"A Duty to Die?"
By Thomas Sowell
May 11, 2010
National Review On-Line
"Top 10 Reasons ObamaCare is a Disaster"
by Kathryn Nix
April 5, 2010
"Timeline of the Democrats Healthcare Package"
by Human Events
April 1,2010
"Mexico Gearing Up for U.S. Healthcare Patients"
by Roger Hedgecock
March 26, 2010
"Solving the 'Pre-Existing Condition' Problem"
by Rep. John Shadegg
March 16, 2010
Link to Health Care Articles on the Web
Saturday, April 24, 2010
Global Warming Alert!
Alert! Clear Skies, sunny days, and low pollution levels cause … GLOBAL WARMING!
Sex Causes the Earth to Move!
News Flash from Islam (Submission) - Sex Causes the Earth to Move!
"Many women who dress inappropriately ... cause youths to go astray, taint their chastity and incite extramarital sex in society, which increases earthquakes,” Ayatollah Kazem Sedighi told worshippers at a Tehran prayer service.
Apparently, it’s not Global Warming at fault after all.
http://www.telegraph.co.uk/news/worldnews/middleeast/iran/7606145/Extramarital-sex-causes-more-earthquakes-Iranian-cleric-claims.html
"Many women who dress inappropriately ... cause youths to go astray, taint their chastity and incite extramarital sex in society, which increases earthquakes,” Ayatollah Kazem Sedighi told worshippers at a Tehran prayer service.
Apparently, it’s not Global Warming at fault after all.
http://www.telegraph.co.uk/news/worldnews/middleeast/iran/7606145/Extramarital-sex-causes-more-earthquakes-Iranian-cleric-claims.html
Tuesday, April 20, 2010
The Limits of Power
A great article.
http://www.humanevents.com/article.php?id=36600
The Limits of Power
by Thomas Sowell
04/20/2010
http://www.humanevents.com/article.php?id=36600
The Limits of Power
by Thomas Sowell
04/20/2010
Tuesday, March 30, 2010
Recommended Reading: "Who Poses the Greater Threat?"
If you haven't yet read, "Who Poses the Greater Threat?" by Walter E. Williams click on the link below.
http://www.humanevents.com/article.php?id=35874
Who Poses the Greater Threat?
by Walter E. Williams
03/03/2010
http://www.humanevents.com/article.php?id=35874
Who Poses the Greater Threat?
by Walter E. Williams
03/03/2010
Tuesday, March 9, 2010
Health Care Reform Simplicity
The health care argument has been extraordinarily complex. When details are discussed eyes glaze over. When broad assertions are made they’re refuted by details quoted from the legislation. Many people don’t know what to think or who to believe.
Here are some simple questions you can ask and answer for yourself. Your answers will tell you everything you need to know about the proposed health care reform.
======================================
If an insurance company denies treatment to a patient, the patient can appeal to the state insurance regulators and to the courts. If the federal government denies treatment where can the patient appeal?
If the government increases taxes on insurance polices and medical devices how will the costs of medical care go down?
If there really are 30 million people who aren’t getting medical care today - who will get care under the proposed model; how will an instant 10% increase in demand for medical services affect access to services for all?
If $500 billion can be saved by cracking down on Medicare fraud and abuse why didn’t the crackdown start last year?
If Medicare is now underfunded; how will its funding be improved by diverting $500 billion from Medicare to ObamaCare?
If Social Security, Medicare, and Medicaid are all underfunded and either in deficit or projected to go into deficit; how will ObamaCare avoid that fate?
If Veterans Administration hospitals neglected wounded solders returned from Iraq and Afghanistan; how will quality be ensured in a much larger health care system run by the federal government?
If politicians control health care; will health care decisions be political decisions? Will access to health care be linked to political influence?
If Congress has the Constitutional power to force you to buy health insurance can they also force you to buy a Chevrolet?
Quote of the Day
“You and I are told we must choose between a left or right, but I suggest there is no such thing as a left or right. There is only an up or down; Up to man’s age-old dream – the maximum of individual freedom consistent with order – or down to the ant heap of totalitarianism.
A Time for Choosing
Ronald Reagan (1911 – 2004)
Universal Health Care
Here are some simple questions you can ask and answer for yourself. Your answers will tell you everything you need to know about the proposed health care reform.
======================================
If an insurance company denies treatment to a patient, the patient can appeal to the state insurance regulators and to the courts. If the federal government denies treatment where can the patient appeal?
If the government increases taxes on insurance polices and medical devices how will the costs of medical care go down?
If there really are 30 million people who aren’t getting medical care today - who will get care under the proposed model; how will an instant 10% increase in demand for medical services affect access to services for all?
If $500 billion can be saved by cracking down on Medicare fraud and abuse why didn’t the crackdown start last year?
If Medicare is now underfunded; how will its funding be improved by diverting $500 billion from Medicare to ObamaCare?
If Social Security, Medicare, and Medicaid are all underfunded and either in deficit or projected to go into deficit; how will ObamaCare avoid that fate?
If Veterans Administration hospitals neglected wounded solders returned from Iraq and Afghanistan; how will quality be ensured in a much larger health care system run by the federal government?
If politicians control health care; will health care decisions be political decisions? Will access to health care be linked to political influence?
If Congress has the Constitutional power to force you to buy health insurance can they also force you to buy a Chevrolet?
Quote of the Day
“You and I are told we must choose between a left or right, but I suggest there is no such thing as a left or right. There is only an up or down; Up to man’s age-old dream – the maximum of individual freedom consistent with order – or down to the ant heap of totalitarianism.
A Time for Choosing
Ronald Reagan (1911 – 2004)
Universal Health Care
Friday, March 5, 2010
Health Care Articles - Links
Links to Health Care Blog Posts
Build a Health Care Bill - Content Index
Universal Health Care
Links to Health Care Articles
"Top 10 Reasons ObamaCare is a Disaster"
by Kathryn Nix
April 5, 2010
"Timeline of the Democrats Healthcare Package"
by Human Events
April 1,2010
"Prescription For Disaster Now Covered Under Obamacare"
by Ann Coulter
March 31, 2010
Human Events
"Mexico Gearing Up for U.S. Healthcare Patients"
by Roger Hedgecock
March 26, 2010
"Solving the 'Pre-Existing Condition' Problem"
by Rep. John Shadegg
March 16, 2010
"Obamacare is a Budgetary Disaster"
By James C Capretta
March 5, 2010
The National Review On-Line
"The Big Problem with Health Care Is Cost, Not Access"
By Richard Baehr
March 3, 2010
The American Thinker
"Alice in Health Care"
By Thomas Sowell
March 2, 2010
The National Review On-Line
"Dear President Obama, Per Your Request ..."
