Repealing Obamacare has a larger Scientific Consensus than Global Warming

Posted by PITHOCRATES - March 1st, 2014

Week in Review

If you’re a fan of alpine skiing you probably were disappointed with the Sochi games.  Because it was too warm.  In fact, they were the warmest Winter Games ever (see It’s Official: Sochi Was the Warmest Winter Olympics Ever by Eric Holthaus posted 2/24/2014 on Slate).

In what was painfully obvious to each and every viewer, the just-completed celebration of snow sports in the southern Russia resort city of Sochi was the warmest Winter Olympics ever.

The Olympics were plagued by spring-like weather: Skiers landed in puddles at the bottom of their runs, snow was trucked in from more northern mountains, and tourists were caught sunbathing between events.

A comprehensive analysis by American meteorologist Matt Lanza, updated on Monday, showed Sochi was head-and-shoulders the warmest Winter Olympics since at least 1950, as far back as reliable weather records go.

Now, to be fair, Sochi had a head start. It has the warmest average climate of any winter Olympics venue in history. But it was even warmer than normal this month in southern Russia: The highest temperature recorded during the games was a whopping 68 degrees Fahrenheit. Six days were in the 60s.

Of course there are those that are saying this is further proof that the planet is warming.  Because of manmade carbon emissions.  And they have the data to prove it.  Because they have ‘reliable’ weather records going all the way back to 1950.  Some 64 years ago.  That is, they have reliable data covering 0.0000013% of the climate history of the planet.  So there you have it.  The science of manmade global warming is settled.  At least they say there is a scientific consensus.

It’s a pity we can’t use such ‘scientific’ sampling like that to determine whether or not to repeal Obamacare.  Because if we did all we would have to do is find 2 people out of one million who say it should be repealed.  For 2 out of one million is 0.000002%.  Which is greater than 0.0000013%.  And the odds of finding 2 people out of one million that would want to repeal Obamacare are pretty good.  Just as good as the odds of finding a favorable weather pattern in 64 years out of a total of 5 billion years of weather to settle the science of global warming.  But the left would never repeal Obamacare if only 0.000002% of the people wanting it repealed.  For they’re refusing to repeal it now even though a recent New York Times/CBS News poll shows 42% of those asked want a full repeal of Obamacare.

For the left 0.0000013% settles science when it comes to their junk science.  But 42% is only a statistical anomaly when it goes against their political agenda.  Showing how ridiculous both global warming and Obamacare are.  And how arrogant and deceitful they are when it comes to their political agenda.

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FT206: “If we got rid of Jim Crowe Laws we can get rid of another bad law like Obamacare.” —Old Pithy

Posted by PITHOCRATES - January 24th, 2014

Fundamental Truth

Colorado has allowed Recreational Use of Marijuana even though Federal Law prohibits its Sale and Use

Everyone on the left is saying it.  Those in the mainstream media are saying it.  Even some on the right are saying it.  Obamacare is the law of the land.  And it isn’t going away.  As no law ever goes away.  So get used to it.  And quit your bitching, conservatives.  Especially you radical Tea Party extremists.  With all of your Constitutional this and Constitutional that.  If you’re all about the rule of law then follow the rule of law.  And quit trying to repeal Obamacare.

Marijuana is a class one narcotic.  Federal law prohibits its sales and use.  Yet those on the left have tried long and hard to decriminalize it.  Comparing it to alcohol.  Which is not a class one narcotic.  For the left does not like the law criminalizing the sale and use of marijuana.  And have bitched so much about it that at first states have allowed medical marijuana.  And now Colorado has allowed recreational use of marijuana.  Washington, too.  Even though federal law prohibits the sale and use of this class one narcotic.

There are millions of illegal aliens in the United States.  Who are in the country illegally.  But those on the left want to change our laws so they aren’t here illegally.  They want to grant them amnesty.  Forgive their law-breaking.  And give them citizenship.  Because they are sure that if they do they will then thank those on the left (i.e., the Democrat Party) by voting Democrat.  Especially when they’re telling them that the only reason why they are illegal is that Republicans hate Hispanics.

The Supreme Court made Law the People or Congress would not by Decriminalizing Abortion

The Second Amendment to the Constitution grants the people the right to keep and bear arms.  The left doesn’t like guns.  And they especially don’t like people owning guns.  So the left hates the Second Amendment.  Have long campaigned to curb gun ownership.  And have used every opportunity to advance new gun control legislation.  Whenever a mentally troubled individual goes on a shooting spree they blame the gun and not the mentally troubled individual.  Adam Lanza, James Holmes, Jared Loughner and Seung-Hui Cho were all mentally troubled people.  Yet the discussion is always about taking guns away from law-abiding gun owners.  Not identifying these mentally troubled people before they hurt someone.  Which they could still do even if you take other people’s guns away.

Abortion was illegal everywhere in the United States.  The left did not like this.  So they campaigned long and hard to decriminalize abortion.  Which they could not do.  At least, in Congress.  Because the majority of the people opposed decriminalizing abortion.  And they never had the votes in Congress to pass a law allowing abortion.  Which is why there has never been an abortion debate in Congress.  Not liking their odds in Congress they turned to the courts.  On January 22, 1973, the Supreme Court made law the people or Congress would not.  And decriminalized abortion.

The progressives in the early 20th century saw the people were just not smart enough to know what was best for them.  And drinking was not.  Husbands drank away their paychecks, came home drunk and beat their wives and gave them (and their unborn children) the syphilis they caught from prostitutes hanging out in saloons.  So the progressives got a new amendment added to the Constitution to prohibit the sale and transportation of alcohol.  The Eighteenth Amendment.  A law the people didn’t like.  And they repealed the Eighteenth Amendment with the Twenty-first Amendment.  The only Constitutional amendment to be repealed.

The Left tries to Change or Go Around via the Courts Laws they Don’t Like

During the 1950s and 1960s Jim Crowe laws kept America segregated.  Separate but equal went the mantra.  The Southern Democrats made it difficult for blacks to vote.  And treated them as second class citizens.  Giving us race riots in the Sixties.  And a civil rights movement.  From the Montgomery Bus Boycott to Martin Luther King’s I have a Dream speech in Washington the movement grew in intensity.  Leading to the Civil Rights Act of 1964.  Overturning the Jim Crowe laws and desegregating America.  Thanks to a united Republican Party that was able to overcome Democrat opposition in Congress to pass the bill.

