Tuesday, March 16, 2010

Cruising the Web

For all those who have been screaming about the Supreme Court allowing corporations and unions to advertise two months before an election about how corporations will be buying elections, how do they feel about unions pressuring and threatening legislators about their vote. Nancy Pelosi is relying on the money and threats from SEIU to help persuade wavering Democrats.

How about states and the federal government privatizing some of their non-governmental functions? In this day and age when every day it seems that government is absorbing previously private functions, it would be a breath of fresh air to take some baby steps in the other direction.

Don't believe the President when he gets before a microphone and starts claiming that ObamaCare would bring insurance rates down. Just look at what has happened in states such as Massachusetts which have tried to adopt parallel plans. The costs of insurance have gone up and up to among the highest in the nation.

Pelosi is confident enough
to expose her true goal - to see ObamaCare as just the beginning of her plans to insert the federal government into more and more of our lives telling Ezra Klein that "once we kick through this door, there'll be more legislation to follow." She's just getting started.

Ed Morrissey points to good news
on air quality improvement that just doesn't get the trumpeting that doom and gloom does.

David Axelrod attempts to redefine "special." Now the Louisiana Purchase isn't a special deal because it didn't specifically mention Louisiana even though the language was written in such a way that it could only be Louisiana. How very special of him.

I've always found Robert Samuelson to be one of the most dispassionate and fair writers on public policy. He's not a partisan; what concerns him is the out-of-control spending that ObamaCare does nothing to stem.
Though it seems compelling, covering the uninsured is not the health-care system's major problem. The big problem is uncontrolled spending, which prices people out of the market and burdens government budgets. Obama claims his proposal checks spending. Just the opposite. When people get insurance, they use more health services. Spending rises. By the government's latest forecast, health spending goes from 17 percent of the economy in 2009 to 19 percent in 2019. Health "reform" would probably increase that.

Unless we change the fee-for-service system, costs will remain hard to control because providers are paid more for doing more. Obama might have attempted that by proposing health-care vouchers (limited amounts to be spent on insurance), which would force a restructuring of delivery systems to compete on quality and cost. Doctors, hospitals and drug companies would have to reorganize care. Obama refrained from that fight and instead cast insurance companies as the villains.

He's telling people what they want to hear, not what they need to know. Whatever their sins, insurers are mainly intermediaries; they pass along the costs of the delivery system. In 2009, the largest 14 insurers had profits of roughly $9 billion; that approached 0.4 percent of total health spending of $2.472 trillion. This hardly explains high health costs. What people need to know is that Obama's plan evades health care's major problems and would worsen the budget outlook. It's a big new spending program when government hasn't paid for the spending programs it already has.

"If not now, when? If not us, who?" Obama asks. The answer is: It's not now, and it's not "us." Pass or not, Obama's proposal is the illusion of "reform," not the real thing.
Illusions. Sort of like "Change you can believe in." Just yet another illusion of the Obama phenomenon.

Obama has gone from being Mr. Sptock to being Captain Kirk. This is an improvement?

Ever wonder what happens for all the T shirts that are pre-printed up for the teams that lose tournaments? They're going to Haiti this year.

Jeff Jacoby ponders the chilling statistics
of "100 million missing girls" in places like China and India where parents either abort or let die unwanted girl babies. Adult males are facing a future where they won't be able to find wives because the ration is now 124 to 100.

Philip Klein ponders Obama's claims that he doesn't pay any attention to polls yet he claims to know that the American people want his plan.
This brings to mind two questions. If Obama refuses to look at public opinion polls, then how can he profess to know what the American people want? And if he doesn't care about polls, then how come the White House is circulating polls on Capitol Hill asserting that support for health care legislation is rising?
Indeed.

Don't look now, but Social Security is ahead of schedule in having to cash in its IOUs from the federal government because it's started to take in less money than it's paying out. Of course, the federal government just doesn't have the money. Just the environment to take on a massive new entitlement.

8 comments:

Tacitus Voltaire said...

Social Security is ahead of schedule in having to cash in its IOUs from the federal government

that's because the federal government has been borrowing money from the SS trust fund for decades. as you can see from the terminology, "IOU", it is money that belongs to SS that it might need to get back

the article that Betsy links states:

for the first time since the 1980s, when Congress last overhauled Social Security, the retirement program is projected to pay out more in benefits than it collects in taxes — nearly $29 billion more

but tax receipts are not the only way that SS makes money. somebody please spend five minutes on the web researching the way pension funds operate so that we can debate from a factual basis, please

the article that Betsy links further states:

Social Security is projected to drain its trust funds by 2037 unless Congress acts, and there's concern that the looming crisis will lead to reduced benefits

not completely correct. the CBO actually projects that SS might ('might' - please take notice that 2037 is still 27 years in the future) begin to have some trouble meeting all of its obligations at that time. the author seems to acknowledge this in the second part of his statement where he says "concern that the looming crisis will lead to reduced benefits". if the SS trust fund was "drained", as he mistakenly declares in his previous sentence, then how could it pay any benefits at all?

and, again, let's please learn a little bit about how pension funds operate before attempting to discuss SS, eh? tfhr and pat, i'm a-lookin' at you!

