Thursday, July 30, 2009

CBO: ObamaCare Bends Cost Curve $820B - In Wrong Direction

HotAir has the details here.

For more background, see previous HotAir post here.

Basically, if you look at this chart of the CBO's numbers and add up all the additional federal health spending for the next 10 years, it adds up to $820 Billion (after subtracting $219 Billion in Medicare cuts). Unrelated tax increases of $581 Billion during those 10 years may mean the federal deficit will only go up by $239 Billion, but it doesn't mean that doesn't mean that ObamaCare is almost deficit neutral. It means that he is going to jack up taxes on "the rich" in order to pay for a massively expensive expansion of federal health care spending. Instead of bending the cost curve down, Obama is bending it up. The CBO numbers clearly show that federal health spending will accelerate over time. And that is assuming the CBO is right, and not undershooting the eventual costs by a factor of 7 like happened with Medicare.

The chart is originally from Keith Hennessey.

Tuesday, July 21, 2009

Stossel: Insurance Hides Costs

Here's a good column from John Stossel from a couple weeks ago.

It really zeros in on the point I've repeatedly made that the cost problem with health care is the lack of a normal market, where consumers make hardly any choices at all based on cost. Most cost decisions are made inefficiently through third-parties, mainly health provider administrators, health insurance companies, and employers. The patient and doctor much of the time have no idea what anything truly costs.

It is very difficult to have a cost-efficient system when users of the system, the consumers and providers (patients and doctors) are completely oblivious to price.

See my grocery insurance analogy in the middle of this previous post.

Also see this American Spectator article on health care myths.
(hat tip Hotair)

Bernanke's Exit Strategy

I have noted before that while I supported the Fed increasing the monetary supply during the financial crisis last fall, I am greatly concerned about where all that money is going to go once the economy starts to recover and hundreds of billions of dollars that are sitting on the sidelines right now in bank reserves start getting lent again. It could be a recipe for huge inflation.

Fed Chairman Ben Bernanke has an encouraging column in the Wall Street Journal today on how they plan to avoid hyper inflation.

The question rumbling around in my head now is what side effects the inflation fighting policies will have. I will have to study it more.

Wednesday, July 15, 2009

Sotomayor's Big Fib

Powerline has the exact quotes from Sotomayor's 7/14 testimony and the original quote, with context, of (one of) the "wise Latina" speeches.

The point is that Sonia Sotomayor, in her previous speeches, quotes Sandra Day O'Connor and then explicitly disagrees with her (O'Connor says a wise man and a wise woman would come to the same judicial conclusion on a case, while Sotomayor said she disagrees and that she would hope that a wise Latina woman would more often than not come to a better conclusion than a white male). Today, she acts like she was agreeing with O'Connor. It is a flat out lie, and I'm suprised some of the GOP Senators did not call her out more forcefully on it.

Nearly All UO Professors are Democrats

Here's an interesting article by a University of Oregon journalism student, who was attacked for noting in the student newspaper that only 2 of 111 professors in the departments of journalism, law, political science, economics, and sociology were registered Republicans.

If you haven't attended a public university lately, I can vouch that what Dan Lawton describes at the UofO is very similar to what I found at Oregon State University where I attended until 2003, though as a Computer Science major almost all of my computer classes were non-political.

Saturday, July 11, 2009

Tuesday, July 7, 2009

Government Borrowing Drains Business Investment

This article at RealClearMarkets by Louis Woodhill of The Club for Growth does a pretty good job explaining why government spending never does much to stimulate the economy, and in fact (if you accept that the government is less efficient at creating jobs than the private sector given the same amount of dollars invested) destroys more jobs than it creates.

The money government spends does not grow on trees or fall like manna from heaven. It does not appear out of nowhere. Sure, it can be printed, but you can only do so much printing of money before you start devaluing your currency and investors worldwide start pulling their money out of the dollar, at which point the dollar collapses and drags the economy down with it. Bernanke's Federal Reserve has printed about $1 trillion since last fall, but the banks in trying to right themselves have in total increased their capital reserves by about $800 billion, so they have mostly offset each other. Look for inflation to ramp up once the banks start lending more again, later this year or sometime next year. Watch closely to see how well Bernanke can head off inflation at that point.

The second way government can obtain money to spend is via taxes, but Obama was so adamant about only raising taxes on those making over $250,000 that he cannot politically get away with raising taxes on incomes below that level. And even if he taxed those making over $250,000 at 100%, he could not generated nearly enough money to pay for all his spending. In any case, he hasn't raised any taxes yet, but between the energy cap-and-tax that might pass Congress soon and the expiration of the Bush tax cuts looming in the next couple of years, the expectation of higher taxes is already changing economic behavior with those most likely to have their taxes raised starting to spend less, which doesn't help consumer spending, which is what keeps businesses in business employee people.

