Archive for category Entitlements
Paul Ryan on Medicare Reform
Posted by Tom in Entitlements, Medicare, Nationalized Health Care on May 25, 2011
This is worth broad distribution. Please pass on.
SHUT IT DOWN!
Posted by Tom in Bankruptcy, Budgets, Congress, Deficit, Entitlements, National Character, Politics, Presidency, Statism on April 3, 2011
I’ve read several articles and posts on the potential shutdown of the government if a wasteful expense cuts are not agreed to by Reid and Obama. The consensus is, as in past shutdowns, that “essential services” would be maintained. (More on that later.) In essence, defense, boarder protections (such as we have), law enforcement, the courts, congress and the administration would continue as would things like welfare checks and social security, medicare and medicaid payments. Our world, our lives, will not end if the government shuts down!
USA Today reports that President Obama has predicted “dire” consequences if there is a shutdown. However, he has instructed agencies not to reveal their shutdown plans. Seems kinda strange, doesn’t? If consequences are so dire, why wouldn’t he let the agencies explain?
“In e-mails from the Office of Management and Budget (OMB) last month, agencies were told their statements to Congress “should not state or imply what functions would or would not be continued in the event of a funding gap.”
It continued: “Agencies should not be previewing shutdown plans — that is, policy and operational decisions — in any way.” Agencies were instructed to clear any responses to questions about their shutdown plans with OMB.”
Here’s the point: why is the United States government rendering NON-ESSENTIAL SERVICES, AND WITH OUR TAX MONEY?
By the blood of our forefathers we are a Constitutional Republic, one of limited powers, those not granted by us are reserved to the states or retained by us; this is embodied in the 10th Amendment. The government should perform ONLY essential services.
So, I say, shut it down. And consider shutting it down permanently. The boogyman Obama and his lackeys in the main stream media would have us fear is our own ignorance and dependency. This doesn’t portend a very confident future for our children!
Rallying the Base……..sort of!
Posted by Tom in Entitlements, Humor, Politics, Welfare on March 9, 2011
Ireland Exports Its Future……Will America?
Posted by Tom in Banks, Entitlements, Financial Policy, Fiscal Policy, Welfare on February 24, 2011
Irish Remedy for Hard Times: Leaving, reads a page one headline in today’s WSJ. Another Potato Famine? No, but almost as bad, and familiar a story: One of the EU’s peripheral favorites, Ireland got “free lunch” benefits and used them to attract industry including that dependent on low taxes and favorable treaties. This promoted a boom accompanied by social welfare benefits. The real estate boom followed then turned into a bubble and burst leaving banks saddled with bad debt. Rather than let shareholders take the losses due them, the government stepped in and, yes, guaranteed the underwater banks. If this sounds familiar it’s because it is.
“However, by 2008, as Ireland’s banking crisis triggered a deep recession and unemployment soared to 13%, the tide turned again. Ireland’s Central Statistics Office predicts that 100,000 people will emigrate over the next two years, more than twice the number that left in 2009 and 2010. That comes to about 1,000 per week, and exceeds the last peak in emigration in 1989 when 44,000 people moved away.”
“And while demographic data on emigrants is scarce, many of those leaving are believed to be well-educated professionals—precisely the people Ireland needs to lead a recovery. “In a modern, knowledge-based economy, dense, diverse cities full of highly-skilled people are a critical competitive advantage,” says Mr. McHale. “If the most enterprising people leave, you undermine that advantage.”
So in essence, Ireland exports its future. Some argue the austerity necessary to right the financial ship is to blame. But without it, there is no hope of recovery at all. No, the EU “free lunch” and government policies are the cause and the remedy is painful but necessary. The Celtic Tiger is brought low; it now occupies as unenviable position as one of the EU’s PIGS! Again, there is no such thing as a free lunch.
Could it happen here? Certainly the continuing welfare state with its ongoing deficits and unsustainable debt build up could drive us to a sustained depression. But would our “best and brightest” leave for greener pastures, exacerbating the situation? Would they vote with their feet? Is Atlas Shrugged feasible?
I don’t profess to know the answer. I suspect some would and that other countries and industries would welcome this young talent that was once our future. As Asia grows its appetite for entrepreneurial talent will grow.
While solutions to our unsustainable welfare system may seem painful now, they will be exponentially more painful later. We simply can’t continue kicking the can down the road. That road has a big “dead end” sign posted right in front of our eyes.
