Here are some of the economic news stories that were posted on Facebook in the month of November.
Bad news about Obamacare just keeps coming. Today the business news publication Barrons brings to our attention that lower income taxpayers are supposed to receive a tax credit to offset the cost of insurance premiums. The law says the credit will be issued if they buy insurance through an exchange set up by their STATE. Well, 36 states chose not to set up an exchange, thereby requiring citizens to use the FEDERAL exchange. So, here in Arkansas, if I qualify for the government subsidy, I will not receive it because I must shop from the FEDERAL website.
The IRS cannot change a law by writing a rule that contradicts it. The only way to fix the problem is for Congress to amend the Affordable Care Act. Obviously, that is not going to happen with the Congress we have in place; with a Republican controlled House, and Democrat controlled Senate.
The Affordable Care Act (all 2,409 pages) is so complex you can count on a lot of these kinds of technical problems in the future.
What the nation really needs is to rise about all of this and take another look at the big picture: Our current health care system is a mess. We spend 17% of our GDP (about $8,200 per person, per year) on health care while other developed countries spend half as much. There are many things that can be done to fix this problem. Shame on the Republican party for saying they want to repeal Obamacare without presenting an alternative.
If you are interested in finding out how other countries tackle the health care problem, I suggest you get a copy of the book entitled The Healing of America, by T. R. Reid.
It’s a shame that Washington thinks it needs to re-invent the wheel when so many other countries have done much better with simpler, affordable systems.
One caveat here is that no health care system is perfect. But ours is definitely one of the worst.
Treasury Secretary Jack Lew reported last week taxes and spending totals for fiscal 2013. Income taxes increased by 13% over 2012 and totaled $2.77 trillion. Spending decreased by 2% and totaled $3.45 trillion.
The White House celebrated the fact that the 2013 deficit (loss) of $680 billion was significantly lower than the $1.09 trillion in 2012. As you can see from the above numbers most of the improvement was due to INCREASED TAXES. That’s not good. We need to see a lot more spending cuts in order to balance the budget. As of right now, Washington has no plan to balance the budget. In fact, Washington has been operating without a formal budget for five years. All expenditures are approved through the “continuing resolution” process.
Since President Obama took office in 2009, the U.S. Government has amassed $5.8 trillion dollars in deficits (losses).Our national debt stands at $17 trillion, and we have liabilities for future entitlements of over $70 trillion. We have a LONG way to go in fixing Washington’s financial health.
For a concise summary of our nation’s finances and what should be done to balance the budget and pay down the debt, take a look at my book, Our Government is Broke.
More gaping holes in the Un-Affordable Care Act (U-ACA) boat. Mr. Obama is now asking the insurance companies to give the millions whose policies have been cancelled, a “do-over”. The insurance industry trade group is saying this action will “destabilize the markets, resulting in higher premiums for consumers”. The trade group is also hinting it will seek “unspecified assistance” (read: “large sums of money to offset the cost of fixing this snafu”).
I have written before about the billions of dollars the U.S. Government will shell out to force Obamacare on us. Add to that the billions the Government will have to shell out to reimburse insurance companies for the money spent fixing Obamacare screw ups, and making citizens whole.
One of the next gaping holes in the U-ACA boat will be the fact that Obamacare’s success is based on the assumption that young, healthy Americans will sign up for health care; offsetting the cost to insure older, less healthy people. A recent Gallup poll shows that 77% of young healthy people will NOT be signing up for medical insurance, and would rather pay the relatively small penalty.
Perhaps another problem will be the lawsuits from thousands of people who had their policies cancelled, then sustained a “non-covered” medical emergency. Washington will need to hire lawyers to settle these claims with money the Government doesn’t have.
The Un-Affordable Care Act boat is sinking…..and taking down our economy with it.
Two things I point out in my book: 1. Obamacare is hated by just about everyone. How can something so flawed and hated actually work? Indeed, it will be an economic drag that we can ill afford. 2. Societal problems are best dealt with on a local basis. Let the 50 states figure out what they want to do about healthcare. Our founders warned us of the consequences of an overreaching, overbearing federal government. Well, that is exactly what we have today…
Mr. Obama has demonstrated over and again supreme arrogance that is now coming back to haunt him. In the private sector, his lack basic leadership skills would have resulted in his firing by now.
P.S. for those of you going to the tanning salon for that post-summer tan, be prepared to pay more as the U-ACA imposes a tax of 10% on all tanning salon revenue. I’m not kidding….
The Obamacare snafu is a real teachable moment in leadership:
1.Don’t let your title and position go to your head. 2. Don’t try to cram your agenda down people’s throats, under the guise of a superior, benevolent savior.
One thing I learned many years ago is that great things happen as a consequence of a team working together. Not by autocratic dictatorship and by deriding successful people.