By Brad Hessel and Madge Cohen
February 24, 2010
The Motley Fool
"Cut Costs and Improve Care? That's True Reform"
by Regina Herzlinger and Eric Silfen
February 17, 2010in National Review On-Line
"The Power of Small Ideas"
by Tevi Troy & Jeffrey H. Anderson
February 15, 2010in National Review On-Line
"Health-Care Nation"
by Robert J Samuelson
December 7, 2009
The Washington Post
"How the Senate Health Bill Punishes Businesses That Hire Low-Income Workers"
by Robert A. Book, Ph.D.
December 3, 2009
Published by The Heritage Foundation
"More Doctors Needed"
by Pat Wechsler
November 17, 2009
The Worcester Telegram & Gazette
"111 New Federal Government Entities Created by Health Care Reform Bill"
November 3, 2009
CNSNews.com
Build a Health Care Bill - Content Index
Universal Health Care
Links to Health Care Articles
"Top 10 Reasons ObamaCare is a Disaster"
by Kathryn Nix
April 5, 2010
"Timeline of the Democrats Healthcare Package"
by Human Events
April 1,2010
"Prescription For Disaster Now Covered Under Obamacare"
by Ann Coulter
March 31, 2010
Human Events
"Mexico Gearing Up for U.S. Healthcare Patients"
by Roger Hedgecock
March 26, 2010
"Solving the 'Pre-Existing Condition' Problem"
by Rep. John Shadegg
March 16, 2010
"Obamacare is a Budgetary Disaster"
By James C Capretta
March 5, 2010
The National Review On-Line
"The Big Problem with Health Care Is Cost, Not Access"
By Richard Baehr
March 3, 2010
The American Thinker
"Alice in Health Care"
By Thomas Sowell
March 2, 2010
The National Review On-Line
"Dear President Obama, Per Your Request ..."
By Brad Hessel and Madge Cohen
February 24, 2010
The Motley Fool
"Cut Costs and Improve Care? That's True Reform"
by Regina Herzlinger and Eric Silfen
February 17, 2010in National Review On-Line
"The Power of Small Ideas"
by Tevi Troy & Jeffrey H. Anderson
February 15, 2010in National Review On-Line
"Health-Care Nation"
by Robert J Samuelson
December 7, 2009
The Washington Post
"How the Senate Health Bill Punishes Businesses That Hire Low-Income Workers"
by Robert A. Book, Ph.D.
December 3, 2009
Published by The Heritage Foundation
"More Doctors Needed"
by Pat Wechsler
November 17, 2009
The Worcester Telegram & Gazette
"111 New Federal Government Entities Created by Health Care Reform Bill"
November 3, 2009
CNSNews.com
Alice in Health Care
Link to the article, "Alice in Health Care"
by Thomas Sowell
published in National Review On-Line on 3/2/2010
http://article.nationalreview.com/426584/alice-in-health-care/thomas-sowell
by Thomas Sowell
published in National Review On-Line on 3/2/2010
http://article.nationalreview.com/426584/alice-in-health-care/thomas-sowell
Tuesday, March 2, 2010
Does the Debt Matter? – Questioning Assumptions
In my post "Does the Debt Matter? - Alternate Projections" I wrote:
“The Obama administration projections assume substantial growth in tax revenues averaging 12.5% each year for 2011 through 2014 and reductions in the growth of federal spending such that spending growth averages 2.9% over the same period. For the years 2001 through 2007, year over year actual increases in tax revenues averaged 3.7%. Average annual increases in federal spending were 6.2%.”
I then projected 2014 revenue and spending based on the 2001 through 2007 averages. But what if the average results for 2001 through 2007 overestimate revenue increases and underestimate the growth of federal spending?
What if Congress passes “Cap & Trade” driving more businesses and jobs overseas?
What if consumers continue to pay down their personal debt?
What if “boomers” realize they’re closing in on retirement and because they haven’t saved any money they establish a new normal personal savings rate of 6% or more – like it was in the 1950’s?
What if the published unemployment rate remains over 9% and the real unemployment rate remains over 15% through 2014?
What health care is reformed and raises premiums for people with insurance, raises taxes on businesses, and adds taxes on medical devices – just like the bill that passed in the House of Representatives and like the bill passed by the Senate?
What if, because government prevents banks from foreclosing on defaulting mortgages, ten times as many homeowners with “underwater” houses use that “Get Out of Jail Free” card – and default on their own mortgages to pay down other debt - all while remaining in their homes?
What if foreign governments – especially China and Japan – stop buying U.S. Treasury Bonds and their yields jump to 14%?
What if rising interest rates drives us deeper into recession and drives unemployment even higher?
What if there are 50 other things that could go wrong that I haven’t mentioned or thought of?
I oversimplified in my previous posts in order to make my points. For example, if Treasury bond yields rose to 10% tomorrow and stayed there, it would take years for overall interest payments to reach the 10% level. Much of the debt is in 10 to 30 year bonds and only a portion comes due each year. Still, the trends are representative and the revenue and spending projections are conservative.
Some have proposed we get out of this situation by intentionally inflating the currency – been there – done that – it doesn’t work! Rising inflation reduces economic growth, increases unemployment, and drives up spending – and deficits.
So how do we get out of this mess? Don’t know. But it has to be a combination of:
(1) Real federal spending cuts and that means cuts in entitlements; Medicare, Medicaid, Social Security, and all others.
(2) Restructuring the tax code to promote economic growth without counterproductive net tax increases – the "Fair Tax" would do it.
(3) Opening up for oil and gas exploration and production all of the currently prohibited areas in the United States including, Alaska and off the east, west and gulf coasts.
What are your ideas?
Quote of the Day
“We should never despair, our Situation before has been unpromising and has changed for the better, so I trust, it will again. If new difficulties arise, we must only put forth new Exertions and proportion our Efforts to the exigency of the times.”
George Washington
Link to Other Topics in the Special Report: Does the Debt Matter?
“The Obama administration projections assume substantial growth in tax revenues averaging 12.5% each year for 2011 through 2014 and reductions in the growth of federal spending such that spending growth averages 2.9% over the same period. For the years 2001 through 2007, year over year actual increases in tax revenues averaged 3.7%. Average annual increases in federal spending were 6.2%.”
I then projected 2014 revenue and spending based on the 2001 through 2007 averages. But what if the average results for 2001 through 2007 overestimate revenue increases and underestimate the growth of federal spending?
