“Our practical choice is not between a tax-cut deficit and budgetary surplus. It is between two kinds of deficits: a chronic deficit of inertia, as the unwanted result of inadequate revenues and a restricted economy; or a temporary deficit of transition, resulting from a tax cut designed to boost the economy, increase tax revenues, and achieve . . . a budget surplus.” John F. Kennedy


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Jul 26 2012

Obama’s Plan Worked?

C.M. Phippen

What plan was it that “worked”?

The plan where the debt held by the US government increased by an amount greater than the debt accumulated from George Washington’s presidency all the way to Bill Clinton’s?

The plan where US competitiveness fell from 1st to 5th?

The plan where unemployment went up as rapidly as the federal deficit and 700,000 more workers lost their jobs during the Obama recovery (I’d certainly hate to see an Obama recession)?

The plan where already unaffordable worker health insurance costs increased 23 percent?

The plan where the number of Americans in poverty rose by 6.4 million, to the highest level since the start of the war on poverty in 1965; and that is with the safety nets in place that were created by that war?

The plan where the number of Americans on food stamps increased 44%, to the highest rate EVER, all while the government runs ads touting dependence on food stamps to help you “look amazing“?

The results of the plan which lead Henry Waxman to declare this?

Jul 16 2012

Economic Reality and Government

C.M. Phippen

“There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.” Frederic Bastiat

The newly upheld healthcare bill, passed by a president who can’t get anything right and always has someone else to blame for his failures, is supposed to add 30 million Americans (or non-Americans) to the “insured” category while at the same time not hampering accessibility or quality, and decreasing costs.

In fact, just after the Supreme Court ruling declaring the mandate unconstitutional but upholding the ability of the federal government to tax non-participation in the US insurance industry, every interview I heard with a supporter of the bill still claimed that it would save the federal government $100 million, even though every recent indication is to quite the contrary.

China is having some government v. free enterprise conflict of its own. In order to continue to grow the Chinese economy without causing inflation, which would be devastating to the 150 million Chinese living in poverty, the government has mandated that utility prices remain below market rates. Of course, we all know that if the government says something must be, then it simply must be.

The result is that private companies in China, refusing to operate at a loss, have been supplying power for fewer hours and have shut down record numbers of power plants for maintenance during the hot summer months. In some areas, power plants have stopped providing power for days at a time, leaving citizens without air conditioning, refrigeration or running water.

The chairwoman of China Power International has warned that if the government continues to enforce price controls, one-fifth of China’s 436 coal-fired power plants could face bankruptcy.

The fact is, there is a cost for goods and services, and a price below which no one will willingly produce or provide them. China’s largest electric utility, Huaneng, says that prices charged to customers should have been 13 percent higher last year to remain in line with the increase in coal prices; this year, spot prices for coal are up 20 percent because of various world events. All the while, the government is mandating almost no increase in the rate that utility providers can charge.

In order to deal with the lack of dependable power, some businesses have their workers come in at night or during odd hours when there are fewer blackouts, some restaurants have resorted to cooking over coals and hauling water by hand from wells. Additionally, the government has put pressure on the mines to sell coal at below-market rates, causing the best and purest coal to be exported while selling high-sulfer, high-polluting coal to Chinese companies.

At the end of May, at least six cargo ships carrying loads of coal from abroad were affected by deferrals or defaults on contracts by Chinese buyers as those ships remained full and waiting in ports with no one to pay. Of course, why would they when the government won’t allow utility companies to be adequately reimbursed for providing the electricity generated by that coal to consumers?

The Chinese economy is experiencing rapid deceleration and its potential growth is being hindered by bureaucrats who claim to honestly believe that their issuance of an edict will cause economic forces to fall into line behind their stated desires.

In the US, 83 percent of doctors who responded to a survey performed by a group opposed to Obamacare have considered leaving the medical profession as a result of “current changes in the medical system,” with 65 percent of those individuals pointing to government involvement as the main culprit.

We can look to Massachusetts to see that since the passage of state healthcare reform, there has been basically no difference in the usage of emergency rooms, doctor shortages abound and premiums shot up above the national average within two years and have only recently started growing at a slower rate.

In order to combat a nearly 50 percent cost overrun encountered with the implementation of the law, the state reduced costs by kicking almost 40,000 legal immigrants off of state health coverage and implementing free market principles which grant tiered health care plans to individuals based on, yes, their ability to pay. Free market principles are what finally brought down the rise in the cost of care in Massachusetts.