Here is an anecdotal story that sort of exemplifies the fiasco created by millions of insurance plans being cancelled because they don’t comply with the law: A Wyoming woman’s policy was cancelled because it didn’t include the required pregnancy coverage, even though the woman had a hysterectomy some time ago.
Mr. Obama is learning some hard lessons (at the taxpayers expense). He must go hat in hand to the insurance companies to ask if they will bail him out. These are the same companies he blamed for the nation’s health care problems during his first term.
You may have seen that the House of Representatives voted to change the law so that insurers could sell, for another year, health policies that don’t meet the high standards of Obamacare. This is intended to provide some sanity and relief while the entanglements of Obamacare get sorted out. The President said he will veto it as he believes he is in complete control now and all will be well in the future. (Yet another sign of arrogance.)
“If ever time should come, when vain and aspiring men shall possess the highest seats in Government, our country will stand in need of its experienced patriots to prevent its ruin.”
Some interesting factoids about the government “budget” and financial forecasting:
As I mentioned in a previous post, my research into how the Government stands on revenue, spending, and the deficit, is primarily focused on the White House’s Office of Management and Budgets (OMB) website, and the Congressional Budget Office (CBO).
The information I access varies quite often, and in a rather big way! Let me give you some examples:
On Feb. 12, 2013, the OMB reported the 2012 deficit to be $1.3 trillion.
On Nov. 8, 2013, the OMB reported the 2012 deficit to be $1.1 trillion.
The U.S. Government fiscal year for 2012 ended September 30, 2012. So how could the deficit number reported in Feb. 2013 be reduced by 15% when it was reported again in Nov. 2013? Did it take nearly a year to get the final numbers correct?
Here is how the fiscal year 2013 deficit was being reported by the OMB:
On Feb.12, 2013 it was projected to be $901 billion.
On April 10, 2013 it was increased to $973 billion.
July 8, 2013 they reported it would be $759 billion.
On October 9, 2013 it was projected to be $753 billion.
On Nov. 8, 2013 it was back up to $973 billion.
Finally, on Oct. 30, Jack Lew (Treasury Secretary) reported it was $680 billion.
As of today, the OMB still shows $973 billion on its website – here is the link http://www.whitehouse.gov/omb/budget/Historicals – click on Table 1.1)
So what conclusion should we draw from the variations in the reporting of the U.S. Government deficits? Perhaps one of these answers:
• The White House OMB is sloppy in updating its website.
• The OMB disagrees with the Treasury Secretary’s number and refuses to recognize it on their website.
• The OMB wants several more months to figure out what the 2013 final number really is.
• The OMB is not very good at projecting revenue, spending, and deficits.
• They don’t really care much because the U.S. Government hasn’t had a real “budget” for the last five years, anyway.
None of those answers are any good. The whole thing seems awfully sloppy and cavalier. These numbers are extremely important; especially since we are talking about huge losses, out of control spending, and out of control debt.
I guess one possible response from the OMB would be: OK, you don’t like the way we report numbers? Fine, well cut off your access to them.
“The liberties of a people never were, nor ever will be, secure, when the transactions of their rulers may be concealed from them”
…..Patrick Henry, American colonial revolutionary
Today the White House put out some propaganda on the SNAP(Food Stamps) program. They point out that 5 million people were kept out of poverty because of food stamps. They also state that the Republicans want to pass legislation that would cause 4 million people to lose Food Stamp benefits. To the uninitiated, you may conclude that the Republicans want to disqualify four fifths, or 80%, of those currently receiving food stamps.
The White House goes on to say that the Food Stamps program is actually boosting the economy because it creates jobs for those in the grocery industry.
Here is what the White House didn’t say:
There are 47 million Americans on Food Stamps, costing American taxpayers $75 billion a year.
It is insulting to our intelligence to think that the more we spend on the Food Stamps program, the better our economy will be. Taxes paid for Food Stamps is a redistribution of income from those who work hard and pay taxes, to those who are underemployed. Taxes take money out of the private sector (where it could be used to invent, sell products, and employ people) thus hurting the economy.
Don’t get me wrong. I am glad that the Food Stamps program is there for the truly needy. But what the US Government should be working on is growing employment and getting people off Food Stamps. This is simple economics 101.
Why isn’t the White House sending out messages explaining what action is being taken to improve the economy and create jobs? Such as:
- Cutting Government spending
- Cutting the Government debt
- Reforming the tax code
- Stop vilifying businesses, and start encouraging businesses
- Abolishing legislation that hurts the economy; like Obamacare, Dodd Frank, and others.
Do we choose Capitalism or Socialism? It is clear the White House chooses Socialism. Unless there is a tectonic shift in the attitude in Washington DC soon, it will become obvious America’s best days are behind us.
Following is a link to the White House’s most recent propaganda: