time will clearly bear this out.

Saturday, March 27, 2010

More Of The Same Failed Policies

Well over a year ago, the President rolled out a new $75 billion dollar program to help 9 million homeowners who are underwater on their mortgages. At the time, I said that at best, about 1 million of those homeowners might get some relief (Click to See My Blog Entry of February 2009: The 31 Percent Solution?).

We know, today, that this program did hardly anything to fix the foreclosure problem. In fact, only about 175,000 homeowners got help from Obama's original mortgage relief program. That's quite the shortfall against his original projection that 9 million would be saved from foreclosure. So, once again, Obama is now putting up another $50 billion dollars to abate the estimated 12 million foreclosures that are expected over the next 3 years (Click to See Full Story: Obama orders fresh help for struggling homeowners).

My only comment is that this man knows nothing about almost anything and his programs totally stink. This is the guy who is running around force feeding us the B.S. that his health care system will be so great for America. Nothing that he has promised has ever come true. When is the media and the rest of the Americans who now support Obama going to come to the realization that this man is a complete failure and should never have been President? He was the worst possible choice to help us out of this recession. He just keeps spending billions on top of past billions in trying to solve problems while repeating the same failing solutions over and over again. That to anyone is the pure definition of insanity.

Thursday, March 25, 2010

The Rage From Within

Right now, the Democrats are desperately trying to paint those who are angry about the health care law as a bunch of right-wing radicals. They point to death threats that a couple of people have received over the votes. But, in contradiction to Democrat's efforts, the Sergeant-at-Arms of the Congress has noted that, currently, there aren't any widespread death threats but they are remaining vigilant. My guess is that someone like Glenn Beck probably gets more death threats from the left in one day than all of Congress in a year.

Yes, there is anger out there. What was done was done on a purely partisan basis. Not a single Republican voted for this health care takeover. The only bipartisanship was in opposition. That's because more than just a few sensible and fear-for-their-jobs Democrats joined the Republicans against what Pelosi/Obama/Reid wanted passed. That bill, which was so far reaching in its impact on all Americans, was only passed with a slim 3-vote majority in the House and only achieved a 2/3 majority in the Senate after arm twisting and bribery ruled the day; and, that hardly makes it a true piece of good-for-all legislation.

I lived and served during the Vietnam War era. I saw a lot of anger then. However, it was initially from an extremely vocal and active minority of young pacifists. As the death tolls rose to unbearable levels and when it was obvious that we were backing a corrupt government in Saigon, only then did the polls shift to a majority anger against the war.

Today's anger is different. In fact, it might not just be simple anger but, instead, a form of rage. Initially, there was a majority support for health care reform. As the process rolled on, the opposition grew because it was obvious that the corrupt government to be angry over was our very own. Because of this, the American people have coalesced more quickly against this partisan health care bill/law than was the case of Americans against the Vietnam War. People are aware that this thing wouldn't be law, today, if it hadn't been bought and paid for with a lot of bribery and dirty deal making from the Democratic leadership and from this President and his Administration. Yes, people are angry; maybe even enraged. However, America understands that the way to solve most all of our problems is to do it at the voting booths. They threw the bums out when Clinton was President and, it is my guess, that there's enough rage to do the same in this year's Fall elections.

Wednesday, March 24, 2010

God Save The Children Because Obama Didn't!

More than a year of screwing around has gone by. There is upwards of 2800 pages of legislation and , now, we find out that ObamaCare doesn't even cover any kids with pre-existing conditions (Click to See Full Story: Gap in health care law's protection for children).

You would have thought that the insurance coverage of children would have been the highest priority in this health care monstrosity the Democrats have come up with. In fact, every speech that Obama has given in the last year has specifically touted the children with pre-existing illnesses. This was one of the primary reasons we needed his health care plan. However, he and the Democrats were so hell bent on taking over medicine in America that they completely let the kids fall right through the cracks. How stupid! This is what happens when there's too many pages to actually read the bill.

As it is, the adults with pre-existing conditions won't get protected by ObamaCare until 2014; a year after the next Presidential election. That's because the Democrats know that insurance rates will soar when those people are included in the insurance system. So, if you're an adult without insurance and you just happen to be dying, try to hang on until 2014 when the law covering your malady finally kicks in.