(calculate your potential new tax burden at if cap-and-trade passes -- mine will be a little over $1000 per year)

But the third and primary way government is getting the money to spend right now is by borrowing. As Woodhill points out in the article I linked to above, government borrowing means investors buying government bonds instead of using that money for private investment. The more the government borrows, the less private business investment (PBI) there is. The less PBI there is, the less jobs are created. This is exactly why the number of public sector jobs is growing while the number of private sector jobs is shrinking. IT IS BECAUSE OF ALL THIS BORROWING AND SPENDING!

Think about it, Obama. You suck all the private investment out of the economy, and then you scratch your head wondering why the economy is shedding jobs as a whole even as your stimulus dollars are directly creating some jobs. It's because you are preventing more jobs from being created through reducing PBI than you are creating/saving through increased government spending. In the meantime, you consolidate more power in Washington along with all the corruption, fraud, waste, red tape, and loss of freedom that goes along with it.

What we should be doing is encouraging PBI, by steps such as:
  • Reducing the Capital Gains Tax Rate (to encourage investment)
  • Reducing the Corporate Tax Rate (highest in the world)
  • Minimizing government borrowing as much as possible
  • Making the Bush tax cuts permanent (so "the rich" will be more likely to invest money instead of keeping it in short term savings to prepare to pay higher taxes)
  • Stop preventing higher domestic energy production

  • Instead Obama is doing exactly the opposite, out of "fairness" no doubt. He is:
  • Proposing to let the 2003 Capital Gains Tax Rate Cut lapse
  • Proposing to leave the Corporate Tax Rate at 35% and tighten the screws down even HARDER on companies who make profits overseas, which will drive more jobs out of America (already there was a story yesterday of a Canadian company that was incorporated in Deleware but is changing status so its headquarters are now in Canada which has a corporate tax rate in the low 20's)
  • Spending like there is no tomorrow, and he will have to borrow more and more as the Porkulus spending ramps up even more later this year and into the next, not to mention other spending like a $600 billion "down payment" on health care deform
  • Proposing to let the Bush tax cuts expire for those in the top income brackets
  • Taking no action to allow any energy production other than uneconomical "green energy" to expand, while at the same time raising energy costs through cap-and-tax which will raise costs for almost all businesses and decrease their ability to keep/hire employees

  • Obama and the Democrats are busy enacting exactly the wrong policies. If Woodhill is right, unemployment is headed for 14% by next year.

    Monday, July 6, 2009

    O'Grady: A Little History Lesson on Appeasement

    Mary Anastasia O'Grady has another great article in the Wall Street Journal today about Honduras and how we let Chavez bully his way to dominance in the region by appeasing him.

    Hat tip to Fausta

    Saturday, July 4, 2009

    Job Losses for All Post WWII Recessions

    Via Calculated Risk

    VIDEO: Reason TV on a New New Deal

    Think about it. There were lots of sharp recessions both before and after the Great Depression. Why is it that the one that FDR tried "bold persistent experimentation" during was the one that morphed from a sharp recession into the Great Despression? Why would we ever want to copy what FDR did while he presided for his entire 12 years over a dismal economy? If 12 years wasn't enough to turn it around... maybe you should try something different. Stop the bold governmental experimentation and let market forces steer the recovery and you would be back on your feet in 2-3 years max. Here's Reason TV's video on the subject:

    For a refresher course on Keynesian economics, also watch this video from CATO's Daniel Mitchell.

    Friday, July 3, 2009

    Obama to Block G8 Sactions on Iran?!

    Haaretz reports that while there is significant momentum for the G8 to impose new sanctions on Iran, the U.S. is "working behind the scenes to prevent new sanctions from being imposed against Iran."

    (Hat tip to HotAir)

    Apparently, Obama is still stuck on the crazy notion that he can talk the Supreme Leader of Iran to give up nukes, and doesn't want to antagonize Iran.

    Idiot! Khamenei and Ahmadinejad will never give up the nukes. Negotiations with them are worthless. Regime change is the only chance to stop them short of military action. Mousavi is still hanging on, and Khatami just spoke out against the regime. Rafsanjani is almost certainly opposed but must not have enough support in the Assembly of Experts to oust Khamenei. Right now is exactly the right time to put MORE pressure on the regime and bolster the opposition in any way possible.

    Instead Obama is putting blind faith in his ability to negotiate with the current regime when it doesn't have a chance of success. In the meantime, he won't even allow sanctions to go forward to put more pressure on the regime. Dimplomacy is only successful when it is backed up by credible threat of military or economic force.

    And if I am right so far, then all of the election protestors are about to become martyrs with no help at all from the U.S.

    Now I know what living during Carter's presidency must have been like.

    For those that need a primer on Iran's Government, first this Wikipedia graphic:

    Note that the Supreme Leader has control of the military and the judiciary, and also has almost complete control over the 12 member Guardian Council. He appoints 6 members directly and appoints the Head of the Judiciary who nominates the other 6 members of the Guardian Council, subject to Parliament's approval. The Guardian Council, in turn, controls the elections. All candidates for Parliament, President, or the Assembly of Experts must first be approved by the Guardian Council.