What if Congress passes “Cap & Trade” driving more businesses and jobs overseas?
What if consumers continue to pay down their personal debt?
What if “boomers” realize they’re closing in on retirement and because they haven’t saved any money they establish a new normal personal savings rate of 6% or more – like it was in the 1950’s?
What if the published unemployment rate remains over 9% and the real unemployment rate remains over 15% through 2014?
What health care is reformed and raises premiums for people with insurance, raises taxes on businesses, and adds taxes on medical devices – just like the bill that passed in the House of Representatives and like the bill passed by the Senate?
What if, because government prevents banks from foreclosing on defaulting mortgages, ten times as many homeowners with “underwater” houses use that “Get Out of Jail Free” card – and default on their own mortgages to pay down other debt - all while remaining in their homes?
What if foreign governments – especially China and Japan – stop buying U.S. Treasury Bonds and their yields jump to 14%?
What if rising interest rates drives us deeper into recession and drives unemployment even higher?
What if there are 50 other things that could go wrong that I haven’t mentioned or thought of?
I oversimplified in my previous posts in order to make my points. For example, if Treasury bond yields rose to 10% tomorrow and stayed there, it would take years for overall interest payments to reach the 10% level. Much of the debt is in 10 to 30 year bonds and only a portion comes due each year. Still, the trends are representative and the revenue and spending projections are conservative.
Some have proposed we get out of this situation by intentionally inflating the currency – been there – done that – it doesn’t work! Rising inflation reduces economic growth, increases unemployment, and drives up spending – and deficits.
So how do we get out of this mess? Don’t know. But it has to be a combination of:
(1) Real federal spending cuts and that means cuts in entitlements; Medicare, Medicaid, Social Security, and all others.
(2) Restructuring the tax code to promote economic growth without counterproductive net tax increases – the "Fair Tax" would do it.
(3) Opening up for oil and gas exploration and production all of the currently prohibited areas in the United States including, Alaska and off the east, west and gulf coasts.
What are your ideas?
Quote of the Day
“We should never despair, our Situation before has been unpromising and has changed for the better, so I trust, it will again. If new difficulties arise, we must only put forth new Exertions and proportion our Efforts to the exigency of the times.”
George Washington
Link to Other Topics in the Special Report: Does the Debt Matter?
Sunday, February 28, 2010
“Dear President Obama, Per Your Request ... “
http://www.fool.com/investing/general/2010/02/24/dear-president-obama-per-your-request.aspx
An interesting health insurance reform proposal:
“Dear President Obama, Per Your Request ... “
By Brad Hessel and Madge Cohen
Published in The Motley Fool
February 24, 2010
"Build a Health Care Bill: We Can Do It Better Than Congress"
Build a Health Care Bill Content Index
An interesting health insurance reform proposal:
“Dear President Obama, Per Your Request ... “
By Brad Hessel and Madge Cohen
Published in The Motley Fool
February 24, 2010
"Build a Health Care Bill: We Can Do It Better Than Congress"
Build a Health Care Bill Content Index
Wednesday, February 24, 2010
Two Good Heath Care Articles
Below are links to two good articles that actually advance the health care debate.
"The Power of Small Ideas"
by Tevi Troy & Jeffrey H. Anderson
in National Review On-Line
"Cut Costs and Improve Care? That's True Reform"
by Regina Herzlinger and Eric Silfen
in National Review On-Line
"Build a Health Care Bill: We Can Do It Better Than Congress"
Link to the "Build a Health Care Bill" Idea Log
"The Power of Small Ideas"
by Tevi Troy & Jeffrey H. Anderson
in National Review On-Line
"Cut Costs and Improve Care? That's True Reform"
by Regina Herzlinger and Eric Silfen
in National Review On-Line
"Build a Health Care Bill: We Can Do It Better Than Congress"
Link to the "Build a Health Care Bill" Idea Log
Tuesday, February 23, 2010
Does the Debt Matter? – Alternate Projections
In my earlier post "Does the Debt Matter? - Government Projections" I described how federal interest payments might be affected by an historical range of interest rates (from 2.0% to 14.0%) applied to the federal debt as currently projected by the Obama administration.
The Obama administration projections assume substantial growth in tax revenues averaging 12.5% each year for 2011 through 2014 and reductions in the growth of federal spending such that spending growth averages 2.9% over the same period. For the years 2001 through 2007, year over year actual increases in tax revenues averaged 3.7%. Average annual increases in federal spending were 6.2%.
The years 2001 through 2007 start during the “dot com” recession and end with the peak year just before the start of the current recession. They were not our country’s best years and they were not our worst. They were in fact typical; enough so that using their average figures as a guide seems reasonable.
If the 2001-2007 average spending increases and average revenue increases are projected into 2011 through 2014 you get the results shown below – a 2014 end of year federal debt of $21,276,966,800,464 ($21.3 trillion)
Using these projections of revenue and spending and therefore of 2014 debt; then applying the same range of historical interest rates we see the potential problem.
Under these conditions the interest payments consume the entire federal revenue at an interest rate of about 11.8%. Ten-Year Treasury Bonds exceeded this rate in 1981, 1982 and in 1984. We also approached it in 1980 and in 1983; and, we were over 10% in 1985.
Could it happen again? You bet your bootees it could
Quote of the Day
“Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”
Ronald Reagan (1911 – 2004)
Link to Other Topics in the Special Report: Does the Debt Matter?
The Obama administration projections assume substantial growth in tax revenues averaging 12.5% each year for 2011 through 2014 and reductions in the growth of federal spending such that spending growth averages 2.9% over the same period. For the years 2001 through 2007, year over year actual increases in tax revenues averaged 3.7%. Average annual increases in federal spending were 6.2%.
The years 2001 through 2007 start during the “dot com” recession and end with the peak year just before the start of the current recession. They were not our country’s best years and they were not our worst. They were in fact typical; enough so that using their average figures as a guide seems reasonable.
If the 2001-2007 average spending increases and average revenue increases are projected into 2011 through 2014 you get the results shown below – a 2014 end of year federal debt of $21,276,966,800,464 ($21.3 trillion)
Using these projections of revenue and spending and therefore of 2014 debt; then applying the same range of historical interest rates we see the potential problem.
Under these conditions the interest payments consume the entire federal revenue at an interest rate of about 11.8%. Ten-Year Treasury Bonds exceeded this rate in 1981, 1982 and in 1984. We also approached it in 1980 and in 1983; and, we were over 10% in 1985.
