Wednesday, August 29, 2012

There is no Medicare free lunch

In an exchange of e-mails with my good liberal friend Rich, I finally realized something profound. Many liberals believe that if they re-elect Obama, Medicare will somehow cost less or at least, the cost to the consumer will never go up.  
Let’s make one thing perfectly clear, the only way Obama can make Medicare cost less is to provide less of it.  That is a big part of his plan. When Dr. Ezekiel Emanuel, health adviser to President Obama says things like “In the next decade every country will face very hard choices about how to allocate scarce medical resources” he is expounding on his and Obama’s belief that doctors should at some times compromise what is best for a particular patent in to do what they believe is better for society.  Dr. Emanuel goes on to say that the usual recommendations for cutting medical spending are mere window dressing.  Feb. 2008 in the Journal of the American Medical Association  (JAMA) the good doctor wrote "Vague promises of savings from cutting waste, enhancing prevention and wellness, installing electronic medical records and improving quality of care are merely 'lipstick' cost control, more for show and public relations than for true change."
In the June 2008 issue of JAMA, Dr. Emanuel states “Medical school education and post graduate education emphasize thoroughness. This culture is further reinforced by a unique understanding of professional obligations, specifically the Hippocratic Oath's admonition to 'use my power to help the sick to the best of my ability and judgment' as an imperative to do everything for the patient regardless of cost or effect on others."  And this explains the doctor’s and Obama’s view on healthcare in general and Medicare in particular.  They believe that sometimes your options for healthcare should be limited in order to decrease the cost to society.  But who should make this decision? Not you of course and not your doctor, but someone in a government office in Washington DC will make the decision if your need is great enough. The President thinks the only way to make the Medicare program sustainable, other than decrease coverage, is to increase taxes to pay for the program. So even if the Medicare user does not see an increase in the amount he pays into the program in the form of co-pays, he is still paying more through his taxes, there is no free lunch.  The money has to come from SOME PLACE!
When Obama siphons 700 billion dollars from Medicare to Obamacare, it is not because he believes it is what is best for the seniors living on Medicare.  He does it because he believes that money should be spent on younger citizens. Dr. Emanuel uses a theory he calls “complete lives system” to explain how the government should allocate health resources and in a Lancet Medical Journal article admits that his program discriminates against older citizens,   "Unlike allocation by sex or race, allocation by age is not invidious discrimination. . . . Treating 65 year olds differently because of stereotypes or falsehoods would be ageist; treating them differently because they have already had more life-years is not."
 "When implemented, the complete lives system produces a priority curve on which individuals aged roughly 15 and 40 years get the most substantial chance, whereas the youngest and oldest people get changes that are attenuated.
The youngest are also expendable: "Adolescents have received substantial education and parental care, investments that will be wasted without a complete life. Infants, by contrast, have not yet received these investments”. The article included a curve of how medical spending should be distributed by our overseers in Washington.




 "Principles for Allocation of Scarce Medical Interventions" The Lancet, January 31, 2009e
Does anyone else find terms like “life years” disturbing? And even more so that aberrantly the President and Dr.  Emanuel believe someone in Washington should be determining which citizens are more useful than others.
 
 It is true that Obama will attempt to force high income citizens to pick up the tab for the rest of our Medicare insurance and if you believe that Bill Gates should pay for your health care just because he was more financially successful than you then you definitely should support the President. But remember that the Bill Gates of this country do not have nearly enough money to eliminate the one trillion dollar a year deficit this President is running, so the only solution left is make you pay more in the form of taxes and cut the health care you receive. Both of those will happen under President Obama.
I am not saying that Emanuel or the President are bad people or do not care about seniors. From everything I have read Dr. Emanuel is a doctor who has dedicated his life to medicine. The problem is a belief that things like health care dollars is a pie of limited size the only fair thing to do is let the government decide how to cut that pie. Conservatives believe the solution is to grow the size of the pie and your health care dollars are yours, not the governments. You and your doctor should determine the best way to spend them. The President believes it is fine to ask you to compromise your health care to provide health care for someone else, and Washington will decide how much and when you will need to compromise. Conservatives believe Washington bureaucrats cannot, and should not be making those decisions.  
So pay more taxes and get less health care under Obama, or support a market based solution like that proposed by Romney/Ryan. We know the way to reduce the cost of any product and that is the free market. My next blog will address a solution that does not involve some bureaucrat in Washington making your health care decisions.

 

Monday, August 27, 2012

Small government works

My liberal friends can never understand why I am so adamant about small government. It’s very simple; I think the one thing that makes this country unique, the thing that has produced the greatest economy of all time is individual freedom.  The larger the government the more individual freedom is limited.
For example - why is the United States and its citizens so much more prosperous that Mexico? Both countries have large land masses with abundant natural resources, both countries are functioning democracies. Are Mexican citizens not as smart? Are they lazy? Of course not!  The Mexican citizens I know are some of the hardest working people I have ever met.  I know Mexican small businessmen that are as smart and motivated as any I know in the US. So why the difference? Why is the US economy the largest in the world with a gross domestic product (GDP) of 14 trillion dollars while Mexico GDP is 14th in the world at 1 trillion? You would have to go back to 1969 to see a US GDP as low as Mexico’s. Why is the US economy 14 times larger than Mexico’s? Why is the tiny island of Japan’s economy 4 times larger than Mexico’s?  What is the difference?
The difference is the government.
While Mexicans suffer from an overbearing government that micro-manages every facet of the Mexican economy and its citizen’s personal lives, the US government, up to at least the 1930s basically stuck to the few enumerated powers as defined by the constitution.  A small government is also less likely to suffer from the massive graft and corruption as we have seen with the Mexican government in the past. Citizens not encumbered by endless regulation and strangled by ever increasing taxes are more productive and freer.
 Almost every new law takes away another right. Every new tax decreases the ability for a tax payer to start a business or send their children to school. No one is begrudging the federal government the money it needs to carry out its constitutional duty.  But, as I’ve said before, isn’t 3.5 trillion dollars a year enough and if not - how much will be enough. 

Thursday, August 23, 2012

If men were angels (2)

reprinted from 2010
"If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place, oblige it to control itself." --James Madison, Federalist No. 51, 1788


12/08
  • The president-elect declined to say Sunday how much his economic stimulus plan would cost. Obama called it the largest public-works program since the creation of the interstate highway system in the 1950s.The plan includes spending on what Obama called "shovel-ready" projects to rebuild roads, make buildings energy efficient, modernize schools and upgrade hospital technology. President Elect Obama, Meet the Press

12/08
  • President-elect Obama wants a proposed economic stimulus package to include billions of dollars for infrastructure improvements. Mr. Obama maintains states have projects that are "shovel ready. The Missouri Department of Transportation says with federal money, it could start $510 million of highway and other construction projects within six months. NPR

1/09
  • On “Meet the Press,” fill-in host Tom Brokaw wants to know how quickly Barack Obama can create jobs, and the president-elect promises to move fast. After all, he says, he’s met with a bunch of governors “and all of them have projects that are shovel-ready.”

2/09
  • As Congressional negotiators worked to reconcile competing versions of the economic stimulus package, President Obama today visited Fairfax County to stump for the plan.Joined by Virginia governor and Democratic National Committee Chairman Timothy M. Kaine, Obama showed off one of the "shovel-ready" projects that would be funded by the stimulus plan: a 1.3-mile segment of the Fairfax County Parkway Washington


3/09
  • WASHINGTON, March 3 (UPI) -- Shovels already are hitting the ground in just the two weeks since the $787 billion stimulus package was signed, U.S. President Barack Obama said Tuesday.

3/09
  • President Barack Obama claimed today that 150,000 jobs will be created or saved by the end of next year with the road-building provisions of the $787-billion economic stimulus that he signed."We are seeing shovels hit the ground,'' Obama said in an appearance this morning at the Department of Transportation.

