They Sold us Obamacare with Lies. Now the Truth Demands that we Repeal Obamacare.

Posted by PITHOCRATES - January 21st, 2011

CBO Scores Obamacare under $1 Trillion.  Just as the Democrats Hoped/Needed.

Healthcare reform ain’t cheap.  And that’s always been the greatest obstacle to getting it.  Medicare and Medicaid are going bust.  Costs are going up faster than we can raise taxes to pay for them.  And healthcare reform was just going to be more of the same.  More costs.  More taxes.  And more budget problems.

The debate of Obamacare proceeded during the greatest recession since the Great Depression.  Not the best environment for debating the creation of the greatest entitlement program we’ve ever considered making into law.  But they did.  It wasn’t going to be an easy sell.  It all depended on cost.  If the first 10 years cost less than $1 trillion, there would be hope.  And, guess what?  They did (see CBO: Health-care reform bill cuts deficit by $1.3 trillion over 20 years, covers 95% by Ezra Klein posted 3/18/2010 on The Washington Post).

According to a Democratic source, CBO has finished its work and will release the official preliminary score later today. But here are the basic numbers: The bill will cost $940 billion over the first 10 years and reduce the deficit by $130 billion during that period. In the second 10 years — so, 2020 to 2029 — it will reduce the deficit by $1.2 trillion. The legislation will cover 32 million Americans, or 95 percent of the legal population.

How about that?  Less than $1 trillion.  With $60 billion to spare.  And it cut the deficit, too.  Who could ask for anything more?

How they got these numbers, and whether there are important qualifiers, will be easier to say once CBO releases its analysis. But the bottom line is that this is the exact sort of score that Democrats wanted, and is in fact considerably better than some had come to expect they would receive. Coverage is better than the Senate bill, which will reassure liberals, and deficit reduction is better than either bill, which will reassure conservatives.

When the nonpartisan CBO released its analysis, these were indeed the numbers.  Things were looking up for Obamacare.  But exactly how did they get those numbers?

Obamacare by the Numbers:  Lies, Deceit and Flimflammery.

Well, it would be awhile before anyone could answer that question.  At some 2,000 pages, the bill was complex to say the least.  So complex that those voting for it didn’t even take the time to read it.  Besides, there was no time to read it with the vote schedule to happen before the ink even had a chance to dry.  So they didn’t.  And voted.  Because as Nancy Pelosi said, they would have to pass it before learning what was in it.  And that’s exactly what they did.

Well, we now know why they rushed Obamacare into law.  Because anyone reading and understanding the details would have been furious.  To say the data the Democrats gave to the CBO were suspect would be a gross understatement.  When the CBO scored H.R. 2 (the repeal of Obamacare) it becomes clear how they got those rosy numbers (see Everything starts with repeal by Charles Krauthammer posted 1/21/2011 in The Washington Post).

“CBO anticipates that enacting H.R. 2 would probably yield, for the 2012-2021 period, a reduction in revenues in the neighborhood of $770 billion and a reduction in outlays in the vicinity of $540 billion.”

As National Affairs editor Yuval Levin pointed out when mining this remarkable nugget, this is a hell of a way to do deficit reduction: a radical increase in spending, topped by an even more radical increase in taxes.

The repeal of Obamacare will increase the deficit.  Because Obamacare included $770 billion in new taxes (i.e., revenue).  To pay for $540 billion in new spending.  High spending.  And even higher taxes.  Of course, at the time all we heard was deficit reduction.  Pretty sneaky of them.

Of course, the very numbers that yield this $230 billion “deficit reduction” are phony to begin with. The CBO is required to accept every assumption, promise (of future spending cuts, for example) and chronological gimmick that Congress gives it. All the CBO then does is perform the calculation and spit out the result.

Future spending cuts.  Like the gutting of Medicare.

In fact, the whole Obamacare bill was gamed to produce a favorable CBO number. Most glaringly, the entitlement it creates – government-subsidized health insurance for 32 million Americans – doesn’t kick in until 2014. That was deliberately designed so any projection for this decade would cover only six years of expenditures – while that same 10-year projection would capture 10 years of revenue. With 10 years of money inflow vs. six years of outflow, the result is a positive – i.e., deficit-reducing – number. Surprise.

Interesting accounting practices.  The kind that sends people to prison in the private sector.  Overstating profits by not matching costs to revenue.  If they did the accounting along GAAP, there would be no deficit reduction.  Because Obamacare actually will increase the deficit.  They’re cooking the books.  To mislead CBO.  And the American people.

If you think that’s audacious, consider this: Obamacare does not create just one new entitlement (health insurance for everyone); it actually creates a second – long-term care insurance. With an aging population, and with long-term care becoming extraordinarily expensive, this promises to be the biggest budget buster in the history of the welfare state.

When you lie, lie big.  No one risks going to prison in the private sector for stealing pennies.  If you’re going to bilk the taxpayers, make it worth the price of getting caught.  There is even the theory that if the lie is big enough most people will believe it.  Because they just can’t imagine anyone making up such a big lie.

And yet, in the CBO calculation, this new entitlement to long-term care reduces the deficit over the next 10 years. By $70 billion, no less. How is this possible? By collecting premiums now, and paying out no benefits for the first 10 years. Presto: a (temporary) surplus. As former CBO director Douglas Holtz-Eakin and scholars Joseph Antos and James Capretta note, “Only in Washington could the creation of a reckless entitlement program be used as ‘offset’ to grease the way for another entitlement.” I would note additionally that only in Washington could such a neat little swindle be titled the “CLASS Act” (for the Community Living Assistance Services and Supports Act).

Fool me once shame on you.  Fool me twice shame on me.  At this point, it would be safe to assume that all their financial projections are dishonest.  Why?  Because liars lie.  If we catch you making one mistake you can claim an accounting oversight.  But we’re well past that now, aren’t we?  I think the term ‘habitual’ is more appropriate.

That a health-care reform law of such enormous size and consequence, revolutionizing one-sixth of the U.S. economy, could be sold on such flimflammery is astonishing, even by Washington standards. What should Republicans do?

Make the case. Explain the phony numbers, boring as the exercise may be. Better still, hold hearings and let the CBO director, whose integrity is beyond reproach, explain the numbers himself.

Yes.  It’ll be easy.  Just do what the Democrats wouldn’t do back in March of 2010.  Show the math.  Even the people who don’t like math will understand it.  I mean, it’s only arithmetic.  Numbers in columns.  Plussing them.  And minusing them.  Simple math.  Just show the people.  They’ll get it.

To be sure, the effect on the deficit is not the only criterion by which to judge Obamacare. But the tossing around of such clearly misleading bumper-sticker numbers calls into question the trustworthiness of other happy claims about Obamacare. Such as the repeated promise that everyone who likes his current health insurance will be able to keep it. Sure, but only if your employer continues to offer it. In fact, millions of workers will find themselves adrift because their employers will have every incentive to dump them onto the public rolls.

And let’s not forget about those death panels.  They were in Obamacare.  Then out.  Then they were in Medicare.  Then out.  Where they are nobody knows.  But you know they’re there.  Because the numbers are far worse than they let us believe.  And the only way you can cut costs when you’re in the business of providing health care is to not provide as much health care.  Especially the expensive kind.  The kind that Granny needs.

This does not absolve the Republicans from producing a health-care replacement. They will and should be judged by how well their alternative addresses the needs of the uninsured and the anxieties of the currently insured. But amending an insanely complicated, contradictory, incoherent and arbitrary 2,000-page bill that will generate tens of thousands of pages of regulations is a complete non-starter. Everything begins with repeal.

Yes.  Repeal Obamacare.  Do it like removing a Band-Aid.  Quickly.  And in one stroke.

Figures don’t Lie.  But Liars Figure. 

Most legitimate polling shows the majority of people want to repeal Obamacare.  And for good reason.  They lied through their teeth to get this thing into law.  But they were even opposed to it before the vote.  There was fierce opposition at the town hall meetings.  And it took the bribing of Democrats to get the thing passed.  Most of who are out of a job now.  Because they acted against the will of their constituents.