The Southern Democrats did not lose the American Civil War well.  They did not like the Fifteenth Amendment allowing their former slaves to vote.  And they did not like the Thirteenth Amendment freeing their slaves.  So the planter elite and their fellow Southern Democrats created the KKK.  And began passing Jim Crowe laws to keep the defeated South racially segregated.  The way it was written into the U.S. Constitution.  The way it had to be written into the Constitution to get the Deep South to join the new United States of America.  As the planter elite made clear.  If there was no slavery there would be no United States.

We’ve had a lot of bad law in this country.  Laws that we’ve repealed.  Sometimes even over Democrat opposition.  In fact the Southern Democrats pulled the southern states out of the union and into civil war with the northern states to defend the planter elite’s right to own slaves.  Just as the planter elite forced those who wrote the Constitution to leave slavery alone if they expected their states to join the new union.  And we’ve had laws the left just doesn’t like.  Laws they’ve worked long and hard to change.  Such as criminalizing gun ownership and decriminalizing marijuana.  Or to get around them via the courts.  Such as abortion.  So the argument to just accept Obamacare because it’s the law of the land is a pretty weak argument.  And chastising Republicans for not accepting laws they don’t like is hypocritical to say the least.  We should be able to get rid of bad law.  And Obamacare is a bad law.  As it is doing the opposite of what it was supposed to do.  So why not repeal it?  I mean, if we were able to get rid of Jim Crowe Laws we should be able to get rid of another bad law like Obamacare.

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Medical Tourism may offer a Final Option if we can’t Repeal Obamacare

Posted by PITHOCRATES - May 5th, 2013

Week in Review

It’s amazing that as unpopular Obamacare is that we have been thwarted at every attempt to prevent its implementation.  We lost in the Supreme Court.  Some states are now buckling and are building their exchanges.  Basically exhausting all our options to repeal Obamacare.  But there may be another way (see Steve Forbes speaking in Edina: ‘Obamacare will collapse under its own weight’ by Ed Stych posted 5/1/2013 on Minneapolis/St. Paul Business Journal).

“We will undo it (Obamacare) piece by piece,” Forbes told about 250 people in a speech to the Freedom Club at Interlachen Country Club in Edina. “All of it can be reversed, and we can have lower health care costs through innovation.”

If Obamacare is not repealed, Forbes said he could see American Indian tribes using their limited sovereignty from the federal government to develop medical tourist destinations on their reservations…

Forbes, the CEO of Forbes Inc., spent much of the evening talking about the benefits of free markets and how they can solve the nation’s health care problems. He said those problems stem from the government and insurance companies playing middlemen, leading to a disconnect between health care providers and consumers.

He said health care is one of the few industries where few people know the cost of services…

“Why is demand for health care considered a problem when demand for anything else is considered an opportunity?” Forbes asked. “The problem is that we don’t have free markets in health care.”

This is a good point.  The American Indian tribes opened casinos on their reservations because there was a demand for gambling venues when there were few places to go.  Now every city and state is falling over themselves to legalize gambling.  Which has greatly diluted the earnings of all casinos as supply is outstripping demand.  But Obamacare will create a huge demand for quality health care as Obamacare reduces quality, increases wait-times and rations services in what was once the best health care system in the world.  And the American Indian tribes can be there to meet that demand.

And these hospitals can use free markets and innovation to attract the best doctors and nurses by eliminating the middle man.  The reservation hospitals can even bring in the old health insurers.  But revamp that system so insurance is insurance and not simply welfare.  People will pay out of pocket for most health care needs.  And buy a true insurance policy for unexpected catastrophic health issues.  In this way market forces will keep costs down.  Because the consumers will be making the spending decisions.  Doctors will be able to charge less because they’ll push less paper.  And spend more time with patients.  And people will actually pay before leaving the doctor’s office.  Like they used to.  And it could get even better.

The American Indian tribes could implement a fair and reasonable medical malpractice legal system.  To reduce the amount of frivolous lawsuits with, say, a loser pays requirement.  Thus reducing the cost of a doctor’s medical malpractice insurance.  Allowing them to earn more money while charging less.  Because they will spend less time doing paperwork.  And have lower overhead costs.

The American Indian tribes could reinvent health care, health insurance and tort law.  They could.  Or perhaps we should.  Let’s look at what the American Indian tribes could do because they are free from the long arm of the federal government.  Build the ideal system.  And then reform our systems to become that ideal.  But if we can’t then let’s help the American Indian tribes build it.  For if they do Americans in pursuit of quality health care will come.

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Tens of Thousands of NHS Patients waiting up to 12 Hours on A&E Gurneys for a Hospital Bed

Posted by PITHOCRATES - August 19th, 2012

Week in Review

There are times in American emergency rooms where patients are waiting on hospital gurneys (or trolleys) for a bed to open up in the hospital.  Sometimes emergency rooms get overwhelmed one day.  While another day they have empty beds and time to kill.  For it is hard to forecast health emergencies.  In the UK, however, it appears budget problems are exasperating their problems.  And they are trending in the wrong way (see 67,000 NHS patients forced to wait up to 12 hours on A&E trolleys by Telegraph Reporters posted 8/15/2012 on The Telegraph).

Almost 67,000 patients during the first half of this year endured long waits for emergency beds, an increase of nearly a third, according to the government statistics…

Over a six-month period to June, 66,845 patients were found to have waited for between four and 12 hours for a bed once doctors decided they needed to be admitted.

During the same period the previous year, nearly 51,000 patients endured similar waiting times, the equivalent of a 31 per cent rise, according to the DoH…

Tim Curry, the assistant head of UK nursing at the Royal College of Nursing, described the scale as “startling”.

He blamed the rise in the figures on a “perfect storm” of increased patient expectations, financial pressures and NHS reforms.

“You need skilled nurses and vacant beds, and both of those are under huge pressure,” he said.