Fear Mongering Is No Substitute For Leadership
Posted by Tom in Deficit, Entitlements, Fiscal Policy, Social Security on February 4, 2011
As Charles Blahous notes in his “Slash” op-ed in yesterday’s WSJ, during the State of the Union address “Mr. Obama mentioned Social Security only long enough to issue vague warnings against “putting at risk current retirees” and “slashing benefits for future generations.”
As has been recently reported, this year alone Social Security is projected to collect $45 Billion less in payroll taxes than it pays out in benefits. This deficit is projected to continue each year until the fund is exhausted in 2037. Our president is not unaware of this. In fact, in that same speech he failed to mention the bipartisan reforms proposed by his own Commission of Fiscal Responsibility and Reform.
It’s worthwhile to review the history of Social Security a fairly concise summary of which is offered by Wikipedia. It is interesting to see the twists and turns the history has taken. It has been a political football with over-promising and mistaken formulae.
Indeed, the formula which Blahous criticizes was inserted in the law to correct an over-indexing mistake which increased payments at double the rate of inflation. “Since 1977, Social Security has employed a formula that links a retiree’s initial benefit payment to growth in the national average wage index. Since wages tend to grow faster than prices, this formula pays younger cohorts greater benefits (in inflation-adjusted terms) than those paid to earlier retirees.”
“The rationale behind this is to provide the same replacement rate (i.e., benefits as a percentage of pre-retirement earnings) for “similarly situated” workers of different generations. In other words, if a typical worker’s benefit today is 50% of his previous wage earnings, then that worker’s grandson, assuming he occupies the same relative position in the national wage distribution, will also get a benefit equal to 50% of his own earnings.”
“What this means practically is that today’s medium-wage retiree receives a benefit just below $18,000 at the normal retirement age. But benefits scheduled for a medium-wage retiree of 2050 would equal nearly $29,000 in today’s dollars.”
“To slow the growth of tax burdens, therefore, the benefit formula must grow more slowly. Current wage- indexing doesn’t create benefit equity across generations. Rather, it ensures that each successive generation must pay higher taxes to get the same replacement rate.”
“Most responsible reform proposals recognize that the benefit formula needs to change. Under the proposal put forward by the commission’s co-chairs, Alan Simpson and Erskine Bowles, for example, the medium-wage worker of 2050 would get a benefit somewhat over $24,000 (in today’s dollars) at normal retirement age. This amount is not as much as the current system is promising, but still offers far more purchasing power than today’s retirees possess.”
Blahous points out that none of the reform proposals would “slash” benefits. For the President to imply such is demagoguery, typical of the class-war rhetoric he’s wont to fall back upon. And this when courageous leadership is the order of the day.
Obamacare’s Medicaid Crutch Is Bankrupting the States
Posted by Tom in Budgets, Centrally Managed Economy, Constitution, Entitlements, Federalism, Fiscal Policy, National Character, State Finances, Welfare on February 4, 2011
To buttress the shaky fiscal credentials of Obamacare Congress increased the eligibility for Medicaid to 133% of the poverty line adding 25% to the rolls; it sent the bill for this to the states. So those new Medicaid entitlees would not have their healthcare welfare charged against Obamacare. George Melloan exposes this neat little trick in his op-ed in today’s WSJ, The States Can’t Afford Obamacare.
States unlike the federal government are required to balance their budgets. One of the largest cost items in those budgets is Medicaid. This is a federal welfare program which requires state administration and state budgetary contribution. The fed dictates the program which like all fed handouts is rife with fraud and abuse.
In the recent Florida Obamacare case, the 26 states argued that Medicaid was unconstitutional as a coercive control over state budgets; in other words a violation of federalism which forces states to implement and pay for federal welfare. Judge Vinson did not buy the argument stating that the states could merely refuse to implement Medicaid. In short the federal government was not forcing the states to implement Medicaid, AT LEAST NOT IN THE LEGAL SENSE OF THE TERM.
And therein lies the rub! If a state withdraws from Medicaid, the federal government continues to tax its residents. Those taxes that would have otherwise gone in part to pay the state’s Medicaid bill will now go to pay the Medicaid bills for other states. In this hard economic sense, Medicaid is an unfunded federal mandate. This is economic compulsion at its best. And this is undoubtedly a breakdown of our federal system.