Yet they still persist.  They keep lying.  They say that if we repeal Obamacare the economy will crash into recession.  And kill kids.  But the numbers don’t agree with this.  Neither does history.  For no one ever stimulated an economy with a massive tax increase.  And a lot of kids have survived without a national health care entitlement.  We haven’t had one all these years.  And we’ve had a lot of kids that grew into adults.  In fact, those lying to us now were all once kids.  They made it into adulthood without a national entitlement.  And others will, too.

Figures don’t lie.  But liars figure.  And they’re figuring like there is no tomorrow to keep this most unpopular law from being repealed.  Why?  Simple.  Because it’s one-sixth of the U.S. economy.  It’s not about health care.  It’s about expanding government.  And the liberal agenda.  To explode the size of the public sector.  Flood Washington in other people’s money.  So these liberals will never have to work a real job in their lifetime.

If you can think of a better idea, let me know.  But I’m sticking with this.  Because it’s always about the money.

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LESSONS LEARNED #49: “The ‘tolerant’ are intolerant.” -Old Pithy

Posted by PITHOCRATES - January 20th, 2011

Agitate and Instigate – Getting the People to Help the Well-to-Do

There are tolerant people out there.  Independents.  Moderates.  Lots of Democrats.  And, yes, even conservatives.  Even though there are those who demonize conservatives.  And say that they aren’t.  By people who claim to be.  Who are, in fact, not.  Liberals.  That 20% sliver of the population.  Those who benefit greatly from a liberal agenda.  And agenda that greatly burdens the other 80%.  Through higher taxes.  And greater regulation.  Which adds costs to business.  Which results in higher prices.  Fewer jobs.  A poorer population that can’t buy as much stuff.  And a depressed economy.

This 20% lives a privileged life.  College professors, public sector employees, union public school teachers, the mainstream media, liberal politicians (both Republican and Democrat), etc.  People who make a lot of money.  But don’t work a real job.  Like the other 80% of the population.

To live a privileged life requires the other 80% to voluntarily pay for it.  And that’s not easy.  These people can make as much as three times what those in the private sector make.  So they can’t expect much pity.  Because people just don’t pity you if you’re struggling to make two house payments and a boat payment.  Especially when they’re staring foreclosure in the face on their one and only home.  So they need to get our support some other way.  So they agitate.  Instigate.  They like to stir up trouble.  Demonize their opponents.  So no one focuses on just how well they live and how little they work.

Feigning Tolerance to Attract the Single Issue Voters

So they agitate and instigate to get some of that 80% to support them.  They look at single issues that are dear to some people.  Abortion.  Immigration.  Drugs.  Cigarettes.  Birth control.  Fast food.  Sugary beverages.  Health care.  Secularism.  Etc.  Anything they can politicize.  Anything they can use as a wedge to move people from supporting the 80% and to supporting the 20%.

Scare tactics.  Demonization of individuals.  Political correctness.  These are some of their tools.  Things that can help stir up trouble.  Agitate people.  And make them do something that they normally wouldn’t do.  Support their far left agenda.  Because they attach these single issues to their agenda.  These single-issue people may not agree with the far left liberal agenda, but their single issue trumps all.  Much like Congress does when attaching pork to a bill.  They’ll attach bazillions of dollars of outrageous earmarks to a bill entitled ‘it’s time to stop abusing children’.  It’s effective.  Vote for the bill (and the irresponsible spending attached to it).  Or be on the public record for being in favor of abusing children.  Not much of a choice, really.  Especially if you ever plan to run for reelection.

Tolerance.  That’s an especially useful tool.  For painting themselves as enlightened and opened minded.  While painting their opponents as mean, cold, unfeeling and close minded.  And it’s rather ironic.  For their opponents are often far more tolerant than the tolerant, liberal left.

The Dangers of Smoke is Relative.  The Cigarette kind is Bad.  But the Marijuana kind, Surprisingly, Isn’t

Pity the poor cigarette smoker.  He or she can’t get a break anywhere.  They’ve made it criminal to smoke pretty much anywhere but in your own home.  And they’re looking at that, too.  Especially if you have kids.  Pity, too.  Some of my fondest memories are as a child when my aunts and uncles came over to visit.  They smoked and played gin rummy.  While we played.  My cousins.  My brother.  And me.  I’m not a smoker.  But to this day when I get a whiff of cigarette smoke I get this warm feeling of nostalgia wash over me.  But those days are gone.  First they’ll band smoking in your home.  Then gin rummy.  And then probably having aunts and uncles over that could unfavorably influence your kids. 

Cigarette smoke is bad for you.  Second hand smoke is bad for those around you. So they are very intolerant of anyone smoking those foul, detestable cigarettes.  But if you want to spark up a fatty, they’re okay with that.  In fact, they want to decriminalize marijuana.  They’ve already started with ‘medical’ marijuana.  Now there is a thriving market for illegal medical prescriptions for medical marijuana.  And, you know what?  That’s silly.  They’re going to smoke it anyway.  So let’s just decriminalize it completely.  And open cannabis coffee shops like they have in the Netherlands.  Because there ain’t nothing wrong with a little unfiltered marijuana smoke.  Unlike that nasty, foul, vile cigarette smoke.  And if you have a problem with marijuana, why, you’re just intolerant.

What’s a worse Lifestyle Choice than Heroin Addiction?  Eating a McDonald’s Happy Meal

San Francisco is a big gay city.  And by that I mean gay-friendly.  They have a lot of gays and lesbians living there.  And a lot of intravenous drug users.  Therefore, they have a big AIDS problem.  To try and prevent the spread of AIDS they’ve been providing clean syringes to help heroin addicts support their heroin addictions.  They brand anyone opposing this policy as intolerant of the gay community.  The addict community.  Or of drug users and sexually active people in general.

Meanwhile, the city of San Francisco has banned McDonald’s from including toys in their Happy Meals.  Because it encourages children to live an unhealthy lifestyle.  So they’re intolerant of parents letting their kids enjoy an occasional Happy Meal.  While they are tolerant of subsidizing an addict’s addiction.  Even though everyone eating a Happy Meal has not gone on to be obese and suffer from poor health.  While most heroin addicts eventually kill themselves from the drugs they abuse.

Gay Marriage is Beautiful.  While Traditional Marriage is Legalized Rape

And speaking of gays in San Francisco, let’s talk about marriage.  The Left says that we should allow gays to marry each other.  That we are denying them the highest form of happiness known to a loving couple.  Wedded bliss.  And anyone opposing this is just intolerant of the gay community.

 Meanwhile, who was it all these years saying that marriage was nothing more than slavery?  An archaic ceremony that made strong, independent women mere chattel.  Slaves in the kitchen.  Whores in the bedroom.  And legalized rape.  Who was this?  Why, the Left.  The feminists.  They hated the institution of marriage.  Because it relegated women into second class citizenry.  Anyone fighting for such an archaic institution was just intolerant of strong women.  Because marriage is bad.  Unless the people getting married are gay.

You can’t tell a Woman what she can do with her Womb.  But you can Police her Eating and Smoking Habits.

The abortion argument is about empowering women.  Liberals say that without the right to choose women are condemned to second class citizenry as housewives and mothers.  Because they would have no choice.  If they enjoy a little slap and tickle and get pregnant, a woman can’t go on in her life afterward like a man can.  And that ain’t fair.  And anyone who is intolerant of abortion on demand is just being intolerant of feminism.  And wants to confine women to being a slave in the kitchen.  And a whore in the bedroom.  Taking care of a bunch of rotten, screaming kids.  While that bastard of a father goes out and builds a glorious career.

Liberals say a woman is responsible for her womb.  That we should all stay out of it.  It’s her decision.  Her personal property.  Her rules.  No one should have any say whatsoever with what she does with that part of her body.  But every other part of her body is apparently open to regulation.  Telling her that she shouldn’t smoke, eat fast food or drink a sugary drink, why, that’s okay.  They have every right, nay, responsibility, to police her body in those respects.  But not her womb.  There, she has choice. 

Temporary Nativity Scenes on Public Property are Intolerable.  But Permanent Religious Displays on ‘Conquered’ Territory are Okay.