To be fair they just don’t park these patients up against a wall while they wait.  Doctors and nurses are still assessing and treating them while they wait in Accident and Emergency (A&E) departments.  But there is a trend.  And it’s going in the wrong way.  Longer waits.  Because, of course, of financial pressures.  Caused by an aging population that is stressing their health system at the same time fewer workers are entering the workforce to pay the bills.  Fewer dollars (or pounds in this case) being spread out to cover more patients.  You don’t need to be a financial analyst to see what this will result in.  Longer wait times.  And rationing.  Including a shortage of skilled nurses and vacant beds.

The NHS has the same problem the Americans have with Social Security and Medicare.  All three of these programs were set up during a time of an increasing population growth rate.  People were having babies.  More workers were entering the workforce than were leaving it.  So each retiring generation had more workers in subsequent generations to pay the bills.  But after the baby boom this all changed.  People stopped having babies.  And throttled back the spigot of new taxpayers entering the workforce.  Which is causing budget deficits and mushrooming debt in every social democracy.  And until the baby boomers leave this world governments will struggle to provide for them with fewer resources.

So this would be the absolute worst time to introduce a new large government program.  Indeed only a fool or one blind of history and utterly ignorant of economics would propose a new massive entitlement program in this day and age.  Which, incomprehensively, the American Left did.  Giving the Americans Obamacare.  The biggest government program in American history.  And the Americans will have no hope of ever paying for it.  Not with an aging population.  And they did this while Social Security and Medicare are already projected to go bankrupt.  In fact, Obamacare even takes some $700 billion from Medicare.  Talk about your perfect storms.  If the Americans don’t repeal Obamacare (and reform their entitlements) their spending obligations will bankrupt them and transform America into a shell of her former self.

Some would say we should learn by Britain’s mistake.  The folly of national health care, especially with an aging population.  Instead the Obama administration seems intent on being the example of ‘what not to do’ for others to learn by.  For Obamacare is clearly something the Americans should not have done.

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Floridians in General and Seniors in Particular want to Repeal Obamacare

Posted by PITHOCRATES - July 15th, 2012

Week in Review

The fact that the Supreme Court upheld Obamacare doesn’t change some facts.  People don’t like it.  They don’t want it.  And they want to repeal it.  Especially the seniors (see Poll: Most Floridians disapprove of federal healthcare law, half want it repealed by Alex Leary, Tampa Bay Times, posted 7/12/2012 on The Miami Herald).

A majority of Florida voters oppose the national healthcare law and half want it repealed, a new Miami Herald/Tampa Bay Times/Bay News 9 poll shows two weeks after President Barack Obama’s signature achievement was largely upheld by the U.S. Supreme Court.

Only 43 percent of voters statewide support the Affordable Care Act and 52 percent oppose it, with 5 percent undecided. With the exception of southeast Florida, more voters think the law will make the healthcare system worse.

More voters also favor the state opting out of provisions of the law, something Gov. Rick Scott has already said it would do…

In perhaps the most worrisome sign for Obama and Democrats, only 39 percent of voters 65 years or older support the law. Seniors make up about 30 percent of the overall state’s electorate…

The results mirror surveys in other states and show the same entrenched partisan feelings.

What is even more significant is that seniors are the largest consumers of health care services.  These aren’t ill-informed young adults who want free birth control and abortion on demand.  These are people whose very lives depend on quality health care.  And that’s the problem.  These informed consumers of health care services see Obamacare reducing the quality of their health care.  For they listen to the details.  Unlike healthy people in their twenties who have other pressing issues on their minds.  I refer you back to the part of Obamacare that interests them.  The free birth control and abortion on demand.

When Coke came out with New Coke the consumers of the original Coke did not like the change.  So they brought out Classic Coke.  And eventually dropped New Coke.  Because New Coke was a disaster with the people who consumed the vast majority of Coke.  The Coca Cola Company understood they had to please the people who consumed the vast majority of their product.  So they took actions to please the consumers of Coke.

The reaction of seniors to Obamacare is similar.  For the new health care system doesn’t benefit the largest consumer of health care services.  These seniors.  No.  These seniors will lose the most.  Obamacare will make huge cuts in Medicare spending which will hurt seniors.  Obamacare will reduce doctors’ Medicare reimbursements and cause many of them to drop Medicare patients.  Again, this will hurt seniors.  And Obamacare will prioritize the use of their limited health care resources.  Those who are younger and have more to live for (i.e., who can work longer and pay more taxes) will receive priority over a senior who no longer contributes to tax revenue while consuming enormous amounts of health care resources.  The phrase ‘death panels’ does not appear in the health care law but there will be government bureaucrats determining who will receive health care and who will not.  Which is a terrifying prospect to all seniors and the terminally ill.  As well as the chronically ill.

Coke listened to their consumers because they cherished them as customers.  The problem with Obamacare is that the government looks at the largest consumers of health care as a burden.  And they don’t like them.  As shown by the passage of a health care bill that is so hostile to them.  Seniors often voted Democrat because they benefited from growing government spending.  That spending will continue to grow under Obamacare.  Only they will pay for a lot of it with spending cuts on programs that serve seniors.  So it’s not likely that the seniors will vote Democrat in the 2012 election.  Especially when only 39 percent of voters 65 years or older support Obamacare.  Meaning 61% don’t.  In Florida as well as other states wherever seniors can be found.  No.  They will vote for those who will listen to them as the largest consumers of health care services.  And who don’t plan on fixing whatever problems we have in the health care system by trying to get seniors to die sooner.

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CBO Scores Obamacare over 10 Years of Revenue and 9 Years of Implementation and finds it about Twice as Costly

Posted by PITHOCRATES - March 18th, 2012

Week in Review

The news just keep getting worse.  Obamacare is twice as costly.  It will destroy the private health insurance industry. Prolong the Great Recession.  And reduce the quality of our health care.  There’s just nothing good that we can say about it.  Other than, perhaps, it will make President Obama a one-term president.  Like Jimmy Carter.  Who also wreaked  economic destruction on the nation.  Making way for the new president to repeal Obamacare.  And save the nation from this most tragic fate (see ObamaCare: If Possible, The News Is Getting Worse by Grace-Marie Turner posted 3/14/2012 on Forbes).