Tacitus Voltaire said...

aha! here we go: the article that Betsy links explains it for those who speak without knowledge:

For the budget year that ends in September, Social Security is projected to collect $677 billion in taxes and spend $706 billion on benefits and expenses.

Social Security will also collect about $120 billion in interest on the trust funds, according to the CBO projections, meaning its overall balance sheet will continue to grow

Rick Caird said...

Tacitus misses the major point, again. Not only does the federal deficit increase by $706-$677 = -$29, the deficit also increase by the $120 billion interest. So, au contraire Tacitus, the Social Security system now claims a net $149 billion from the Federal budget. That is hardly the advance you claim. Are you speaking w/o knowledge again?

Zog Karndon said...

Ah, Tacitus -

Where, exactly, does this interest come from?

The SS "trust fund" is a collection of non-tradable bonds, which makes it nothing more than an accounting fiction.

Any redemptions from the "trust fund" have to come from current income (of which the US Government has far too little).

Bachbone said...

Social Security's future deficit is just one slice of the pie, just as the whole thrust of Betsy's post pointed out in the last two sentences.

From the same article TV refers to, but conveniently omits: "...the nonpartisan Congressional Budget Office projects that Social Security will continue to pay out more in benefits than it collects in taxes for the next three years. It is projected to post small surpluses of $6 billion each in 2014 and 2015, before RETURNING TO INDEFINITE DEFICITS IN 2016. [emphasis added]" Also, the $120 billion TV referred to "...is paid by the government, adding even more to the budget deficit." Deficit $$$ the U.S. is borrowing while Moody's is again warning our bond rating is on the verge of being lowered, meaning those debt trillions will cost more to repay. And while China is quietly selling off U.S. dollars in favor of gold.

The "don't worry about Social Security" attitude some espouse suggests Federal debts are locked up in sacrosanct drawers never to be raided by Congress for other purposes, and that Congress can be trusted to honor IOUs dollar for dollar, when it shafted GM and Chrysler bond holders, who had similar guarantees they believed would be honored by law, with 30 cents on the dollar. Voters know that's hogwash, and in fact, Obama and his merry band of Progressives would love to have the feds paying for everything, cradle to grave, from one big federal pot. A pot they can dip into and dole out to whatever cause they deem worthy and helpful.

After Health Care, Obama has already said he's going to push for immigration "reform," and his previous attempt would have added tens of millions to the extra 31 million he already says this Health Care bill will cover. You can be sure he, Reid and Pelosi haven't calculated into the deficit the extra trillions those millions will cost.

Symbolic pitchforks, torches, tar and feathers are going to be hot items when the financial chickens come home to roost. Congress is terrific at looking for scapegoats after the fact. A lot of politicians may find themselves before prosecutors in the next ten years.

Tacitus Voltaire said...

The SS "trust fund" is a collection of non-tradable bonds

no, it is mostly treasury bills

you can invest in treasury bills yourself, if you like. they are considered just about the safest investment in the world

the part in the article where the author claims that the intestest on treasury bills "adds to the deficit" is nonsense

Tacitus Voltaire said...

Tacitus misses the major point, again. Not only does the federal deficit increase by $706-$677 = -$29, the deficit also increase by the $120 billion interest. So, au contraire Tacitus, the Social Security system now claims a net $149 billion from the Federal budget. That is hardly the advance you claim. Are you speaking w/o knowledge again?

you are arguing with the author of the article that Betsy linked to in this post, who says:

Social Security will also collect about $120 billion in interest on the trust funds, according to the CBO projections, meaning its overall balance sheet will continue to grow

however, his claim that the interest on the t-bills that SS holds "adds to the deficit" makes about as much sense as saying that the interest you get on a bank account causes the bank to go into the red

there's a reason that banks pay interest on money in a bank account, and that the u.s. government pays interest on treasury bills

and if you don't know why that is, you have no business discussing finance at all

Pat Patterson said...

Luckily most bands don't invest too much of their deposits in t-bills. Or else no one could borrow for a car or purchase a house. Plus that $120 million, a large sum, does not go into the amount paid out by Social Security but rather stays with the total principal that is held briefly then loaned to the government. The problem is that its very similar to owning a house in very flush times when its value increases but the owner still goes into the red by spending more than his current income allows. At that point he is in the red in spite of holding an asset that has appreciated in value. But what the SSA has been forced to do here is simply cash in its treasuries which in turn will cause the national debt to rise as the government will have to pay back the money it borrowed during a period of depressed tax revenues.