The Way Things Really Are 10/29/09

This came from a financial blog. The guy hits the nail right on the head.

The speaker of the house today gleefully announced as only she can do that a sweeping new bill has worked its way through the house chamber and once enacted, will provide affordable health INSURANCE for nearly every American.

To do this, the new bill will create a public health INSURANCE company to compete with private insurance companies, require everyone to have insurance, subsidize low income workers by taking from others (again) and require large businesses to cover their employees. Large businesses will presumably (the bill did not seem to consider what large businesses will do to make up the added cost) either pass the cost on to the consumer (another hidden tax further eroding discretionary income) or if competing with foreign manufacturers will probably just go out of business, but heck, congress has been doing that to our workers for a long time so that is nothing new. We will just keep extending unemployment benefits and stick the bill to the next several generations.

The stated price tag for this insurance coverage is estimated at only $894 billion. This $894 billion dollar boondoggle is the result of trying to cover 25 million un-insured with health INSURANCE. Do the math. That is $35,760 for each un-insured. Hey, it’s a government program so what did you expect? A bargain? Consider this. The ancestors of today’s demo goons thought social security would only require $30 per worker per year. Today, the payroll tax bite for that little gem and its offspring Medicare is up to $15,300 per worker per year which is I guess just a Washington style rounding error from the original $30 per year estimate.

So don’t be surprised if the $894 billion swells to the stratosphere just as every other government program has done. The insanity in all this is Obama actually praised Medicare many times as being a good example of what can be done in having the government provide this sort of program. I guess he does not realize that Medicare is now under funded by nearly $40 Trillion. But hey, there is no accountability if they are wrong and the future will get the bill, not you and me, so why even care?

We are still in a deep recession, yet here we go again, being led by Obama, down another path of treating the recession with higher taxes, higher costs, and more government spending. And in this case, the government has done absolutely nothing to reign in the originally stated problem of the cost of health CARE itself. This is because the original goal of making health CARE more affordable was very quickly shown to be a difficult goal, so Obama and his spin-minions changed course in March and began marching toward the revised goal of making health INSURANCE more affordable, thus creating a “crisis” in health INSURANCE. Government just loves a “crisis”.

Question. How many long distance passenger rail lines of significance do we have in this country? Other than Amtrak? None that I know of. Keep that thought in mind, because the government has been subsidizing Amtrak and Amtrak in turn has charged less for a ticket than its costs would otherwise indicate. Hence, there are no other long distance passenger rail lines because the private sector is not allowed to just print money. It has to earn it. So private enterprise can not compete with government.

Apply this Amtrak analogy to the fact that the government is going to sell health INSURANCE and compete against the private health INSURANCE companies. The only reason to buy the government’s insurance would be that it is cheaper, that is a given. So, if it too is subsidized just like Amtrak (remember the $894 billion estimate – that is the estimated cost of subsidy at this point), how then is there to be a different result? How are we to avoid wiping out most private sector health INSURANCE companies? This is a very real possibility, but we should not question Obama as that is un American.

These same goons in government garb recently tried to provide housing for nearly everyone in America by creating two public GSE’s (Fannie and Freddie) that were to help lower the cost of a MORTGAGES instead of increasing discretionary incomes (cutting taxes) or making the cost of HOUSING itself more affordable. Do you remember what happened? The cost of HOUSING increased due to the bubble demand created by the government assisted mortgage programs. The result, HOUSING costs for everyone went up, and then the MORTGAGES failed and many more people than were originally helped saw their life savings wiped out as the stock market failed, as the value of their real estate declined, and as the round of foreclosures still working its way through our economy put people in the streets, literally, after losing their jobs and their houses. In the end, the government’s attempt to provide a government assist to home ownership actually deprived millions of their homes, and many more millions of their livelihood. Did socialism work? No. So heck, let’s try it again anyway.

So we are now going to spend $35,000 per uninsured, raise the cost of doing business, become even less competitive with overseas suppliers, and hope the taxpayer is still too dumb to see the real cost of doing this. So I say yippee. We have now “fixed” the health INSURANCE “crisis”. In Washington speak, “A crisis is a terrible thing to waste”.

What have we done to make health CARE more affordable? Nothing. We gave up on that “crisis” in March because changing that paradigm would have stepped on too many toes belonging to too many special interests that donate too many funds to Political Action Committees just as did the GSE’s and the banking Industry in the last debacle. So with health CARE costs continuing to climb, and health INSURANCE costs capped at will by the government (we will probably have another Czar, yippee again), the health INSURANCE industry is going to be in for a rough ride, just as a passenger rail line would be in if it tried to compete with Amtrak. We are not supposed to think of these things. Instead, just trust Pelosi. After all, she is from a state that is now broke. So let’s be more like California.

The bottom line is simply this. In Washington, one “crisis” is as good as another, because a “crisis” is a blank check to expand the role of government. So, if you don’t have a crisis, you can just create one. Housing, global warming, health INSURANCE, etc., etc. See what I mean. With every crisis, you lose more of your freedoms and government gets even bigger, employing more and more people that do nothing of value at great cost, pushing the deficits higher in the process.

America, I am convinced, will fail from the enemy within.