Could it happen again? You bet your bootees it could
Quote of the Day
“Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”
Ronald Reagan (1911 – 2004)
Link to Other Topics in the Special Report: Does the Debt Matter?
Tuesday, February 16, 2010
Does the Debt Matter? – Government Projections
At the end of the 2009 fiscal year (September 30th) the federal government debt stood at $11,875,900,000,000 ($11.9 trillion). It's bigger already. Just last week the legal debt ceiling was raised by another $1.9 trillion.
Official federal projections of spending, revenue, and end of fiscal year debt for 2010 through 2014 are shown below.
Assuming the federal government projections of spending & revenue for 2010 through 2014 are accurate (a very poor assumption in my opinion) the debt at the end of fiscal year 2014 will be $16,959,800,000,000 ($17 trillion). Using that figure and the federal projection of 2014 revenue (also a very poor assumption) the range of interest payments due on the debt based on the range of possible interest rates are:
One could say, “We’ll be fine" because the recent 10 year Treasury Bond rate was 3.26% and at that rate of interest the debt will be only 15.5% of projected 2014 revenue. Or, one could ask the question, “What will happen when (not if – when) interest rates go up?”
At the very least, one could expect an increase in the annual deficit equal to the excess interest payment. For example, if interest rates revert to the 48 year average of 6.89% then there would be excess interest due (above that due at 3.26%) in the amount of $597,045,398,958 ($0.6 trillion). The debt after paying the extra interest would be $600 billion higher than projected for that year.
This feels a bit like the credit card trap. You know, getting a low introductory rate on a credit card and maxing it out. Then, the bank raises the interest rate and you start making minimum payments. Then the bank raises your credit limit and you charge more. After a while you’re minimum payments on the card grow so high you have to stop going to the movies. Then, you have to stop eating out. Then you have to sell your car. Then… well, you get the picture.
Quote of the Day
“… I have to point out that government does not tax to get the money it needs; government always needs the money it gets.”
Ronald Reagan (1911 – 2004)
Link to Other Topics in the Special Report: Does the Debt Matter?
Official federal projections of spending, revenue, and end of fiscal year debt for 2010 through 2014 are shown below.
Assuming the federal government projections of spending & revenue for 2010 through 2014 are accurate (a very poor assumption in my opinion) the debt at the end of fiscal year 2014 will be $16,959,800,000,000 ($17 trillion). Using that figure and the federal projection of 2014 revenue (also a very poor assumption) the range of interest payments due on the debt based on the range of possible interest rates are:
One could say, “We’ll be fine" because the recent 10 year Treasury Bond rate was 3.26% and at that rate of interest the debt will be only 15.5% of projected 2014 revenue. Or, one could ask the question, “What will happen when (not if – when) interest rates go up?”
At the very least, one could expect an increase in the annual deficit equal to the excess interest payment. For example, if interest rates revert to the 48 year average of 6.89% then there would be excess interest due (above that due at 3.26%) in the amount of $597,045,398,958 ($0.6 trillion). The debt after paying the extra interest would be $600 billion higher than projected for that year.
This feels a bit like the credit card trap. You know, getting a low introductory rate on a credit card and maxing it out. Then, the bank raises the interest rate and you start making minimum payments. Then the bank raises your credit limit and you charge more. After a while you’re minimum payments on the card grow so high you have to stop going to the movies. Then, you have to stop eating out. Then you have to sell your car. Then… well, you get the picture.
Quote of the Day
“… I have to point out that government does not tax to get the money it needs; government always needs the money it gets.”
Ronald Reagan (1911 – 2004)
Link to Other Topics in the Special Report: Does the Debt Matter?
Tuesday, February 9, 2010
Does the Debt Matter?
Links to Topics in the Special Report: Does the Debt Matter?
Does the Debt Matter? - We Owe it to Ourselves
Does the Debt Matter? - Paying the Interest
Does the Debt Matter? - Government Projections
Does the Debt Matter? - Alternate Projections
Does the Debt Matter? - Questioning Assumptions
Does the Debt Matter? - We Owe it to Ourselves
Does the Debt Matter? - Paying the Interest
Does the Debt Matter? - Government Projections
Does the Debt Matter? - Alternate Projections
Does the Debt Matter? - Questioning Assumptions
Does the Debt Matter? – Paying the Interest
As of September 30th, the end of fiscal year 2009, the official debt of the United States federal government was $11,875,900,000,000 ($11.9 trillion). The yield of the 10 year Treasury bond at that time was 3.26%; Using 3.26% as an estimate of the average interest rate results in an annual interest estimate of $387,154,340,000 ($0.4 trillion). That was 18.4% of total federal revenues from all sources in 2009.
This is a huge amount of money no matter how you cut it. But, it could be much worse. The 10 year Treasury bond yield since 1962 has averaged $6.89%. Below is the end of year yields for each year from 1962 through 2009.
Year - Yield of 10 Year Treasury Bond (%)
1962 - 3.95%
1963 - 4.00%
1964 - 4.19%
1965 - 4.28%
1966 - 4.93%
1967 - 5.07%
1968 - 5.64%
1969 - 6.67%
1970 - 7.35%
1971 - 6.16%
1972 - 6.21%
1973 - 6.85%
1974 - 7.56%
1975 - 7.99%
1976 - 7.61%
1977 - 7.42%
1978 - 8.41%
1979 - 9.43%
1980 - 11.43%
1981 - 13.92%
1982 - 13.01%
1983 - 11.10%
1984 - 12.46%
1985 - 10.62%
1986 - 7.67%
1987 - 8.39%
1988 - 8.85%
1989 - 8.49%
1990 - 8.55%
1991 - 7.86%
1992 - 7.01%
1993 - 5.87%
1994 - 7.09%
1995 - 6.57%
1996 - 6.44%
1997 - 6.35%
1998 - 5.26%
1999 - 5.65%
2000 - 6.03%
2001 - 5.02%
2002 - 4.61%
2003 - 4.01%
2004 - 4.27%
2005 - 4.29%
2006 - 4.80%
2007 - 4.63%
2008 - 3.66%
2009 - 3.26%
If interest rates return to the 6.89% average, annual interest payments on the federal debt would total $818,670,114,792 ($0.8 trillion) – 38.9% of total 2009 federal revenues.
Annual interest payments on the federal debt at a 10% rate would be $1,187,590,000,000 ($1.2 trillion) – 56.4% of 2009 revenue.
And, annual interest payments on the federal debt at a 14% rate would be $1,662,626,000,000 ($1.7 trillion) – 79.0% of 2009 revenue.