A Foreign Policy In Tatters

Amid all the talk about health care over the last year, nobody seems to be worried that Obama has been allowing the Middle East situation to get totally out of hand. Iran has gained another year in its drive to get nuclear weapons. Korea is still on its path to nukes and a long range deliver via missiles. The Israel/Palestine situation is deteriorating quickly as Obama sides with Hamas and continues to publicly admonish Israel over settlements. Chavez is threatening his neighbors; especially Columbia. The Mexican border situation has exploded into bloody violence with Americans dying at the hands of the drug cartel. Russia is in bed with Iran and that relationship has only gotten stronger since the President took office.

So, where is all this respect and peace that Obama promised before taking office? I guess they went to that same black hole that jobs, the economy, and improving the deficit went.

Monday, March 22, 2010

No One Can Say Obama Is A Popular President Anymore

The last three polls that had been released mid-week last week -- Gallup, Fox Opinion Dynamics, and Rassmussen -- are all now showing Obama's approval rate below his disapproval rate. This upending of what had been an extremely popular President (when he took office) just proves that America is turned off, in mass, by this guy and his policies. To quote his ex-pastor: "The chickens have come home to roost!" Obviously, the American people were duped. Actually, he's doing exactly what he said he would do. But, America didn't listen.

To me, we now have a renegade President and Congress because of the stupidity of the voters of this country. I would hope, in the future, that the American voters get more up to speed about the candidates that they vote for. In the last year we have had an extremely expensive and totally ineffective Stimulus Package. Now, we have health care reform that, in the years to come, will probably bankrupt America. With that, Americans only have themselves to blame for voting this guy into office.

Sunday, March 21, 2010

Caterpillar Inc. Exposes Another Dirty Little Secret of Health Care Reform

Last week, Caterpillar, Inc. announced that the proposed health care reforms currently being processed through Congress will cost them at least $100 million in the first year (Click to See Full Story: Caterpillar: Health Bill Would Cost Company $100M ).

Most people, probably just shrugged their shoulders and thought this to be no big deal. After all, Caterpillar is a big company and they can afford it. Right? Well, to those people, I say you're not understanding the massive implications of what Caterpillar is saying.

What Caterpillar is "effectively" saying is that they will have, at the very least, an additional $100 million dollars in new expenses per year. Anyone who understands how business income taxes are calculated will understand that this $100 million in new expenses will reduce their profits and, subsequently, will reduce both their state and federal tax burdens. At the very least, that is about 40% of that $100 million dollars or a $40 million reduction in federal taxes they will have to pay. There will also be another $2 to $5 million reduction in their various state income tax bills. And, this story will be repeated across the country; from small businesses to the more than 25,000 publicly-traded corporations that exist here.

When the Democrats claim that their health care bill is deficit neutral and, in fact, claim that they will save billions against the deficit over the next 10 years, they are being blatant liars. They are completely basing this on gimmicks and tricks such as collecting taxes and penalties for ten years while only providing the program benefits for 6. They are also double counting cash inflows from things like Social Security payments. But, this reduction in tax burdens across the corporate and small business spectrum is something that no one has taken into consideration and it could be substantial. It could really inflame the already massive deficit spending levels. It won't just be because some companies will have to now provide health insurance for their employees. It will also be because of those companies who must increase their insurance costs to meet new federal mandates. Either way, those new higher expenses will mean lower tax revenues for our government.

When Social Security was passed, no one seemed to take into consideration that Americans would be living longer with both parents of a family working and becoming eligible for that benefit. It was also assumed that the big families of the past would continue on so that there would always be an abundance of younger workers to sustain payments for those who had retired. But, things are all different now. Because of that lack of foresight, it won't be too much longer before Social Security is both broke and broken. The same will happen to health care reform when the reduction of tax revenues becomes evident. Like Medicare and Social Security, the federal health care system will fail and will be fiscally insolvent in the not too distant future. What the Democrats are really doing is piling on another unsustainable social obligation that could eventually bring this nation to its fiscal knees.

Saturday, March 20, 2010

Obama's Bret Baier Interview Revealed A Lot About Obama And ObamaCare

Bret Baier, of Fox News' Special Report, is getting a heavy dose of hate mail. Most of it is from the far political left of this country. And, that should be expected. He made Obama look bad -- really bad -- in his exclusive interview on Wednesday. Baier made this President look more like a man who was being interrogated for committing a crime; not a man who was the President of the most powerful country in the world and who should be in complete command. He completely dodged some questions. He gave all too many intentionally confusing and evasive answers. For Obama, it was a full hour's worth of "Amateur Hour"; even though it only lasted fifteen minutes.

