Barack Obama has finally released his own proposal for Health Care Reform.  Most of his proposal is just a rehash of the Bills before the House and Senate with proposals for how differences should be reconciled.  In other words, not that much is new.

Some highlights (or lowlights depending on your perspective).

One of the new proposals is for a new bureaucracy called the Health Insurance Rate Authority.  This bureaucracy is slated to oversee increases in insurance premiums.  The idea is similar to State oversight of Utility rates.

The problem here is that the justification for Government oversight of Utility rates is that Utilities are Government granted monopolies, and these type of monopolies need to be regulated to prevent “obscene” profits.  The term “monopoly” usually doesn’t apply to the Health Insurance Industry and their profits can hardly be termed “obscene”.

Health Insurance Providers have a profit rate hovering around 3.5%.  The average profit rate for a typical American Corporation is closer to 10%.  How can you possibly justify regulating what an industry with lower than average profit rate can charge its customers?  Especially when they are in a field where there is competition between providers.

This proposal to control Insurance Premiums becomes even more troublesome when coupled with all the other regulations being proposed.

Under the current proposals, the Government will control what conditions Insurers will cover, it will mandate that Insurers cover everybody (no preexisting condition clauses), will mandate no coverage limits, will mandate coverage of “dependents” up to the age of 26, etc.

Now, Obama proposes the Government control what premiums Insurers will be able to charge as well.

With the Government making all the decisions, how can we say that we have private Insurance?

Instead, we will have Government Health Care by proxy, with the only decision being made by private companies being who is employed.  And even the terms of employment stand to be regulated by the Government under the current proposals with the mandate that 85% of revenues be spent on health care.

I’m back after a much needed break from dealing with Government stupidity.

The latest idiocy that just needs to be posted on: new Government restrictions on travel with Lithium-Ion batteries.

The U.S. Department of Transportation has issued proposed changes to the rules governing shipment of batteries and battery operated devices by air.  This includes rules governing checked and carry-on luggage for air travelers.

The proposed regulation would prevent air travelers from keeping extra batteries in their carry-on luggage.  (Alkaline and rechargeable).  Think about that.  You are on a 4 hour flight, and have a portable device that lasts about 2 hours on one set of batteries.   So much for carrying extra batteries so you can use it the entire flight.

The rules would also impact shipping any electronic device that uses Li-Ion batteries by air.  The proposed rules could double the cost of shipping electronic devices by air.

All this due to 40 or so incidents involving Li-Ion batteries.

It’s gotten to the point that the U.S. Government is passing regulations based on freak accidents.

Back to the grind after a much needed vacation from Political idiocy.  There is just so much moronic activity you can deal with before it starts turning your own brain to mush.  Back to covering political stupidity, and the first subject is a doozey:  Barack Obama has announced intentions to levy a new tax an financial institutions, something laughingly called a “financial crisis responsibility fee.”

Why laughingly?  Well, it doesn’t tax those responsible for the financial crisis.

The financial crisis was caused by mortgage loans being handed out to people who were high credit risks.  These loans were given due to pressure from the Government, charging that the banks were engaging in racial discrimination in their decision not to give loans to these credit risks (i.e. “Red Lining”).

Also involved in giving out these loans were organizations known as Freddie Mac, Fannie Mae, and the F.H.A. (Federal Housing Administration), otherwise known as the Government.

These loans were bundled in an attempt to lower the risk involved and sold to the banks.   The banks that bought these bundled mortgages underestimated the risks involved.  They didn’t cause the financial problem, they were the victims of the ones that did (the Government).

That’s just the first problem with this so-called “Responsibility Fee.”

Another problem is the fact that the vast majority of the banks that took TARP funds  have already paid back the TARP funds, with interest.   (The only bank that hasn’t paid back TARP funds is Citigroup).  The Government has already gotten the TARP funds back from these banks.  Asking for more on top of what has already been paid is just double-dipping on the part of the Government.

Couple that with the fact that many of the banks that took TARP funds did so because the Government forced them to after deciding that the bank was in “financial trouble”.  The people running the bank didn’t think they need the money, and paid it back as soon as the Government allowed them to do so.  The fact that these banks are now showing a profit means the people running them were right, and the loan was not needed, and the Federal Government was wrong.

Think about that, the Government forced the banks to take loans they didn’t want, gets the loans paid-back with interest, and now wants to punish the banks for taking the money they didn’t want or need in the first place.

Then there is the fact that the “Responsibility Fee” will hit banks that never took TARP funds.  How can banks that didn’t hold these bundled mortgages, were never in financial trouble and never took TARP funds, possibly be responsible for the financial crisis?

Never mind, Obama will tax them anyway.

Then there is the effect that this “fee” will have.

To start with, the fee will not simply be absorbed by the banks.  They will pass the additional cost imposed by this fee onto the people that use these banks.  That means higher ATM fees, higher mortgage rates, higher fees on checking/savings, etc.

In other words,the fee will take  more money out of the pockets of the American Consumer.

It’s the consumer that drives the American economy, and taking more money out of their pockets will hurt economic growth.  This during a Recession with a double-digit unemployment rate.

Secondly, the fee has the potential to lower the Capitol available to these banks to give out in the form of loans.  (Assuming that attempts to pass the cost along aren’t completely successful)

This comes on the heels of President Obama lambasting banks for their failure to give out loans.

Excuse me, you say you want the banks to give out more loans and then turn around and propose a fee that will limit their ability to do so?   Given President Obama’s previous rhetoric and the fact that the banks have already paid back the TARP funds, the proposed fee makes absolutely no sense as long as you accept the supposed reason for it.

It gets even worse when you examine all the entities that also received TARP funds or that also played a part in the mortgage crises.  Chrysler and GM both took TARP funds, but are exempt from the new tax.  It probably doesn’t hurt that the Government is now basically running both these companies.  Do you really think the overnment would ever tax itself?

Then there is the matter of Fannie Mae and Freddie Mac.  These companies probably bear the majority of the responsibility for the financial crisis.  After all, they were the entities most responsible for the mortgages that were re-bundled and sold to the banks.  But they won’t be hit by the tax.

In fact, Freddie and Fannie will benefit from the tax.  The Government, in its infinite wisdom, decided to give the American People a Christmas present, and eliminated the $400 Billion cap on tax payer liability for loses incurred by these companies.

The Government basically told these two irresponsible companies that they could lose however much money they wanted, and then decided to tax the profitable banks (also known as the responsible banks) in order to pay for the losses.

It’s not a “Responsibility fee” it’s a fee to pay for irresponsibility.

The stink surrounding this idiotic proposal gets even worse.

President Obama announced this proposal on Thursday.  The very next day, the Democrats started using it in an attempt to keep the Massachusetts Senate seat vacated due to the death of Ted Kennedy.

Martha Coakley is ina very tight race against Scott Brown, in large part due to her support for the Democrat’s plans in regards to Health Care.

She immediately glommed on to the proposed fee in an attempt to change the subject away from Health Care.  Apparently, she can’t get elected unless she has an enemy to run against.

The problem is what happens when people in Government decide that profitable banks are the enemy.  A country where banks are not allowed to make a profit, is a country without the means to spur economic growth.

Well, Senate Majority Leader Harry Reid finally seems to have his 60th vote.

Senator Nelson has announced support of the Senate Health Care Bill.  The cost?  Revised language on Abortion, and an exemption for Nebraska in regards to Medicare expenditures.

That’s right.  The Federal Government will pay for the Medicare expenditures for the State of Nebraska.  All those other States with Senators that joined earlier will just have to pay those Medicare expenditures, themselves.

That means that not only will states like California have to pay the Medicare costs to take care of the citizens of California (including illegal aliens) they will have to pay for the Medicare costs for taking care of the citizens of Nebraska.

Governor Schwrazenegger has already stated additional Medicare costs would bankrupt his state.

This reminds me of the joke about the millionaire that propositions another man’s wife.  After saying yes to $1 Million, he then offers $50.  She get’s offended and asks what kind of woman he thinks she is.

His response?  We’ve already established what kind of woman you are.  Now we’re just negotiating price.

Well, we now know what kind of man Senator Nelson is and we know the price.

The naming of Ben Bernanke as Time’s Man of the Year prompted a discussion on a local talk show as to whether or not he deserved it.

One caller called in saying no, arguing that he had not really done anything to deserve the recognition.  The caller stated that he had not actually done anything to stimulate the economy.  When asked by the hosts what more he could have done, the caller answered “raise interest rates.”

The hosts could not understand how raising rates would stimulate the economy and the caller did a very poor job of explaining.

Interestingly, the topic of how raising rates is what is needed to stimulate the economy came up on today’s Rush Limbaugh show.  (I know, there are some people that will have a visceral reaction to that name.)

As usual, Rush did a much better job of explaining this.

The problem starts with the Prime Rate.

This is the interest rate that the Fed. Reserve charges private banks on the money it loans out.  The current Prime Rate is almost zero.  MEaning it costs banks almost nothing to borrow from the Federal Government.