To review the bidding, the Obama-Reid-Pelosi triumvirate enacted a new, intrusive and unsustainable federal welfare program, Obamacare, by increasing the size of an existant unsustainable federal welfare program, Medicaid. In the process the three exploded the states budget obligations, exacerbating the states budget deficits. This case of robbing Peter to pay Paul has driven both closer to bankruptcy.
It is good to keep in mind that these federal farces, these piles of money, promote overuse, fraud and abuse. There is little justification for this welfare largess, other than to addict voters to their source, in this case the liberal, leftist Democrats.
Uncle Milty’s Wisdom and the Hidden Cost of Government
Posted by Tom in Deficit, Entitlements, Fiscal Policy, Government Regulation, National Debt, Taxation, Welfare on January 23, 2011
As sure as we have unintended consequences of legislation and regulation we have hidden cost thereof and indeed of basic government. This was brought home last week in a WSJ op-ed by Dick Armey and Matt Kibbe, What Congress Should Cut. They lead with Milton Friedman’s wise observation:
“Milton Friedman correctly argued in 1999 that the “real cost of government—the total tax burden—equals what government spends plus the cost to the public of complying with government mandates and regulations and of calculating, paying, and taking measures to avoid taxes.” He added, “Anything that reduces that real cost—lower government spending, elimination of costly regulations on individuals or businesses, simplification of explicit taxes—is a tax reform.”
Just think of that simple observation and put it alongside with the runaway regulatory environment wrought by Obama. The EPA plans to regulate the breath you exhale from one end or the other! The FCC likewise with your freedom of email and web based speech. HHS with Obamacare favors and penalties for both unions and states, not to mention individuals. Financial services regulators do overburdened with Dodd-Frank that they can’t get new rules out quickly enough.
Top these administrative dictates off with Obamacare, Financial Regulation, Cap and Trade proposals, and the ongoing Fannie-Freddie mess and its aftermath, and you have the perfect storm for explosive government costs. Obama’s feint at regulatory restraint a couple of days ago, was just that, nice sounding words with little substance when it comes to the important issues restraining growth.
So Friedman’s maxim bears analysis. Think of the man hours, expensive man hours, spent, no wasted, in compliance, or workarounds to obviate compliance. How much better could the time be spent. How much better could the dollars thus spent be invested in potentially productive endeavors! The same is true for paying or not paying taxes under our complex tax structure. What a needless waste of time and money, both of which could be put to better use.
The article goes on to suggest candidates for elimination and they are numerous: The discretionary spending binge since 2007. Obamacare. Fannie/Freddie subsidies. Farm subsidies like Ethanol. And eventually, no soon, a serious reform of Medicare, Medicaid, and Social Security. All of these are a cancer some slowly, some rapidly bankrupting the nation.
The call is to wake up; time is rapidly running out.
Snake Oil Resold: Repealing Obamacare Will Raise Deficit!
Posted by Tom in Centrally Managed Economy, Congress, Deficit, Democrats, Entitlements, Nationalized Health Care on January 9, 2011
The Democrats really think the public is stupid: They are saying that eliminating a new unsustainable Obamacare entitlement will increase the deficit! (Of course, they passed this abomination with cloak room deals, in the dark of night, against the will of the voters.) Let’s see, adding 32 million to a federal health care program will save money. Really!
They who make it their mission to steal from our grandchildren are claiming the high ground and claiming that repeal of this monstrosity will increase our grandchildren’s indebtedness. If the public believes that they will buy bridges in Brooklyn!
Yesterday’s WSJ editorializes against their lies with ObamaCare’s Reality Deficit. The article treats the phony assumptions given to the CBO, and the real assumptions withheld from the CBO, and shows how the CBO can do the math correctly and say that the deficit will increase. Given the real assumptions and complete picture, the CBO would say that the deficit will be reduced by repealing Obamacare.
“Among the worst Democratic abuses was gaming the CBO’s budget conventions to make it seem as if ObamaCare “saves” money.”
“The accounting gimmicks are legion, but we’ll pick out a few: It uses 10 years of taxes to fund six years of subsidies. Social Security and Medicare revenues are double-counted to the tune of $398 billion. A new program funding long-term care frontloads taxes but backloads spending, gradually going broke by design. The law pretends that Congress will spend less on Medicare than it really will, in particular through an automatic 25% cut to physician payments that Democrats have already voted not to allow for this year.”