It was obvious that the President doesn't really know what is in the health care legislation when he made this statement: "By the time the vote has taken place, not only will I know what's in it, you'll know what's in it..." It is also apparent, from that comment, that he doesn't care what's in the bill. He doesn't care if it is bad or good for the country. All he wants is reform; any reform; and, reform that will put the first, big finger of this government's heavy hand on the health care system of the nation. Any reform that is a baby step towards its complete takeover. That was very obvious; even though the always-loving-Obama media probably didn't hear that in his answers, it was there if you listened. It was there when this supposedly trained Constitutional lawyer said that "we shouldn't worry about the process" in an answer as to whether or not he backed the "Slaughter - deemed to pass -- Rule"; a rule that many believe is an unconstitutional procedure for the passage of this law or anything except for the minor budgetary changes that it had been traditionally used for in the past. This is a man who vowed to protect and defend the Constitution but, in his comments to Bret Baier, is now completely willing to violate that oath in order to get his health care takeover enacted. In my opinion, if this man signs something into law that was unconstitutionally passed through Congress (a violation of Article 1, Section 7 of the Constitution ), he is guilty of "high crimes and misdemeanors" and should be impeached and dishonorably removed from Office. Those, too, who passed the legislation, should also be punished. Hopefully, the next non-Democratic Congress will be able to prosecute this President and those of Congress that passed this into law.

Bret Baier's interview exposed Obama for what he really is. It also exposed his true intentions on health care, and, it clearly proved that he is a man who could care less about our Constitution. Who better to abuse it than a man like Obama -- a Constitutional lawyer.

Friday, March 19, 2010

The New Police State Of Health Care In America

If what the Democrats of Congress posted on the Internet yesterday becomes law, that legislation will add 16,500 new IRS agents. That's the equivalent of adding the population of a small city to the IRS.

This fact, alone, tells you what health care reform is all about. It is a law that would mandate that companies -- large and small -- be fined for not providing health insurance to their employees. It is a law that says that you and I will be fined for not buying health insurance. And, it is law that will go after insurance companies and doctors for not meeting all the other ridiculous mandates as outlined under their so-called reform.

The IRS will be the Gestapo organization that will used to bust heads over not complying with what the Democrats seem to think health care in should be. Sadly, the health care system in America will become a police state. It will no longer be about quality of care. Instead, it will be all about the bottom line and the growth of government's control over our lives. And, it is this massive addition of IRS agents that clearly points those facts out.

Thursday, March 18, 2010

America's Credit Score at Risk

For you and I, it is our credit score -- our FICO score -- that determines whether or not we're credit worthy enough to get a loan or another credit card. People with poor FICO scores will generally pay higher interest rates if they are even able to get a loan.

For an entity like the U.S. Government, the equivalent of the FICO score is the Moody's Investment Rating. Right now, America's investment rating is the highest possible at AAA --- meaning that America is an excellent credit risk. Earlier this week, Moody's Investment Service warned that the United States' high rating is now at risk because of it's massive and unsustainable deficits and it's failure to come out of recession (Click to See Full Story: "Moody's warns nations to cut spending or risk AAA ratings"). This is the second warning issued to the United States by this premier rating's agency in just so many months.

Just as if your personal FICO score was lowered, the United States will have to pay higher interest rates for all the massive debt we've accumulated if we lose that AAA rating. Currently, about 40 cents on every dollar that is collected by the IRS goes to just pay off the interest. If our credit rating is lowered, that amount that goes to interest could be as high or higher than 50 cents on each dollar. That's because the people who hold the debt (such as China) will demand higher rates to offset the higher risk of default on the loans. Increasingly, we are getting to a tipping point where there isn't enough money in our entire economic system to pay off our debt.

As a point of reference we now owe $14 trillion dollars. With 7 billion people in the world, that means that, if we could spread that number across the entire world, each and every living person on this planet would owe approximately $2,000. As it is, our debt is so great that each American citizen owes about $181,000. If that amount took into consideration all other liabilities such as the unfunded portion of Social Security, that number soars to nearly $350,000 in debt per person in America. (Click to see the national debt clock)

When you really think about, if we didn't have our current and future debt, our government could provide the same amount of services with nearly half the same amount of taxes being collected. Or, in other words, without this burden, all businesses and individuals that are currently paying taxes could see a 40% reduction in the taxes. That alone would make our products more competitive in the world market place and we would see a growth in jobs that would be unbelievable. We would actually regain many of the manufacturing jobs that we have lost over the last 40 years.

Wednesday, March 17, 2010

Even The Correction Is A Lie

On Monday, Obama held a town hall meeting with about 200 loving and adoring supporters to talk about -- what else -- his health care plan. During his speech the stupid crowd gave him rousing applause when he made the absolutely ridiculous remark that his health care plan will lower health care premiums by "THREE THOUSAND PERCENT"! As a point of reference, a 100% reduction in premiums would mean no one would be paying anything for their health care. 3000% means that the insurance companies would be paying you tens of thousand of dollars to have a health care policy with them.

Realizing how stupid that remark was, the White House press office issued a correction by saying that Obama meant to say that ObamaCare would save $3000 a year in health care premiums. But, that too is a ridiculous statement. Every study that has been conducted to review the impact of ObamaCare has established that health insurance premiums will go up. Not down! Note this morning's Fact Check that was issued by the normally quite friendly to Obama Associated Press: FACT CHECK: Premiums would rise under Obama plan.

Just the mere fact that ObamaCare will cut $400 billion in Medicare payments will force those costs to be passed on to the private insurers; as it has all along. Additionally, ObamaCare will add millions of new insured to the system while doing nothing to increase the number of medical practitioners. Anyone who understands simple economics knows that increasing demand without increasing supply will result in higher prices; and, those price increases will be passed on to the insurance companies who will, in turn, raise their premiums for all of us who have private insurance. What's worse, the supply will actually go down. That's because the lowered Medicare payments will result in less doctors taking Medicare patients. Also, more than just a few doctors have indicated that they will leave the profession if ObamaCare is enacted; as noted by this recent O'Reilly commentary:

Obama and the Democrats are constantly complaining that people on the right are distorting his health care reform plan. But, the reality is that it is Obama and the Democrats who have done most of the lying about this legislation. There is no way you can add more people to what will be a shrinking health care system and expect the quality to remain the same and, at the same time, expect to lower costs and reduce the deficit.

Tuesday, March 16, 2010

It's All About The Numbers Mr. Obama!

In 2008, America spent roughly $2.2 trillion dollars, or 16% of the GDP, for health care. Based on a population of 300 million people, that is an average cost of more than $7,300 per person per year. However, we know that 46 million Americans don't have any health insurance. That means that those who do have insurance wind up footing the bill for those that don't. This, then, means the average cost of health insurance among those who have insurance is closer to $8,600 than the previously stated $7,300. On top of that, Medicare and Medicaid patients -- about 44 million people -- underpay the real cost of health care by about 20%. Therefore, that means the health care system is being underpaid by approximately $400 billion dollars a year by those two government insurance programs. That cost doesn't go away. Instead it is picked up, again, by all those who have private non-Medicare/non-Medicaid insurance. So, effectively, the real average cost for health care for those having private insurance turns out to be about $10,200 a year.

People who are self-employed probably pay close to that amount. However, most people -- the one's who get employer-based insurance -- don't see that amount because half or more of the cost is being picked up by the employer.

That brings me to Obama's town hall meeting in Ohio yesterday (Click to See Full Story: Obama seeks to reassure seniors on health care). In his introductory speech on, once again, health care reform, he related a story of a woman by the name of Natoma Canfield who was a professional, self-employed cleaning woman. Ms. Canfield had to cancel her health insurance because the premiums rose to $8,500 a year and she just couldn't afford it. She subsequently contracted cancer and, I think you can figure out the worst-case scenario that followed from there.

The situation that Ms. Canfield found herself in is certainly a sad one. However, what Mr. Obama failed to explain in his use (or abuse) of her as an example is that the amount of money that Ms. Canfield was being asked to pay for health care insurance was more than fairly representative of what the true cost is for any self-employed worker in America. What's more, ObamaCare wouldn't change that. In fact, the bipartisan Congressional Budget Office has indicated that Ms. Canfield's cost for private insurance cost is likely to go up under ObamaCare; especially when another $500 billion in Medicare cuts is implimented. Additionally, under the plan that Obama and the Democrat's have for health care reform, Ms. Canfield wouldn't be allowed to cancel her health insurance. If she did, she would be fined as much as $4,000 yearly; and, that fine wouldn't give her one iota's worth of health insurance coverage. It's just a fine that goes into the coffers of the Federal Government.

In typical fashion, Obama uses extreme examples that are complete distortions of the truth in order to sell his lies about ObamaCare. Sadly, and just like some ruthless con-man, he uses a poor woman with cancer to scam his target -- the American public.

Monday, March 15, 2010

A Tightrope Walk: Using Drones In Pakistan/Afghanistan

The Obama Administration made a decision last year to ramp up the use of drones and missile attacks in the border areas of Pakistan and Afghanistan; rather than use ground troops. While this tactic avoids losing U.S. and coalition military lives, it has a political downside that could make our American military look to be the no better than -- probably worse than -- the Taliban. This is because, in using missiles from the air rather than using the tactic of maneuvering troops on the ground, there is a very high rate of collateral civilian deaths. From a political standpoint, this could lose us the war by losing the hearts and minds of the Afghan and Pakistani peoples.

Sunday, March 14, 2010

The Democrats: All Tied Up In Their Own Gordian Knot

There's a lot of things that could be said, politically, about the Democrats and their head long plunge into getting their partisan health care reform legislation passed. However, I would prefer to simply express it as saying that they have created a Gordian Knot of their own doing.

In legend, the Phrygian King, Gordius, allowed himself to be tied in a circular knot that, presumably, could only be untied by the person qualified to be the king of all Asia. However, as the legend continues, Alexander the Great solved the complexity of the knot by simply cutting it in half with his sword. Thus, the moral of the legend is that there can be a quick solution to even the most difficult of problems.

The Gordian Knot that the Democrats now find themselves in is the fact that they are damned if they do pass health care reform and they are damned if they don't. They are damned if they do because the bulk of Americans don't want the plan as it is written. As a result, the political gurus are predicting heavy losses for them in the Fall elections. They are damned if they don't because their own political base would be turned off and they could suffer even bigger loses due to assumed voter apathy on the left; resulting in a poor turnout by their supporters in November. This, then, could result in an "anti-Democrat" turnout with little or no "pro-Democrat" votes to offset it. It is for this reason that the Democrats think their losses could be even greater.

So, they have painted themselves into a corner.

The simple solution that could break the knot would be to start over and create a bipartisan bill that would be acceptable to the majority of people in this country. Barack Obama could figuratively act as Alexander the Great in this situation by simply giving his blessing to a new beginning for health care reform. However, he lacks the wisdom of Alexander the Great because he is an ideologue who is hell bent on pushing this highly charged legislation through Congress. As a consequence, he is actually tightening the "Knot" -- much like a hangman's noose around the neck of each and every Democrat.

What we are actually witnessing is mass stupidity and mass suicide by one political party -- something that has, to my knowledge, never been seen in American politics. It is being completely driven by ideology and not common sense. And, as history has proven, over and over again, that when leaders and rulers, politicians, and governments ignore the will of the people, they are doomed to fail.

Friday, March 12, 2010


When President Obama is forced to delay his upcoming trip to Indonesia in order to personally muscle his own health care bill through Congress, you've got to know that there is some serious trouble among the Democrats in what should have been a complete cakewalk; given their majority control in both Houses.

Yesterday, the entire "gang" of House Democrats cloistered in a Congressional meeting room and Nancy Pelosi emerged empty handed without even a simple one vote majority. We know this because, if she had the votes, she would be proceeding with passing the legislation.

Now, I can only assume that real deal making -- much like the low-life deals we already know of -- will begin in earnest. I would suspect these new ones will make the previous Louisiana Purchase, Gator Aid, and Corn Husker Kickback look like child's play. But, I'll will also bet that they will do everything in their power to hide these new bribes because of the previous political heat they got from the last ones.

What is really sad is that these unethical Democrats are attempting to completely take over 16% of this country's economy with just the slenderest of margins and no bipartisan support. And, to do this, they are using some of the most unethical deal making that this country has ever seen. You can thank the President and his background in corrupt Chicago politics for that. Never in the history of this country has this free market economic system completely taken over an entire industry such as health care. If they are successful, I can only imagine that other industries, such as energy production, are next on the list.

Thursday, March 11, 2010

Blue State Blues

Some of the biggest states in our union -- all politically left -- are the ones that are in the most serious financial trouble. These include California, Illinois, New Jersey, New York, and Michigan. Each and every one of these states are heavily influenced by labor unions; and, each is being burdened by social programs that they can't pay for. Each of them has unemployment rates that are higher than the national average; with Michigan leading the pack at an astounding 14.3 percent. California, our most populous state, isn't too far behind that with a 12.5% rate. Every one of these states has some of the highest taxes in the country; and, each has lost population and businesses over the years due to those taxes and heavy handed government regulations.

These states are warnings for us all. They are telling us that big governments with big social programs and with heavy union influence don't make for a better life. Yet, we have a Democratic Congress and a Democratic President who are hell-bent on taking us down the very path that has put these States on the brink of ruination.