As for the rest of us, our president promised that with the passage of Obamacare we would see lower premiums, less federal spending and no additional federal debt, no taxes for anyone making under $250,000 a year, the ability to keep any current health plan if one were to so choose and greater access to health coverage.

Too bad saying it just doesn’t make it so.

Apr 27 2010

C.M. Phippen

From coast to coast, the furor is brewing over the state of Arizona experimenting with policies to attempt to protect its citizens by minimizing the number of illegal aliens within its own borders.

After years of lack of federal action and increasing crime by illegals, Arizonans are fed up. Phoenix is now the kidnapping capital of America; worldwide only second to Mexico City. Ranchers are being harassed and threatened, and one was recently killed by a man authorities believe to be a scout for a drug cartel.

The state has approximately 500,000 illegal immigrants, many of whom come to this country just looking for a way to feed their families. We allow a limited number of them to do this, based upon the needs of our citizens.

Arizona has an unemployment rate of around 9% for citizens. Recently, 300 workers at Pro’s Ranch Markets in AZ were let go when they were found to be working illegally. Now, many hardworking Arizonans among those 9% who also want to feed their families, will be able to find a job.

Liberals don’t seem to care nearly as much about the rights of the law-abiding citizens as the non-citizen lawbreakers, but I think I do have a solution to bring them in on this one – include in the bill the power of authorities to randomly stop anyone suspected of being a US citizen and require them to provide proof of federally-approved health insurance coverage. Sound about right?

Apr 1 2010

Obamacare and Unintended Consequences, I

C.M. Phippen

It is now estimated that in the first two quarters of 2010, $14 billion in writedowns could be taken as a result of changes in tax law contained in the new health care legislation. Stock prices have begun to fall, and Congress is in a huff.

Deere & Co. is estimating a $150 million charge this quarter, Caterpillar Inc. $100 million, AK Steel $31 million, AT&T $1 billion, Boeing $150 million, Lockheed Martin $96 million, and the list goes on and on.

The reason for the charges is that after the Medicare Part D prescription drug benefit was passed (another entitlement costing us many times more than estimated), companies that continued paying drug benefits for their retirees rather than dumping the responsibility onto the government, were given incentives for doing so. Not only did they receive a 28% subsidy, but they were allowed to deduct the cost of providing the coverage, including the portion paid by the government. Under the new law, this subsidy will no longer be deductible.

Those who support the closing of this “loophole” in the law argue that it’s only fair, as companies were receiving a double benefit. Sure, but they were paying costs that would be shouldered entirely by the federal government (taxpayer) if those companies failed to choose to provide the benefit in the first place.

Get it? Under the old law, taxpayers were still saving money. The result now is that either benefits will need to be reduced or those companies that will see an increased tax burden can simply choose to hire fewer workers or shift operations to other countries with more favorable tax laws.

“The change in the law is expected to affect primarily industrial companies with retirees represented by collective bargaining pacts, whose benefits are more difficult for companies to cut.”

According to the AFL-CIO on Dec. 10, eliminating the deduction “will be highly destabilizing for retirees who rely upon employer sponsored drug coverage” and “will impose a dramatic and immediate impact on company financial statements.”

The companies that will be receiving less beneficial tax treatment are the very types of companies many Americans, especially those who ostensibly supported this legislation, have complained about when they’ve chosen to move offshore in order to reduce production costs. Additionally, Congress was warned as early as December that these writedowns would need to occur.

The response of Einstein Commerce Secretary Gary Locke is truly mind-boggling. “During the past year, I have heard from CEOs from across the country that skyrocketing premiums are crippling the competitiveness of their companies. It is simply not responsible to suggest that the new health care law is bad for business.”

These CEOs wanted something done about skyrocketing premiums, so don’t you think they would have been ecstatic if that had actually happened? Much to the chagrin of the administration, this is not an ideological issue; rather, it’s an issue of good governance versus ramrodding through any garbage legislation just to say you did. Why did the administration choose to do everything except deal with the actual costs of health care when passing the current law?

This administration and Congress seem absolutely baffled that the universe is not heeding their decree of lower costs for all while covering more Americans and enabling, ultimately, more extensive health care coverage. It’s okay; at some point reality smacks all of us in the face, but for most of us it’s before we reach middle age and have “fundamentally transformed” America based on bad information and bad laws.

I had assumed that those who supported this bill fully understood that costs would increase but would be so supplemented by the taxpayer that many Americans wouldn’t notice, and would continue believing the rhetoric about cost savings to the country. Either I was wrong or the political games never end with these guys.

