Posts Tagged ‘deficit’

The healthcare reform bill may be dead but there is still a need to understand why government expansionism is bad for business and for taxpayers.

The elephant in the room on the healthcare plan was how the heck was the government going to pay for it?

And not just healthcare reform’s costs, but the debt we are already in for Social Security, Medicare and Medicaid.

Taxing just the top 2% of earners (greater than $250,000 income) in this country to pay for millions of Americans to get free medical care is just not going to cut it.  Nobody needs a degree in calculus to know that math just won’t work.

In addition to the “tax-now-benefits-later” game I mentioned in a previous post, a tax on suntan salons, and the myriad other taxes they’ve built into the bill…the government is scrambling to find new things to tax.

Today’s new tax is called the “Bailout Tax” and will affect mostly the 10 largest financial institutions. The fee (they like to call taxes “fees” so we don’t know it’s a tax) will be in place for 10 years and raise about $90 billion.

The government is taking advantage of the American people not being happy with the banks or their bonuses to create this tax. As upset with the banks as we may be, this “fee” is just a tax the government needed to help pay for their expansion through such things as the healthcare reform bill.

Another problem with taxes is that the banks won’t pay for them, we will.  Why would a bank take a hit like that when they can just past those additional costs onto us through fees, higher interest rates or more restrictive lending standards.  Rest assured, the banks will still be open for business, still make their profit goals, still be handing out bonuses and we will get to pay their new tax.

The current healthcare reform bill uses a dirty trick to “lower costs” that many don’t know about…

  • The benefits of the healthcare reform must not begin until after the next presidential election in 2013.
  • The new taxes on American citizens and insurers and cuts to Medicare funding must happen immediately.

The government is just playing a game on the people. The two statements above are fact.  They are part of the bill.

And it’s no accident the benefits don’t kick in until after the next election. If healthcare is so important…if so many people are suffering needlessly…why wait four years to help them? Oh that’s right…so you can get re-elected first.

Here’s an analogy for you to consider…

A man (whose profession is being a thief) wants to buy a house, but his wife says the one they want is too expensive.  So he says, “Nonsense, I can prove to you that for ten years the house won’t cost us anything.”

This is how he makes the house not cost anything for ten years…

  • He spends four years robbing people to collect the down-payment for a house.
  • He saves $100,000 in that time.
  • He buys a $500,000 house but does not use the down-payment when he buys it.
  • He pays the first six years of monthly mortgage payments using the down-payment money only

Badabing! The house hasn’t cost anything for the first ten years. Exactly what the government is telling us about the new healthcare reform bill.  And what about AFTER the first ten years?  Oddly, they are silent on that.

This is the same math the government is using the convince the American people the healthcare bill will not add to the deficit.  Truth through ommission…yes, it will not add to the deficit in the first ten years because of this game playing…but it will to the tune of billions of dollars for all eternity after that.

“Government deficits have caused the U.S. savings rate to turn negative for the first time since the Great Depression…” ~Bloomberg

This is a good example of why government stimulus sounds good on paper, but does little to help the economy…

Federal, state and local governments spent $1.3 trillion and $14.9 billion in a ‘Hail Mary’ play to stimulate the economy. Meanwhile personal (you and me) and corporate savings increased by $983 billion.

While government spent, we saved.

This means that most of the stimulus money being pumped into the economy is being squirreled away by citizens and corporations into savings accounts.  This is a completely normal and rational event in bad economic times.

This also means the impact of the stimulus spending is minimized while governments run up large deficits.

To pay those deficits, governments will have to raise taxes.

Taxes you will have to pay from your savings.

Let’s review…

  • You spend less to save money in scary times.
  • Government makes up for your spending less by spending more
  • Your savings go up while the government goes into debt
  • The government raises your taxes to pay off their debt
  • You withdraw from your savings to pay your taxes.

It’s one…big….circle.  The irony is almost funny.  Almost.

The solution: Is always…lower taxes and allow producers (the American worker) to keep more of what they earn and spend it, invest it, or save it as they see fit. A recovery would come much faster this way but that would cut government out of this loop and the last thing the government wants the American people to learn, is that we don’t actually need them.

Contact your Senators now.  We are out of time, this healthcare bill is going to pass. 

Click here, put in your address and it will tell you who to contact for your area.