Wednesday, March 10, 2010

Obamazilla And The Attack On The Insurance Companies

From early on, Obama and the Democrats have attacked those "bad" health care insurance companies. They know from focus groups and internal polling that Americans hold substantial anger towards the insurers.

But, why is that?

For most Americans, especially those who rarely have to see a doctor, the only thing they ever see is the constantly rising cost of health insurance. They never really see medical bills from the hospital, the doctors, and the diagnostic testing companies that have been rising precipitously ; forcing the insurers to raise their rates in kind.

But, if they had seen the bills from the entities that are billing the insurers, they would have seen doctor's fees for office visits rising by nearly double in the last 8 years. They would seen costs for blood tests increasing dramatically as doctors order up a wider and wider variety of tests in an effort to cover their behinds against possible lawsuits. They would have seen how very expensive CAT scans and MRI's have replaced cheaper X-rays. They would see emergency room fees skyrocketing by hundreds of dollars for a single visit because of the amount of uninsured that are seeking free medical care at hospitals.

The insurance companies are merely the messengers and Obama and his gang in Congress want to shoot the messengers. The insurance companies don't determine the cost of health care in America. The providers do. That's why Medicare is going broke. It isn't because of the insurance companies raising their rates. It is because of the rapidly rising cost of health care bills. Medicare is, in reality, just another insurance company. But, instead of raising their rates as rapidly as other insurers, it is backed by the Federal Government who is content on running deficits that are subsidized by tax money from you and I. Private insurers would go out of business if they operated that way. So, instead they "have" to raise their rates.

In the title of the blog entry, I used the term "Obamazilla" because, like the fictional Godzilla, the attack of the insurance companies is monstrous theatrics that is designed to push a health care agenda that will ultimately force the insurers out of business and make the doctors and hospitals totally accountable to the Federal Government. And, as we all know, the Federal Government is too big, too non-profit, and too uncaring to manage health care in America and do it right.

Tuesday, March 9, 2010

With Chicago Style Politics Could Come Chicago Style Corruption

Ever since Obama took office, the media has taken note of the fact that he has brought Chicago-style politics to Washington D.C. Having lived in the Chicago area for the bulk of my life, I know quite well that "corruption" is the finger print of this Chicago-style and, for that matter, all of Illinois politics. The Illinois State prison system has been host to quite a few city and state politicians; including many of the state's Governors like Kerner, Walker, Ryan, and, now, probably Blagojevich (which would make two consecutive Governor's in a row going to jail).

With Obama and his people being practitioners of Chicago politics, it is almost inevitable that one or more of them, may find themselves in legal or ethical hot water. With health care, we have already seen glimpses of unethical behavior with the Corn-Husker Kick Back and the Louisiana Purchase. Other deals have been cut for the unions on health care and in the General Motors bankruptcy. Yes, I think its just a matter of time before some Obama official or the man, himself, is caught with the dirty hands that typically come with this style of governing. If it's Obama, we could see another first: The first Black President to be impeached.

Monday, March 8, 2010

Postal Insanity

Last week, the media's airways were filled with commentaries about the possibility that our U.S. Postal Service (USPS) just may eliminate Saturday mail delivery. The USPS is in deep financial trouble. This year it is expected that it will have a financial loss of $7 billion dollars. The year prior it was $4 billion. By cutting out Saturdays, the Postmaster General expects to save $3.5; far short of the $7 billion that they will lose this year.

Besides the Saturday mail gambit, the USPS, as usual, plans to raise rates. And, every time they do, they lose the only money maker they have: First Class Mail. By raising rates, they continue to force the typical first class mailer to an alternative service: The Internet.

The Post Office's problems aren't Saturday mail or the need for higher rates. The real problem is the amount of labor they have hired and the amount of benefits that their labor force receives while they are working, as well as after retirement.

Despite all the efforts to automate, the productivity of the Post Office has barely increased over the years. The reason for this is that it is a labor behemoth that is primarily dedicated, these days for sure, to the delivery of junk mail. Because of junk mail, the postal workforce is forced to deliver mail to almost every customer on a daily basis. A situation that truly "only" benefits the postal workers union. On top of it, they charge less for labor intensive junk mail than for a simple first class letter -- the mail that they were originally chartered to deliver.

When you think about it, the average postal delivery customer probably only gets fewer than a dozen pieces of legitimate mail per month. Yet, every day, the postman is there hand sorting junk mail into each and every mailbox. Junk mail is time consuming at the delivery end and it is also time consuming because of sheer volume. As a result of all that junk, the carrier must restock his truck or mail sack more frequently. Again, more labor.