At the same time, interest rates on Federal Bonds is in the 3% range.  These bonds are typically purchased by institutional investors.  This includes banks.

Right now, banks can achieve a guaranteed, risk-free rate of return of 3% on the money they borrow from the Fed. by simply buying Government Bonds.  Banks have very little incentive right now to give the money they get from the Fed out in the form of private loans.

The only way to solve this problem is to raise the short-term Federal Rate to the point where simply buying Government Bonds is no longer a viable option for banks.  That means a hike in interest rates to the 3% range.

This comes after President Obama excoriated banks for not loaning out the money they were given.

Well, if he wants banks to loan money to private entities, he really needs to take a good long look at the policies of his administration.

Right now, he is giving banks the incentive not to loan that money out.

Another example of the President needing to look in the mirror when it comes to the economic problems currently facing this country.

Never has Presidential economic illiteracy been so clearly defined as it has in the past couple of days in the statements President Obama has made in regards to the Banking industry.

The first statements came in the interview Obama gave on 60 minutes on Sunday.

In that interview, President Obama attacked saying:

“They’re still puzzled why is it that people are mad at the banks. Well, let’s see, You guys are drawing down $10, $20 million bonuses after America went through the worst economic year that it’s gone through in — in decades, and you guys caused the problem. And we’ve got 10% unemployment.”

Excuse me, Mr. President, but you are attacking the wrong “Guys”.

The “Guys” responsible for the current economic problems were primarily the politicians in Washington.  Those “Guys” pressured these banks to give those loans, loans that the banks were reluctant to give out.

When they refused to give them out, you people accused them of being racist.  (Remember the term “redlining?)

They starting giving those loans out to avoid bad publicity and lawsuits, and then rebundled them in an attempt to lower the risk.

Then those “Guys” in Washington change accounting rules, making those rebundled loans worth nothing for accounting purposes.  Forcing the banks holding those rebundled loans to ignore the fact that only a portion of the loans were actually worthless.

You really think Washington telling banks to treat assets that had value as if they had none played no portion in the meltdown?

I can understand why you want to ignore Washington’s role in the crises, since you were in the Senate when President Bush tried to head it off and opposed his attempt to do so.

That means, Mr. Obama, YOU are one of those Guys responsible for the current economic problem.

This is doubly true when you consider the fact that you have been President for nearly a year.  What economic policies have you enacted that would boost the economy and create jobs.

Mr. President, stop blaming other people for the problems that you are responsible for.  It’s unpresidential.

To paraphrase the President from my home town, the buck stops with you.
Stop pushing the blame for the economy onto someone else.  And stop telling them they are responsible for creating economic growth by giving out more loans. The reason they aren’t giving these loans out, is because they are risky.  Stop telling bankers they are responsible for creating an economic disaster by giving out risky loans, then turn around and tell them to give out loans they consider risky in order to create economic growth.  That is just shear idiocy.

Bankers are not responsible for stimulating the economy.  The responsibility of Bankers is to ensure the safety of the money deposited in their financial institution.  By insisting that they (again) give that money out in the form of risky loans (after all, if they weren’t risky they would already be giving these loans out) you are actually insisting that the abandon their responsibilities.

Mr President, the person responsible for creating economic growth, is you.

Clearly, you have absolutely no idea how to do this.

Hopefully your replacement will.

The Democrat’s latest proposal for Health Care “Reform” is a real doozy.

They’ve proposed expanding Medicare Coverage to those people in the 55-64 year bracket.  This one is just so jaw-droppingly bad that I’m really not sure where to begin with criticism.

First, Medicare is already going bankrupt.  The amount of money being spent will be far more than what the plan takes in within the next decade.  Adding people in the 55-64 range will greatly increase the cost of the program, making it go bankrupt even sooner.

Only Government officials could conclude that extending a Government program they already have problems paying for would be a good idea.

Congress will either have to increase payroll taxes, cut benefits or engage in extra deficit spending (or a combination) in order pay for the additional costs.

Then there is the fact that people in the targeted age group are usually still employed, often with health benefits.  Plus they have access to Health Insurance through AARP, and are likely to be able to afford it.  The 55-64 year bracket are the people least likely to need Government Health Insurance.

Then there is the way that the Democrats planned to pay for there Health Care Reform.  You know.  That 500 Billion in savings from Medicare.

So is that still in the works?

How much sense does it make to take $500 Billion out of Medicare in order to finance an extension of Medicare?

Otherwise known as “The Government Givith and the Government Taketh Away.”

It’s been awhile since I posted. I got sick.  Then busy.  Then sick again.  (I know, no need to post personal problems.)

Anyway, the latest CBO report on the effect of the Senate’s latest Health Care Reform Bill undermines the arguments being made by the Democrats.  The keep saying that the bill will lower Health Costs, but according to the CBO report, insurance premiums for anybody buying a personal insurance policy will face increased insurance premiums.

So much for lower cost.

At least for individuals.

One thing you need to remember in this entire debate, is that certain people have a Government centric view.  This is especially true for long time Washington insiders.  Meaning most of our elected officials.

To them, as long as the Health Care Cost for the Government go down, that is all that really matters.  When these people talk about lowering costs, they’re not talking about your costs.

It gets even worse when you take into account the way the CBO scores things.  The CBO makes certain assumptions, and sometimes those assumptions just aren’t realistic.

In the case of the Senate Bll, the CBO neglects to factor in the fact that a large number of healthy individuals will just refuse to purchase health insurance.  It just isn’t worth it.  Not when the bill guarantees your ability to purchase insurance after you get sick and caps the premiums Insurers can charge.

Insurance premiums for everyone will go up once you factor those provisions in.

Not really.

Recent developments in New London, Conn. have actually proven how idiotic the judges in the majority were when they ruled that New London could exercise Eminent Domain to take away private property and then give it to a developer in an attempt to increase tax revenues.

In the Kelo decision, the 5 panel majority basically rewrote the Constitution.  Instead of the Government only being able to take property for public use, the Court held that the Government could take property for the “public good”.  And more tax revenues equaled “public good”.  The decision completely undermined the idea of private property rights, and the majority of States responded by insuring that their State Constitution clearly set out that Eminent Domain could only be used when they property was going to be used for some kind of public function (like parks or a government building).

After that digression, back to the latest development.

The development plan that resulted in the Supreme Court decision was created in an attempt to attract Pfizer to New London.  Pfizer has just pulled out of New London.  Not only has Pfizer pulled out, but the land where all the homes were previous located, was never developed.

Now, instead of having home owners that pay property taxes, New London is sitting on a vacant field that produces no tax revenues at all.   And it cost the city $80 million.

So much for the belief of the New London politicians that they could put the land to better use than the individuals that owned it.

And so much for the five judges on the Supreme Court that bought into that belief.

The Health Care Bill currently being debated in the House has a large number of Tax provisions, some of them are just dumb-founding.

Sec. 501 revises the Internal Revenue Code to impose a tax on any individual without “Adequate” Health Coverage.  One of the major problems here is the fact that the Federal Government gets to decide what constitutes “adequate” coverage.  Anyone with an insurance plan that does not meet that definition has a tax of 2.5% imposed on them.

That means that many individuals will face the choice of paying for coverage they don’t need or paying an additional tax.  At least as long as non-qualifying insurance plans are available (not likely given this bill.)  No unmarried, childless male needs an insurance plan that covers maternity care or well baby coverage, but this bill imposes those requirements on Insurers.

This provision either forces people to pay more for additional coverage (which they may not need) or pay more in taxes.  Either way, many people will face higher out-of-pocket costs as a result.

Sec. 512 Imposes a new tax on Businesses that don’t offer their employees health coverage (and remember, any Employer offered coverage must meet the Government imposed requirements, giving employers ample reason not to offer coverage).  The tax is equal to 8% of the employee’s wages.

Read that carefully.  8% of the employee’s wages.  This is not an 8% tax rate.  That would be a tax on the employer’s profits.  This is instead, an increase in the cost of doing business, and could increase costs for some business enough to put them out of business.  This is especially true of those businesses that don’t make enough currently to offer their employee’s health insurance.

The costs associated with emplying workers is typically the highest expense for any business.  Increasing it by 8% is a cost many businesses just can’t afford to absorb.

Sec. 532 Decreases the amount of money that can be contributed to FSAs (Flexible Spending Arrangements).  This forces individuals with those plans to face higher taxes.

Sec. 533 Increases the penalty for “nonqualified” distributions from Health Savings Accounts from 10% to 20%.  Again, another tax hike.

Sec. 551 Imposes an additional tax on “High Income” Individuals.  The rate is 5.4% for individuals making $500,000 or $1,000,000 for joint filers.  FYI, many of these people are small business owners.  Taking money from them can result in less money for expanding a business, especially during a period of tight credit.  This is coupled with the phase-out of George Bush’s tax cuts, which lowered the top marginal rate.  The top rate will be 45% after this.

This is coupled with State income taxes.  This means many of these people will be facing income tax rates well over 50%.  How hard do you think people will work once the Government starts taking the majority of what is earned.  When people stop working to earn more than a particular amount, because it just isn’t worth the effort, there is no longer any income for the Government to tax.

BTW, this particular provision id not indexed for inflation.  Remember what occurred with the Alternative Minimum Tax (ATM)?

Sec. 552 Imposes a new 2.5% Excise/Sales Tax on the sale of Medical Devices.  This is going to increase the costs associated with the use of those devices.  If your Hospital buys a new MRI, they will now have an additional cost, one that they will have to pass on to the people using that Hospital.

If the idea is to lower medical costs, why impose a provision guaranteed to increase medical costs?

I have posted previously on the fact that the costs of  Health Care Bill’s currently before Congress aren’t accurately reflected in the CBO’s scoring of those bills.

The bills shift costs of Health Care away from Medicare and onto Medicaid.  Because the latter is administered by the States, this serves to shift the cost off of the Federal Government’s books.  It instead forces the States to pick up much of the cost of the Health Care Bills.  These costs need to be considered in order to get a true picture of the cost associated with the bill.

Then there is the “Doctor Fix.”  This is $250 Billion in spending for Medicare that has been pushed into another bill.  However, this spending is necessary in order to get the Health Care Bill passed and should be associated with the bill.  Including this spending increases the cost of the bill well over $1 Trillion and causes the bill to increase deficit spending by over $200 billion over the first 10 years of the program.

Then there is the budgetary game Congress plays in regards to timing.  In this case, Congress immediately implements all the taxes related to the bill, but it defers much of the spending until 2013.  This is when the “Health Care Exchanges” are created.  This includes a public insurance program.

Then there is the latest accounting gimmick that NRO has pointed out.  When the Health Care Bill proposed under Bill Clinton was proposed, the CBO included the cost associated with the mandate that all Americans carry health insurance in the cost of the bill.  This cost was 50% more than the government incurred costs.

The cost this bill imposes on the American people could be as high as $1.5 Trillion.

Congress has shifted the costs associated with Health Care of the books of the Federal Government, and imposed them onto the States and the American people.

The true cost of Health Care is closer to 2 and a half Trillion Dollars.

There has been a 40+ page Amendment to the House of Representative’s Health Care Bill.

Sec. 104 (“Sunishine on Price Gouging”) has been amended as to provide a quick method to reach Universal, Government Run Health Care.

This section forces insurers to defend any increase in premiums.  It couples this forced disclosure of information from health insurers with grants to States that only occur if the State makes recommendations on excluding insurers from participation in the Health Exchanges.  This is especially troubling when coupled with the bill’s prohibition on purchasing health insurance outside the Health Exchange after a certain point.

Preventing insurers from participating in the Health Exchange basically puts them out of business, and the States are given financial incentive in this bill to recommend that insurers be banned from participation.

Once all insurers are banned from participation in the Health Exchange, the only source of insurance will be the Government.

This becomes far more likely when the effect this bill will have on insurance premiums is taken into account.  Premiums will skyrocket as a result of all the increased costs imposed on insurance companies, coupled with the incentive to healthy individuals to drop insurance.

Greatly increasing the cost of insuring individuals coupled with a decrease in the ability to spread the costs across an insurance pool will cause premiums to increase at an exponential rate.  The Government will call this “price gouging” and ban insurers from participating in Health Exchanges.  This will result in the Government being the only entity legally allowed to offer health insurance.

Hello Government run Health Care.

There are people that keep talking about the provisions for end of life counseling and referring to those as “death panels”.  Those aren’t really death panels (although there is potential for the counseling to put pressure on a senior to fill out something like a DNR order, so they could result in deaths for senior citizens.)

The real provision that should cause concern is Section 223.

SEC. 223. HEALTH BENEFITS ADVISORY COMMITTEE.

(a) Establishment-

(1) IN GENERAL- There is established a private-public advisory committee which shall be a panel of medical and other experts to be known as the Health Benefits Advisory Committee to recommend covered benefits and essential, enhanced, and premium plans.

This establishes a panel that decides what benefits will be covered.  Initially this probably won’t result in the denial of coverage , but based on historic precedent (the U.K., Canada, Oregon, etc.) this will eventually result in coverage being denied for certain benefits.  This is especially likely when the costs incurred start to greatly exceed the projected costs.

The type of bureaucracy set up by this provision has the tendency to evolve, and in the case of committees that set benefits, they tend to evolve into committees that ration health care.

Only a completely and utter economic illiterate could possibly believe that the Health Care Bill proposed in the House would result it insurance becoming more affordable.  (Unfortunately, that seems to be an apt description of far too many of our elected officials.) It is full of provisions that will do nothing but increase costs for insurers.

Increasing costs for insurers can do nothing but increase the premiums they charge their policy holders.

Sec. 211 prohibits the exclusion of preexisting conditions, and Sec. 212 is a provision for guaranteed issue of insurance.  That means that insurers must cover any condition you have when thy agree to cover you and they have to cover you if you try to purchase insurance.  This means that people are now going to have an incentive not to carry insurance unless they have a medical condition.  Insuring a larger ration of sick individuals to healthy will greatly increase the cost per policy for insurers, which will in turn greatly increase the premiums people have to pay in order to get coverage.  Which then increases the incentive not to buy insurance unless sick.

These two provisions will create a death spiral for insurance premiums.

SEC. 213. INSURANCE RATING RULES.

(a) In General- The premium rate charged for a qualified health benefits plan that is health insurance coverage may not vary except as follows:

(1) LIMITED AGE VARIATION PERMITTED- By age (within such age categories as the Commissioner shall specify) so long as the ratio of the highest such premium to the lowest such premium does not exceed the ratio of 2 to 1.

(2) BY AREA- By premium rating area (as permitted by State insurance regulators or, in the case of Exchange-participating health benefits plans, as specified by the Commissioner in consultation with such regulators).

(3) BY FAMILY ENROLLMENT- By family enrollment (such as variations within categories and compositions of families) so long as the ratio of the premium for family enrollment (or enrollments) to the premium for individual enrollment is uniform, as specified under State law and consistent with rules of the Commissioner.

By limiting how much insurers can increase premiums based on these conditions, the Government well force insurers to increase premiums across the board.

Sec. 222 sets out the list of what an insurance plan must cover and under what terms it offers coverage in order to be a “Qualified plan”.  Or to put it bluntly, what insurers must cover after 2013 and what the insurer can charge.

Insurers are forced to cover a wide range of options.  The more they are forced to cover, the greater the cost for insuring any individual.  Increased costs means increased premiums.  And you have to remember that insurers are not just concerned with current costs.  They have to be concerned about future costs.

Just because an unmarried individual doesn’t currently need well-baby coverage doesn’t mean they won’t in the future.   And the bill prohibits cost sharing (i.e. co-payments) for that particular type of coverage.  That means the only way to cover the increased cost related to this particular mandate is the imposition of higher premiums.

This section also limits the out-of-pocket costs that the policy holder can incur.  The cost is limited to $5,000 for an individual in 2013.  The limits the ability of the insurance company to limit its costs.  Again, higher costs means higher premiums.

President Obama kept defending the Democrat’s Health Care Bill by saying that if you were happy with your current coverage you would be able to keep it.

Well, not really.

SEC. 202. PROTECTING THE CHOICE TO KEEP CURRENT COVERAGE.

(a) Grandfathered Health Insurance Coverage Defined- Subject to the succeeding provisions of this section, for purposes of establishing acceptable coverage under this division, the term ‘grandfathered health insurance coverage’ means individual health insurance coverage that is offered and in force and effect before the first day of Y1 if the following conditions are met:

(1) LIMITATION ON NEW ENROLLMENT-

(A) IN GENERAL- Except as provided in this paragraph, the individual health insurance issuer offering such coverage does not enroll any individual in such coverage if the first effective date of coverage is on or after the first day of Y1.

(B) DEPENDENT COVERAGE PERMITTED- Subparagraph (A) shall not affect the subsequent enrollment of a dependent of an individual who is covered as of such first day.

(2) LIMITATION ON CHANGES IN TERMS OR CONDITIONS- Subject to paragraph (3) and except as required by law, the issuer does not change any of its terms or conditions, including benefits and cost-sharing, from those in effect as of the day before the first day of Y1.

(3) RESTRICTIONS ON PREMIUM INCREASES- The issuer cannot vary the percentage increase in the premium for a risk group of enrollees in specific grandfathered health insurance coverage without changing the premium for all enrollees in the same risk group at the same rate, as specified by the Commissioner.

In other words, you can keep it as long as absolutely nothing is changed when it comes to your insurance. The minute anything is altered by you insurer, it must meet all the requirements imposed by the House Bill.

Plus, your insurer can no longer enroll new participants in your particular plan.  That means if you have a plan offered by you employer, they could not enroll new employees in the plan unless it met the Government imposed requirements.

That forces employers to either carry two types of plans, or shift all employees to a new plan in order to cover new employees.

Employers that currently carry insurance that does not meet the requirements imposed by this bill will basically be forced to change to a plan that does.  If you get insurance from your employer, and it currently does not meet the imposed requirements, you will not be able to keep it.

I’ve been sick this week, I finally got around to looking at the House Health Care Bill just released.  It seems ironic that it goes on for nearly 2000 pages, given that diarrhea was one of the symptoms I was suffering from when it was posted.  (I know, TMI)

Section 101, which is the first section of actual legislation and covers high-risk insurance pools as the legislation is phased in includes this:

(2) INSUFFICIENT FUNDS- If the Secretary estimates for any fiscal year that the aggregate amounts available for payment of expenses of the high-risk pool will be less than the amount of the expenses, the Secretary shall make such adjustments as are necessary to eliminate such deficit, including reducing benefits, increasing premiums, or establishing waiting lists.

The Democratic leaders in the House are envisioning the need to ration health care (i.e. establishing waiting lists) for those in the high-risk insurance pool during the transitional period.  That means the people that wrote the bill foresee the need to ration care in the next 3-5 years if the bill is past as written.

If this is in the first section of a 2000 page bill, you can just imagine what the rest of this debacle holds.

I plan to post more as I read.

The Congressional Democrats have finally managed to pass federal Hate Crime Legislation that includes sexual orientation as one of the “protected classes”.

Of course, they had to bundle it into a Defense Spending bill in order to get it passed.  This tells you something about the actual support for this insanity.

Hate Crime Legislation takes all the aspects that makes a person unique and eliminates everything except for one factor, be that gender, sexual orientation or skin color.  Every thing else is deemed unimportant.  The fact that the victime was a living unique hu,man being with dreams and aspirations is ignored.  The fact that the victim has friends and family that are grieving over the loss and are forever negatively impacted by the loss is ignored.  The basic tenant that taking another human being’s life is one of the worst wrongs that a person can commit, is ignored.

Instead, the only thing that matters is whether the victim is a member of a particular group.

Hate Crime Legislation makes the victim’s individuality subordinate to that of the group.  It dehumanizes the victim.

And if you need an object lesson as to why having a government subordinate individuality to group identity is a bad idea, think numbered tattoos.

When what matters about people is their membership in a particular group, the Government no longer cares what happens to any particular individual.

There has been a debate over the last month or so about using the “Nuclear Option” in order to pass the Democrat’s version of Health Care Reform.

The Nuclear Option in this case is something called Reconciliation.

The reconciliation process is used on budget bills.  It changes vote needed in the Senate to halt debate from the usual 60 to 51.

Charles Rangel, the Democrat Head of the House Ways and Means Committee, certified House Bill 3200 as ready for reconciliation.  This is the House version of the Health Care Bill.  It is not a budget bill and is not supposed to be the kind of bill reconciliation is used for.

Certifying the Health Care Bill as ready for reconciliation prevents any amendments.  This means the House Health Care Bill will have all the problems that caused the near riots this August.  The Democrats have basically told the American People that voiced their concerns with the House Bill “Screw You!”  They have decided to ignore the American people and do it their way.

After all, they’re smarter than their constituents and know what’s best for them.  And they’ll give it to them even if it means using a method not meant to be used with ordinary legislation in order to shove it down their throats.

The Democrats think people were hostile this Summer?  Wait tell they pass this debacle using budgetary procedures.  If they pull this stunt, there might be an actual riot.

President Obama’s stimulus plan is doing a great when it comes to creating jobs!  It’s responsible for creating or saving 30,000 jobs in the Construction Industry.

You know, all those shovel ready jobs he promised.

Of course, the rest of the economy has lost several million jobs in that time, boosting the unemployment rate to near 10%.

And if you run the numbers you realize just how bad a deal the tax-payers are getting.

Contractors have spent $2 Billion on those jobs.  That’s just under $67,000 per job.  Of course, the Stimulus package wasn’t implemented until February and we are just into the middle of October right now.

Adjust for the fact that we’re only discussing part of the year, and the jobs created are costing tax-payers over $100,000 each.

Then there is the fact that we are also discussing “saved” jobs.  Jobs that already existed create no stimulus, only new jobs do that.  How many of the people working on these jobs were already employed?  If most of people on these jobs were already working for the construction firm, then we are talking about absolutely no stimulus at all.

There’s a problem for the Democrats push for “Health Care Reform.”  There are just too many intelligent people analyizing their plans, and all reach the same conclusion.

That holds true for the latest installment, the CBO scoring of Senator Baucus’s “Bill” (which hasn’t even been written yet).

The latest blow comes from a report done by the PriceWaterhouseCoopers.  Baucus’s bill would actually make Insurance more expensive than if Congress took no action.  Of course, the Democrats attack the report as being unreliable becuase it was paid for by the Insurance Industry.

The problem with that response is that many people analyzing the bill reached the conclusion that the Bill would actually increase Insurance Premiums before the report come out.  (Me Included)

Given the actions of some of the Senators, they realize that the report is correct.  They are attempting to exempt their state from certain provisions or make the Federal Government pay for the additional Medicare mandates.  Include Senate Majority leader Harry Reid in this last category.  He’ll impose additional Medicaid spending on the other 49 states, but don’t you dare expect his state to pay them.

I think the applicable word is “hypocrite.”

Of course, when you realize the plan “saves” money by shifting costs from the Federal Government to the States by shifting  people to Medicaid from Medicare would increase Nevada’s Medicaid expenditures by 85%, it’s no wonder Reid wants the exemption.

The shifting of costs from Medicare to Medicaid was done to keep the Baucus plan from causing the deficit to increase.  If you include the additional Medicaid costs the plan imposes on the States, the plan suddenly looks far worse than it does now.  That’s a tough thing to do, considering the Federal costs are over $800 Billion for the first 10 years.

Not only do yoy have to factor in the $800+ Billion in Federal Spending, you also have to include the multiple billion worth of spending being imposed on the states.

The actual costs are likely to exceed $1 Trillion.

Congress basically used Enron style cost-shifting accounting to move costs off it’s books.

The New York Times has an article that should greatly concern anybody with a passing familiarity with the causes of last year’s financial melt-down.

The latest problem?  The F.H.A. or the Federal Housing Administration.

The F.H.A. was created in 1934 to aid lower-income and first-time home buyers purchase homes.  It does this by insuring the mortgages given out to these people.  It also offers loans at terms not available from other lenders.  The problem is that the people running the F.H.A.  have apparently decided that their job is no longer helping people purchase houses.  Instead, they are making decision based on propping up housing prices.  That means facilitating as many sales as possible.

Propping up housing prices is not the role mandated for the F.H.A.

And the proverbial doo-doo is about to hit the fan.

Roughly 20% of the loans given out in 2007 and 2008 are in serious trouble.  The number of loans in default have jumped from 232,864 to 410,916 in only a year. And the F.H.A.’s response is to increase the amount of loans they give out.

The mortgages issued by the F.H.A. are bundled into mortgage-backed securities and sold to investors.  Investors aren’t buying.  They aren’t buying because they realize just how much of the loans backing the securities amount to bad debt.  You know, the toxic-assets that caused the financial melt-down in 2008?

This means money is drying up at the F.H.A.  The F.H.A.’s capitol reserve has dropped from 6% two years ago to under 2% now.  This is below the reserve mandated by the Government.  This is likely to result in the F.H.A. being bailed out by the Federal Government.

Only the Government would reward poor decision making with more money.

The tragic part of this entire debacle is that the only reason the Government felt the need to intervene in the first place, is that Government policy made our financial markets dependent on artificially inflated housing prices.  Prices that were also inflated by government policies.

If Government had stayed out of the housing market in the first place, it wouldn’t feel the need to intervene now.

We are coming out of a period of time that saw a housing bubble.  Housing prices were inflated due to Government policies that allowed people that couldn’t ordinarily afford to buy one to do so.  Now, Government is trying to fight against the bursting of the Government created housing bubble.  It’s a losing battle, and the American people are going to be caught in the implosion.

Only Government could decide that the thing to do when finding themselves in a hole is to get the back-hoe out.

The CBO scoring of the Senate Finance Committee’s Outline for Health Care Reform (no actually legislation) will supposedly reduce the deficit by $81 Billion.  This, despite the fact that the cost is $829 Billion over ten years.

Anybody feel like buying a bridge in N.Y.?

And if you look at the proposal as scored, you begin to realize just how disingenuous the results truly are.

The CBO scores 2010-2019, but the plan isn’t fully implemented until 2013.  The cost for the program from 2010-2013 is scored at $14 Billion total.

That means the cost for 2014-2019 (six years) is $815 Billion. (Or $136 Billion a year.)

Then there are the idiotic assumption on tax revenues.  The CBO predicts that revenues will be $200 Billion from the excise tax on “Cadillac” Health Plans.

Never going to happen.  The $10 Billion in 2013 might be accurate, but the number will go down from there as people start losing plans that get taxed.    By 2019, the amount from that excise tax will be far closer to zero than it is to $46 Billion.

The lack of revenues from this tax alone, is enough to ensure that the current proposal will result in increasing the deficit.  (Let alone the results of it being amended.)

Couple that with the idiotic assumption on outlays.  Government predictions on costs of new programs are notorious for vastly underestimating the costs of those programs.  The CBO predicts $400+ Billion in subsidies for people buying health insurance through the Government exchange.

Try doubling or tripling that prediction.  Given the fact that far more people will lose their private insurance as the Government’s intervention makes it unaffordable, and the number of people getting subsidies is going to be far more than predicted.

This certainly matches the result of past predictions on the costs involved in new government programs.

Then there are the promised spending cuts.  These have been promised before and never happen.

Add the $150 Billion shortfall in taxes, the $600 Billion or so in additional spending on subsidies and $400 Billion in spending cuts that don’t occur and the proposal costs about $1.150 Trillion more than predicted.

That means an increase in the deficit of over $1 Trillion, not a deficit reduction of $81 Billion.

One of the things lost in the Health Care Debate currently going on in Washington is the fact that some of the States have already tried the approach being pushed by President Obama and Congressional Democrats.

8 States have implemented guaranteed issue and community rating rules for insurers in their states (a large portion of the current proposals before Congress).  In every instance the results were a disaster.

Why?

Community Rating means that insurers can’t charge people based on the risk of covering them.  They must charge everybody the same rate.  The result of this is that healthy people (the people least likely to use insurance) have to pay the same amount for coverage as the people that utilize insurance the most.

At the same time, Insurers can’t refuse coverage for conditions that exist before coverage began.

This means that healthy individuals have an incentive not to buy insurance due to its high cost.  At the same time, they bear no consequences for that decision because they can purchase it if they do become ill without having to pay more and they are covered for their illness.

As a consequence, only sick individuals carry insurance.  As a result, Health Insurers are now faced with increased costs with a lower pool of policy holders.  The only way to stay in business is to drastically increase premiums.  The only way to force the healthy to buy insurance under this system is to impose a fee that dwarfs the cost of buying insurance.

All of this is a predictable result based on basic human nature.

Plus there is empirical evidence based on the results of implementing theses proposals in 8 States.

Yet, the Democrats are still insisting on implementing these failed policies nation wide.

Someone once said that the definition of insanity is doing the same thing that has been done in the past and expecting a different result.  Couple that with the belief that the result will be different because you’re the one doing it, and what you get is a God Complex.

Democrats are currently debating extending parts of the “Stimulus” Package passed at the start of this year.

The provisions they are thinking of extending?

1) Extending Unemployment Benefits

2) Tax Credits under COBRA (purchasing Health Insurance when Unemployed)

3) The tax credit for first-time home buyers (and this one is unlikely to pass)

And that is all the Democrats are considering.

Think about that, we have just hit 9.8% unemployment, and all the Democrats are going to do about it is extend Government Unemployment provisions.

How about something to create jobs?

Of course, that would require provisions aimed at aiding the businesses that hire people.

When was the last time you heard of Democrats being in favor of helping businesses?

In a move that can only be described as moronic, the Obama administration has decided to give $35 Billion to State Housing Finance Agencies, or HFAs.

Why does this amount to Governmental idiocy?  Try the phrase “toxic assets”.  Banks being forced to devalue these mortgage-backed securities is what lead to the Banking Crisis.

The “problem” as far as the Obama administration is concerned is that these HFAs are no longer giving out loans to low-income or first-time home buyers.  They can no longer find anybody in the private sector willing to buy the debt instruments they sell to raise financing.

Why?

Well, the Banks that bought those instruments in the past, found out that those mortgage-backed bonds were far riskier than they were initially told when they purchased them.  These securities were sold to them as securities backed with assets (houses).  Or in other words, collateralized loans.

Then the housing market imploded, and the value of the houses purchased with these loans dropped.  People began defaulting on loans.  And the mortgages backing these securities were now under-collateralized.  This wouldn’t have been that big of a problem, but new Government accounting rules forced the Banks to value these securities as being completely worthless because they couldn’t determine what there worth actually was.

The Banks in this county have just been burnt as a result of the bonds these HFAs produce.  Is it any wonder these HFAs can’t find private financing?

So the Obama administration has decided that the Federal Government (along with the quasi-Governmental agencies Fannie Mae and Freddie Mac) will now buy the bonds issued from these HFAs.

The Federal Government is taking your hard-earned tax money, and giving it to a State agency that is issuing mortgages to people that can’t get a loan from a private mortgage company, at least not at a rate that actually represents the risk involved in issuing the mortgage.

Does this sound like wise financial policy to you?

No,I don’t mean out-sourcing jobs.  I’m talking about the out-sourcing of financial policies.  The Unites States has let other countries determine our financial policies, and it had had extreme repercussions.  It’s what led to our financial melt down.

Commercial Bank regulations are basically set by the banking regulators of the 20 largest economies (the G-20).  In 2001, a rule was implemented by the G-20 that forced U.S. Banks had to hold a much larger capitol cushion for mortgage loans than for mortgage-backed securities.

The result was predictable.  U.S. Banks shifted from holding mortgages to holding mortgage-backed securities.  Why?  Because they could invest more of their capitol.  Investing more capitol results in higher returns.

For example, take a Bank with $1 Billion in capitol.  If it needs a 50% cushion for mortgages, it can only invest $500 Million.  If it only needs a 10% cushion for mortgage-backed securities, it can invest $900 Million in those instead.   Shifting to mortgage-backed securities made sense because it allowed the bank to make more money on their investments.  This was true even if the securites provided a lower return.

In the above, being able to invest 40% more money in the securities means the mortgages had to have a rate of return at least 40% higher than the securites before they became a viable alternative.

This meant that the mortgage-backed securities did not need to be high-return in order to be attractive to U.S. Banks.  The fact is, they weren’t.  The Banks primarily bought AAA rated securities.  These are low-risk, low yield investments.

Investing in low-risk, low-yield investments is not supposed to expose the investor to high risks.  These did, because the nature of the risk was hidden to the end buyer (i.e. the Banks.)

That is not the fault of the Banks buying these securities, it instead lies with the ones giving the loans or bundling them into investments.

Why were risky loans being given out?  Pressure from the Government.

Ever heard of Red-Lining?  Well, the government began pushing loans to areas that weren’t initially being serviced by loan companies.  The reason they weren’t giveing out loans to people in those areas was that they were credit risks.  The Government is responsible for the risky behavior, and it wasn’t the Banks buying the mortgage-backed securities that knew of the risky nature of the loans.

And who was bundling the risky loans to disguise the risk?  Try Fannie Mae and Freddie Mac.

Two organizations created by the Government and run to a large degree by people coming out of Government service.  (Usually the Clinton Administration.)

Then there were the changes to accounting rules that the Government imposed after Enron.  That basically cut the legs out from under any body that had bought these securities once people began defaulting on the mortgages.  Basically, the Bank was forced to mark the security as worth nothing on its balance sheet.

This was despite the fact that only a small portion of the mortgages backing the security being defaulted on.

Think about that, the Government tells these Banks to treat an asset that has value as being valueless.  Is it any wonder they wound-up in financial trouble?

The Government changes the incentives so that mortgage-backed securities become more attractive.  They increase the risk of these securities mortgage companies to give loans to people with bad credit.  They hide the risk by bundling the mortgages.  Then they force the people that buy the “risky” investments to treat them as having no value.

And the Government blames the actions of the Bankers?

Frankly, it didn’t take a genius to see the fiasco coming.  After all, if George Bush could see it coming and push for needed changes to stem the disaster it must have been fairly obvious.

In fact, he tried multiple times to change the financial regulations to keep the crisis from occuring.

It’s the Democrats that were running Congress at the time that prevented these attempts that apparently couldn’t see the writing on the wall.  Even worse, they’re still running things, and still in charge of financial regulations along with the G-20 that initiated the entire fiasco.

The Senate today voted down a proposed Amendment to its latest Health Care Bill that would have required the Bill to be posted online 72 Hours before being voted on.  They decided to post a “conceptual” version of the bill, instead.  After all, posting the actual Bill would result in the vote being delayed for several weeks.

So?  It’s not like any provision in the Bill is going to be implemented immediately.  Most provisions don’t take effect for several years.

There is absolutely no reason not to post the Bill before voting on it.

Except for the obvious.  The more the American people know about the Bill the more they oppose it.

Can’t let those peons know what’s in the Bill if it will get them all worked up, can we?

Something struck me just after I posted this.  Posting the Bill will result in delaying voting for weeks in order to get an accurate cost estimate.

In other words, the Senate is going to schedule a vote on a Bill without having any idea as to how much it will cost.

It also suggests what the “conceptual” version of the Bill will be like.  The “concept” being telling the American people whatever they need to in order to get it past.

I have a “concept” for those Senators, but I don’t think I can post it without getting in trouble.

And if you needed an illustration on just how disingenuous the decision not to post the bill is, Baucus’s proposal has already been posted online by OpenCongress.

And this editorial makes interesting reading on the subject.

It makes an important point.  It wouldn’t take much effort at all to make these sorts of Bills readily accessible.  If nothing else, Congress could simply use some sort of XML format.

The fact that these bills aren’t readily accessible kind of makes you think about whether our Senators want out input.

Another Amendment gave lie to the statement that the Bill wouldn’t result in anybody loosing their Insurance.  Orrin Hatch proposed an amendment exempting Medicare Advantage Plans (Medicare in the form of Private Insurance) from Medicare Cuts.

The Amendment was voted down.

Good-bye Medicare Advantage Plans.

There are a large percentage of Seniors with these plans, and they are very happy with them.  The fact that the Government is targeting these plans for elimination is why many Seniors are up in arms about Health Care Reform.

Senator Max Baucus has sicked Federal Regulators on Humana.

What did the Health Insurer do to incur Senator Baucus’s wrath?

They had the temerity to tell the truth about the results of his Health Care Reform proposal to their customers.

They told their customers that the Health Care proposal would result in cuts to Medicare Advantage Plans.  A  great many of Humana’s customers are on Medicare Advantage Plans with that company.

All they did was point out the results of those cuts, customers would face cuts in care.

That was like waving a red flag in front of a bull in regards to Baucus.

Who is Human to tell the truth about Baucus’s plan?

The Government bullying a company for telling the truth about Government policies, that is the type of thing that occurs in third-world Dictatorships, not representative Republics.

It’s time to remind our idiot leaders who they serve, and to remind them of this little thing called the First Amendment.

Senator Baucus need to be removed from power because it has apparently gone to his head.

President Obama has proposed subjecting Internet Service Providers to “net neutrality” rules.

This idea stems from the time when AT&T had a monopoly on phone service.  (This alone should tell you why the idea has problems.)  Basically, AT&T and its successors, were prohibited from giving any phone call preference in how quickly it was connected.

Now, the Obama administration was to extend that to Internet Service Providers.  This means Dial-Up, DSL, Cable, Satellite and Wireless Services Providers will not be able to regulate the use of their services.

The first problem is that the situation is not analogous in regards to AT&T’s monopoly.  There are at least four different options for Internet Service, and most of the options involve multiple companies.  There is no monopoly involved.  I personally have a DSL connection through AT&T.  If I wasn’t happy with that option, I could switch to my cable company.  They also offer high-speed internet access.  I could also switch to a satellite or wireless provider.

This competition puts limits on AT&T’s actions.  If people are unhappy with their provider, they have the ability to switch companies.

All phone calls are basically the same; you have one phone being connected to another.  The only real difference is the amount of time the call lasts and the distance between the phones.  This is not the situation with Internet use.  Not only does the amount of time and the distance the information travels differ, the amount of bandwith used differs as well.

This is key when discussing “net neutrality”.

The original version of net neutrality involved the Government telling AT&T that they had to treat people the same way because they used the service provided in the same manner. Now, the Government is telling ISPs that they have to treat the people that use their services the same way, despite the fact that they use those services differently. If you want to know why that distinction is important, try looking up the Judicial definition of fairness.

The position being taken by the Obama Administration has serious repercussions.

The first possible problem is that Service Providers may no longer be able to ensure that the majority of users are happy with the service provided.  It will increase the existence of high-bandwidth content, which will result in the internet infrastructure becoming clogged.  In other words, the Government policy will result in an internet traffic jam.  This policy amounts to a denial of service attack by the Government.

The second problem is the implication for building of additional bandwidth.  Adding bandwidth takes investment (i.e. it costs money).  If the Government steps in and tells the companies that build internet infrastructure that they will not be able to determine how it is used, why will they build it?

Say good-bye to infrastructure investment by the private sector.

Then there is the philosophical objection to the very idea of this kind of Government Regulation.  Dial-Up, DSL, Cable and Satellite Internet Service all involve the use of private property.  (Wireless involves the “public” airwaves.)

All these ISP’s own the property being used to provide a service, and the high band-width users are often running some sort of business as well.

Does it really make sense for the Government to come along and tell one business that they must provide their property for another company to use, free of charge?

How are they supposed to make a profit?

I forgot.  We’re dealing with liberals.  Profit is a bourgeois idea.

BTW, this is why “Net Neutrality” isn’t neutral.  The Government has taken sides in a dispute between the company providing a service and the companies using it.

Then there is this little thing called the Constitution.  I know, it’s passe.

It prohibits things like taking property for public use.  At least it used to.  (This, by the way, includes “taking” property by regulating its use.)

Property Rights, another bourgeois idea that is now passe.

Remember Barack Obama’s promise during the campaign to “restore” America’s image around the world?  Well, he sure is doing a great job of that, isn’t he.

At least if you think American should cozy up to the worlds dictators, and hard-line leftists, and leave the world’s democracies hanging out to dry.

In Latin American, Obama has sided with leaders like Hugo Chavez and Evo Moralis.  These are hard-line leftist that hate America, and in some circumstances, actually support terrorist oganizations.

And hanging democracies out to dry?  Try the way Obama is treating Honduras.  Honduras gets rid of Hugo Chavez’s ally when he tries to subvert that county’s Constitution in order to retain power, and our response?  We order Honduras to return that Hugo Chavez stooge to power.

We have even gone as far as refusing to recognize any Government elected by the Honduran people unless Zeleya is returned to power before the election occurs.  Think about that.

We won’t recognize a duly elected Government. What do you think that will do for Democracy?

What’s worse is that I’m not sure that’s the most egregious foreign policy implemented by this administration.  Try the recent decision to pull the missile shield from Poland and the Czech Republic.  This seems to have been done in order to please the Russians.  You know, that country that recently invaded another country and annexed part of it?

Poland is currently refusing to take calls from our State Department.

I don’t think you can say you’ve improved our image when your policies result in our allies giving us the cold-shoulder.

The only countries happy with us right now are the world’s bad actors, like Venezuela and Russia.

The Obama administration seems determined to recreate the Great Depression.

It started by recreating “make work” policies of the FDR regime.  Of course, the Obama administration referred to this as “stimulus”.  Remember all those “shovel ready jobs” he promised, arguing they would stimulate the economy?   Well, those were basically Government, make-work projects.  Just like FDR.

This was followed by policies directed at aiding Labor Unions.  In the original Great Depression, this was done under Hoover during a recession, and deepened it.  The Obama administration has adopted a great many policies that also seem directed primarily at aiding labor unions, and again they are doing it during a recession.

Another parallel?  Protectionism.  There were a great many factors that went into creating the Depression.  The tariff wars that occurred in the 1930’s was one of the most important.  The world-wide, hyper protectionism gutted world trade and harmed the economies of just about every country.

The latest edition to the Obama’s administration’s attempt to recreate the Great Depression is probably the most outrageous.  It doesn’t involve just bad policies, it involves the Government personally destroying peoples’ livelihoods.

The Obama administration, in its infinite wisdom, has decided to recreate the Dust Bowl.

Earlier this year the Government decided to cut off water to the San Joaquin valley.  That is where a large amount of our country’s produce is grown.  It now looks like Kansas during the 1930’s.  Instead of being green, with crops ready to harvest, it is nothing but a vast waste-land.

The farmers that used to grow food for this Nation are now waiting in line at a food bank in order to feed themselves.

There is one important distinction between the original Dust Bowl and the current situation.  The first was an Act of God.

The latest is an Act of Government.

And the farmers know where to focus their anger.

The last thing that President Obama needs right now is for the outburst from Representative Joe Wilson to get continued examination.

Why?

Well, it results in an examination of Obama’s truthfulness.  The problem with that is, he lies.

Try some of the other statements made by Obama when pushing Health Care, especially claims about Insurance Companies.

Obama continually uses an example of a man that had treatment for cancer delayed due to failure to disclose gallstones.  The problem, not only id he get treatment, he got it within the desired period of time and the treatment successfully extended his life by 3 1/2 years.

He also uses the example of a woman who had her insurance dropped due to failure to disclose “acne”.  The problem, she failed to disclose previous heart problems and deliberately lied about her weight.  And the “acne”?  It was apparently diagnosed as precancerous.

Another problem, the number of policies rescinded after being issued is extremely small.  Of the policies issued during a five-year period, 20,000 were rescinded.  Less that 1/2% of all policies are dropped.  And those that are dropped are often dropped due to bad faith on part of the person taking out the policy.

Insurance premiums are determined by the risk the Insurance Company incurs as a result of issuing the policy.  They rely on truthful disclosures on part of the policy holder when applying for the policy.  The alternative is to investigate every application.  This would greatly increase the cost of doing business for the Insurance Companies, which would greatly increase premiums.

The ability to drop insurance due to dishonesty on the part of the person applying for coverage actually keeps premiums down by preventing the Company from having to investigate every applicant in order to have an accurate picture of the risk they incur.

Then there is the President’s claim that 90% of the policies in Alabama are issued by one company, and that this has negative impact on prices and treatment of policy holders.  Allowing the company to have huge profits and high administrative cost.