3/09
  • President Barack Obama claimed today that 150,000 jobs will be created or saved by the end of next year with the road-building provisions of the $787-billion economic stimulus that he signed."We are seeing shovels hit the ground,'' Obama said in an appearance this morning at the Department of Transportation.

3/09
  • Infrastructure, or "shovel-ready," projects are set to get underway almost immediately after President Obama signs the $787 billion stimulus bill on Tuesday, his senior adviser said Sunday. "There will be signs of activity very quickly," David Axelrod told "FOX News Sunday," fox News

3/09
  • President Obama said Tuesday that the country already is "seeing shovels hit the ground" on the first infrastructure repair project funded through the Transportation Department's share of the $787 billion stimulus bill. CNN


10/10
  • With unemployment hovering near 10 percent nearly two years after President Obama signed his economic stimulus package, Mr. Obama is acknowledging that, despite his campaign promises, "there's no such thing as shovel-ready projects." New York Times

I am willing to assume that the President was not lying when he made his claims about shovel ready jobs. But if he was not lying, then he must have been ignorant to make that claim week after week. So in typical political fashion say anything to sell your political agenda, in this case to justify spending $787 billion with no idea if it will help the short term problem. Makes me wonder what else he is trying to sell us that he has no idea what he is talking about.

We are not governed by angels……

Sunday, August 19, 2012

Is this really a good energy policy?

In reviewing updates to the tax law, I noticed a couple changes with the “domestic production Activities Deduction”. For those of you who might not know anything about this deduction it is a tax provision that allows businesses that manufacture in the US to reduce their tax rate by 9%. So it’s a tax incentive to reward companies that produce products in the United States. A couple of interesting points about this tax incentive to not outsource jobs.


Point one; this bill was passed in 2004 by a republican congress and signed by a republican president. The people, who the democrats accuse of only pandering to wealthy, passed a very effective bill to promote American manufacturing.

Two; originally a business could reduce their tax rate by 3%. In 2007 the bill provided an increase to 6% and in 2009 an increase to 9%. But the democratic congress amended the bill for 2010, so people in the business of producing oil can only claim a reduction of 6%. So make something we really need like gum Balls and deduct 9%, whoopee cushions - 9% or ping pong paddles - 9%, but produce oil and only get 6%. Makes you wonder why the democrats want to make business more difficult for domestic oil producers at a time when imported oil is at an all-time high as well as gas prices. Also makes you wonder why Senator Schumer (DNY) lead the push to punish this one particular American producer and reduce this industries competitiveness against oil produced in countries with a much lower corporate tax rate.

In other news the Wall Street Journal reports that the oil and gas industry receives a total of 654 million dollars’ worth of tax incentives or about $ .64 for every megawatt of electricity produced.


Meanwhile the solar power industry receives 986 million dollars of tax incentives or $775.00 for every megawatt of electricity produced and the wind power industry receives 4,986 million dollars of tax payers’ money or $56.00 per megawatt of electricity.

I am not sure punishing the most productive energy producers and rewarding the most inefficient is really the best use of tax payer’s money.



Thursday, August 16, 2012

What exactly is your "fair share"

(reprinted with permision from "For Love of Family and country")
I am tired of hearing about the top 1% not paying their fair share. Though I am not in the top 1%, I am sick of the slander and hate and more so the out right lie. Demonizing and preaching punishment of one citizen to the benefit of another has no place in our Republic.

A simple visit to the IRS and its vast data base can bring forth and shed a bright light on the main battle cry of the Democratic Party, our current president, Mr. Obama, and perhaps all those that say, “they should pay more!” A simple chart is all that is needed to demonstrate just how “fair” our tax system really is. And it will not take a statistician to discover an inconvenient truth in it all; our tax code is progressive and completely unfair in regards to people paying “their fair share”. It puts a tax premium on success and rises to meet every addition of income with its little book of 72,000 (?) plus pages of tax code aimed at those able to make it.