If America is serious about saving its mail system, it should demand that the US Postal Service return to its mandated charter of delivering correspondence and not junk advertisements. If those advertisers still want delivery of their junk, they -- not us -- should pay a heavier postal rate. Let's keep Saturdays and let's stop the insanity of the constant rate increases that exceed normal inflation and just seem to push the Post Office deeper into debt.

Saturday, March 6, 2010

Some Truths About Wellpoint's 39% Health Insurance Rate Increase in California

Prior to Obama's Health Care Summit, the Democrats were up in arms and were quick to repeat that health care reform was needed to keep bad health insurers from jacking insurance rates up by 39%; as was the case with Wellpoint Anthem Blue Cross in California. But, the 39% is a political exaggeration that is being used, not to control the health insurers, but, instead, takeover health care in America.

It is true that Wellpoint will raise "some" insurance premiums by 39%. But, the operative word is "some" and not all; as the Democrats would have you believe. As it is, they will raise premiums by an average of 25% which, too, is still very high; but, significantly lower than the exaggerated claim by the Democrats.

What people seem to forget is that health insurance is a highly regulated activity in all 50 states; with extremely liberal California being one of the most avid regulating entities. For that reason, you should know that Wellpoint didn't just raise their rates without getting prior approval from the State of California's Insurance Commission.

Since 2007 and the beginning of the recession, Wellpoint's profits had been falling. From 2007 to 2008, their profits fell nearly 40%. But, by the end of 2009, Wellpoint's profits were actually double that of 2007. Therefore, the need for a rate increase was being distorted by Wellpoint and, apparently, the California Insurance Commission fell for it; hook, line, and sinker.

In typical fashion, the Democrats love to use "extremes" as an example of why they should do something. But, in reality, all extremes are hardly the norm and the use of them is more theatrics than reality. Probably the worst case of using extremes was when Rep. Louise M. Slaughter told a story where a woman was forced to use her dead sister's dentures because she didn't have insurance (Click to See Full Story: HEALTH: Slaughter’s story goes national ). Of course, the reality is that we don't have a rash of people running around with the dead people's dentures in their mouths. More importantly, most health insurance doesn't cover dental. So, even if the Democrats do pass health care reform, that woman will still have to wear her sister's fake teeth.

For sure, Wellpoint's rate increase, by any measure, is totally out of line. However, under the current state-by-state regulation of health insurance providers, it is up to the State of California to come down hard on Wellpoint for distorting it's earnings numbers in an attempt to justify an outrageous rate increase. Also, the Democrat's attempt to portray this single incident as the "norm" in the industry is also out of line and irresponsible. They, too, should be punished by being thrown out of office on their ears in November's mid-term elections.

Friday, March 5, 2010

Another 9.7% Unemployment Rate Report?

According to the Bureau of Labor and Statistics, the unemployment rate held steady at 9.7% (Click to See Full Story: Payrolls fall by 36,000; jobless rate steady at 9.7%).

What is amazing is the fact that, each month, the unemployment rate either holds steady (as in this February) or falls (as was the case in January) despite job losses. This month's report for February showed that 36,000 more people became unemployed. In addition, the number of people who lost their jobs in January was adjusted upwards by another 35,000 unemployed workers from the previously reported number. Add to those numbers the fact that the Federal Government added 15,0000 Census workers whose jobs will go away in few months and, effectively, this report is saying that 84,000 "more" workers have lost their jobs in the last two months. Yet, the unemployment rate remains the same.

What's even more disturbing about the report is the fact that the discouraged workers -- those who have completely given up looking for work -- rose from 16.5% to 16.8%. The discouraged workers number is what the Bureau of Labor and Statistics has been using to keep the unemployment rate artificially low. As I have said before, this exclusion of people who have given up looking for work from the greater workforce just makes those workers who do have a job a greater piece of a smaller workforce; making the unemployment rate appear to be less.

Now, to my last comment and the effect of the weather on this report. Even, the Bureau of Labor and Statistics, who mentioned the weather as part of their report, said they couldn't quantify it. So, Obama's chief economic adviser, Larry Summers, was all wet to say that weather would distort the unemployment picture. Then, too, I was wrong in saying that the unemployment rate would be higher than 9.8%. I guess I was too naive in thinking that the number of discouraged workers would abate and the unemployment number would start to rise again.