The secular left is very intolerant of any nativity displays on public property for a few weeks around Christmas.  They scream about the separation of church and state.  They argue that if we allow these nativity displays we’re just a step away from antidisestablishmentarianism.

These same people though called anyone who opposed the Muslim community center near Ground Zero intolerant.  Now even though all Muslims aren’t terrorists, the terrorists who crashed into the Twin Towers were Muslim.  And, interestingly, throughout history Muslims have built mosques on conquered territory.  So the terrorists (who happened to be Muslim) would have seen that community center (that included a mosque) near Ground Zero as a symbol of the territory that they, the bad guys, not Muslims in general, conquered.  And this was just the height of insensitivity to those who lost loved ones on 9/11.  But as far as the liberal left is concerned, these people are just being intolerant.  Because that community center that will be there all year long for years and years to come is no big deal.  But the appearance of nativity scenes for a scant few weeks around Christmas, well, that’s just plain offensive.  In intolerable.

We Should Tolerate Attacks on Christianity.  But not Attacks on Islam.

And speaking of religion, remember all that hoopla about those cartoons in the Danish press?  Of the Islamic prophet?  Well, this ignited a firestorm.  That reached all the way to South Park.  In Cartoon Wars Part II the show featured an appearance of the prophet.  But when the episode aired, Comedy Central blacked out the image.  Because they said it would be offensive to Muslims.  The Left applauded this.  For anyone who dared to do such an insensitive thing were obviously Christians showing their intolerance of Islam.

Meanwhile, placing a crucifix in a jar of piss is art.  Making a movie about Christ having a sexual relationship with Mary Magdalene is art.  Openly deriding Christians derogatively as ‘God-clingers’ is just free speech.  And perfectly acceptable.  No matter how many Christians are offended.  To the offended the Left simply says, “Get over it.  You intolerant God-clingers.”

Never Let a Crisis go to Waste.  Or an Opportunity.

You get the picture.  America is basically a center-right country.  A nation that was founded on Judeo-Christian values.  And these values still guide many people today.  This is the 80%.  So the 20% attacks these values.  To agitate.  To instigate.  To foment.  They attack Christianity and tell gays that conservatives want to get rid of them.  Meanwhile the religion they say we must be tolerant of openly persecutes gays.  They don’t preach to them that they are morally wrong.  But literally persecute them.  Kill them.  The Left supports this religion and their mosque near Ground Zero.  In New York City.  Where there is a large gay population.  And yet no one sees this disconnect.

Because everything for this 20% is an opportunity.  And when you’re opportunistic (never let a crisis go to waste), you don’t let a thing like philosophical consistency weigh you down.  Look at every issue they stand on and you will probably find a paradox.  Cigarette smoke is bad for you but marijuana smoke is fine.  We shouldn’t eat fast food or drink sugary drinks because they are unhealthy.  But let’s give clean syringes to help our heroin addicts feed their addictions.  Marriage is bad and oppresses.  But gay marriage is a beautiful thing.  Women can choose to have an abortion.  But they can’t choose to have a Big Mac Combo meal and a cigarette.  Christianity can be mocked because it’s ‘not nice’ to gays and women.  But we must respect Islam that persecutes gays and treats women as chattel. 

Here a paradox.  There a paradox.  Everywhere a paradox.  Why, you can say liberalism itself is a paradox.  Because it is both tolerant and intolerant.  Often on the same issue.  It all depends on which way the political wind is blowing at the time.  You see, that’s what happens when you trade philosophy for political expediency.  When you don’t govern but exploit opportunity.  When you see an opportunity to extort money (sue Big Tobacco).  Or just to screw with Big Business (like McDonalds) to show those corporate sons of bitches who really has power.  Or to just stir up the pot, getting people riled up against their Judeo-Christian tradition (gay marriage, abortion, feminism, etc.).  Not to advance a particular philosophy.  But an agenda.  That has but one goal.  To perpetuate their privileged class.

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Obamacare and H.R. 2 – The Perfect Match

Posted by PITHOCRATES - January 19th, 2011

When Healthcare Insurance becomes Welfare

Well, the Republican controlled House passed H.R. 2 (Repealing the Job-Killing Health Care Law Act).  But the Democrat controlled Senate is vowing to defy public opinion.  Harry Reid won’t even bring it up to a vote.  Probably because he’s afraid some of his Democrat colleagues worried about reelection in 2012 may vote to repeal it. 

So they’re rolling out the usual sob stories.  Repealing the bill will kill kids.  Plunge the country into a depression worse than FDR’s Great Depression.  You know, the usual stuff (see House votes on repeal of healthcare law by Michael A. Memoli, Washington Bureau, posted 1/19/2010 on the LA Times).

The move by House Republicans has spurred a vigorous defense of the law by many Democrats and the Obama administration, even as they were reluctant to do so in the fall campaign. They cited emotional stories of constituents who are benefitting from the law — particularly children who can no longer be denied insurance coverage for preexisting conditions.

Repeal, Democrats said, could cause more than 5 million Americans with preexisting conditions to be denied coverage, and add $230 billion to the deficit in the next 10 years.

Think for a minute why insurance companies exclude preexisting conditions.  Better yet, let’s say you own an insurance company.  You make money by collecting insurance premiums.  You pay claims out of those paid premiums.  Now, the key for this to work is that more people have to pay premiums than collect claims.  If not, you will run out of money and go out of business.  See?  It’s business.  Your income (paid premiums) has to be greater than your costs (claims).  Ergo the exemption of preexisting conditions.  If you didn’t exclude them, people would only buy insurance when they’re sick and need benefits.  Costs (claims) would be greater than your income (premiums).  And your insurance company would go out of business.

Allowing preexisting conditions.  It sounds nice.  In a touchy feely caring kind of a way.  But it will kill the insurance industry.  Then the government will have to step in and make healthcare insurance welfare.  Supported by an ever growing tax burden.  Like in every other nation with nationalized health care.  So they’re being a bit disingenuous by pulling on the old heartstrings.  Then they just flat out lie.

“Democrats have made a firm commitment that we would judge every proposal that comes to the floor by whether it creates jobs, strengthens the middle class, and reduces the deficit. The repeal of patients’ rights fails on all three counts,” House Minority Leader Nancy Pelosi (D-San Francisco) said before the vote.

The Economically Challenged:  Nancy Pelosi and her Constituents

What they call deficit reduction is a huge tax increase and a gutting of Medicare.  But raising taxes doesn’t create jobs.  If it did we would never cut them during bad economic times.  We cut them because lowering taxes creates jobs.  Even Obama admitted this in the big compromise to extend the Bush tax cuts.

When you kill jobs you crate unemployment.  With fewer people working there are fewer people paying taxes.  This is one of the reasons why we have record deficits now.  We have record unemployment rates that just go on and on and on with no end in sight.  (The other is the explosive government spending corresponding with this fall in tax revenue).  Making this problem worse will add to the deficit, not reduce it.

Higher taxes and unemployment and a reduction of Medicare benefits is not going to help anyone in the middle class.  It’s going to make their lives that much harder.  So Pelosi is wrong on all three counts.  Of course, it’s hard to blame her.  It must be the water in her district.  Makes people economically challenged.  For her constituents all think like she does.  At least the 80% or so that keeps voting for her.  No, passing H.R. 2 will be the best thing to happen to the middle class since the 2010 midterm elections.

Obamacare is so Good that it Insured the Uninsured – Even before it was Passed

And the lies keep coming.  This from Karen G. Mills, administrator of the Small Business Administration, on January 18, 2011.

Every day America’s entrepreneurs and small-business owners are finding more ways to access affordable health care insurance because of the Affordable Care Act. We have some very important data recently, which is that after years of dropping coverage, the number of small businesses offering health insurance to their workers is actually going up. This is according to the Kaiser Family Foundation: nine percent more small businesses with less than 200 employees provided coverage in 2010 compared with 2009, and for those with less than 10 employees, the expansion in coverage was even bigger. It was 13 percent.

Funny.  Because small business (and unions) have been asking for Mini-Med plan waivers.  Because the cost to comply with Obamacare would otherwise force some 1.5 million people off of their current health care plans.  So how does Ms. Mills reconcile this fact with the rosy statement above?  Why, you lie about polling results (see Small business and the health care repeal by Glenn Kessler posted 1/19/2011 on The Washington Post).

Mills, to her credit, cited her source, the Kaiser Family Foundation 2010 annual survey of Employer Health Benefits. And her statistics are correct. It’s just that they have nothing to do with the new health care law.

First, the survey was taken between January and May of last year, so much of the data was collected before the law even passed… Second, the Kaiser report specifically says the analysts were puzzled by the shift in small business figures, but were pretty sure it did not mean more firms were signing up to provide health insurance to their employees… “A possible explanation is that non-offering firms were more likely to fail during the past year, and the attrition of non-offering firms led to a higher offer rate among surviving firms.”… A third problem is that the data set for small firms is too small to be significant.

So the administrator of the Small Business Administration, Karen G. Mills, is making less than honest statements.  She’s saying that polling data shows Obamacare is already having a positive impact on small business.  With the poll numbers taken before the passage of Obamacare, this is just impossible.  It would appear that Ms. Mills, the Small Business Administration, is not a friend of small business.  Because she lied about the poll results.  Put the two together and one must conclude that Obamacare is not good for small business.  If not, why would she lie?

Yes, Nancy, Let’s Pass H.R. 2 to Find out what’s in It

Remember how they passed Obamacare.  Quickly.  With backroom deals (the Louisiana Purchase, the Corn Husker kickback, etc.).  And, of course, without reading it.  Nancy Pelosi said they’d have to pass it to learn what was in it.  Why?  Because they were afraid that if people knew what was in it the people would pressure their representatives and senators to not pass it.  What other reason could there be?

But in the new spirit of civility, let’s extend an olive branch to Nancy Pelosi.  Let’s follow her advice.  Let’s pass H.R. 2.  Then let’s see what will happen.  If the recession turns into depression, if the deficit continues to grow, then we’ll concede that she was right.  Then we can reinstate Obamacare.  Increase taxes.  Gut Medicare.  Ration health care.  And make this nation the liberal paradise they so long for.  But first let us pass H.R. 2 to see what’s in it.

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FUNDAMENTAL TRUTH #49: “The ‘tolerant’ are intolerant.” -Old Pithy

Posted by PITHOCRATES - January 18th, 2011

Liberals Benefit most from a Liberal Agenda

People on the left claim to be more tolerant than those on the right.  Live and let live, they say.  But they don’t really mean that.  For they are very intolerant of anyone who thinks differently than they do.

We’re talking about the far left.  The liberals.  That 20% of the population.  Which excludes a large percentage of Democrats.  And moderates and independents.  We’re talking college professors, public school teachers, the liberal media, the Hollywood elite, public sector unions, liberal politicians, etc.  People who have an air of superiority about them.  Who think they’re better than most people.  And who don’t care to hear any contrary views or opinions.  Because if they disagree with them, those views and opinions are just wrong.

For the ruling elite is always right.  And that’s who they think they are.  Elite.  And they rule.  Or try to.  Either in Congress through legislation.  Or by shaping opinion.  In the elite liberal media.  In our public schools where they shape the minds of our young children (to be good stewards of the planet, to trust government and not private business, that Americans stole the land from the indigenous people, that America was built on slavery and greed, etc.).  In our colleges where they continue and add to the work of the public schools (that we oppress women, that we’re a racist society, that Marxism is good while capitalism is bad, etc.).  In the entertainment world (actors, musicians, etc.) that gives a loud voice to this minority opinion.  In the public sector that grows bigger and consumes ever more of our tax dollars in exchange for support of the liberal agenda.  Etc.

It’s a small community.  Where they take care of each other.  They all have a vested interest in advancing the liberal agenda.  Because they live better than the average American.  At the expense of the average American (through high taxes, tuition, union contracts, etc.). 

Getting the People to Vote you into the Privileged Elite

So we have a minority group enjoying a privileged lifestyle.  Far better than the people paying to support that lifestyle can ever imagine.   In times past, the ruling elite used the power of the state to oppress the masses.  To get the money from them to support those privileged lifestyles.  While keeping them living in fear.  So the oppressed didn’t band together to overthrow the ruling elite.

It’s an effective formula.  And it has worked.  For awhile.  For some.  They may enjoy a few years.  Or a decade.  Or two.  A century.  Until they get overthrown by the masses.  Like the French did in 1789 (the French Revolution).  Or like the Russians did in 1917 (the February Revolution and the October Revolution).  These got pretty ugly.  A lot of people died.  Including the royal sovereigns. 

That’s the downside of absolute power.  You really piss off the people you oppress.  And pissed off people tend to revolt.  Thankfully, in a democracy, you don’t have to worry about that.  You can live the privileged life.  Without physically oppressing them.  You just have to get the people to vote for you.  And you do that by promising them free stuff.  And by demonizing your opponents.

Political Correctness helps to Limit Political Dissent

It’s called divide and conquer.  When you go up against a larger enemy, you try to divide that enemy and attack smaller parts of the enemy.  Because there is no way you can win going head to head.  The liberals, that 20%, cannot go up against the other 80% with any hopes of winning.  So they pick off parts of the 80% and attack them.

Their weapon of choice?  Political correctness.  Today you have to be very careful of what you say.  And how you say what you say.  Because if you don’t you can offend someone.  This helps to limit political dissent.  Because dissenters may say something politically incorrect.  And no one wants that.  Because they tell us in our public schools that that is wrong.  In college, too.  And in the media.  And on TV.  In the movies.  Etc.

And you can use political correctness to demonize your opponents.  If you oppose affirmative action you’re racist.  If you oppose immigration reform, you’re racist.  If you oppose welfare reform, you’re cruel and indifferent to the sufferings of the poor.  If you oppose gay marriage you’re a homophobe.  If you oppose gun control you’re a redneck Second Amendment nut (somehow that’s politically correct to say).  If you oppose Big Government you’re a tool of the special interests and Big Business.  And so on.  If you oppose any part of their agenda, there’s just something wrong with you.  Because you disagree with the enlightened people (that 20% of the population).  And because we see so many people admire and respect these enlightened people (thanks to our schooling, the media, Hollywood, etc.) we should want to be like them.  So people admire and respect us, too.

Divide and Conquer the Single Issue People

Those on the left, that 20%, are very tolerant of what you say or do.  As long as it’s what they say or do.  Because if you think and act like they do, they can maintain their privileged life.  If you disagree with them, then you threaten their privileged life.  You could vote liberals out of office.  You could set performance standards for public school teachers.  You could reduce the power of public sector unions.  You start doing these things and the next thing you know these liberals will have to get real jobs.  And they ain’t having none of that.

So they divide and conquer.  They support gay marriage and call you a homophobe because of your ‘intolerance’ of the gay lifestyle.  So the gays and lesbians support liberals.  They support abortion and call you a religious extremist because of your ‘intolerance’ of women having choice.  So a lot of people who enjoy consequence-free sex support liberals.  (And a lot of women who want to keep the right to choose just in case.)   They want to decriminalize drugs and call you a fascist for your ‘intolerance’ of people being free to put whatever they want into their bodies.  So the potheads and other recreational drug users support liberals.  (Of course, these same liberals will tell you NOT to eat a Big Mac or drink a Coke because they’re just not healthy for you.  Unlike heroin or cocaine.  Apparently.)   They support affirmative action and call you a racist because of your ‘intolerance’ of minorities.  So a lot of minorities support liberals.  And so on.

It adds up.  Get enough of these single issue people and you can maintain your power base.  So they are very tolerant of these people’s views and opinions.  And very intolerant of anyone opposing them.  They do this to persuade as many of the 80% that oppose their liberal agenda to support them.  So this minority of the population can continue to live a privileged life.  At our expense.

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Obama/Liberals want a Health Care System more British while the British want one more American

Posted by PITHOCRATES - January 17th, 2011

Fixing the NHS in the UK to be more like that in the USA

The United Kingdom’s National Health Service (NHS) must be broken.  Because they’re trying to fix it.  Not by making it bigger.  But by making it smaller.  They’re reducing the role of the central government.  And increasing the role of doctors and nurses treating patients.  It’s a program called General Practice Pathfinders.  And its goal is to improve the quality of health care of patients while reducing the cost of that health care (see General practice pathfinders now cover more than half the country posted 1/17/2011 on the United Kingdom’s News Distribution Service for Government and the Public Sector).

If we want better results for patients and a more efficient NHS, then we must devolve power to General Practices.

That means fewer bureaucrats in the business of medicine.  Instead, they’ll be more doctors and nurses.  Less one size fits all.  More of what’s best for you.  The patient.  As determined by a patient’s doctor.  Not some spreadsheet analyst in a faraway Big City.  But by someone in the local community that actually sees you. 

Some distant bureaucrat will not determine your care by looking at numbers in columns.  Instead, it will be by someone close enough to take your pulse.  To listen to your lungs.  To lay a reassuring hand on your shoulder.  Someone more personal.  In a system that is less scary.  Less cold.  Less impersonal. The way it used to be in the United Kingdom.  The way it still is in the United States.  For a while, at least.

And how is that working in the UK?

Patients are already seeing the benefits of local commissioning where consortia have been formed. The Croydon Healthcare Consortium, which serves a culturally and economically diverse population, are already leading the way in improving patient access to diagnostics, treatment and care. In response to feedback from patients, the Consortia was able to introduce a pilot locating mobile screening clinics at six Croydon GP practices to provide heart monitoring and ultrasound.

This has provided patients with greater choice and convenience, avoided long waiting times, high travel costs and expensive hospital parking, and sped up testing, diagnosis and treatment.

Improved access to diagnostics, treatment and care?  Greater choice?  Less wait times and travel costs.   Speedier testing and treatment?  Sounds like it’s a smashing success.  In fact, that sounds like the kind of care that affluent British have been traveling to the USA for.

Of course, to have these improvements means that the NHS had limited access to diagnostics, treatment and care.  Less choice.  Longer wait times.  Higher travel costs.  Slower diagnosis and treatment.  All the pitfalls of national health care.  Everything the critics of Obamacare warned about.  And supporters denied.

There’s a word for this.  Rationing.  And the UK is trying to reverse their rationing by reversing the top-down managed system that is the NHS.  Because the current system is broken.  And they’re trying to fix it.  By moving in a direction that is closer to what we have here.  All the while Obama and the liberal Democrats are desperately trying to move the USA in the direction the UK is moving away from.

The NHS is Dead.  Long live the NHS.  At least its American Version.

So we’re trying to move to the British system.  And the British are trying to move away from the British system.  I think that says something about the British system (it’s bad).  And it says something about the supporters of Obamacare (they’re bad). 

The British system isn’t the utopia liberals think it is.  If the NHS was they wouldn’t be changing it to get “better results for patients.”  Or to make it “more efficient.”  So why are liberals trying to take us there?  Give us an American NHS?  Are they trying to destroy our health care system?  To kill old people to cut the deficit?  Or is it just because they have great big egos?  “Sure, it’s failed everywhere it’s been tried.  But we’ll make it work. Because we’re just so much smarter than everyone else.”

You see, that’s the problem you have when you give narcissists legislative powers.  They legislate.  And then we get to clean up the mess they make.

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A Liberal Opines on things Economic, Confirms why they Suck at Creating Jobs

Posted by PITHOCRATES - January 16th, 2011

Liberals don’t know Business or Jobs but they have their Big Keynesian Words

If you want to know why liberals are so bad at stimulating economic activity just read Paul Krugman’s Wages and Employment, Again (Wonkish) posted 1/16/2011 on The New York Times.  He pontificates with an erudite air of all-knowing condescension.  He’s smart.  And he wants to make sure you get this.  So he writes with big words and references big demand-side macroeconomic theories that he and his kind accept as undisputed fact.  Despite what the lessons of history say. 

Krugman is a Keynesian.  So, as a Keynesian, he knows nothing about business.  But, like a Keynesian, that doesn’t stop him from opining on the subject of business.

Here’s a fundamental truth (FT) about business.  FT 1:  If you make the cost of doing business high, you will reduce the amount of business a business does.  Here’s another.  FT 2:  If the people are NOT buying whatever they’re selling, this will also reduce the amount of business a business does.  A couple of key things a business needs here.  To have the cost of doing business kept low enough so they can sell at a price that makes them competitive in the market place.  And they need people to have jobs so they can buy their competitively priced goods or services they place into the market place.

Liberals never seem to get either of these points.

High Wages have never Stimulated Economic Activity

Keynesians believe if you give money to people that fixes everything.  When Krugman says:

…I’ve also argued a number of times that cutting wages now would probably make the slump worse, not better.

That’s Keynesian.  You cut wages and the people have less money spend.  So that’s why Keynesians are all about high wages.  Of course, they miss the other side of high wages.  High wages mean fewer jobs.  Because high wages limit the number of employees a business can hire and still sell at prices that are competitive in the market place.

High wages have never stimulated economic activity.  They just raise costs.  This let the Japanese take huge chunks of market share away from the Big Three.  And it’s bankrupting our big blue cities and states that are drowning in debt because of their public sector union contracts.  If Krugman was right, these cities would be booming in economic activity because of those fat public sector pay and benefits.  But they’re not.  The only thing those high wages are doing is bankrupting these cities and states.

Liberals never seem to get this point.  So they trade off economic activity for votes, blissfully unaware of the extent of economic damage they’re doing.  Or they’re aware and they just don’t care.

Easy Money begets Irrational Exuberance which begets Asset Bubbles which begets Recessions

Another favorite of the Keynesians is manipulating interest rates.

…a rise in the real money supply reduces interest rates, leading to a rise in demand.

Read ‘a rise in real money supply‘ as printing money.  The idea here is to make money cheap and plentiful so people will borrow it to buy things.  Like houses.  Like they did during Bill Clinton’s and George W Bush’s presidencies.  And, boy, did they.  Times were good.  Real good.  Only one problem.  Irrational exuberance.

Clinton and Bush thought they found the magical economic elixir.  Home ownership.  So they did everything in their power to extend homeownership.  Even to the people who couldn’t afford it.

Easy money.  Monetary policy that keeps money cheap and plentiful.  To entice people to borrow.  And they were.  Borrowing.  And buying houses.  So much so that they bid up the prices into a huge asset bubble.  Meanwhile, people who couldn’t afford to buy a house were buying houses, too.  The federal government pushed lenders to lend. Or face the consequences.  Be investigated for discriminatory lending.  Or, worse, suffer the public spectacle of having Jesse Jackson or an Al Sharpton publically calling them racist (a lot of the inner city poor were black).  So they came up with some creative ways to qualify unqualified people for mortgages.  We call them subprime mortgages.  And we know how those came back to bite us in the ass.

The problem with bubbles is that they burst.  And when they do, the life blows out of the economy like the air out of a popped balloon.  Deflationary spirals often follow.  And nasty, horrible and painfully long recessions.

Liberals never seem to get this point, either.  You’d think that they would as it has happened so often.

For Narcissists, it’s not the economy.  It’s their Egos, Stupid.

Krugman’s column really shows the problems with liberals.  They’re a bunch of narcissists.  Who love their superior minds.  They love to hear themselves talk.  And love to read what they write.  They write to impress.  And to stimulate themselves.  If you know what I mean.  Only those in his elite circle can understand what the hell he is writing about.  Not us.  The sloped-brow, knuckle-dragging, Neanderthals who didn’t go to the Ivy League schools.  We just work and live in the real world.  Raise our families.  And pay our taxes.

Liberals like to complicate things.  And to try to control the complex.  The economy will work fine on its own.  And when it does we experience some of the greatest economic expansions.   But when they tinker with their Ivy League knowledge, bad things typically happen.  Such as the subprime mortgage crisis.  The Great Recession.  Even the Great Depression.  All of which resulted from liberal tinkering.

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Crushing Debt is Crushing Europe and the United States

Posted by PITHOCRATES - January 15th, 2011

The Republicans are Irresponsible for not Allowing the Democrats to Spend Irresponsibly

Washington has maxed out their credit card.  They do like to spend.  But now they need to increase their credit line.  And the Republicans aren’t playing nice (see US debt passes $14 trillion, Congress weighs caps by Tom Raum, Associated Press, posted 1/15/2011 on Yahoo! News).

Remarkably, nearly half of today’s national debt was run up in just the past six years. It soared from $7.6 trillion in January 2005 as President George W. Bush began his second term to $10.6 trillion the day Obama was inaugurated and to $14.02 trillion now. The period has seen two major wars and the deepest economic downturn since the 1930s.

With a $1.7 trillion deficit in budget year 2010 alone, and the government on track to spend $1.3 trillion more this year than it takes in, annual budget deficits are adding roughly $4 billion a day to the national debt. Put another way, the government is borrowing 41 cents for every dollar it spends.

In a letter to Congress, Geithner said the current statutory debt ceiling of $14.3 trillion, set just last year, may be reached by the end of March — and hit no later than May 16. He warned that holding it hostage to skirmishes over spending could lead the country to default on its obligations, “an event that has no precedent in American history.”

Such righteous indignation.  According to Mr. Geithner, holding the debt ceiling hostage is just irresponsible.  The Republicans are using the financial wellbeing of the nation for political gain.  But I see it differently.  I don’t see the refusal to raise the debt ceiling as being irresponsible.  I see the runaway spending that makes the debt ceiling an issue as irresponsible.  And, yes, you can blame Bush for adding $3 trillion in 4 years.  If you blame Obama for adding $3.42 trillion in two years.  And then for passing Obamacare which will make us pine for the gold old days when the deficit increased only $3.42 trillion in two years.

Debt-level brinkmanship doesn’t wear a party label.

Here’s what then-Sen. Barack Obama said on the Senate floor in 2006: “The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance the government’s reckless fiscal policies.”

It was a blast by the freshman lawmaker against a Bush request to raise the debt limit to $8.96 trillion.

Bush won on a 52-48 party-line vote. Not a single Senate Democrat voted to raise the limit, opposition that’s now complicating White House efforts to rally bipartisan support for a higher ceiling.

Apparently, reckless fiscal policies that explode the debt are only a problem when a Republican is president.  Obama, a tax and spend liberal Democrat, opposed raising the debt ceiling to $8.96 trillion.  Then he outspends George W. Bush and approves a debt ceiling somewhere north of $14.3 trillion.  And to add insult to injury, they bitch with righteous indignation when the Republicans object to their reckless and irresponsible spending.  As if there is no hypocrisy in their actions.

The Debt Dominoes ready to Fall in Europe?

But there is hypocrisy.  Worse, Obama is putting the nation in financial peril.  The debt ceiling is dangerously high.  It’s nearing 100 percent of GDP.  What does that mean?  Well, let’s take a look at Europe.

Greece is drowning in debt.  Even after their bailout, they project her debt to reach 165% of GDP in 2014.  Italy is close behind.  France, Ireland, Belgium and Portugal have debt between 80-99% of GDP.  Britain, Spain, The Netherlands, Germany, Austria and Hungary have debt between 60-79%.

Some of these nations are on the brink of bankruptcy.  Greece had to make ‘austerity’ cuts.  And the people rioted.  France increased the retirement age a couple of years.  And the people rioted.  Britain made students pay more of their own university tuition.  And the people rioted.  They just bailed out Ireland.  Portugal and Belgium have crushing interest costs on their debt.  Spain is of concern.  And Germany, the fiscally responsible nation in the Eurozone, is picking up the tab for a lot of these bailouts.  Not out of altruism.  But a Euro problem anywhere is a Euro problem for Germany.  She doesn’t have much choice.  But how long can she continue to afford this generosity?

Will the Debt Crises be the end of the ‘Cradle-to-the-Grave’ Nanny State?

Not long, it would appear (see Time for Plan B posted 1/13/2011 in The Economist).

This newspaper does not advocate the first rich-country sovereign defaults in half a century lightly. But the logic for taking action sooner rather than later is powerful. First, the only plausible long-term alternative to debt restructuring—permanent fiscal transfer from Europe’s richer core (read Germany)—seems to be a political non-starter. Some of Europe’s politicians favour closer fiscal union, including issuing euro bonds, but they are unlikely to accept budget transfers big enough to underwrite the peripheral economies’ entire debt stock.

Things are so bad with some of these Social Democracies in Europe that the Economist is recommending they just ‘file bankruptcy’ and start anew.  Their financial holes are just too deep.  Of course, this means they’ll probably screw the debt holders.  But there will be fair-shared sacrifice.  They’ll eliminate some of that debt.  But they will also eliminate a lot of that spending that caused their debt crisis in the first place.  Some of their ‘cradle-to-the-grave’ nanny state will go bye-bye.  Considering how ugly it was when France tried to raise their retirement age and when Britain cut back on tuition subsidies, these austerity moves will take ugly to a new level.

But like any problem, the longer you wait to address it the worse it’ll get.

And the longer a restructuring is put off, the more painful it will eventually be, both for any remaining bondholders and for taxpayers in the euro zone’s core. The rescues of Greece and Ireland have increased their overall debts while their private debts fall, so that a growing share will be owed to European governments. That means that the write-downs in any future restructuring will be bigger. By 2015, for instance, Greece could not reduce its debt to a sustainable level even if it wiped out the remaining private bondholders.

And this is our future.  Especially with Obamacare waiting in the wings.

The Road to Serfdom – from Medicare to Obamacare

We shouldn’t be talking about raising our debt ceiling.  We need to be talking about spending cuts.  Geithner, Obama, et al are playing a dangerous game.  They want to grow government at any cost.  To get it so deeply entrenched no matter the cost so that people will riot when faced with austerity cuts.  And they’re coming.  Austerity cuts. 

It’ll start with Medicare doctor reimbursements.  Then when Medicare collapses, Obamacare will add a public option.  This will be the end of private insurance.  Obamacare will then evolve into a national health service.  Which will ration health care services.  Then they’ll raise the Social Security retirement age.  Just like in France.  By then we’ll be well along the Road to Serfdom.

And then the rioting will start.

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Incivility is NOT to Blame for Jared Loughner’s Arizona Shooting Rampage. But the Left still Blames It.

Posted by PITHOCRATES - January 14th, 2011

The Uncivil Calling the Civil Uncivil

Civility.  Civility.  Civility.  That’s all we hear.  That we must be more civil.  Too much partisanship in the country.  We need to fight less.  And work together more.  Of course, the people saying this just took a shellacking at the 2010 midterm elections.  But they sure were singing a different song before that shellacking.

Civility?  Please.  Was wishing Rush Limbaugh dead civil?  Was wishing Sarah Palin dead civil?  Was making a movie based on a ‘what if’ assassination of George W. Bush civil?  Was wishing Dick Cheney dead civil?  Was wishing Sean Hannity dead civil?  Was throwing a pie at Ann Coulter civil?  Was saying you’d have sex with Michelle Malkin, Laura Ingraham and Elisabeth Hasselbeck because they’re hot even though you hate them civil?  Was dropping a crucifix in a glass of urine and calling it art civil?  I could go on.  But that should suffice to make the point.

Is this truly a cry for civility?  Or simply a way to neuter the opposition’s power?  By calling political dissent uncivil?  Now that they have lost their power?  My, how things change.  Once upon time it was patriotic to debate and disagree.  Of course, that’s only when the ‘wrong people’ were in power.  Apparently.

This Nutcase came from the Left

The shooting rampage in Arizona showed the consequences of the lack of civility (i.e., when conservatives debate and disagree).  At least, so thought those on the left.  Until some of the facts started coming out.  Turns out that the shooter was more of a leftist than a rightwing radical.  That’s right, this Nutcase came from the Left.

He didn’t listen to talk radio.  Didn’t follow Sarah Palin.  Rush Limbaugh.  Sean Hannity.  Glenn Beck.  Or anyone on the Right.  In fact, one of his favorite books was the Communist Manifesto.  Which is not a conservative manifesto.  And he was a conspiracy nut.  One of his favorite films was Zeitgeist: The Movie.  A film citing conspiracy theories about Christ (He was just a myth), the 9/11 attacks, bankers manipulating the international monetary system, etc.  And these are, of course, theories held by people on the Left.  It’s pretty clear that if anyone incited Jared Loughner with vitriolic rhetoric, it was those on the left.

Doesn’t matter.  Still the cry for civility rings out.  Even though a lack of civility clearly didn’t prompt Loughner to do anything.  It was his insanity that did.  Even so, we still need to be civil.  And not debate or disagree.  With the liberal left.  Because that incivility could create a Jared Loughner.  Even though it didn’t here.

Forget the Paranoid Schizophrenia.  Focus on the Vitriolic Political Debate.

The Arizona shooter was oblivious to all the incivility around him.  It was the paranoid schizophrenia rattling around his head driving him.  Not all that vitriolic political debate that is supposedly ruining our nation.  Still, it is a time to reflect.  To step back and take a look at ourselves and say, “Hey.  We can be better.”  Or so David Brooks writes about in the New York Times (see Tree of Failure posted 1/13/2011).

But over the past few decades, people have lost a sense of their own sinfulness. Children are raised amid a chorus of applause. Politics has become less about institutional restraint and more about giving voters whatever they want at that second. Joe DiMaggio didn’t ostentatiously admire his own home runs, but now athletes routinely celebrate themselves as part of the self-branding process.

So, of course, you get narcissists who believe they or members of their party possess direct access to the truth. Of course you get people who prefer monologue to dialogue. Of course you get people who detest politics because it frustrates their ability to get 100 percent of what they want. Of course you get people who gravitate toward the like-minded and loathe their political opponents. They feel no need for balance and correction.

Brooks makes some good points.  And the Left should listen to them.  Because he’s talking about them.  When George W. Bush was president Hillary Clinton said it was patriotic to debate and disagree.  Now she says that this leads to domestic terrorism.  No doubt she and her fellow Democrats believe they alone speak the truth.  And that they have no need for balance or correction.  Because they are always right and loathe their political opponents.  Especially when they get shellacked in the midterm elections.

They’re Civil in North Korea.  And Oppressed

Holding hands and singing kum bay ya isn’t going to change anything.  Because we don’t agree.  If everyone in the country agreed it wouldn’t be the United States.  It would be North Korea.  And they’re very civil there.  Especially when it comes to the government that’s oppressing them.  But I don’t think we want that kind of civility here.

Debate is good.  Dissent is good.  It prevents the rise of tyrants.  That’s why Americans can debate and disagree.  That process has prevented the rise of tyrants.  And we shouldn’t be quick to dismiss that process.

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LESSONS LEARNED #48: “Government benefits aren’t from the government. They’re from the taxpayers.” -Old Pithy

Posted by PITHOCRATES - January 13th, 2011

Defense Spending is in the Constitution, Entitlements Aren’t – And it’s Entitlement Spending that’s Growing

People like to bitch about defense spending.  And I can understand why.  It’s a lot of money.  Just to kill people and break things.  People would rather see that money spent on education.  Health care.  Food assistance for the poor.  Entitlements.  Those nice, generous, government benefits.  The kinder, gentler side of government spending. 

People like the free stuff.  They want to get something for all those taxes other people are paying.  And it just kills them to see it spent on the military.  Because they’d rather see that money spent on them.  Of course if you read the Constitution, you’ll find defense spending in there.  It’s in the preamble (provide for the common defense).  You’ll find it in Article I.  In Article II, too.  Defense spending is pretty conspicuous in the Constitution.  Conspicuous by their absence, though, are entitlements.  Did the Founding Fathers overlook this?  No.  It was the whole point of federalism.  They designed the central government to do only those things that the states couldn’t.  To establish credit for the new nation, to treat with foreign nations, to coin money, etc.  And, of course, to provide and maintain a military force.  Alexander Hamilton wanted it to do more.  And he stretched the “necessary and proper” clause in Article I for some of the things he wanted the central government to do (to try and make the nation rich and powerful like Great Britain).  Pity, too.  For the Left has been stretching that clause ever since.

All right, defense spending is a constitutional requirement of the federal government.  Entitlements aren’t.  So how much are we spending on these?   In 1962, defense spending was 49% of all federal spending (see Federal Spending by the Numbers 2010).  Social Security and Medicare (the two biggest entitlements) were 13%.  Current baseline projections show that, in 2020, defense spending will drop to 14%.  And Social Security and Medicare will rise to 36%.  Medicare is the real cost driver here.  In the decade from 2000 to 2010, Medicare spending has jumped 81%.  It is outgrowing Social Security and Medicaid.  The runaway costs of Social Security, Medicare and Medicaid (the Big Three) are projected to equal total current tax revenues in the year 2020.  That means the total federal budget today will only pay for the Big Three in 2020.  Concerned?  You should be.  Especially if you’re a taxpayer.

You can pay Uncle Sam with the Overtime.  And will.

Taxpayer, beware.  The government is feeling especially generous.  With your money.  By 2020, Washington will be spending $35,604 per household.  That’ll take almost $5,000 in additional taxes per household for the Big Three alone.  That is projected to jump to $12,636 in 2050.  And that doesn’t include Obamacare.  When that is factored in, it’ll cost you as much as paying cash for a new car each and every year.  And a nice one, not a subcompact with a sewing machine for an engine.  Can you afford that?  I hope so.  Because you won’t have a choice.  You’ll be buying it.  But not for yourself.  No.  That nice beautiful car you’ll be buying each and every year?  You don’t get to drive it.  It will be for someone else.

The entitlement spending is getting so out of hand that we have record deficits.  Compounding this problem is the 2008 recession corresponding with a huge jump in entitlement spending.  It’s opened a rather large gap between revenue and spending.  And that gap isn’t going anywhere soon.  Unless they cut entitlements.  Or raise taxes.  And you know they won’t be cutting entitlements.  So, guess what?  You can pay Uncle Sam with the overtime.  Because that’s all you’ll get for your money (borrowed from Billy Joel’s Movin’ Out (Anthony’s Song)).  So get used to it.  Paying Uncle Sam.  Because Sam is going to raise your taxes.  He has no choice.  Because he won’t cut entitlements.

And they’ll have to raise taxes.  Because we’re running out of creditors to borrow from.  I mean, the Chinese only have so much money to lend.  And we can’t keep printing money.  They’ve been doing that.  Quantitative easing, they call it.  But they can’t keep doing it.  Anyone alive during the Seventies will know why.  Or anyone who has done some reading outside the public school curriculum.  In a word, stagflation.  That’s a phenomenon where you have both high inflation and high unemployment.  It’s usually one or the other.  The normal rules of economics don’t allow both to happen at the same time.  Unless you’re printing money like there’s no tomorrow.  Which they were in the late Sixties and Early Seventies.  To pay for the Vietnam War.  NASA’s Apollo program (to the moon and back).  And, of course, entitlement spending.  The biggest to date was a group of programs we called the Great Society.  Inflation was so bad that they joked about it on Saturday Night Live.  Dan Aykroyd played President Jimmy Carter, joking about the pleasure of owning a $400 suit.  And how easy it was to just call the treasury to have them print off another sheet of hundred dollar bills.  (Or something like that.)

The Reagan Deficits were Bad, but they Make the Obama Deficits look Good

The Seventies were a bad time.  Economically speaking.  Printing money was bad.  Quantitative easing was bad.  Easy money was bad.  So Paul Volcker started tightening monetary policy.  And Ronald Reagan cut taxes. And the Eighties were like a glorious spring following the bleakest of winters.  But you can’t teach an old dog new tricks.  The liberal Democrats weren’t going to roll over and cry ‘uncle’.  For they knew there was more spending left that they could do. 

So the spending continued.  Reagan had a Democrat Congress.  They fought him tooth and nail.  But he spoke directly to the American people and got his tax cuts.  And Reagan’s tax cuts resulted in a windfall of revenue.  And the Dems in Congress couldn’t spend the money fast enough.  Actually, they could.  They spent it so fast that surpluses soon turned into deficits.  They blamed Reagan’s defense spending.  So he made a deal.  He agreed to increase taxes.  If they would cut some of their entitlement spending.  To get the deficits under control.  So they did.  Increased taxes.  But they never cut spending.  Which just goes to show you that you can’t trust liberal Democrats.