Our tax code is not fair; it is not fair to the top 50% who pay 97.75% of ALL Federal income tax. What happened to one country and all of us in this together? Our POTUS thinks these people, or as I would refer to them as citizens, should pay more than they already do. Shortly 50% of the tax payers will pay 100% of the federal income tax burden. When he said “you didn’t build this” with 50% not paying their fair share he was half right. Of course, he really wants the very top to pay more, those 1% at the very top that have built nothing on their own. We are lead to believe that they simply lived in the correct house, opened the door and had the windfall of monetary exuberance come crashing through and dump endless supplies of ill-gotten booty into their living room. They need to pay their fair share or as we will see, more of their fair share.

Let us peer into the tax tables of the IRS for a moment and look at what we find. I will be using the tables that display share of federal income tax paid be each group and the AGI share of income. For those that scream, “it’s not about income, it is about wealth”, I say, no it is not. Our tax code is not based on your wealth; it is based on your income. It is about what a citizen earns each year, not what they have managed to save and create over their life time or their heirs.

We will start with the year 1987, and I choose that because the AGI (adjusted cross income) was re-determined in 1986 so previous data is hard to compare. The time span I use is over 22 years so it should prove sufficient in its demonstration of “tax fairness”.

In 1987, the top 1% paid 24.81% of all Federal Income taxes. “Wow”, you say, “but they made more than that, right? They had to earn that much as well.” Well the IRS also grants us the ability to see the AGI for each sector to determine just what they made. In 1987 the top 1% had 12.32% share of the total AGI. They had a smaller share of the AGI but paid more taxes as a result of the tax code. Fair? I am not suggesting that they should only pay a percentage equivalent to their AGI share mind you; I only point out that “they” did not make 24.81% of the income.

Just for comparison, the bottom 50% paid 6.07% of all Federal income tax and brought home an AGI share of 15.63%.

So we have:
1987                             top 1%           top 10%          Lower 50%

Income tax share:        24.81%            55.61%            6.07%

AGI share:                    12.32%            36.90%            15.63%

As we proceed from 1987 to the current time of 2009, as far as the IRS tables go, we see a progression. And I’ll give you a hint, it progresses just like a success tax would progress; the rich pay more and the bottom 50% pay less, by a large amount. What does not quite correlate is the AGI share, though it increases for the top 1%, it does not increase by as much in comparison to the Federal Income tax paid. This would say the top 1% have increased the amount they pay for the rest of us yet have not made the same amount more in income. I will not ask the reader to feel sorry in any way but I must insist that in our pursuit of Life, Liberty and Happiness, fully armed with our unalienable rights why is it that one group of citizens must be so burdened by the rest of us? Why do some work in slavery for the rest of us? Why is it okay to demonize one citizen for the benefit of another? And please review the Clinton years when they paid a higher tax rate, even in those liberal-magic times the top 1% still did not pay the share they are paying now.

In 2009, the top 1%, you know “tax paying citizens”, pay a total of 36.73% of all Federal income taxes in the good ‘ole US of A; land of the free and home of the (taxed at a fair rate based on an imaginary feeling of moral goodness brought about by class war fare and wealth envy). The lower 50%, also citizens, pay 2.25%. The top 1% have increased their share from 24.81% to paying 36.73%!! That is a gain of 48%! Talk about fair. In the last 22 year span the top 1% have increased, through political compulsion, their personal support of the Federal Government (meaning the other 99%) by 48%! The top 10% of American citizens pay a grand total of 70.47% of all federal income taxes. How much more fair can it get? Though I admit, I am afraid of the answer.

Would our POTUS have us believe that each taxpayer in the top 10% should pay for 75% of the country? 80%? And some would suggest that they must have a far greater share of the income but again those pesky tables do not support this. The top 1% share of the AGI grew from 12.32% to a grand total of 16.93%. This is a 37% increase in AGI for a Federal Tax burden increase of 48%.

