TheHealthCareCritic

The Pattern is clear and the ideological inference is inescapable. It started in the early days of the OBAMA Administration and it culminated with the virtual takeover of the health care sector (17% of the US economy). The US government is short order acquired control of about 2/3 of GM, one third of CITI, all of AIG and control over Freddie Mac and Fannie May. It is now well positioned to control the health insurance sector and have influence over the life of every American.

All of this was done in the name of good, fairness, the welfare of children, ending waste and corruption in the government run programs, limiting greed, and regulating an abusive, out of control health care industry. Who can possibly be against this? The irony is that even Roosevelt who had massive, bipartisan support for the Social Security (SS- 1935) program got is completely wrong. The program is costing infinitely more than was anticipated. President Johnson did no better. The Medicare program (1965) is almost bankrupt and no attempt to save it will succeed without increasing taxes and /or cut benefits. The Combined SS and Medicare unfunded liabilities are at 107 trillion. Yet, President OBAMA is cutting Medicare not to reduce its unfunded liabilities an increase its solvency, but rather to use the money to sustain an unpopular takeover of the health care sector. In so doing the Medicare cuts are double counted. Medicare is no better off under either scenario. And, the ‘big lie”: the OBAMA health care reform reduces the budget deficit over the next 10 years by some $130 billion exacerbates our budget numbers, and further stresses our political structure.

The United States has run budget deficits since 1970 with a few years of interruption during the Clinton Administration won through strong arm tactics by then Speaker Gingrich. The current fiscal year budget deficit is projected to be $1.27 trillion on a budget of $3.8 trillion, down from the previous year of $1.56 trillion. The budget deficit was $458 billion in 2008 with the US fighting two wars and restructuring its internal security system.

The new policy indicates that those in charge believe that deficits do not matter. Soon the interest on the national debt will exceed the total defense spending of the United States. Every trillion dollar in debt costs the US a billion dollars a day in interest. How long can this be sustained is what driving the American people to demand fiscal accountability and transparency.

The lessons need not be learned all over again. There are many that can be drawn from the European experience. An overregulated market is inefficient and grows very slowly. Those working inside of it spend their time answering to the government instead of producing goods and services. That is why Europe has been growing at only 1.7% in the last ten years. Add to market rigidities powerful labor unions and dramatically changing demographics and the situation may not be correctible without major restructuring of the welfare state and the very essence of what entitlements are truly legitimate and what limits must be placed on them. Structural changes are inevitable as Greece and now Portugal are finding out.

The fear of a truly competitive market, especially for labor, that runs across the current European tradition and mindset, is another handicap in the European domain. Even President Sarkozy of France is learning not to push the peddle of reform too hard. The Clarion was sounded in the recent regional elections. The jury is still out as to whether Greece will succeed in reversing budget overruns, distorted accounting, and in restraining labor demands that have little to do with the productivity and the national welfare.

Europe has recognized that it must reverse its policies that are encroaching on personal freedom and the growth potential of its economies, while the United States is hell bent on copying their system knowing that the evidence is contrary to OBAMA’s assumptions.

Yet, the Obama administration is pursuing a strategy at odds with the American tradition: increase the size of government even if you borrow astronomical amounts of money. Federal, state and local government spending has reached an unprecedented percentage of GDP in 2010: 37.5%. We are quickly catching up to Europe’s 52% and that is without the inclusion of the new health care costs.

If we only subtract the ‘savings’ from the cuts in Medicare (almost impossible to execute politically), and if we eliminate the projected $200 billion cuts in doctors reimbursements, and if we stop the political nonsense about taxing the Cadillac plans that union members enjoy, we will add $800 billion to the OBAMA deficit  OBAMA. The Health care Bill that is now law is really a $2 trillion plan.

This is not the time to do any of this. America is losing its edge in the world. More massive budget deficits exacerbate this in pronounced and dangerous ways.

The temporary euphoria over the passage of HR3962 will inevitably yield to reality. I trust and hope for the sake of America that it will be sooner than later.

Joe Concerned

This entry was posted on Wednesday, April 7th, 2010 at 1:31 pm and is filed under Healthcare Reform Bill, Obama. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.