While, the media headline number will show an unemployment situation that is improving by leveling off, the reality is less than optimistic if you look below the surface. Every week, the economy continues to report that more than 469,000 workers are joining unemployment lines; and, that is a reality that says thing are still bad, economically and mentally, in this country. We really won't start creating jobs until that number gets below 350,000 on a weekly basis. Until then, this economy will still be in the doldrums.

Thursday, March 4, 2010

The Problem With Doing With Less

During the Great Depression, people learned to be frugal and save money. Once the depression was over, they continued that frugality and spent less and saved more for many years to come.

Today, this country is laboring in a recession with high unemployment. Once again, Americans are saving more and spending less. Every day that this recession continues on, today's Americans, like those of the Great Depression era, are being ingrained with the same sense of being penny wise and probably won't return to their lavish spending habits of the past; even after the recession is well over.

At the same time, businesses are learning a similar lesson. They are learning how to spend less and how to make more products and deliver more services with less people. This morning, the nation's Productivity Report came out and business productivity increased by an astounding 6.9% from last year (Click to See Full Story from Reuters: Jobless claims fall, productivity surges). This is worrisome. Like those Americans who have learned to save and probably will continue to spend less after the recession is over, American businesses, too, are less likely to hire back as many workers when the good times return.

This is why, time and again, employment is the last to recover in any depression or long term recession. We blew a whole year with a failed stimulus package. In that year, businesses were forced to learn how to survive with less people and productivity soared. Because of the failed stimulus package and because of that lost year of recovery, business may have acquired productivity habits that could keep people unemployed for a very, very long time.

Wednesday, March 3, 2010

Throwing Water On My Prediction

It didn't take long for my prediction of a 10% unemployment rate on Friday to have water thrown on it.

This morning -- as is the case every month -- Automatic Data Processing (ADP) corp released it's own pre-unemployment report statistics. In their report, they showed a vastly improved employment situation for February with the least amount of jobs being shed since April '08 (Click to See Full Story: Private sector sheds 20,000 jobs in February).

The reason that the ADP Report is so significant is because that company is one of the largest payroll processing companies in the country. As a result, they are able to easily tell if payroll headcounts have declined or risen from one week to another or, as in this case, from month-to-month.

Of course, if I'm wrong on the upcoming report, then so is Larry Summers in predicting that the February "snows" would distort the unemployment situation. I'm still betting that the unemployment rate will go up based on the rising number of jobless claims that have been reported in the last 7 weeks. Whether or not it goes up to 10% is anyone's guess, now, with ADP reporting such better numbers than expected.

Please note: I intentionally scheduled my blog to be posted at 1:00 in the morning (rather than my normal 6-ish posting time) "knowing" that the ADP report would be released just a few hours after that. I could have easily waited and, then, never published that entry after having seen a favorable number. However, I was determined to be truthful to my prediction and not play games with other influencing statistics that had yet to be released. As it is, my prediction is significantly weaker than it was yesterday when I originally wrote that posting.

Summers On Winter

Yesterday, Larry Summers -- one of Obama's chief economists -- warned that the blizzards of 2010 will probably "distort" the unemployment numbers (Click to See Full Story: Winter storms to distort US jobless figures-Summers).

First, you had the Associated Press saying that last week's unexpected filings for unemployment insurance benefits (jobless claims) was a result of the recent storms (Click to See My Blog Entry: Another Bad Employment Number). Now, Obama's front man on economics is saying the same for the monthly unemployment numbers that are due to be released this Friday.

A couple of points..

First, my guess is that Friday's numbers are going to be really bad. Summers is acting like he doesn't know what the they will be; but, the agency that will be reporting them actually reports to Obama and I am quite sure everyone was already given a heads up. That's why Summers is suddenly out on the street trying to soften the blow by using the ridiculous "the weather did it" story. Last month, when the rate looked better, it was Christina Romer out in front hyping the positive effects of the stimulus package in creating jobs. One thing you can always count on is that there are no poker faces in the Obama Administration when it comes to holding either good or bad cards.

Secondly, isn't it interesting that Summers is following the Associated Press' lead of last week on the winter weather affecting unemployment. It makes you wonder if the always-loving-Obama AP wasn't used as a "point man" in helping to get the public mindset primed to believe that weather -- as opposed to Obama's failed stimulus -- is responsible for bad unemployment. I know I'm sounding quite cynical but the Associated Press has almost always managed to make lemonade from every lemon that Obama hands this country.

The bottom line is that I will be surprised if Friday's unemployment numbers aren't bad. The consensus of economists is that the rate will jump from 9.7% to 9.8%. However, my guess is that we will go back up to 10%. Just my opinion.