A sample letter for you to cut and paste…

_________________________________________________________________________________________

Dear Sir/Madam:
This healthcare bill is the cornerstone upon which the failure of this Republic will be built.  Social Security, Medicare, Medicaid…all of these government run programs are running unimanginable deficits and now you wish to add another with Universal Healthcare. 
Your vote to support this bill will speak volumes about your disregard to future generations and will bankrupt unborn generations the day you vote for it.  Future medicines and life saving medical equipment that will not only help Americans, but help people all over the world will never be developed.  By instituting price (cost as you like to call it) controls will only discourage investment into future medicines and technologies.  For this many will suffer and die needlessly.  This will occur on your watch.  This will be your legacy.
Sincerely,

__________________________________________________________________________________________

The passing of this bill will be marked in history generations from now as one of the greatest failures of our generation.  Government is already bankrupting this country with Medicare, Medicaid, Social Security and Public Labor Unions, meanwhile any entity the government controls like the Post Office, run losses in the billions.

Now they will take over our healthcare.  Expect the same level of mismanagement.

What keeping costs down really means….

When they say they will keep “costs” down, what they mean is the “price” which is what we are charged for it.

The costs of developing a new life saving medicine or new surgical equipment can never be reduced, only the price.  If a car costs $10,000 to manufacture, but sells for $15,000 – reducing the sales price to $11,000 doesn’t change the $10,000 in costs it took to build the car.  It only means the car company will make $1,000 instead of $5,000 on the sale of the car.

When you force companies to lower their price, they have less money to invest in the costs of research and development.  In the case of cars, it was the profit in cars that allowed car companies to create air bags, anti-lock brakes, traction control, safety glass, better tires, etc…  If  you take away the profits, they have less money to develop improvements.  Imagine cars without air bags or anti-lock brakes.  How many people would have died except for their air bag or anti-lock brakes saving their lives?  If the government had tried to keep the “costs” of buying a car down, more people would be dead now because airbags and anti-lock brakes would never have been developed.

The same is true in medicine and surgical care.  If you force pharmaceutical companies to make less in profits, then they don’t have the money to research and develop new medicines.  They make billions in profits because it takes billions in research to come up with the medicine.  There is nothing wrong with this.  They bring to us a medicine that helps people live better and live longer and as time passes that medicine gets cheaper and cheaper and more and more people have access to it.  However, if that medicine had never been developed, then nobody would have access to it…ever.

With the passing of this bill, we will in one day eliminate the development of life saving drugs and medical care that you yourself may one day die from because they don’t exist, but would have, had government not tried to control the PRICE of medical care.

We are condemning ourselves and our future generations to a reduced standard of care, the absence of medicines that would have saved or improved the lives of millions, all because an ideological few are on a crusade to feel important about themselves.

I often say that government removes our freedoms and destroys our liberties one brick at a time. 

This bill is a wrecking ball.

My rule of thumb on polls is that whatever your desired outcome, someone can create a poll to support it.  As many have said before me, “There are three kinds of lies: lies, damned lies, and statistics.”

I decided to “poll the polls” and see just how scattered the polling conclusions are.

I noticed a couple of things doing this very quick and informal poll polling.  How do people subconsciously process a headline that proclaims “49% of Americans Support Healthcare Reform.” In this headline, less than half of the people polled support healthcare, and yet they use the word “support” even though the supporters are in the minority.  It may well be the brain locks onto and retains “support healthcare reform” regardless of what the number is in front of it, sort of subtle brainwashing.

Another poll from the Maine Public Broadcasting Network was a little more disturbing.  It stated, “A new poll finds that Maine AARP members support elements of the health care reform bill passed by the U.S. Senate.”  Elements? Why would they use the qualifier, “elements” of the health care reform bill?  Everyone on the planet will support various “elements” of any bill.  The title of a bill is an element.  The author of a bill is an element.  I would agree 100% with those elements of any bill, but that has nothing to do with whether or not I support the bill itself.

This is misleading, and in my mind, sort of desperate.  It may have well been that a majority of the AARP members in Maine did not support healthcare reform at all, but we’ll never know because the article never says.

It simply says that “82% support a provision requiring insurance companies to cover routine checkups and preventive care” and “78%…approve Medicare to negotiate with pharmaceutical companies for lower…drug prices.”  That says nothing about whether or not Maine AARP members support the other 99% of the bill.

It seemed that all in all, most people believe the system needs reform but they are generally happy with what they have now and they don’t believe the government is capable of providing universal health care without bankrupting the country.