Congress now has issued letters to the CEOs of many of the companies who’ve reported such writedowns. Rather than reevaluate legislation they should have read and understood before passing, they’ve decided to harass those running companies which provide jobs to Americans. In case you’ve forgotten, the American worker is currently suffering under levels of unemployment not seen in decades; I’d think we’d be thanking them and asking how they can be accommodated to hire more of our citizens.

The week before passage of the bill, only 17% of Americans believed the plan would reduce the cost of care. Looks like 83% of us were forced to face reality long before our “leaders” in Washington.

Mar 25 2010

Tax dollars and Viagra

In a vote to “reduce the cost of providing federally funded prescription drugs by eliminating fraudulent payments and prohibiting coverage of Viagra for child molesters and rapists and for drugs intended to induce abortion,” 42 senators said no. There were, though, 73 who support such an amendment to the healthcare legislation. This amendment currently has been tabled.

I don’t understand anything less than 100% for such limitations, but if this is the level of morality in the halls of the capital, I am at a total loss for words. Except for maybe to ask this one question: Do you think a victim of rape, committed by a user of taxpayer-provided Viagra, will have the right to sue those members of Congress who chose to table this motion rather than allow the 73 yea votes to rule?

Don’t be silly.

Mar 24 2010

Healthcare and Charity

C.M. Phippen

Healthcare – so much to say and no idea where to even start with a bill so full of manipulations, cost-shifting, and purchased votes.

I think I’ll begin with a few of the responses of liberal friends since the bill’s passage. They tend to go something like this:

“I just don’t understand why people who claim to know of God’s love would deny help to their fellowman.”

“My family has plenty of money and we don’t mind helping those in need. We can afford it.”

Those who “claim to know of God’s love” were already helping others before this bill ever came along, and to a greater degree than those without God. Arthur Brooks, a former professor at Syracuse University, spent twenty years studying the issue of philanthropy. His book, Who Really Cares, is based upon hundreds of studies and the underlying theme is that those who truly care have always helped their fellowman. No government program of forced redistribution necessary. I mentioned a very small portion of this in a previous ultra-simplified post entitled Ideology, Religion, and Charity.

We are a country of givers.

This, from an article by Arthur Brooks, citing some of the data from his book:

“In 1995 (the most recent year for which data are available), Americans gave, per capita, three and a half times as much to causes and charities as the French, seven times as much as the Germans, and 14 times as much as the Italians. Similarly, in 1998, Americans were 15 percent more likely to volunteer their time than the Dutch, 21 percent more likely than the Swiss, and 32 percent more likely than the Germans.”

“One nationwide survey from 2002 tells us that monetary donors are nearly three times as likely as non-donors to give money informally to friends and strangers. People who give to charity at least once per year are twice as likely to donate blood as people who don’t give money. They are also significantly more likely to give food or money to a homeless person, or to give up their seat to someone on a bus.”

To the issue of those who “know of God’s love” – not only are the people in the US the most charitable on the face of the earth (in any way that can be measured), but religious people in the US are even more charitable than the average citizen. They are 25% more likely to give to charity than the non-religious, and 23% more likely to volunteer. When looking at the average dollar amounts and average time volunteered, religious people give nearly four times as much money and volunteer twice as often. This is the difference between giving $2,210 versus $642 and volunteering 12 times/year versus 5.8 times.

Certainly we would see a much different world if all gave to same degree as the religious. Unfortunately, what tends to happen in any society is that the more government does for the people, the less they do for themselves and for each other. Thus, increasing government programs that limit the freedom of individuals and decrease their available resources doesn’t bode well for our future.

The answer to the second response is based on the first, “Well, if you have plenty of money, then why do you need government to take it from you in order to help those in need?” Incidentally, the income of this family is generated by an ER doctor. Apparently he never thought to donate his time and efforts to those who can’t afford medical care or to establish a charity that would treat indigent patients. Maybe that would take just a little more than he’s willing to give, while still speaking the language of charity (with a little bit of his money and a whole lot of ours).

What he also fails to understand is that pretty soon he won’t have “plenty of money.” As more and more individuals are forced onto the government plan, his income will decrease. The reimbursements rates of government plans must be driven down over time in order to not only cover an additional 30 million new Americans, but all those whose employers can no longer afford to pay their rising premiums (premiums that will have to rise as a result of what will surely be a slew of new mandates placed on insurance companies by the federal government when the plan finally goes into effect). Incidentally, most of this plan doesn’t begin until after the next presidential election.