Mr. President, the rich, the top 1%, are paying more. They are paying a larger than life “fair” share. You are a disingenuous class warfare combatant and in no way a leader of merit when it comes to the citizens as a whole. You represent only one portion of this great Republic and only seek to further divide us.

Tables provided by the Tax Foundation (as I am mathematically lazy): http://taxfoundation.org/article/summary-latest-federal-individual-income-tax-data-0


Total Income Tax Shares, 1980-2009 (Percent of federal income tax paid by each group)

Year

Top 1%

Top 10%

Top 25%

Top 50%

Bottom 50%

1987

24.81%

55.61%

76.92%

93.93%

6.07%

1988

27.58%

57.28%

77.84%

94.28%

5.72%

1989

25.24%

55.78%

77.22%

94.17%

5.83%

1990

25.13%

55.36%

77.02%

94.19%

5.81%

1991

24.82%

55.82%

77.29%

94.52%

5.48%

1992

27.54%

58.01%

78.48%

94.94%

5.06%

1993

29.01%

59.24%

79.27%

95.19%

4.81%

1994

28.86%

59.45%

79.55%

95.23%

4.77%

1995

30.26%

60.75%

80.36%

95.39%

4.61%

1996

32.31%

62.51%

81.32%

95.68%

4.32%

1997

33.17%

63.20%

81.67%

95.72%

4.28%

1998

34.75%

65.04%

82.69%

95.79%

4.21%

1999

36.18%

66.45%

83.54%

96.00%

4.00%

2000

37.42%

67.33%

84.01%

96.09%

3.91%

2001

33.89%

64.89%

82.90%

96.03%

3.97%

2002

33.71%

65.73%

83.90%

96.50%

3.50%

2003

34.27%

65.84%

83.88%

96.54%

3.46%

2004

36.89%

68.19%

84.86%

96.70%

3.30%

2005

39.38%

70.30%

85.99%

96.93%

3.07%

2006

39.89%

70.79%

86.27%

97.01%

2.99%

2007

40.41%

71.20%

86.57%

97.11%

2.89%

2008

38.02%

69.94%

86.34%

97.30%

2.70%

2009

36.73%

70.47%

87.30%

97.75%

2.25%
Adjusted Gross Income Shares, 1980-2009 (Percent of total AGI earned by each group)
Year
Top 1%
Top 10%
Top 25%
Top 50%
Bottom 50%
1987
12.32%
36.90%
60.75%
84.37%
15.63%
1988
15.16%
39.45%
62.44%
85.07%
14.93%
1989
14.19%
39.00%
62.28%
85.04%
14.96%
1990
14.00%
38.77%
62.13%
84.97%
15.03%
1991
12.99%
38.20%
61.85%
84.87%
15.13%
1992
14.23%
39.23%
62.47%
85.08%
14.92%
1993
13.79%
39.05%
62.45%
85.08%
14.92%
1994
13.80%
39.19%
62.64%
85.11%
14.89%
1995
14.60%
40.16%
63.37%
85.46%
14.54%
1996
16.04%
41.59%
64.32%
85.92%
14.08%
1997
17.38%
42.83%
65.05%
86.16%
13.84%
1998
18.47%
43.77%
65.63%
86.33%
13.67%
1999
19.51%
44.89%
66.46%
86.75%
13.25%
2000
20.81%
46.01%
67.15%
87.01%
12.99%
2001
17.53%
43.11%
65.23%
86.19%
13.81%
2002
16.12%
41.77%
64.37%
85.77%
14.23%
2003
16.77%
42.36%
64.86%
86.01%
13.99%
2004
19.00%
44.35%
66.13%
86.58%
13.42%
2005
21.20%
46.44%
67.52%
87.17%
12.83%
2006
22.06%
47.32%
68.16%
87.49%
12.51%
2007
22.83%
48.05%
68.71%
87.74%
12.26%
2008
20.00%
45.77%
67.38%
87.25%
12.75%
2009
16.93%
43.19%
65.81%
86.52%
13.48%