Could you borrow 90% of your income?

When could you ever pay that back, even if you lived forever? You couldn't even make the minimum payments.

That is the core issue with government spending beyond its means. Even if they say it is just for a little while because the economy is bad, the consequences go on for decades. There is no "little while" borrowing because there isn't any income to pay it back - not next year, not next decade. The money coming in is just going back out to pay for current obligations (social security, medicare) plus last century's debt -- for the Iraq war, for Katrina, for all the stuff we did without bothering to budget for it.  On top of that, add all the new spending, up 20% from 2008 levels for non-military programs. Well, those chickens are coming back to roost already. Yet we are going to keep spending beyond our means, ignoring the tsunami headed toward us while the harbor is draining as we speak.

Here are two articles for your consideration:

The debt tsunami:

The federal public debt, which was $6.3 trillion ($56,000 per household) when Mr. Obama entered office amid an economic crisis, totals $8.2 trillion ($72,000 per household) today, and it's headed toward $20.3 trillion (more than $170,000 per household) in 2020, according to CBO's deficit estimates. That figure would equal 90 percent of the estimated gross domestic product in 2020, up from 40 percent at the end of fiscal 2008. By comparison, America's debt-to-GDP ratio peaked at 109 percent at the end of World War II, while the ratio for economically troubled Greece hit 115 percent last year.


The bond harbor draining:
The recent rise in Treasury yields (interest) represents a “canary in the mine” that may signal further gains in interest rates. Higher yields (interest) reflect investor concerns over “this huge overhang of federal debt which we have never seen before,” Greenspan said.

Not that I am a fan of Greenspan, but he makes several compelling points:

Doesn't sound like freedom to me....

The legislation allocates $10 billion to pay for 16,500 IRS agents who will collect and enforce mandatory "premiums." Does that sound like the private sector at work to you?

The reality of Obamacare

Change!
01-20-2013
 

Beam me up, Scotty

This rant isn't really about health care, so bear with me.

The official democratic talking points now are:
1) How many Americans are covered (another 31 million or about 10%)
2) The reduction in the deficit

Except statement 2 is a downright lie. Here's why.
Nearly half the reduction in the deficit is coming from reductions in medicare that they are turning around and spending on those 31 16 million people - robbing seniors to pay slackers.

Why are we still talking about health care?

In my not so humble opinion, this is a done deal. My score is 100% chance health care passes. Because it already has. The House passed a bill. The Senate passed a bill. Reconciliation only involves spending and paying for it. Obama decided after the new year, that the dems only have more to lose by doing nothing, so it doesn't matter how they do it, just do it. If Congress is going to lose either majority, it isn't going to happen just because they pass health care - both houses already voted yes on it anyway. And if they don't pass health care, Obama is going to be a lame duck after his first year.

The Alinsky precept that the ends justify the means and the spin that says it is the ethical thing to do.

Very clever, these folks. Last week, the message changed from "we want an up or down vote" to "it's the right thing, it's the ethical thing to do." This is to make our elected officials feel better about what they have already done. The hell with what people want. As long as they don't have to vote again. We were all talking about reconciliation instead, never seeing what was coming. They were crafting the discussion for this week - how to vote on something without having to talk about the Senate bill by itself. And lo, this week we are talking about the Slaughter plan - to deem the Senate bill as passed without having to actually have an up or down vote.

It's 11 o'clock, do you know where your representative is?

C-SPAN has a page that shows the number of days on the floor for each senator and representative. You can sort by name, state or attendance. How many representatives have shown up on the floor less than 3 days? Ten!!!! Some of the people listed are in other positions now, such as Clinton and Ted Kennedy. But last I checked Kirsten Gillibrand isn't one of those.

Check it out

It's the message, stupid!

I hate to just link to another blog to make a point, but this one is just too emblematic. So, this is what prompts my rant today: Jackson says EPA is losing a public relations war over climate regulations 
Subtitle: It's all Bart Simpson's Fault.
This is the problem: This admin seems to think that if only they could be more articulate (or perhaps less articulate), or better at marketing, or had a good facebook page, or if voters weren't so stupid...
Never a problem with the message itself. Never that the policy is being rejected. If the idea doesn't fly, the problem is never the idea, it just hasn't been presented effectively.
So, what part of "NO!" do they not understand? Well, all of it actually. If you say no, then obviously you have missed their point.
It's a bad idea! Actually, "bad" is a qualitative judgment that is not substantiated by the facts we have selected that fully support the policy adopted by (fill in the blank agency). It is an idea, it is our idea, and therefore it will be done regardless of public opinion. Good or bad is not relevant.
We don't want it! Clearly, you have not listened. Because if you had, you would know what is good for you. If you now what's good for you, you would agree, nay, you would be out there demonstrating for us! Or at least tweeting for us.

The web behind the teensie spider

OK, lame title. But hang with me here. This is about why the healthcare package doesn't break down into little pieces and parts so well.

Start with "No pre-existing conditions." If that is the rule, then people won't get insurance until they need it. Kind of a no-brainer. Insurance companies don't like it because it presents a risk - a really large risk - that anyone applying for health insurance is actually sick to begin with. That isn't insurance folks, that's having someone else pay your bills. Insurance is for the unexpected.

Then there is removing the caps or ceilings on how much an insurance company is going to pay for someone's health care over a lifetime.  Not that the ceilings are a problem for a lot of people, but for insurance companies, it means there is no limit to the amount they have to pay, and that is simply an incalculable risk.

If insurance companies have to insure these two risks, the premiums are going to increase like you cannot imagine. They can't just say "let's see what happens" as the government requires them to carry cash reserves sufficient to cover the people they are underwriting and to reasonably measure their risks (including their investment risks). They are audited according to government standards.

But the insurance companies are going along if (big if) a lot more people, presumably young healthy people pay monthly insurance premiums. Makes sense. If they can't control the risk coming into the pool, then they want to make the pool wider and deeper - dilute it so to speak. Forget for the moment that sooner or later those young healthy people aren't going to be young and healthy anymore.

So, in order to get rid of the pre-existing condition rule, Congress has to give insurance companies a lot more paying policy holders.

But, not everyone can afford health insurance, so some people are going to require government subsidies. There is a lot of back and forth about what sort of stick goes with what sort of carrot, but bottom line, government is going to pay a big chunk of the cost for eliminating pre-existing conditions and upper limits. It's not cheap - where will the money come from? Well, it is coming in large part from medicare. Seniors on medicare will have to pay more (premiums, copays, uncovered costs) and medicare physicians are going to lose some of their medicare revenue. And that money will go to subsidize the premiums for the new (poor) people that the insurance companies need to make the numbers work. As much as people like to demonize insurance companies, the reality is that their income from premiums must be larger than their outgo in claims. If you don't get premiums from more people, then you will have to get more premiums from the people you have.

Two things are wrong with this picture.
1) What does this have to do with reducing the cost of medical care????? What exactly are we doing to solve that problem????? Nothing.
2) Why on earth would we think it is fair to take money from seniors and from their physicians and give it to insurance companies to cover other people? This is robin hood government.

Taking away money from medicare and giving it to someone else is NOT the same as reducing medicare costs. If someone steals your wallet, they aren't reducing your monthly bills any. Which shell is the pea under here? What a joke. Except it isn't funny.