“The CBO budget gnomes are required to “score” what’s on paper in front of them, no matter how unrealistic, and that’s the method its Congressional masters prefer. The political class makes believe that CBO’s forecasts are carved into stone tablets through divine revelation, but all they really show is that politicians have rigged the budget rules to hide the true cost of entitlements.”
“The government can’t subsidize coverage for tens of millions of new people and simultaneously reduce the deficit, as most Americans seem to intuitively understand. The real offense Republicans are committing in the eyes of Washington is exposing its illusions.”
A quick review of some of the posts on Nationalized Health Care on the right side of this page may refresh any memories that need refreshing. Suffice it to say that the House should repeal the damn law and let the Senate go on record after the November results as favoring it; and let Obama veto any repeal that gets to his desk! 2012 is just around the corner!
Democratic Governors Face Their Own Mess
Posted by Tom in California, Entitlements, Liberalism, State Finances, Unions, Welfare on January 5, 2011
And it’s not pretty. Yesterday’s WSJ editorializes on “The Blue Men Group,” a wonderful pun treating California, Illinois, and New York, all essentially bankrupt. One chart is worth a thousand words, this one ranks the three spendthrifts in terms of tax climate for businesses, all are pretty near the bottom:
But focus on CA for the moment, NV’s neighbor upon whom so much depends. Jerry Brown will reprise the position he had in 1976, then sworn in with his girlfriend, Linda Ronstadt at his side. Jerry is responsible for public employee unions in the state. Now he must face the mess he created with a $28 Billion deficit and multiples of that in unfunded pension liabilities.
One other issue he may want to look at is the welfare system. It seems that CA’s welfare credit cards are good worldwide!
Good luck!
Health Care, Right or Entitlement?
Posted by Tom in Centrally Managed Economy, Constitution, Entitlements, National Character, Statism on January 2, 2011
Is health care a right? How about health insurance? What about car care! What is a right and how is it distinguished from an entitlement?
Ross Kaminsky in his American Spectator post, Is It a Right or Isn’t It?, treats the rights issue with respect to health care. If health care is a right as both Obama and McCain asserted, then it is a positive right, one that is provided by others without regard to its being earned or paid for. He distinguishes this from negative rights such as those in our constitution, the right to be free from interference by others.
“The problem with Obama’s positive right formulation — as with all positive rights — is that one never knows where such a right ends, if or when such a right might be curtailed when it conflicts with citizens’ other (usually negative) rights.” Thus if health care is a right, how can we cut it off at the point society can no longer afford it? “This leaves proponents of a “right” in the uncomfortable position of having to say that it’s only a right up to a certain age, a certain degree of sickness, or a certain cost.” Kaminsky comes down against health care being a right.
Steven Yates, a philosopher, distinguishes between Rights Versus Entitlements in the Freeman blog.
“If we consider the original rights expressed in the Declaration of Independence and enumerated in the U.S. Constitution, it should be clear that there are massive differences between those rights and these new ones. The original rights were rights to live by one’s personal efforts without the interference of others, and in particular, without interference by government. That is what the founders of the United States were declaring independence from, after all. The Declaration of Independence speaks of the right to pursue happiness; it does not offer a guarantee that one will achieve happiness. This makes all the difference in the world; for in a free society there can be no guarantee that effort will meet with success.”
“In other words, there is a hard and fast difference between rights and entitlements, a difference which the past seventy years of government policy has blurred to the point of indistinguishability. A free society must recognize the distinction. Otherwise, it has no way of knowing which claims of rights to acknowledge and which to reject as spurious. Legitimate rights are easy to recognize. They can be acted on by individuals without the assistance of government and without forcibly interfering with other individuals. Entitlements, on the other hand, cannot be fulfilled except through specific government actions which require forcible interference with others. Protecting rights is thus compatible with limited government. Granting entitlements requires an ever- expanding and increasingly meddlesome state. The more entitlements the state grants, the more it must extend itself to make good on its promises, and the greater its level of interference with people’s actions. Moreover, by interfering with successful actions, government becomes a drain on the individual’s energies. The individual must expend more and more effort to get the same personal benefits. This translates into a disincentive to produce, and when less is produced, there is less to seize and distribute. Soon, the state can no longer keep its promises.”
Since the dawn of the progressive era, we have seen the United States becoming more and more an entitlement dependent society. The recent passage of Obamacare on top of the bankrupt Medicare, Medicaid and Social Security systems is only the last example. To paraphrase Margaret Thatcher, the problem with entitlements, like socialism, is that eventually you run out of other peoples money to spend on them.