    The Assembly of Experts is a 86 member body that meets twice a year whose sole purpose is to appoint and monitor the Supreme Leader. They apparently have the power to remove the Supreme Leader if "the Leader becomes incapable of fulfilling his constitutional duties, or loses one of the qualifications mentioned in the Constitution, or it becomes known that he did not possess some of the qualifications initially..." I assume this could be done on a majority vote. Reform-minded Rafsanjani is currently head of the Assembly of Experts, and appears to have a majority of the members on his side. However, it is unclear if that means enough support that they could ever oust the Supreme Leader. Rafsanjani recently called an emergency meeting of the Assembly of Experts. However, all notes are classified and only viewable by the Assembly Members and the Supreme Leader, so its hard to say what they discussed. The Assembly of Experts has never publicly opposed a Supreme Leader on any matter.

    Obama's EPA Puts Politics Ahead Of Science

    Kimberly Strassel has a must read column at the WSJ on a man named Alan Carlin who works at the EPA and was silenced when trying to put out a report that recommended the science behind man-made global warming be revisited (given new peer-reviewed research that has cast doubt on the theory and the fact that temperature have been going down for 10 years which was not predicted by the computer climate models that most climate scientists were relying on).

    One of the Democrats' favorite lines about the Bush EPA was that they were putting politics ahead of science. Well, emails have been uncovered from Carlin's superior telling him to drop it because, "The administrator and the administration have decided to move forward on [classifying carbon as an] endangerment, and your comments do not help the legal or policy case for this decision. . . . I can only see one impact of your comments given where we are in the process, and that would be a very negative impact on our office."

    In other words, the EPA has already decided to move forward on this, so do not bring up any science that will conflict with their already-made decision. The EPA administrator could be really unhappy with us about that.


    Thursday, July 2, 2009

    VIDEOS: Obama is a Big Fat Liar

    Guy Benson from NRO has Obama ads from last year's presidential campaign posted that illustrate that yet another one of Barack Obama's promises comes with an expiration date.

    Obama constantly ripped McCain for proposing to tax employer-provided health insurance. Of course what McCain was proposing was leveling the playing field where instead of only giving a tax DEDUCTION to those who get their health insurance through their employer, EVERYONE would get a $5,000 tax CREDIT. As I've noted before, I think over 95% of people would get a better tax scenario under McCain's plan. And it would be exactly the right step to move toward a much better functioning health insurance market.

    What Obama is now refusing to take off the table is just a plain old tax increase on employer provided benefits in order to fund his health care reforms. He's not simply restructuring the tax treatment to level the playing field as McCain proposed.

    Oregon Bans Field Burning

    Field burning is already one of the most heavily regulated activities imaginable. Farmers must pay $10/acre, not burn within buffer zones along major highways, standby ready for countless hours in hopes that they will get the call that they can burn a field, and post flaggers at both ends of any adjacent roads that will be impacted by smoke. The Oregon Dept. of Agriculture (ODA) monitors weather conditions and only allows burning on about 10 days each summer during the best wind conditions possible to achieve good lift and transport of the smoke out of the area.

    Over 500,000 acres used to be burned annually, but since legislation in 1991 phased that down, a maximum of 65,000 acres can now (before the just passed ban) be burned. The total acres burned for most of this decade averaged around 50,000 acres, dropping to 32,000 in 2007 and 38,000 in 2008.

    The Oregon Department of Agriculture - Natural Resources Division's Smoke Management Program publishes an annual summary report on field burning. The ODA has Nephelometers, to measure smoke impact, located in Portland, Salem, Corvallis, Carus, Lyons, Sweet Home, Eugene, and Springfield. Going back to 2002, with only the exceptions of 2 hours in Corvallis (2006), 2 hours in Eugene (2005), 4 hours (2005) and 1 hour (2002) in Springfield, and 1 hour in Carus (2004), the only nephelometers to record any smoke at all were in Sweet Home and Lyons. The smoke impact is reported as light (no impact to visibility), moderate (12 miles visibility), or heavy (5 miles visibility). Since 2002, about 2/3 of the measured smoke impact is light and 1/3 is moderate. Obviously, there are other areas that would have been affected by smoke and not measured, but there is no way that field burning smoke, measured at about 2% of air pollution each summer, is today a major problem.

    The annual summary reports also list the number of complaints broken down by city. Unfortunately, they are not broken down by day so that they can be cross-referenced to see if there was even any open field burning on that day. Eugene, who remember has only had 2 hours of measurable smoke since 2002 and none in the last 2 years, is consistently a top complainer, registering 134 of 463 total complaints in 2008 and 368 of 776 in 2007. Sweet Home and Lyons, in comparison, have relatively few complaints.

    The field burning ban will force farmers to use more pesticides and increase ground tillage, expanding even more the summer haze of dust that now comprises 80% of summer air pollution. Even with these more expensive measures, crops will not grow as cleanly and some farmers will be driven out of business.