To mark the law’s two-year anniversary, the House of Representatives is planning a vote to repeal one of the law’s most unpopular provisions — the Independent Payment Advisory Board (IPAB), which many seniors fear will become Medicare’s rationing board…

ObamaCare will cost $1.76 trillion over a decade, according to a new projection released Tuesday by the Congressional Budget Office, rather than the $940 billion forecast when it was signed into law.

The new 10-year projections cover nine years of ObamaCare’s implementation (2013-2022). Original estimates counted only six years of implementation — a budget gimmick to obscure the true cost of the law. At this rate, the conservative estimates of ObamaCare’s cost will be $2 trillion over 10 years, not the $1 trillion that President Obama promised…

Sen. Mike Enzi (R-WY) released a statement saying that the CBO’s estimate also shows that the new health law will dramatically increase Medicaid spending and result in 4 million fewer people getting health insurance through their jobs. So much for being able to keep the coverage you have now “no matter what,” as the president promised.

There will be rationing.  This despite the $2 trillion price tag for the program.  Which when you compare 10 years of revenue to 10 years of implementation the price shoots up from $1 trillion to somewhere closer to $2 trillion.  Which adjusts their previous estimate up 100%.  Talk about a large margin for error.  Which really begs the question do you want the same people who were off 100% in their cost estimates running one-sixth of the U.S. economy?  Or be in charge of rationing life-saving health care services?  And if that wasn’t bad enough (and don’t you think it should be?) it will also end private health insurance like you have now.  Meaning that if you like the plan you have, tough.  You’re going to lose it.

An AP-GfK poll taken early this month shows that only about a third of Americans (35 percent) support the health care law, while nearly half (47 percent) oppose it. That’s about the same split as when it passed.

Opposition remains strongest among seniors, many of whom object to Medicare cuts that were used to help finance coverage for younger uninsured people…

A new study of employers conducted by Willis Human Capital Practice found that employers expect higher health costs for both employers and employees as a result of ObamaCare, and many expect to shift employees into taxpayer-paid coverage once the option is available. That shift would certainly exacerbate the exploding costs of the law.

Last year, health costs rose 9 percent for employers, triple the rate of the year before ObamaCare’s provisions began to be implemented. Employers expect costs to only go higher…

Uncertainty about the future of the health sector is also drying up investor capital — and threatening tomorrow’s medical innovations. The share of venture dollars flowing to seed and early-stage investments in biotechnology and medical devices has plummeted since 2007, when investors pumped $3.6 billion into 332 deals in which a price was disclosed, according to data compiled for Kaiser Health News by FactSet Research Systems. Overall venture investing declined by nearly one-third as the economic recession set in.

Obamacare is unpopular.  It will gut Medicare.  Kill the private health insurance industry.  And when it does all those people covered under plans they got at work will be dumped into Obamacare.  Absolutely exploding costs.  And forcing more rationing to spread limited resources over more patients.

The economy is mired in recession.  The Great Recession lingers on.  With unemployment at 14.9% (the more realistic U-6 rate that counts everyone who can’t find full time work as opposed to the U-3 rate that doesn’t count everyone who can’t find full-time employment).  And because of the costs of Obamacare employers aren’t hiring.  So the economy isn’t going to improve anytime soon.

With the fall in medical investment you can add in a further decline in quality to the high costs and rationing of health care.  While the economy sinks further into recession.  Unless the next president repeals Obamacare.  Or the Supreme Court strikes it down first.  For if we don’t repeal it the country may never recover from the economic fallout that Obamacare wreaks.

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American Profit-Driven Health Care System provides New Hope for Transplant Patients

Posted by PITHOCRATES - March 11th, 2012

Week in Review

There’s good news and bad news for transplant patients.  The good news is that Obamacare is not yet fully implemented.   The bad news is that unless the new President and/or Congress repeals Obamacare, it will be.  And if and when that happens developments like this will be a thing of the past (see Immune system tricked to accept donor organs: study by Julie Steenhuysen posted 3/9/2012 on Reuters).

Scientists have found a way to trick the immune system into accepting organs from a mismatched, unrelated organ donor, a finding that could help patients avoid a lifetime of drugs to prevent rejection of the donated organ…

With conventional organ transplants, recipients need to take pills to suppress their immune systems for the rest of their lives. These drugs can cause serious side effects, including high blood pressure, diabetes, infection, heart disease and cancer.

This new approach would potentially offer a better quality of life and fewer health risks for transplant recipients,” Dr. Suzanne Ildstad, director of the Institute of Cellular Therapeutics at the University of Louisville in Kentucky, who developed the new approach, said in a statement.

The new technique draws on research by Australian immunologist Sir Frank Macfarlane Burnet and Brazilian-born British zoologist Peter Medawar, who won the 1960 Nobel Prize for discovering that the immune system in animals can be trained to acquire tolerance of foreign tissue.

But it has been a long road to bring this about in people, says Dr. Joseph Leventhal, a transplant surgeon at Northwestern Memorial Hospital in Chicago, where the transplants took place.

To get transplant recipients to accept the donor organ, the team needs to condition” them by suppressing their body’s bone marrow with chemotherapy and radiation before transplanting the donor’s bone marrow, the soft fatty tissue inside bones. Bone marrow contains immature blood-forming stem cells that give rise to all blood cells, including immune system cells.

The idea here is to try to use donor-derived stem cells to achieve engraftment, a state we call chimerism,” Leventhal, a co-author of the study, said in a telephone interview. Here what we are trying to do is get donor and recipient cells to peacefully coexist in the transplant recipient.”

About a month before transplant surgery, kidney donors must inject themselves with a medication for several days that forces stem cells and other key cells called facilitating cells” into their bloodstream, from where they can be collected and sent off to the University of Louisville for processing.

Leventhal said these facilitating cells” are naturally occurring cells that help create a more favorable environment for the stem cells and allow engraftment to occur safely.

Ildstad has developed a process for enriching these cells and formed a company called Regenerex LLC, which is developing the patented technology.

Louisville, Kentucky?  Chicago, Illinois?  And American pharmaceutical company?  An amazing new procedure?  See a pattern here?  The American health care system.  At least, pre-Obamacare.  Because up until Obamacare health care in America was a profit-driven system.  Providing huge financial incentives to encourage investors to invest in things exactly like this.  This did not come out of the UK.  Where their nationally funded National Health Service (NHS) is bursting at the seams due to out of control costs.  And causing great government deficits.  Where their focus is on cost cutting.  And the rationing of services.  To keep the NHS afloat.  Where investors don’t take financial risks.  Taxpayers just pay more.

This will be the future in America under Obamacare.  A change from where investors help bring about amazing new procedures and drugs.  To one where the focus is on cost cutting.  And the rationing of services.  At least based on all the empirical evidence we have so far.

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Raising the Debt Ceiling may be Worse than Default

Posted by PITHOCRATES - July 30th, 2011

Despite U.S. Debt Crisis, U.S. still the World’s Safe Asset of Choice

As Congress debates over the debt ceiling…blah blah blah…Armageddon.  Funny thing is, the U.S. debt problem is not that bad.  When compared to the debt problem in Europe (see Err, over here by Schumpeter posted 7/29/2011 on The Economist).

AS THE August 2nd deadline for a resolution of America’s debt-ceiling row approaches, other news is being drowned out. America’s debt debacle provokes rubber-necking fascination but the euro crisis is still the bigger threat to financial stability.

The chances (admittedly diminishing with time) are that America will get its house in order and avoid default; and that a ratings downgrade will happen but not threaten the pre-eminence of Treasuries as the world’s safe asset of choice. In contrast, the euro area’s crisis is already in full swing and policymakers, as this week’s issue of The Economist makes plain, have not found a way to stop it.

Things are worse in the European Union.  Especially the Eurozone.  And though Armageddon is at hand in the U.S., we’re still the “world’s safe asset of choice.”  So the end of the world as we know it may not be at hand.  But the out of control government spending and debt is fast approaching European levels.  So if we don’t cut our spending and reduce our deficits, we will follow lockstep behind Europe into fiscal ruin.  And then, of course, Armageddon.  

Partisan Democrats decry Republican Partisanship

So this Republican partisanship needs to end.  They need to be bipartisan.  Like the Democrats.  That is, when they’re not being partisan themselves (see For Reid, Durbin, and Obama, a (very) partisan record on debt ceiling by Byron York posted 7/30/2011 on The Washington Examiner).

A look at Reid’s record, however, shows that in the last decade his own voting on the issue of the debt ceiling is not only partisan but perfectly partisan. According to “The Debt Limit: History and Recent Increases,” a January 2010 report by the Congressional Research Service, the Senate has passed ten increases to the debt limit since 2000.  Reid never voted to increase the debt ceiling when Republicans were in control of the Senate, and he always voted to increase the debt ceiling when Democrats were in control…

At look at Durbin’s record shows that he, too, has voted along absolutely partisan lines.  In the last decade, Durbin never voted to increase the debt ceiling when Republicans were in control and always voted to increase the debt ceiling when Democrats were in control.  As for Obama, there were four votes to raise the debt ceiling when he was in the Senate.  He missed two of them, voted no once when Republicans were in charge, and voted yes once when Democrats were in charge.

So the Democrats have a history of being just as partisan as the Republicans.  Even now, as they decry the Republican’s partisanship, they refuse to compromise at all on what they’ve always wanted.  More taxes.  And more borrowing.  So they can spend a lot more.

Democrats open to Compromise, as long as it’s the Republicans doing the Compromising

And they’ve drawn a line in the sand.  No meaningful cuts without new taxes (see Senate Kills Debt Bill, Bipartisan Talks on Hold by Steven T. Dennis posted 7/29/2011 on Roll Call).

“We’ve got a closet full of triggers,” he said. But, he added, “I came to the conclusion that we are negotiating with ourselves. The Republicans will not agree to any triggers that have any revenues in it.”

And Reid noted that Democrats have drawn a line in the sand against any cuts to entitlement programs without revenue.

The Republicans refuse to raise taxes because America is still wallowing in the Great Recession.  Democrats refuse to drop their request to raise taxes.  And flat out refuse to cut entitlements.  Like Social Security.  Medicare.  And the new Obamacare.  Because, though fiscally responsible, it’s not politically expedient.  Which is going to become a BIG problem soon.

Repeal Obamacare and all our Current Troubles go Away

Health care spending will take the U.S. to European levels of spending and debt (see CMS Projections Confirm Runaway Health Care Spending by Kathryn Nix posted 7/29/2011 on The Foundry).

As the economy recovers and the major provisions of Obamacare kick in, national health spending is projected to grow at quite a clip—increasing, on average, 5.8 percent each year. By 2020, the nation will spend $4.54 trillion on health care, or close to 20 percent of GDP. (For the sake of comparison: In 2010, federal tax revenue totaled 14.9 percent of GDP, and all federal spending combined amounted to 23.8 percent of GDP.)

Of course, every cloud has a silver lining.  An S&P report calls for real spending cuts of $4 trillion or more over 10 years to avoid the credit downgrade.  And look at this.  Obamacare will cost $4.54 trillion over some 10 years.  Imagine that.  Save the AAA bond rating.  Leave Social Security and Medicare intact.  And all you have to do is cut one program that no one is receiving any benefits from yet.  Repeal Obamacare.  And all our current troubles go away.

Or you can Devalue the Currency

Of course, that’s one way of solving the current crisis.  There appears to be another.  One that is a bit more destructive (see Answers to the 7 big “what-ifs” of debt default by Lauren Young posted 7/30/2011 on Reuters).

Traders say Asian central banks, among the world’s biggest dollar holders, have been steady buyers of alternatives to the dollar such as the Singapore dollar and other Asian currencies as well as the Canadian, Australian and New Zealand dollars. “Foreigners are at the vanguard of the drop in the dollar,” says Dan Dorrow, head of research at Faros Trading, a currency broker/dealer in Stamford, Connecticut. “I don’t think anyone expects a catastrophic U.S. default. But a downgrade will make them more aggressive in moving away from the dollar…”

The bottom line? It will be more expensive to travel overseas, drink French wine or buy Japanese cars.

A little trade war anyone?  A weak currency is like a tariff.  It makes imports so expensive that we stop buying them.  And buy American instead.  Thus increasing U.S. GDP.  And there is a corollary to this.  Can you guess what that is?  Here’s a hint.  It does something to our exports.  And our vacation market.

Fixing our Economy by Destroying other Economies

A weak currency not only makes your imports more expensive, it also makes your exports less expensive.  Which helps your export market.  And encourages people to vacation in your country because those stronger, foreign currencies can buy so much more (see U.S. Economy: Growth Trails Forecasts as Consumers Retrench by Shobhana Chandra posted 7/29/2011 on Bloomberg).

The improvement in the difference between imports and exports added another 0.6 point [of U.S. GDP].

Overseas sales will remain a backstop for factories. Dow Chemical Co. (DOW), the largest U.S. chemical maker, said demand is “strong” in markets abroad.

“We captured strong growth in Latin America, and the emerging geographies more broadly, while North America experienced moderate growth,” Andrew Liveris, chief executive officer, said on a July 27 conference call with analysts.

So perhaps this is the grand plan.  Increase spending to unsustainable levels.  Incur record debt.  This spending and debt triggers a downgrade of U.S. sovereign debt.  Which devalues the U.S. dollar.  Which places a de facto tariff on imports.  And provides a subsidy for our exports.  And it makes the U.S. a vacation destination.  Until our trading partners retaliate for fixing our economy by destroying their economies.  Like everyone is saying the Chinese are doing by keeping their own currency weak.

Repealing Obamacare would Please the Credit Rating Agencies

So the only bright spot in the U.S. economy is other economies.  Where they’re experiencing growth.  And can easily afford U.S. goods.  Which is about the only market buying them these days.  But for the world’s largest economy (for now) to rely solely on exports can be a bit risky.  Especially if it triggers a trade war.  Which, incidentally, helped trigger the Great Depression.

No, it would probably be more prudent to keep that AAA rating by cutting spending.  Before we spend ourselves to European ruin.  That’s the key to everything.  In particular cutting the fastest growing government expenditure.  Health care.  Which makes repealing Obamacare made to order.  No one is benefitting from it yet.  So no one will even notice this cut.  Other than the credit rating agencies.  Who will stand up and applaud this action. 

For just raising the debt ceiling doesn’t solve the real problem.  In fact, raising the debt ceiling without the $4 trillion in spending cuts will just push us closer to European ruin.

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Obama’s Choice – Cut Spending or Downgrade U.S. Sovereign Debt

Posted by PITHOCRATES - July 27th, 2011

The BIG Problem is the Excessive Spending, not the Debt Ceiling

I don’t know what’s more annoying in the budget debate to raise the debt limit.  The cries on the left for the Republicans to quit being partisan.  To instead propose a true bipartisan bill that has a chance of passing the Senate.  And by ‘bipartisan’ they mean one that gives the left everything they want.  Or is it the doom and gloom being bleated by the president, Congressional Democrats and the mainstream media if the debt ceiling isn’t raised (see Debt-ceiling threat has Wall Street scrambling by Nathaniel Popper and Jim Puzzanghera posted 7/27/2011 on the Los Angeles Times).

Without a deal, the most feared scenario is that the U.S. will miss payments on its bonds and default — which financial experts say would be disastrous. While still considered unlikely, the prospect is popping up more in conversations…

No.  This can’t happen.  There’s enough money to pay interest on the debt.  And to issue Social Security checks.  But they will have to make cuts elsewhere in some nonessential areas.  Like in some cabinet departments (Education, Energy, EPA, etc.).  This is all fear peddling by the Obama administration to do one thing.  Raise the debt ceiling.  So they can keep spending.  And this is the BIG problem.

The more likely scenario that investors are preparing for is that a temporary deal is struck to lift the debt ceiling. But such a makeshift plan is unlikely to allow the U.S. to maintain its AAA grade with bond rating companies. Citigroup analysts say the odds are 50-50 that the U.S. will be demoted to an AA rating for the first time ever.

Such a downgrade could lead to a temporary market panic. In the longer term it could push interest rates up for everyone from bankers down to ordinary people taking out car loans, and weaken the dollar’s position as the world’s reserve currency.

Even if they raise the debt limit in time there is a far greater problem.  And yet few are talking about THIS problem.  The excessive spending that will ultimately cause the credit downgrade.

To Avoid Credit Downgrade will Require $4 Trillion in REAL Spending Cuts

And it’s no secret.  S&P was very explicit in their report of what would cause a credit downgrade.  Unrestrained government spending (see The Real S&P Warning: A $4 Trillion Deal or a Downgrade by Veronique de Rugy posted 7/19/2011 on National Review).

As the debt-ceiling showdown heads into its final stages, the political maneuvering has intensified. Yet I fear that we are losing sight of the only reason why the fight over the debt ceiling matters: It forces a discussion of the country’s real problem — unrestrained government spending and the tremendous fiscal imbalances that jeopardize our financial safety.

This is the real message in the July 14 S&P report.

First, S&P writes that unless there’s a credible $4 trillion deal within the next three months, they will downgrade us. By “credible,” S&P explains, they mean a plan that will actually be put into place (i.e., not one where the tax increases happen but not the spending cuts). Not $2 trillion, not $1 trillion,  but $4 trillion. And it has to be credible.

That means REAL spending cuts.  Not those ‘future’ kind that never happen.  Those that Democrats have promised time and again only to renege on those promises.  Or the base-line budgeting type of ‘cuts’ that still increase spending.  The onus is all on Obama and the Democrats.  Because they are the ones steadfast in their opposition to any real spending cuts.

The Electric Car – Typical Wasteful Government Spending

To get an idea of their voracious appetite to spend, consider the electric car.  What the economy of the future is based on.  Green energy.  The thing that’s going to make America rich and prosperous again (see California dials back its electric car credits by Eric Evarts posted 7/26/2011 on Consumer Reports).

In large part, EV appeal was greater in California due to a $5,000 state rebate that came on top of the $7,500 federal tax credit. With the tax credits, the price of an all-electric Nissan Leaf could be as low as $21,000, making it cheaper than a Toyota Prius and putting it on par with other small cars. (The Chevrolet Volt was not eligible for the state credit, although it does receive the $7,500 federal tax credit…)

While the price of electric cars is going up for California drivers, other factors still make the Golden State more attractive than most for electric cars: California uses no coal to generate electricity; its major electric utility companies have time-of-use rates and special power rates for electric cars, effectively lowering their energy costs; and perhaps most importantly, pure electric cars are still eligible to use carpool lanes on the state’s notoriously congested freeways with just a driver onboard. In addition, public charging infrastructure is on a faster track than it is elsewhere in the nation.