What would happen to the economy under these conditions? What would happen to federal government services?
Quote of the Day
“I can calculate the movement of the stars, but not the madness of men.”
Sir Isaac Newton
Link to Other Topics in the Special Report: Does the Debt Matter?
This is a huge amount of money no matter how you cut it. But, it could be much worse. The 10 year Treasury bond yield since 1962 has averaged $6.89%. Below is the end of year yields for each year from 1962 through 2009.
Year - Yield of 10 Year Treasury Bond (%)
1962 - 3.95%
1963 - 4.00%
1964 - 4.19%
1965 - 4.28%
1966 - 4.93%
1967 - 5.07%
1968 - 5.64%
1969 - 6.67%
1970 - 7.35%
1971 - 6.16%
1972 - 6.21%
1973 - 6.85%
1974 - 7.56%
1975 - 7.99%
1976 - 7.61%
1977 - 7.42%
1978 - 8.41%
1979 - 9.43%
1980 - 11.43%
1981 - 13.92%
1982 - 13.01%
1983 - 11.10%
1984 - 12.46%
1985 - 10.62%
1986 - 7.67%
1987 - 8.39%
1988 - 8.85%
1989 - 8.49%
1990 - 8.55%
1991 - 7.86%
1992 - 7.01%
1993 - 5.87%
1994 - 7.09%
1995 - 6.57%
1996 - 6.44%
1997 - 6.35%
1998 - 5.26%
1999 - 5.65%
2000 - 6.03%
2001 - 5.02%
2002 - 4.61%
2003 - 4.01%
2004 - 4.27%
2005 - 4.29%
2006 - 4.80%
2007 - 4.63%
2008 - 3.66%
2009 - 3.26%
If interest rates return to the 6.89% average, annual interest payments on the federal debt would total $818,670,114,792 ($0.8 trillion) – 38.9% of total 2009 federal revenues.
Annual interest payments on the federal debt at a 10% rate would be $1,187,590,000,000 ($1.2 trillion) – 56.4% of 2009 revenue.
And, annual interest payments on the federal debt at a 14% rate would be $1,662,626,000,000 ($1.7 trillion) – 79.0% of 2009 revenue.
What would happen to the economy under these conditions? What would happen to federal government services?
Quote of the Day
“I can calculate the movement of the stars, but not the madness of men.”
Sir Isaac Newton
Link to Other Topics in the Special Report: Does the Debt Matter?
Tuesday, February 2, 2010
Does the Debt Matter? – We Owe It to Ourselves
President Franklin Roosevelt is supposed to have said that the size of the Federal debt didn’t matter because “we owe it to ourselves”.
Of course, he was right in a certain sense because at the time, individual Americans were buying and holding a wide variety of United States Treasury debt. Common citizens bought “War Bonds” and “Liberty Bonds” out of patriotism and a shared need to win World War II.
The debt, however, was owed by the corporate Federal government to each and every individual holder of US bonds. So, it wasn’t really “owed to ourselves”. The government was obligated to pay others and those others expected and depended on the government to honor the obligation.
Once, some years ago, I really did owe a debt to myself. I borrowed a sum from my 401k account so, in true FDR fashion, the size of the debt didn’t matter since I truly owed it to myself. Or did it?
My 401k loan didn’t have to be paid back. But, an unpaid 401k loan is treated by the IRS as a distribution. And, if you’re not yet 59 ½ years old, an early 401k distribution is levied a 10% surcharge on top of your normal income tax. So, if I failed to pay back my loan I would owe income tax on the unpaid balance with a 10% surcharge.
Beyond these costs, failure to repay the loan would mean the value of the loan would not be available to compound and grow my 401k account.
In the event, I partially repaid the loan. When I changed jobs the unpaid balance was due immediately but I didn’t have the money to pay it off. So, I allowed the balance of the loan - about $3,500 – to become an early distribution. I paid the income tax and the 10% penalty - a combined total of about $1,000.
The debt I owed myself turned out to matter quite a lot. It cost me $1,000 out of pocket and my retirement account will be lighter by about $61,000 ($3,500 compounded annually for 30 years at 10%). Worse, I don’t even remember why I took the loan in the first place.
Our current Federal government debt can’t be described as one that we “owe to ourselves”. A great deal of it is owed to foreign governments. And, unlike during World War II, few individual Americans hold government debt except thru pension funds and mutual funds.
Winning World War II was an overarching and clear justification for Federal borrowing. But, “We owe it to ourselves” was never a very good rationalization for increasing Federal debt. Today it makes no sense at all.
Quote of the Day
“We can evade reality, but we cannot evade the consequences of evading reality.”
Ayn Rand (1905-1982)
Link to Other Topics in the Special Report: Does the Debt Matter?
Of course, he was right in a certain sense because at the time, individual Americans were buying and holding a wide variety of United States Treasury debt. Common citizens bought “War Bonds” and “Liberty Bonds” out of patriotism and a shared need to win World War II.
The debt, however, was owed by the corporate Federal government to each and every individual holder of US bonds. So, it wasn’t really “owed to ourselves”. The government was obligated to pay others and those others expected and depended on the government to honor the obligation.
Once, some years ago, I really did owe a debt to myself. I borrowed a sum from my 401k account so, in true FDR fashion, the size of the debt didn’t matter since I truly owed it to myself. Or did it?
My 401k loan didn’t have to be paid back. But, an unpaid 401k loan is treated by the IRS as a distribution. And, if you’re not yet 59 ½ years old, an early 401k distribution is levied a 10% surcharge on top of your normal income tax. So, if I failed to pay back my loan I would owe income tax on the unpaid balance with a 10% surcharge.
Beyond these costs, failure to repay the loan would mean the value of the loan would not be available to compound and grow my 401k account.
In the event, I partially repaid the loan. When I changed jobs the unpaid balance was due immediately but I didn’t have the money to pay it off. So, I allowed the balance of the loan - about $3,500 – to become an early distribution. I paid the income tax and the 10% penalty - a combined total of about $1,000.
The debt I owed myself turned out to matter quite a lot. It cost me $1,000 out of pocket and my retirement account will be lighter by about $61,000 ($3,500 compounded annually for 30 years at 10%). Worse, I don’t even remember why I took the loan in the first place.
Our current Federal government debt can’t be described as one that we “owe to ourselves”. A great deal of it is owed to foreign governments. And, unlike during World War II, few individual Americans hold government debt except thru pension funds and mutual funds.