Government policies have consequences. If we truly believe that this new entitlement program that robs from the future prosperity of this country in order to establish rights never envisioned by the founders will make us a better country, then we have certainly come a long way from their “land of the free.”

Incidentally, while we’re changing the meaning and intent of the Constitution, it might be nice to note that the right to healthcare was part of a constitution, but it was the constitution of the USSR. Heaven help us.

Mar 16 2010

Obama and Math

C.M. Phippen

Yesterday, at a rally in Ohio, our President told the crowd that ObamaCare will reduce health insurance premiums by “3,000%.”

Of course, that would mean the federal government would be paying us to have health insurance. did a little math to illustrate just how much money those of us responsible enough to currently have health insurance could make from this new scheme.

“If your current health insurance policy costs $5,000 a year, insurance companies will pay you $145,000 a year (2,900 percent multiplied by $5,000). If you’re fortunate enough to be paying $25,000 a year for health insurance, insurance companies will pay you $725,000 a year. There’s no word whether you can purchase a more expensive health insurance policy to increase the amount of money that insurers pay you each year.

“Just think, America: These are the people telling us that they know best how to run 1/6 of our economy.”

Just one more question: Do you think the CBO was given that information to use when scoring the costs of healthcare reform?

Mar 11 2010

Congress, Perceptions, and Reality

C.M. Phippen

Last week, the issue of Sen. Bunning singlehandedly holding up a bill that would extend jobless benefits and “hurt millions of Americans” was all over the news. The Senator was refusing to budge because Congress had just passed a paygo rule, which would require that any new spending be offset by cuts elsewhere. The very individuals taking credit for passing the rule weren’t supporting Bunning’s stance, and apparently aren’t willing to apply it to any spending programs they happen to like.

According to Senator Bunning, “When 100 senators are for a bill, and we can’t find $10 billion to pay for it, there’s something the matter, seriously the matter, with this body.” Could it be that they aren’t at all interested in actually finding a way to pay for their “gifts” to the American people (taken directly from other Americans, by the way)? Could it be that this paygo rule was just an opportunity for photo ops, creating the illusion of fiscal responsibility while spitting in its face?

In fact, in the midst of the opposition to Senator Bunning’s position, President Obama held a reception at the White House to celebrate paygo. Huh?

Today, the news is out that Louise Slaughter, House Rules Chairwoman, is considering a move to usher the Senate healthcare bill through the House without requiring an actual vote on the bill itself. She knows that the current Senate bill is so unpopular with the American people that there’s a good possibility that even using reconciliation, it may be dead.

The move under consideration would require only a vote on changes to the Senate bill and would presume the Senate version passed if this rule change bill passes, without actually voting on it. This is an absolute end-run around reconciliation, (as well as the Constitution) which requires that any bill using reconciliation be passed in its original form. Once that is done, changes can be made and voted on by both houses of Congress.

Just as with the paygo rule, too many in Congress want to have it both ways. They know the American people are overwhelming against the Senate healthcare proposal. No one in the House wants to be maligned for voting yes on a piece of legislation so poorly pieced together and so widely known to contain outright payoffs to Senators in exchange for their votes.

The supposed solution: Vote for the bill without voting for the bill. This way, as with paygo and jobless benefits, you can pose for the cameras saying one thing while actually doing another. Brilliant way to manipulate, obfuscate, and possibly save your job. Horrendous way to “serve” the American people and our republic.

Feb 27 2010

Question: Healthcare Reform and Cost Cutting?

Okay, I know there are at least a few of you liberals who read this website and I have a serious question for you – what are the mechanisms in the House and/or Senate healthcare bill that will lead to lower medical costs, one of the two major goals of reform?

Feb 25 2010

Healthcare and Transparency

C.M. Phippen

President Obama today is holding his health care summit to “bridge the gaps” that exist between what Republicans think is best for the country with regard to healthcare reform and what the Democrats want to see passed.

In his opening remarks, President Obama said, “I hope that this isn’t political theater where we’re just playing to the cameras and criticizing each other, but instead actually trying to solve the problem.” I couldn’t agree more!

Cameras tend to make congressmen less effective and more prone to grandstanding; on the other hand, we were promised transparency by this administration. Just one question – where were all the cameras when those backroom deals were being made to buy the votes of Democrats to support the healthcare reform bills initially? Just asking.