So that’s $5,000 from the state.  $7,500 from Washington.  That’s a discount of $12,500 (37.3%).  And yet the price of the Nissan Leaf is still $21,000.  But that still isn’t enough to make this car sell.  They need a subsidized electrical rate as well.  Government at all levels is paying a lot of our tax dollars to make a car no one wants to buy.  And this is the kind of spending that they just can’t cut.  Wasteful.  And this is only one example from the multitude.

Repeal Obamacare – Save Money, Please the People

Cutting $4 trillion over 10 years will not be easy.  But we can halve this number with one stroke of a pen (See By a Margin of 21 Points, Americans Favor Repeal by Jeffrey H. Anderson posted 7/27/2011 on the Weekly Standard).

While President Obama’s notion of a “balanced approach” to deficit reduction isn’t written down anywhere, it’s quite clear that it doesn’t involve repealing Obamacare (despite the fact that the health care overhaul would cost over $2 trillion in its real first decade, from 2014 to 2023). Polling, however, strongly suggests that it should. The latest Rasmussen poll of likely voters shows that, by a margin of 21 points (57 to 36 percent), Americans support the repeal of the centerpiece legislation of the Obama presidency.

Repealing Obamacare would be a step in the right direction.  It will save $2 trillion in spending that is pushing the U.S. toward a credit downgrade.  And the people don’t want it by a margin of 21 points.  Save money.  Please the people.  It’s a no-brainer for responsible government.  If only government was responsible.

The Choice – Cut Spending or Downgrade U.S. Sovereign Debt

The president said we need to live within our means.  And he’s right about that.  But living within our means doesn’t mean taxing and borrowing more to pay for out of control government spending.  Living within our means starts by NOT spending money we don’t have.  Not to spend first and figure out how to pay later. 

And just because other presidents raised the debt limit doesn’t mean we have to raise the debt limit.  You don’t justify bad behavior with bad behavior.  We’ve borrowed too much.  The credit rating agencies have spoken.  We need to cut spending.  And not get all professorial and lecture the American people that we need to be ‘responsible’ and raise taxes to pay for the government’s irresponsible spending binge.

We either cut spending.  Or Obama and his Democrats will downgrade U.S. sovereign debt for the first time in history.  Those are the choices.  And a good place to start would be to repeal Obamacare.  Because that’s all future spending.  All $2 trillion.  Not like Social Security or Medicare.  You can cut Obamacare.  And no one will miss it.

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Learning nothing from Europe’s Financial Crises, Obama pushes hard to increase the Debt

Posted by PITHOCRATES - July 11th, 2011

No Economy is too Big to Fail

Having too much debt is a bad thing.  For one thing, you have to pay it back eventually.  And until you do, you have to service it.  Make interest payments.  Which can become very large if you have a lot of debt.

Greece has a lot of debt.  So much that they can’t sell any more.  And they can no longer service that debt.  Which is a big problem for the European Union (EU), in particular the Eurozone and its common currency the Euro.  Greece is small.  But the EU is big.  And Greece’s problem is now their problem because of that common currency (see Eurozone moves to stop Greek debt crisis by Gabriele Steinhauser, Associated Press, posted 7/11/2011 on USA Today).

Investors are concerned that the debt crisis, which has so far been contained to the small economies of Greece, Ireland, and Portugal, could soon drag down bigger countries like highly indebted Italy and unemployment-ridden Spain. The mere size of their economies could easily overwhelm the rescue capacity of the rest of the eurozone…

“The fact that contagion is spreading marks the failure of politicians to draw a line under the Euro-crisis to date,” Rabobank analyst Jane Foley said. “As yields rise and debt financing costs become even more exaggerated the difficulties of containing the crisis become even bigger.”

The Europeans crated the EU and the Eurozone to counter the economic prowess of the United States.  And it has.  Their economies run shoulder to shoulder.  Which is why the U.S. should be worried about what is happening in Greece.  And how scared the EU is that their contagion may spread.  For no economy is too big to fail from an overload of debt.

Excessive Government Debt making Investors Nervous

If you’re looking for confirmation on the size and reach of the Greek debt crisis, look no further than the world’s financial markets (see Markets Tumble on Debt Crisis by The Associated Press posted 7/11/2011 on The New York Times).

Wall Street and global stocks slid further Monday because of renewed concerns about the euro zone’s debt crisis and after a dismal jobs report in the United States last week rekindled concerns about the recovery in the world’s largest economy…

The downbeat sentiment in markets was worsened by indications that Europe’s debt crisis might be spreading beyond the three countries that have already received rescue packages. There have been mounting concerns that after Greece, Ireland and Portugal, much-larger Italy and Spain could need bailouts to manage its tremendous debt load.

Investors are nervous.  Both about Greece and the EU.  And the United States.  They’re worried about excessive government spending.  And excessive government debt.  Because the higher the debt the higher the interest paid on the debt.  And interest paid on the debt is money spent that results in nothing beneficial.  It’s just a drag on the economy (i.e., higher taxes are required to pay it).  Or worse.  As in borrowing money to service the debt.  Which makes a bad problem (too much debt) worse (more debt).  Which is a further drag on the economy.

The Children refuse to Eat their Peas

And speaking of debt, there was no progress on the budget debate to increase the debt limit.  As if anyone was surprised by this (see WRAPUP 9-Obama, lawmakers fall short on US debt deal by Steve Holland and Thomas Ferraro posted 7/11/2011 on Reuters).

U.S. President Barack Obama and top U.S. lawmakers fell short on Monday of finding enough spending cuts for a deal to avoid an Aug. 2 debt default and Republicans came under fresh pressure to agree to tax hikes.

The two sides achieved no breakthrough in a roughly 90-minute meeting and scheduled a third straight day of talks for Tuesday. This came after Obama, at a news conference, declared it is time for both Republicans and Democrats to “pull off the Band-aid, eat our peas” and make sacrifices.