You youngsters probably have no memory of these times.  But Ronald Reagan was attacked more than George W. Bush.  Hell, he was attacked almost as much as Abraham Lincoln.  The Seventies were the high-water mark of liberalism.  Then it went head to head with Reagan’s limited government supply-side economics in the Eighties.  And lost.  The hatred for Reagan knew no bounds.  For he was the man that repudiated liberalism.  So they attacked him ruthlessly. Screamed about his defense spending.  And yet his deficits were only around $200 billion.  Obama’s, on the other hand, are around $1,500 billion.  But they’re okay with that.  It’s no big deal, they say.  Just raise the debt ceiling.

It’s Spending, not Tax Cuts, that’s Causing those Record Deficits

But they can’t just raise the debt ceiling to keep spending.  Because spending is the problem.  Our debt is approaching 100% of our GDP.  When you’re borrowing money at record levels, you’re doing this because you just can’t raise taxes anymore.  You put the two together and it’s destroying the economy.  Taxes kill economic activity.  And the interest on the debt is soaring.  It’s projected to be approximately $760 billion in 2020.   That’s more than 70% of the projected budget deficit.  That means that most of the money we’ll be borrowing will go to pay the interest on the money we’ll be borrowing.  At that rate we’ll never pay down our debt.

Revenue averaged 18.0% of GDP from 1960-2009.  During the same period, spending averaged 20.3% of GDP from 1960-2009.  Not good.  But not too bad.  That’s a small, somewhat manageable deficit.  But spending takes off in 2010.  It’s projected to rise to 26.5% of GDP.  Meanwhile, revenue is projected to rise only to 18.2% of GDP.  That’s a projected deficit of 8.3% of GDP.  That’s fricking huge.  And that’s all runaway spending causing this mammoth deficit.  It ain’t tax cuts causing this.  It’s those entitlements.  Those fat, generous government benefits.

By this time there won’t be anything left to cut from the defense budget.  So they will have to turn to the generosity of the taxpayers.  And hope they enjoy personal sacrifice.  Because they’re going to be doing a lot of that.  To pay for these generous benefits.  These benefits for other people.

www.PITHOCRATES.com

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Excessive Spending on the Public Sector and Entitlements Explode Debt to Unsustainable Levels

Posted by PITHOCRATES - January 12th, 2011

Our Debt as a Percentage of GDP Growing to almost ‘Greece’ Levels

US Federal Debt As Percent Of GDP ranged from about 32% to 52% during Ronald Reagan‘s 2 terms.  It ranged from about 56% to 67% during Bill Clinton‘s 2 terms.  It ranged from about 56% to 69% during George W. Bush‘s 2 terms.  After Barack Obama‘s first year in office it jumped to about 83%.  After his second year, it jumped to about 94%.  Our federal debt almost equals our Gross Domestic Product.  And President Obama wants to raise our debt ceiling so they can borrow more.  So they can spend more.  So how do these numbers compare to other nations?  Not good (see Same as the Old Boss? by John Stossel posted 1/12/2011 on Creators.com).

Last year, I reported that the United States fell from sixth to eighth place — behind Canada — in the Heritage Foundation/Wall Street Journal’s 2010 Index of Economic Freedom. Now, we’ve fallen further. In the just-released 2011 Index, the United States is in ninth place. That’s behind Hong Kong, Singapore, Australia, New Zealand, Switzerland, Canada, Ireland and Denmark.

The biggest reason for the continued slide? Spending as a percentage of gross domestic product. (State and local spending is not counted.)

The debt picture is dismal, too. We are heading into Greece’s territory.

And we all know what happened in Greece.  They had a debt crisis in 2010.  They tried to cut spending.  Cut government benefits.  And the people rioted.  So, is it too late for us?  Perhaps not.  Because Canada pulled themselves back from the brink.  And if they can, can’t we?

Economist David R. Henderson points out that our neighbors to the north faced a similar crisis. In 1994, the debt that Canada owed to investors was 67 percent of GDP. Today, it’s less than 30 percent.

What did Canada do? It cut spending from 17.5 percent of GDP to 11.3 percent.

This wasn’t merely a cut in the growth of spending, a favorite trick of congressional committees. These were actual reductions in absolute spending.

“If a cabinet minister wanted a smaller cut in one program, he had to come up with a bigger cut in another program,” writes Henderson in “Canada’s Budget Triumph,” published by the Mercatus Center. All but one of Canada’s 22 federal departments experienced real cuts in spending. While Canada raised taxes slightly, spending was cut six to seven times more.

These supposedly painful cuts didn’t cause terrible pain. In fact, there was much more gain than pain. Unemployment dropped, the economy boomed, and the Canadian dollar — then worth about 71 cents U.S. — today is about equal to the American dollar.

Real spending cuts, eh?  Who are we kidding?  We can’t do that.  It just may be that Canada is more fiscally responsible than us.  And, dare I say, more capitalistic?

Debt Crises Hit Greece, Ireland and now Portugal

So how are things over there in Europe?  Everything hunky-dory now that the European Central Bank bailed out Greece and Ireland, saving them from their financial crises?  Well, they were talking about another EU nation that was in danger of following them.  Portugal.  So far, though, they’re still treading water.  They pulled themselves back from the brink of bankruptcy with a successful bond auction.  Unfortunately, the interest they have to pay on those bonds may bankrupt them (see This little piggy went to market posted 1/12/2011 by The Economist online).

But it is unsustainably high for a country with such so much public debt relative to its GDP. If Portugal is to remain solvent, its borrowing costs will have to fall much further. It is hard to imagine what might push its bond yields down other than concerted buying by the ECB, a de facto bail-out. It therefore seems likely that Portugal will eventually have to seek rescue funds from its euro-zone partners and the IMF, as Greece and Ireland have had to.

Yeah, it doesn’t look good for Portugal.  Or the European Union.  It’s kind of ironic.  The EU and the common currency, the Euro, were supposed to unite Europe and make it an economic superpower to compete against the United States.  But, instead, that noble idea is its own worst enemy.  Because of the common currency, one member’s fiscal mismanagement is a problem for all members in the union.  And social democracies just don’t give up those fat government benefits.  They spend until they can borrow no more.  Then they let the more fiscally responsible members bail them out.

Some of the EU members could learn a lesson from Canada.

New Jersey, New York, California and Illinois Having their own Debt Crises

And the U.S. could learn a lesson from Canada.  Because we just don’t know how to cut spending.  Illinois is “swimming in debt” and ranks 48th in job creation (see Illinois: Thank Goodness For Michigan… Or We’d Be Last In Everything by Tabitha Hale posted 1/12/2011 on RedState.com).  And what are they doing?  Cutting spending?  No.  They’re raising taxes.

In California, Jerry Brown will cut entitlements and raise taxes (see Jerry Brown’s Budget Gambit by Allysia Finley posted 1/12/2011 on The Wall Street Journal).  California, like Illinois, is sucking air.  And you need a supermajority to raise taxes in California.  And how does he plan to persuade the good people of California to agree to the tax hike?  By threatening to cut education if they don’t approve it.

Dick Morris writes that public sector unions are bankrupting New Jersey, New York, California and Illinois (see TO SAVE THE STATES: LET ‘EM DECLARE BANKRUPTCY posted 1/12/2011 on DickMorris.com).  He argues they should go bankrupt to break those unsustainable public sector union contracts.

Debt Crises the Norm unless Government takes on the Public Sector and Entitlements

Excessive spending leads to debt crises.  We all know this.  And yet no one wants to cut spending.  Except Canada (go figure).  Even though everyone knows this, no state will go up against the public sector.  Or entitlements.  For two reasons.  First, they just don’t have the stones.  Second, these are the most important demographics that keep these politicians in office.

So if you’re wondering what our future will be like just take a look at what happened to Greece in 2010.  For that may very well be our future.  Or it can be worse.  It can be like New Jersey, New York, California or Illinois.

www.PITHOCRATES.com

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