The truth is that 75% of the policies are held by Blue Cross and Blue Shield.  This is a non-profit company.  It’s “profit” rate is almost non-existent and it has a low administrative cost.  Both fly in the face of the President’s claims.

And it’s policy holders?  They are so satisfied with the care they receive from the company that it rates second in customer satisfaction for all preferred provider companies.  This satisfaction is why Blue Cross and Shield has such a large market share.

After all, there are no barriers that prevent other national health insurers from entering the Alabama market.

President Obama’s push for Health Care Reform has been hurt because people have concluded that he lack credibility when it comes to his arguments on the subject.

The above is part of the reason why.

There’s and old saying, “Those that fail to learn from History are doomed to repeat it.”

World leaders are in the process of failing by ignoring History.  They are currently increasing protectionist trade policies at an alarming rate, and they are doing so when the world economy is in the middle of a global recession.

Why is this frightening?  Tariff Wars were one of the events that lead to the Great Depression of the 1930’s.

While the tariffs aren’t as extreme as the ones implemented in the 1930’s (at least not yet) they are expected to have a dire impact on the global economy.  Global trade is expected to shrink by 10% in 2009.

It’s hard to see how ANY country can have positive economic growth if world trade shrinks by that amount.

The latest addition to the protectionist trend?  President Obama imposed greater tariff against tires imported from China.  This move is not even intended to help domestic tire producers.  They have already stopped manufacturing the type of low-cost tires being imported from China.  They aren’t even in this market, and have said they have no plans to enter the market after the tariffs are hiked

If the companies most likely affected by the tariffs didn’t want them, who was pushing for their adoption?

The United Steelworkers Union, and the AFL-CIO praised the move.  Looks like we now what the unions have received for supporting Obama’s Health Care Plan.

And China has just retaliated by increasing tariffs on American goods.

Looks like Obama’s courting the Labor Unions in order to get their support for his attempt to impose Health Care Reform has just set off a trade war.

The Online version of the Wall Street Journal has an article on how the Democratic Health Care Bills will effect Unions.  It looks like the Bills before congress are primarily written to benefit Unions.

Some High Lights (or Low Lights, depending on your perspective)

1) The Senate bill creates a “personal care attendants workforce advisory panel” that will likely impose union affiliation to qualify for a newly created “community living assistance services and support (class)” reimbursement plan.

This provision extremely similar to provisions in Illinois and California that resulted in mandatory Union membership for Health Care Workers.  The only way you can be reimbursed by the Government is if you are a Union Member.  Imagine having to deal with the SEIU every time you went to a Hospital.  (BTW, the violence occurring at those Health Care Town Halls?  The people responsible for that violence are members of the SEIU.)

2)  The House version grants the Secretary of Health and Human Services the right to regulate Health Care Workers.  This included the ability to make Union Membership mandatory.

3)  The House Bill includes $10 Billion to bail-out Union health-care plans.

4)  The House Bill has a professional-development grant program for Health Care Workers.  The funds must be administered jointly with a labor union.  Nonunion medical facilities can’t qualify for the program.

5)  The Chair of the Senate’s Finance Committee has proposed a tax on existing health plans to pay for the Bill.  With an exemption for plans under a union contract.  In other words, only nonunion workers will be taxed.

Do you really want a Union running your Health Care?  The Democrats in Congress (and President Obama) apparently do.

A copy of the speech can be found here.

First, Obama starts by basically saying that things are just rotten in America in regards to Health Care.

Our collective failure to meet this challenge – year after year, decade after decade – has led us to a breaking point. Everyone understands the extraordinary hardships that are placed on the uninsured, who live every day just one accident or illness away from bankruptcy…

Some can’t get insurance on the job. Others are self-employed, and can’t afford it, since buying insurance on your own costs you three times as much as the coverage you get from your employer. Many other Americans who are willing and able to pay are still denied insurance due to previous illnesses or conditions that insurance companies decide are too risky or expensive to cover.

etc. (With the obligatory sob stories about people denied care.)

After all, if there’s no problem we hardly need his fix.

Then there is this gem:

Finally, our health care system is placing an unsustainable burden on taxpayers. When health care costs grow at the rate they have, it puts greater pressure on programs like Medicare and Medicaid. If we do nothing to slow these skyrocketing costs, we will eventually be spending more on Medicare and Medicaid than every other government program combined. Put simply, our health care problem is our deficit problem. Nothing else even comes close.

I don’t think he really wants to go here.  He’s basically proposing Medicare for everybody.  If we already can’t afford it what will expanding it to everybody do?

When talking about the August recess:

But what we have also seen in these last months is the same partisan spectacle that only hardens the disdain many Americans have toward their own government. Instead of honest debate, we have seen scare tactics. Some have dug into unyielding ideological camps that offer no hope of compromise. Too many have used this as an opportunity to score short-term political points, even if it robs the country of our opportunity to solve a long-term challenge. And out of this blizzard of charges and counter-charges, confusion has reigned.

No, Mr. President.  That was not partisan spectacle, and you haven’t learned your lesson.  That was not scare tactics, that was anger from the people that realize the impact of your proposals.  They don’t want your version of reform and chalking it up to scare tactics and partisanship on the part of the protesters is just adding insult to injury.  Look for your poll numbers to drop after insulting the American people.

And people were trying to have honest debates.  Your fellow Democrats far too often decided to run for the hills instead of facing their constituents.  (One of the biggest cowards represents a district near me.  He refused to hold town halls and only held closed events.  Where only those agreeing with reform were invited.  So much for debate.)

As for the statements on your plan:

First, if you are among the hundreds of millions of Americans who already have health insurance through your job, Medicare, Medicaid, or the VA, nothing in this plan will require you or your employer to change the coverage or the doctor you have.

Unless you are a Senior with a Medicare Advantage Plan.  Those will be eliminated.

What this plan will do is to make the insurance you have work better for you. Under this plan, it will be against the law for insurance companies to deny you coverage because of a pre-existing condition. As soon as I sign this bill, it will be against the law for insurance companies to drop your coverage when you get sick or water it down when you need it most. They will no longer be able to place some arbitrary cap on the amount of coverage you can receive in a given year or a lifetime. We will place a limit on how much you can be charged for out-of-pocket expenses, because in the United States of America, no one should go broke because they get sick. And insurance companies will be required to cover, with no extra charge, routine checkups and preventive care, like mammograms and colonoscopies – because there’s no reason we shouldn’t be catching diseases like breast cancer and colon cancer before they get worse. That makes sense, it saves money, and it saves lives.

All that will also make premiums sky rocket, but let’s not talk about that.

Now, even if we provide these affordable options, there may be those – particularly the young and healthy – who still want to take the risk and go without coverage. There may still be companies that refuse to do right by their workers. The problem is, such irresponsible behavior costs all the rest of us money. If there are affordable options and people still don’t sign up for health insurance, it means we pay for those people’s expensive emergency room visits. If some businesses don’t provide workers health care, it forces the rest of us to pick up the tab when their workers get sick, and gives those businesses an unfair advantage over their competitors. And unless everybody does their part, many of the insurance reforms we seek – especially requiring insurance companies to cover pre-existing conditions – just can’t be achieved.

Excuse me, but if I get sick and have to visit the emergency room, it’s my responsibility to pay for the costs.  I know the idea of personal responsibility is probably a foreign concept for you.

And you are basically admitting that the entire idea is to get people that aren’t using the health care system to pay the cost for those that are.

That’s why under my plan, individuals will be required to carry basic health insurance – just as most states require you to carry auto insurance.

There is an important difference.  The auto insurance is there to protect someone else if I injure them in an accident.   And requiring me to buy something because you think I should, probably violated the Constitution.

Try the Due Process Clause or the Takings Clause.  You are taking property (money) and both apply.

Death Panels:

Some of people’s concerns have grown out of bogus claims spread by those whose only agenda is to kill reform at any cost. The best example is the claim, made not just by radio and cable talk show hosts, but prominent politicians, that we plan to set up panels of bureaucrats with the power to kill off senior citizens. Such a charge would be laughable if it weren’t so cynical and irresponsible. It is a lie, plain and simple.

Try this quote, from you, later in your speech:

The only thing this plan would eliminate is the hundreds of billions of dollars in waste and fraud, as well as unwarranted subsidies in Medicare that go to insurance companies – subsidies that do everything to pad their profits and nothing to improve your care. And we will also create an independent commission of doctors and medical experts charged with identifying more waste in the years ahead.

When is the last time Government cut cost by eliminating fraud and abuse? Any savings are far more likely to come from refusal to pay for certain services.  And if the decision is from your “independent commission” you now have a death panel.

Public Option:

Let me be clear – it would only be an option for those who don’t have insurance. No one would be forced to choose it, and it would not impact those of you who already have insurance. In fact, based on Congressional Budget Office estimates, we believe that less than 5% of Americans would sign up.

Only being available to those without insurance undermines the entire rationale of hiving a public option if it’s about providing competition for private insurance companies.  Care to try again?

But by avoiding some of the overhead that gets eaten up at private companies by profits, excessive administrative costs and executive salaries, it could provide a good deal for consumers. It would also keep pressure on private insurers to keep their policies affordable and treat their customers better, the same way public colleges and universities provide additional choice and competition to students without in any way inhibiting a vibrant system of private colleges and universities.

You want to talk about excessive administrative cost, try Government programs.  This type of argument is why people are rejecting your plan.  The argument just doesn’t hold water under a quick examination. 

Mr. President, your speech is just a rehash of the arguments made in favor of your plan for the last couple of months.  If those arguments were going to settle the issue, you wouldn’t be needing to make this speech.  This isn’t going to change anybody’s mind, and going through with the plan as outlined in your speech will have serious repercussions for you and your fellow Democrats.

If our leaders in Washington ever needed an object lesson on the problem with the minimum wage, here it it.

Unemployment among the group most likely to make minimum wage (teenagers) has hit an all-time high.  Compare the unemployment rate among teenagers to the list of hikes in the Federal Minimum wage.

The Minimum increased May 1, 1956.  Teenage unemployment spiked in the summer of 1956. This increase was the result on an Law passed in 1938, and only applied to workers directly involved in interstate commerce.  The unemployment rate for teenagers stayed roughly the same until 1964,  It started going down at that time.

It was increased again in 1967, and 1968 and extended to basically everybody. It was increased every 2-3 years during the 1970’s into 1981.  The unemployment rate for teenagers went up steadily as well.

Unemployment among teenagers started declining in 1984.   Then the minimum wage was increased again in 1990.

The unemployment rate for teenagers spiked.  Then started to decrease again (as the hike was absorbed).

It was increased again in 1996/1997.  (Interestingly, this is one of the times there was no spike in unemployment.  Unemployment actually continued down for teenagers.  The wage for these workers was probably already higher for many of them, so no impact.)

The minimum wage was increased again in 2007, 2008 and 2009.

Unemployment for teenagers has gone from 15% on Jan. 2008 to an 26-year high of over 25%.  That means 1-in-4 teenagers could not find work this summer.

Other workers do show some impact as a result of hikes in the Minimum Wage, but the effect is less since a smaller portion of those workers make the wage.

This does show the problem with the minimum wage, it can (and often does) result in unskilled workers not being able to find work.  It prices them out of the work force.

President Obama announced that government workers would be getting a 2% pay increase in 2010.

The response?  The president of the National Treasury Employees Union (Colleen Kelley) “expressed disappointment with the decision.”  After all, members of the Military were going to get a bigger pay hike.  That’s just not fair.

Lady, when your union members do the job of the military (putting their lives on the line) AND make what they get paid, then you have grounds to complain.

That’s not the only outrageous part of the story.  Government workers were slated to get a 2.4% cost of living adjustment on top of a 16.5% boost mandated by another statute.

That’s right, Government workers were going to get an 18.9% pay hike in the middle of a recession, where 10% of the workforce is unemployed.  The only reason they didn’t get this statutorily mandated pay hike was due to a “national emergency”.  The emergency?  9-11.

I’m sorry, but that really isn’t an emergency any more.

Using that as an excuse to stop idiotic pay increases is just disingenuous.  If the result of a law is bad (like the one mandating pay hike) the course of action you should take is changing the law.

Of course, that would require doing something difficult.  When was the last time leaders in Washington did that?

There is a new study on how Herbert Hoover’s policies in response to a recession helped lead to the Great Depression.

While Barack Obama’s policies aren’t exactly the same as Hoover’s, there are some parallels.

“By keeping industrial wages too high, Hoover sharply depressed employment beyond where it otherwise would have been, and that act drove down the overall gross national product,”

While not exactly an Obama policy, the minimum wage was raised right at the start of this recession.  Its effect is to artificially prop up wages, especially for union jobs.  Unions have a sliding wage scale that often starts with the minimum wage.  When the minimum wage increase, it automatically increases the wages of everybody in the union.

“Hoover’s response illustrates the danger of knee-jerk policy reactions in a time of crisis,”

Think “Stimulus Package” and TARP II.  (TARP I occurred under Bush, but Obama supported it).  All “knee-jerk” reactions to bad economic news.

“Hoover had the idea that if wages were kept high for workers and they shared jobs instead of being laid off, they would be able to buy more goods and services, which would help the economy improve,”

Think “Cash for Clunkers”.  It’s a “success” because it caused people to buy more goods.  Actually, it just caused car purchases to occur in a narrow window.  The vast majority of those that purchased cars were already planning on doing so.  They just purchased in August due to the program.  What do you think car purchases in the month of September will look like?

Also, the bailouts of the car companies.

After the crash, Hoover met with major leaders of industry and cut a deal with them to either maintain or raise wages and institute job-sharing to keep workers employed, at least to some degree, Ohanian found. In response, General Motors, Ford, U.S. Steel, Dupont, International Harvester and many other large firms fell in line, even publicly underscoring their compliance with Hoover’s program.

Think Car Company bailouts.  The main reason behind these was to protect the union jobs at those companies.

The worst part of this one was what the Government did in regards to creditors.  It took bond holders, creditors that are first in line in a normal bankruptcy, and placed them behind the Government and Unions in regards to preference.

This means that companies with unions will find it difficult in the future to raise funds by selling bonds.  The Government has just told the bond holders that the contract between them and the company is worthless.  It will rewrite it to benefit the union.

This means that a great many companies will have difficulty raising funds to expand their business.  No expansion means no economic growth.

In the latest act of Governmental Stupidity surrounding the debate over Obama’s plans to reform Health Care, Representative Pete Stark, the Democratic head of the health sub-committee of the House Ways and Means committee, has insulted people he needs to support that plan.

“The Blue Dogs just want to cause trouble,” Stark said during a conference call organized by the liberal group Campaign for America’s Future. “For the most part they’re — I hate to say brain-dead. They’re just looking to raise money from insurance companies and promote a right-wing agenda that isn’t very useful in this process.”

Not a smart move, Mr. Stark.  You need the vote of those Blue Dogs to pass legislation.  Insulting them is not the way to guarantee their votes.  Well, not unless you want them to vote against you.

Frankly, the Blue Dogs are the ones thinking.  It’s you and your fellow Democrats that are mindlessly pushing for the reform plan despite all the evidence of the harm it will cause as well as the public outrage over your proposals that aren’t thinking.

And insulting the people you need to support your Bill just proves that.

If you needed a reminder why certain people should never be given the responsibility of protecting the National Security of the United States, the Wall Street Journal has a reminder.

The Obama administration apparently has no idea what it takes to secure this Country against terrorism.  They instead are trying to punish those people that kept us safe against domestic terrorism for almost eight years.  And some of the actions they are contemplating are just plain reprehensible.  No one with a single ounce of decency would ever contemplate the actions the Obama Administration is apparently ready to adopt.

First on the list is the decision by Attorney General Eric Holder to name a special prosecutor to investigate the interrogation techniques used by the CIA.  The CIA interrogators were given guidelines on what was legal by the lawyers in the Bush Justice Department.  It seems a bit difficult to understand how people told what they were doing was legal could then be prosecuted by the same group that told them it was O.K. to take the actions they took.  (BTW, the Justice Department under Obama has already investigated and decided not to prosecute.)

If the organization responsible for enforcing the law tells you your actions are legal, they should be barred from then prosecuting you for taking those action.  Leon Panetta has gained my respect for his repsonse to this hideous act by the Obama administration.  Panetta is the current head of the CIA and he apparently had a complete melt0down as a result, including the threat to resign.  Panetta understands the implications for his ability to protect our national security.

The people responsible for protecting us will no longer be able to get the information from apprehended terrorists that they need to do so.  Actually, since the terrorists will now be under the FBI, they won’t even be able to ask them any questions.

Terrorists could actually face less strenuous questioning under this Administration than domestic criminals face when arrested by local police.  This despite the fact that terrorism could place thousands of lives at risk (hundreds of thousands with certain tactics.)

And prosecuting people that were told what they were doing was legal is just reprehensible.

Holder states that the decision was influenced by the Justice Departments Office of Legal Responsibility.  This is the same group that wants to punish Bush era lawyers that gave the administration legal opinions as to what was and was not legally permissible.  This group wants to punish lawyers for the “crime” of reaching a legal conclusion opposite of the outcome they wanted reached. Some descriptions come to mind for this group.  Spiteful, mean-spirited, short-sighted, cruel, slimy, etc.  Influential should not be one of those words.

What lawyer will ever give an honest opinion if they know someone is going to come along later and punish them for it?  Ever heard of Free Speech?  Lawyer-Client privilege?   (The ability to get honest opinions is the reason for the last one.)

Criminalizing differences when it comes to legal opinions should have every lawyer in this country up in arms.

The Obama Administration has announced that they are no longer interested in the War on Terrorism.  They have instead declared was on those that carried out that war under the previous administration.

The implications are dire.