I’m a grownup.  And I like peas.  I think a lot of grownups like peas.  That’s probably why I see a lot of peas in grocery stores.  But one thing I don’t see is kids begging their mother to buy more peas.  No.  Mothers have to tell them to eat their peas even though kids don’t want to.  Because kids just don’t know what’s good for them.  And mothers, being mothers and not diplomats, don’t discuss this.  They just dictate terms to their children.  Which is what Obama appears to be doing.  Trying to dictate terms to the children on the other side of the aisle.  To get them to accept what’s best for them.  Because he knows best.  Like Mother.

The Treasury Department has warned it will run out of money to cover the country’s bills if Congress does not increase its borrowing authority by Aug. 2. Failure to act could push the United States back into recession, send shock waves through global markets and threaten the dollar’s reserve status.

This ‘running out of money’ line is very strange.  The government is currently collecting some $2 trillion plus in cash a year.  Which comes out to about $180 billion a month.  And as long as your employer is withholding taxes from your paycheck, there’s money flowing into Washington.  So how exactly are they running out of money?

Back into recession?  Didn’t know we ever came out of recession.

Boehner also took issue with Democrats’ suggestion that most of the spending cuts should be concentrated out into future years, rather than beginning right away.

Smart man that Boehner.  He knows Democrats lie.  “Raise taxes now and we’ll make spending cuts later.  Promise.  $3 in cuts tomorrow for every new dollar in taxes today.”  Ronald Reagan fell for it.  George H. W. Bush, too.  But tomorrow never came.  And neither did those spending cuts.  The Democrats had their new taxes.  So they said, “Screw you, Republicans.  Suckers.”

Obama used the latest in a series of White House news conferences to urge lawmakers on both sides to stop putting off the inevitable and agree to tax increases and cuts in popular entitlement programs, trying to persuade Americans he is the grownup in a bitter summer battle over spending and taxes…

Obama is seeking to cast himself as a centrist in the bitter debate. His 2012 re-election hopes hinge not only on reducing America’s 9.2 percent unemployment but on his appeal to independent voters who are increasingly turned off by partisan rancor in Washington and want tougher action to get the country’s fiscal house in order.

And that’s what this debate is all about.  The 2012 election.  If he comes out of this smelling like a centrist he wins.  Even if he loses the debate.  Because he can campaign as a centrist.  Even though he’s the biggest leftist to have ever entered the Whitehouse.  Who tripled the deficit.  And put the U.S. on the road to national health care.

So how much exactly are they looking to raise the debt limit by to save the country?

They said Obama’s view was that without tax increases, the package would at best be little more than $1.5 trillion in deficit reduction, far short of the estimated $2 trillion needed to extend the $14.3 trillion debt ceiling through the end of 2012.

Hmmm, $2 trillion dollars.  Where can we find $2 trillion dollars?

You Repeal Obamacare and we’ll raise the Debt Limit by $2 Trillion

Here’s a thought.  How about repealing Obamacare?  If we need to live within our means and can’t muster the guts to reform entitlements, then Obamacare is a no-brainer.  It’s not an entitlement yet.  No one would miss it if they repeal it.  Because how can you miss something you don’t even have yet?  So how much money would this save?  Let’s take a look at some facts and figures from an interesting article (see Obamacare Tragedy Primed To Further Explode the Deficit by Peter Ferrara posted 7/6/2011 on The American Spectator)?

…close analysis of the CBO score and additional new data indicates that, quite to the contrary, Obamacare will likely add $4 to $6 trillion to the deficit over its first 20 years, and possibly more…

Of course, the deficit is not the biggest problem.  Even bigger is that regardless of the deficit, Obamacare involves trillions of increased government spending and taxes…

In the Wall Street Journal on June 8, Grace-Marie Turner, President of the Galen Institute, estimated based on the numbers in the McKinsey report that as many as 78 million Americans would lose their employer provided coverage.  If those workers ended up receiving the new Obamacare exchange handouts, the estimated costs for those subsidies in the first 6 years alone would soar by 4 times, adding nearly $2 trillion to the costs and deficits of Obamacare during that time…

Such draconian cuts in Medicare payments would create havoc and chaos in health care for seniors.  Doctors, hospitals, surgeons and specialists providing critical care to the elderly such as surgery for hip and knee replacements, sophisticated diagnostics through MRIs and CT scans, and even treatment for cancer and heart disease would shut down and disappear in much of the country, and others would stop serving Medicare patients.  If the government is not going to pay, then seniors are not going to get the health services, treatment and care they expect.

Yet, reversing these unworkable Medicare cuts would add $15 trillion to the future deficits caused by Obamacare.

So Obamacare isn’t going to reduce the deficit after all.  How about that?  You see, Boehner is right not to trust Democrats.  Because they lie.  And while they’re bitching and moaning about trying to raise the debt limit by $2 trillion Obamacare will add another $4 to $6 trillion, or more, to the deficit over its first twenty years.  And there’s a whole bunch of unpleasantness in addition to that.  78 million people losing their private insurance coverage.  And the gutting of Medicare that will destroy that program.  Which will add another $15 trillion to future deficits. 

This should be the Republican position.  This is the deal they should offer.  Raise the debt limit by $2 trillion.  And repeal Obamacare.  Final offer.  Take it or leave it.  Either eat your peas.  Or you, President Obama, can default on America’s debt obligations.  For it is your Obamacare that has put us in this position in the first place.

Too much Debt is a bad Thing

Having too much debt is a bad thing.  We see it in Europe.  The EU is worried about what’s happening in Greece spreading to larger countries in the Eurozone.  Markets are jittery about Europe’s financial crises.  Even on Wall Street.  Because too much debt is a bad thing.  And no economy is too big to fail from an overload of debt.

The whole world understands this.  That too much debt is a bad thing.  And yet what is the Obama administration doing?  Piling on to their debt.  And not in a little way.  They’re collecting some $2 trillion in cash each year but it’s not enough.  They need to borrow an additional $2 trillion this year to pay their bills.  I don’t know what’s going on in Washington but one thing for sure – it ain’t good governing.

Repeal Obamacare.  Solve a bunch of problems with one act of legislation.  And demonstrate some good governing for a change.

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