Resistance Begins at Ohm!

Tuesday, November 24, 2009

Interest payments in the future

Look, the fact that the national debt has gone from 2tri to 12tri is worrisome just because it grew so fast. We never really think about paying down the principle on the debt, it just keeps inching up, right? As long as GDP goes up, we can afford the incremental increase in interest payments, right?

Interest payments alone are going more than triple in 10 years. Like think of it this way. You are paying $200 on your credit card now. In 2019, if you do nothing to pay down the principle, you are going to be paying $700 per month. It's just money going out the door (to China) without earning anything or doing anything productive (like build roads or schools). Yep, just money out the door before it even lands in the wallet. Consequence? Read on... (hint: health care ain't got nuthin on this problem, at least paying for health care contributes to the economy).

(Talk about your hockey stick graph.)

With the national debt now topping $12 trillion, the White House estimates that the government’s tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically. Other forecasters say the figure could be much higher.

In concrete terms, an additional $500 billion a year in interest expense would total more than the combined federal budgets this year for education, energy, homeland security and the wars in Iraq and Afghanistan.

CNBC from the NYTimes

Wednesday, November 11, 2009

Dear Senator Mark Warner

I am writing to say that I agree, the issue with health care is cost. In my opinion, government insurance programs (medicare, medicaid, CHIP) have largely removed cost-based market competition, resulting in the current complete disconnect between the price charged and the cost of the service performed. The market motive right now is get the most possible out of the government program. Given the percentage of Americans that use these programs, the private insurance companies are seriously constrained by having to play in the same market.

For example, for routine blood tests (the usual annual panel) a lab submits charges of $150.00 to BCBS. The allowance is $25.75. Neither of these amounts have anything to do with the actual cost for performing the service. When I negotiated prices for surgery, lab and xray for my (uninsured) son's surgery, I could get reductions of 35-50% for cash in advance. This was for professional services as well as facility costs. (Always get it in writing before paying.)

I do not see how a federal program covering even more people is going to change that market dynamic. I believe consumers are far more effective in driving the cost of service down. Currently, they have no influence in the process, let alone motive. Most people have very few choices for providers (under private or government programs) and little knowledge about service costs because the bill goes to the insurance company. They have no way to make any decision about the price of the service before it is performed.

If consumers have choices and incentive to choose lower cost alternatives among service providers, not insurance policies, costs will go down. As long as the government is getting the bill, it's just a game managed by lobbyists and law makers, who despite what they say, aren't concerned about the price. It always comes back to political motives which is how we got in this situation in the first place.

Saturday, November 7, 2009

Results count

To the Congress:

The U.S. Postal Service was established in 1775 - you have had 234 years to get it right; it is broke.

Social Security was established in 1935 - you have had 74 years to get it right; it is broke.

Fannie Mae was established in 1938 - you have had 71 years to get it right; it is broke.

The "War on Poverty" started in 1964 - you have had 45 years to get it right; $1 trillion of our money is confiscated each year and transferred to "the poor"; it hasn't worked and our entire country is broke.

Medicare and Medicaid were established in 1965 - you've had 44 years to get it right; they are broke.

Freddie Mac was established in 1970 - you have had 39 years to get it right; it is broke.

Trillions of dollars were spent in the massive political payoffs called TARP, the "Stimulus", the Omnibus Appropriations Act of 2009... none show any signs of working, although ACORN appears to have found a new source: the American taxpayer.

And finally, to set a new record:
"Cash for Clunkers" was established in 2009 and went broke in 2009! It took cars (that were the best some people could afford) and replaced them with high-priced and less-affordable cars, mostly Japanese. A good percentage of the profits went out of the country. And the American taxpayers take the hit for Congress' generosity in burning three billion more of our dollars on failed experiments.

So with a perfect 100% failure rate and a record that proves that "services" you shove down our throats are failing faster and faster, you want Americans to believe you can be trusted with a government-run health care system?

20% of our entire economy?

With all due respect,

Are you crazy?

Sunday, November 1, 2009

1948 cartoon extension dept., Harding College

This is a fascinating perspective. You can see how far we have come - or how far gone we are.
National Juggernaut