Winning World War II was an overarching and clear justification for Federal borrowing. But, “We owe it to ourselves” was never a very good rationalization for increasing Federal debt. Today it makes no sense at all.
Quote of the Day
“We can evade reality, but we cannot evade the consequences of evading reality.”
Ayn Rand (1905-1982)
Link to Other Topics in the Special Report: Does the Debt Matter?
Tuesday, January 26, 2010
Monetizing Foreclosures
Fannie Mae reports that their delinquent mortgages are up 163% compared to last year. The delinquency rate was 4.9% in October 2009 and only 1.8% in October 2008. What does this mean for the economy?
We all know that the US Treasury has poured money into all sorts of financial institutions including Fannie Mae, Freddie Mac, AIG, and a multitude of banks. Less well known are the Federal Reserve Bank purchases of Fannie & Freddie’s debt and the mortgage backed securities (MBS) they guarantee.
What happens to mortgages that are on the Fed’s balance sheet? The Fed can buy MBS’s with money they create out of nothing. MBS’s are simply bundled mortgages. So the result is that the Federal Reserve Bank owns a growing number of mortgages and they paid nothing for them.
The fact that the Fed paid nothing doesn’t mean the seller received nothing. On the contrary, the money created by the Fed is just as spendable as the money the Treasury borrows from China. But this situation intrigues me.
If the mortgages the Fed brought with nothing become worth nothing when the borrowers default what happens? Is the money the Fed created to buy the bad loans inflationary? Or, does it merely inflate to the same degree that the bad load deflates?
If a house and its mortgage were worth $1,000,000 last year but this year they are worth only $500,000 is it inflationary if the Fed buys the mortgage for $1,000,000 or is it anti-deflationary by $500,000?
What if on average the Fed pays $750,000 for a bundle of identical suspect mortgages and in the end only 10% of them default? Then the Fed has assets worth $900,000 per original mortgage contract. Is this then deflationary? How about if the Fed sells the mortgages for that $900,000 average price?
It seems like everything depends on how much the Fed pays and what real default rate results. No matter what they do they'll be wrong. The only way they can not distort the money supply (and therefore eventual inflation) is to sell the mortgages for the same total dollar amount they originally paid. But, if they do that either the buyer gets an instant windfall profit (if the mortgage value at the sale is more than the Fed paid) or the Fed fails to sell the mortgages (if the mortgage value at the sale is less than the Fed paid).
My head hurts. If the Fed must play with the money supply I think they should stick to buying and selling Treasury bonds. Then, at least, they would be giving nothing for nothing - the valuation being purely made up and in the eye of the beholder.
Quote of the Day
“The essence of Government is power; and power as it must be in human hands, will ever be liable to abuse.”
James Madison
We all know that the US Treasury has poured money into all sorts of financial institutions including Fannie Mae, Freddie Mac, AIG, and a multitude of banks. Less well known are the Federal Reserve Bank purchases of Fannie & Freddie’s debt and the mortgage backed securities (MBS) they guarantee.
What happens to mortgages that are on the Fed’s balance sheet? The Fed can buy MBS’s with money they create out of nothing. MBS’s are simply bundled mortgages. So the result is that the Federal Reserve Bank owns a growing number of mortgages and they paid nothing for them.
The fact that the Fed paid nothing doesn’t mean the seller received nothing. On the contrary, the money created by the Fed is just as spendable as the money the Treasury borrows from China. But this situation intrigues me.
If the mortgages the Fed brought with nothing become worth nothing when the borrowers default what happens? Is the money the Fed created to buy the bad loans inflationary? Or, does it merely inflate to the same degree that the bad load deflates?
If a house and its mortgage were worth $1,000,000 last year but this year they are worth only $500,000 is it inflationary if the Fed buys the mortgage for $1,000,000 or is it anti-deflationary by $500,000?
What if on average the Fed pays $750,000 for a bundle of identical suspect mortgages and in the end only 10% of them default? Then the Fed has assets worth $900,000 per original mortgage contract. Is this then deflationary? How about if the Fed sells the mortgages for that $900,000 average price?
It seems like everything depends on how much the Fed pays and what real default rate results. No matter what they do they'll be wrong. The only way they can not distort the money supply (and therefore eventual inflation) is to sell the mortgages for the same total dollar amount they originally paid. But, if they do that either the buyer gets an instant windfall profit (if the mortgage value at the sale is more than the Fed paid) or the Fed fails to sell the mortgages (if the mortgage value at the sale is less than the Fed paid).
My head hurts. If the Fed must play with the money supply I think they should stick to buying and selling Treasury bonds. Then, at least, they would be giving nothing for nothing - the valuation being purely made up and in the eye of the beholder.
Quote of the Day
“The essence of Government is power; and power as it must be in human hands, will ever be liable to abuse.”
James Madison
Tuesday, January 19, 2010
Lead, Follow, or Get Out of the Way!
"If you will not fight for the right when you can easily win without bloodshed, if you will not fight when your victory will be sure and not too costly, you may come to the moment when you will have to fight with all the odds against you and only a small chance of survival. There may even be a worse case: you may have to fight when there is no hope of victory, because it is better to perish than to live as slaves."
Winston Churchill
What must be done?
You must vote in November, naturally; but will that be enough?
What can be done?
Contributing money to Political Action Committees and conservative candidates will be helpful; but will it be enough?
What should be done?
Volunteering some of your time to help the campaign of a conservative candidate this Fall would be a very good thing; but what if your candidates aren’t conservatives?
Why are RINOs & Socialists in office?
Because conservative people are busy living private lives while those who are motivated to use politics for personal gain populate the county and city committees of the major political parties.
How can you ensure conservative candidates are on the ballot in future elections?
By joining and participating in your local political party committee yourself and by encouraging your conservative friends to do the same.
As was said in other times for other reasons, “If not now, when? If not us, who?”
Use this link to the "American Thinker" for additional ideas.
Quote of the Day
"Freedom is never more than one generation away from extinction."
Ronald Reagan.
Winston Churchill
What must be done?
You must vote in November, naturally; but will that be enough?
What can be done?
Contributing money to Political Action Committees and conservative candidates will be helpful; but will it be enough?
What should be done?
Volunteering some of your time to help the campaign of a conservative candidate this Fall would be a very good thing; but what if your candidates aren’t conservatives?
Why are RINOs & Socialists in office?
Because conservative people are busy living private lives while those who are motivated to use politics for personal gain populate the county and city committees of the major political parties.
How can you ensure conservative candidates are on the ballot in future elections?
By joining and participating in your local political party committee yourself and by encouraging your conservative friends to do the same.
As was said in other times for other reasons, “If not now, when? If not us, who?”
Use this link to the "American Thinker" for additional ideas.
Quote of the Day
"Freedom is never more than one generation away from extinction."
Ronald Reagan.
Tuesday, January 12, 2010
At War With al-Qaeda
Are we at war with al-Qaeda? Did the “panty-bomber” commit a felony, attemped murder? Or, did he attack the United States as part of the larger war waged by al-Qaeda on the United States?
Below are some interesting thoughts on the subject.
-------------------------
“This is all quite mad even in Obama terms. He sends 30,000 troops to fight terror overseas, yet if any terrorists come to attack us here, they are magically transformed from enemy into defendant.
“The logic is perverse. If we find Abdulmutallab in an al-Qaeda training camp in Yeman, where he is merely preparing for a terror attack, we snuff him out with a Predator – no judge, no jury, no qualms. But if we catch him in the United States in the very act of mass murder, he instantly acquires protection not just from execution by drone but even from interrogation.”
From Charles Krauthammer’s article in Human Events
"War? What War?"
12/25/2009
-------------------------
“… more than one-third of all terrorist plots since 9/11 transpired in 2009 – despite loud chest-thumping about rejecting the idea of a war on terror, reaching out to the Muslim world, and apologizing for purported American sins.”
From Victor Davis Hanson’s article in National Review On-Line
"Who Is the Enemy"
1/4/2010
-------------------------
“Abdulmutallab's a rich kid. He didn't come from a deprived background, bearing the grievances of the slum. He's a graduate of a top English university. And Osama bin Laden's from a super-rich family. How does building a footbridge in Afghanistan deter them?
Most of our home-grown Islamist terrorists hail from middle-class families -- such monsters as Maj. Hasan or the Virginia virgin-chasers under arrest in Pakistan (where jail conditions are a lot worse than at Guantanamo -- can't we just leave 'em there?).
This isn't a revolt of the wretched of the earth. These terrorists are the Muslim-fanatic versions of Bill Ayers and the Weathermen, pampered kids unhappy with the world. Al Qaeda's big guns are rebelling against privilege. There's a lot of Freud in this fundamentalism.
Spoiled brats remade their god in their own vengeful image. And we have to kill them. This one really is a zero-sum game.”
Ralph Peters from the article entitled
"Lying To Ourselves"
New York Post12/29/2009
Below are some interesting thoughts on the subject.
-------------------------
“This is all quite mad even in Obama terms. He sends 30,000 troops to fight terror overseas, yet if any terrorists come to attack us here, they are magically transformed from enemy into defendant.
“The logic is perverse. If we find Abdulmutallab in an al-Qaeda training camp in Yeman, where he is merely preparing for a terror attack, we snuff him out with a Predator – no judge, no jury, no qualms. But if we catch him in the United States in the very act of mass murder, he instantly acquires protection not just from execution by drone but even from interrogation.”
From Charles Krauthammer’s article in Human Events
"War? What War?"
12/25/2009
-------------------------
“… more than one-third of all terrorist plots since 9/11 transpired in 2009 – despite loud chest-thumping about rejecting the idea of a war on terror, reaching out to the Muslim world, and apologizing for purported American sins.”
From Victor Davis Hanson’s article in National Review On-Line
"Who Is the Enemy"
1/4/2010
-------------------------
“Abdulmutallab's a rich kid. He didn't come from a deprived background, bearing the grievances of the slum. He's a graduate of a top English university. And Osama bin Laden's from a super-rich family. How does building a footbridge in Afghanistan deter them?
Most of our home-grown Islamist terrorists hail from middle-class families -- such monsters as Maj. Hasan or the Virginia virgin-chasers under arrest in Pakistan (where jail conditions are a lot worse than at Guantanamo -- can't we just leave 'em there?).
This isn't a revolt of the wretched of the earth. These terrorists are the Muslim-fanatic versions of Bill Ayers and the Weathermen, pampered kids unhappy with the world. Al Qaeda's big guns are rebelling against privilege. There's a lot of Freud in this fundamentalism.
Spoiled brats remade their god in their own vengeful image. And we have to kill them. This one really is a zero-sum game.”
Ralph Peters from the article entitled
"Lying To Ourselves"
New York Post12/29/2009
Sunday, January 10, 2010
Section K
He's on the right flank of the third rank of Section K. It’s a fitting place; a place of honor. It’s a place rightfully reserved for non-commissioned officers.
His unit guards the Western point of the encampment. Veteran solders join the formation weekly.
My Dad claimed his place on the right flank 1 November 2002. It was a carefully considered decision planned several years before. Tuesday, when he died quietly at home, he was 84 and his plan went into effect. The following Friday, he joined his comrades-in-arms at Section K, Fort Custer National Cemetery.
I visited his grave today for the first time since his interment. I stood before him although the only evidence of his presence was the small plaque imbedded in the snow-covered sod at his feet. The plaque proclaimed his name and plot number. Soon it would be replaced by an engraved footstone.
I stared at the plaque. Behind it was a Christmas wreath placed there earlier by one of my sisters and a miniature tree crafted by the other. Placing the tree was the immediate reason for our presence on this holy ground. Ground made holy by the bodies of thousands of brave men.
My wife and I, my Mother, my two sisters, and my niece visited that holy place to deliver the Christmas tree, to honor my Father, and to share our grief.
We stood before him mostly in silence missing him and remembering. I looked down the ranks and files of the Section K formation. The men, covered by a thick blanket of snow, were in perfect order, dressed right and front.
The white snow was dulled by the steel gray overcast sky. It was cold and remote. Guard duty like I remember it. It was lonely too, though only for us. Dad is in a great formation of soldiers, sailors, airmen, and marines. These men fought and beat the Italians, the Germans, and the Japanese on the battlefields of Europe, Asia, and the Pacific. They were the greatest armed forces ever assembled in the history of mankind.
My mind drifted entertaining the thought that this great army defeated all enemies but time. The survivors of World War II fall by the thousands to the bullets of age. Heart disease and cancer are the artillery and the machine guns of this new/old enemy who has never lost a war.
Before we turned to leave I wondered what God will do with this awesome army. Suddenly, I realized Dad has reenlisted. Sgt Irvin C Clark, a veteran amphibious tank commander from the Peleliu, the Philippines, and the Okinawan campaigns, has reenlisted.
I don't know what need God has of such an army. Ragnarok, the great last battle between the good and evil gods of Norse myth, is not found in the Christian scriptures. But if He has need of an army, He's getting the very best.
His unit guards the Western point of the encampment. Veteran solders join the formation weekly.
My Dad claimed his place on the right flank 1 November 2002. It was a carefully considered decision planned several years before. Tuesday, when he died quietly at home, he was 84 and his plan went into effect. The following Friday, he joined his comrades-in-arms at Section K, Fort Custer National Cemetery.
I visited his grave today for the first time since his interment. I stood before him although the only evidence of his presence was the small plaque imbedded in the snow-covered sod at his feet. The plaque proclaimed his name and plot number. Soon it would be replaced by an engraved footstone.
I stared at the plaque. Behind it was a Christmas wreath placed there earlier by one of my sisters and a miniature tree crafted by the other. Placing the tree was the immediate reason for our presence on this holy ground. Ground made holy by the bodies of thousands of brave men.
My wife and I, my Mother, my two sisters, and my niece visited that holy place to deliver the Christmas tree, to honor my Father, and to share our grief.
We stood before him mostly in silence missing him and remembering. I looked down the ranks and files of the Section K formation. The men, covered by a thick blanket of snow, were in perfect order, dressed right and front.
The white snow was dulled by the steel gray overcast sky. It was cold and remote. Guard duty like I remember it. It was lonely too, though only for us. Dad is in a great formation of soldiers, sailors, airmen, and marines. These men fought and beat the Italians, the Germans, and the Japanese on the battlefields of Europe, Asia, and the Pacific. They were the greatest armed forces ever assembled in the history of mankind.
My mind drifted entertaining the thought that this great army defeated all enemies but time. The survivors of World War II fall by the thousands to the bullets of age. Heart disease and cancer are the artillery and the machine guns of this new/old enemy who has never lost a war.
Before we turned to leave I wondered what God will do with this awesome army. Suddenly, I realized Dad has reenlisted. Sgt Irvin C Clark, a veteran amphibious tank commander from the Peleliu, the Philippines, and the Okinawan campaigns, has reenlisted.
I don't know what need God has of such an army. Ragnarok, the great last battle between the good and evil gods of Norse myth, is not found in the Christian scriptures. But if He has need of an army, He's getting the very best.
On Target: Paul Volcker in the 12/8/2009 London Telegraph
Excerpt from the 12/8/2009 The London Telegraph:
The former US Federal Reserve chairman told an audience that included some of the world's most senior financiers that their industry's "single most important" contribution in the last 25 years has been automatic telling machines, which he said had at least proved "useful".
Echoing FSA chairman Lord Turner's comments that banks are "socially useless", Mr Volcker told delegates who had been discussing how to rebuild the financial system to "wake up". He said credit default swaps and collateralized debt obligations had taken the economy "right to the brink of disaster" and added that the economy had grown at "greater rates of speed" during the 1960s without such products.
Yup!
The former US Federal Reserve chairman told an audience that included some of the world's most senior financiers that their industry's "single most important" contribution in the last 25 years has been automatic telling machines, which he said had at least proved "useful".
Echoing FSA chairman Lord Turner's comments that banks are "socially useless", Mr Volcker told delegates who had been discussing how to rebuild the financial system to "wake up". He said credit default swaps and collateralized debt obligations had taken the economy "right to the brink of disaster" and added that the economy had grown at "greater rates of speed" during the 1960s without such products.
Yup!
Wednesday, January 6, 2010
Tuesday, January 5, 2010
Some Health Care Reform Stupidity You’ve Probably Not Heard Yet
The Devil, as they say, is in the details. The only certainty is that government meddling has unintended consequences.
The Senate version of health care reform includes a provision that will penalize small business with more than 50 employees that provide health insurance to their workers.
Employees who are eligible for the Federal health insurance subsidy may choose to opt out of their employer-based insurance in favor of the insurance exchange created by the reform bill. For each employee who opts out the company can be penalized with up to $3,000 in extra taxes. And, the eligibility of the employee is determined by his family situation - working spouse, number of children, etc – things not under the control of the employer.
Furthermore, if enough employees (25%) opt out, the tax penalties may be enough to incentivize the company to drop its health insurance altogether since the penalty for providing NO insurance will be less than the penalty for providing insurance to employees who qualify for federal insurance subsidies.
Probable Effects:
1. Some companies will intentionally avoid hiring people who qualify for subsidies
2. Some companies will drop their health insurance plans resulting in significant health insurance cost increases to their employees who do not qualify for subsidies.
As usual, government is coming to “help” us! The details of this particular stupidity can be found in the article, "How the Senate Health Bill Punishes Businesses That Hire Low-Income Workers", By Robert A. Book, Ph.D. and published by The Heritage Foundation
Quote of the Day:
“What does Sarah Palin know about economic policy or foreign policy? Good question. But let us put the question in context. What does President Obama know about economic policy or foreign policy after a year on the job that he doesn’t need to unlearn (and fast)?”
Christopher Chantrill in the American Thinker
Universal Health Care
"Build a Health Care Bill: We Can Do It Better Than Congress"
Link to the "Build a Health Care Bill" Idea Log
The Senate version of health care reform includes a provision that will penalize small business with more than 50 employees that provide health insurance to their workers.
Employees who are eligible for the Federal health insurance subsidy may choose to opt out of their employer-based insurance in favor of the insurance exchange created by the reform bill. For each employee who opts out the company can be penalized with up to $3,000 in extra taxes. And, the eligibility of the employee is determined by his family situation - working spouse, number of children, etc – things not under the control of the employer.
Furthermore, if enough employees (25%) opt out, the tax penalties may be enough to incentivize the company to drop its health insurance altogether since the penalty for providing NO insurance will be less than the penalty for providing insurance to employees who qualify for federal insurance subsidies.
Probable Effects:
1. Some companies will intentionally avoid hiring people who qualify for subsidies
2. Some companies will drop their health insurance plans resulting in significant health insurance cost increases to their employees who do not qualify for subsidies.
As usual, government is coming to “help” us! The details of this particular stupidity can be found in the article, "How the Senate Health Bill Punishes Businesses That Hire Low-Income Workers", By Robert A. Book, Ph.D. and published by The Heritage Foundation
Quote of the Day:
“What does Sarah Palin know about economic policy or foreign policy? Good question. But let us put the question in context. What does President Obama know about economic policy or foreign policy after a year on the job that he doesn’t need to unlearn (and fast)?”
Christopher Chantrill in the American Thinker
Universal Health Care
"Build a Health Care Bill: We Can Do It Better Than Congress"
Link to the "Build a Health Care Bill" Idea Log
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