Politics, Government & Public Policy: October 2009 Archives

I haven't been particularly worried about hyperinflation; despite not know as much as Megan McArdle I was thinking along similar lines as she is when she says "Seriously, Stop Worrying About Hyperinflation".

If you're talking about a past stock of debt, it makes some sense to talk about it solely in terms of dollars--really, accounting entries. But of course, the reason the government borrowed the money is that it needed to secure real goods in the economy, and its citizens didn't want to reduce their consumption enough to pay for it all with their taxes. Sometimes that's a one time event, like a war, in which case inflating away your debt looks quite attractive (immoral, possibly--but then, lots of attractive things are immoral, n'est ce pas?)

But more often it's an ongoing problem. In which case, it's hard to aggressively inflate, because within a very short period of time, your ability to borrow in your own currency at attractive rates will fall off. So if you're going to hyperinflate, you need to be prepared to quickly close the gaps between the real goods and services you want to consume, and the real goods and services you want your citizens to give up in order to pay their taxes. In other words, you need to be prepared to stop running a budget deficit--or to resort to increasingly desperate tactics like Argentina's nationalization of its private pension regime in order to loot the accounts.

In the US, the problem is even more complicated because so many of its mandatory payouts are inflation-indexed; it doesn't do you any good to inflate your debt away if half the debt is owed to inflation-linked Social Security accounts.

She concludes by arguing that there are plenty of politicians who expect to be in office for decades more distributing pork to their benefactors, and hyperinflation would derail the gravy train. Sounds reasonable!

Corollary: is this a good argument in favor of entrenched political interests and pork spending?

John Mackey, CEO of Whole Foods, has written a terrific health care reform proposal that includes not only eight important steps we can take to make health care better and cheaper, but also an excellent explanation of why viewing health care as a "right" is nonsensical.

Many promoters of health care reform believe that people have an intrinsic ethical right to health care-to universal and equal access to doctors, medicines, and hospitals. While all of us can empathize with those who are sick, how can we say that all people have any more of an intrinsic right to health care than they have an intrinsic right to food, clothing, owning their own homes, a car or a personal computer? Health care is a service which we all need at some point in our lives, but just like food, clothing, and shelter it is best provided through voluntary and mutually-beneficial market exchanges rather than through government mandates. A careful reading of both The Declaration of Independence and the Constitution will not reveal any intrinsic right to health care, food or shelter, because there isn’t any. This “right” has never existed in America.

Even in countries such as Canada and the U.K., there is no intrinsic right to health care. Rather, citizens in these countries are told by governmental bureaucrats what health care treatments and medicines they are eligible to receive and when they can receive them. All countries with socialized medicine ration health care by forcing their citizens to wait in lines to receive scarce and expensive treatments. Although Canada has a population smaller than California, 830,000 Canadians are waiting to be admitted to a hospital or to get treatment. In England, the waiting list is 1.8 million citizens. At Whole Foods we allow our team members to vote on what benefits they most want the company to fund on their behalf. Our Canadian and British team members express their benefit preferences very clearly-they want supplemental health care more than additional paid time off, larger donations to their retirement plans, or greater food discounts; they want health care dollars that they can control and spend themselves without permission from their governments. Why would they want such additional health care benefit dollars to spend if they already have an “intrinsic right to health care”? The answer is clear-no such right truly exists in either Canada or the U.K.-or in any other country.

So how can America entice Mr. Mackey and others like him into public service? I expect that if you asked him to run for office he's laugh in your face.

Sound Mind Investing nearly summarizes how health care "reform" will screw the middle class from both ends.

Indeed, there are compelling reasons to be concerned that your taxes and/or personal insurance costs will rise significantly if health care legislation passes in something similar to its currently proposed form. Why? Consider the big picture: insurers will have to accept all applicants, even those with serious or terminal illnesses. Their costs' will skyrocket as a result of having to cover claims by a surge of already-sick new customers.

In theory, a significant portion of these new costs would be offset by the insurers gaining new income from the insurance premiums paid by millions of healthy, currently-uninsured new customers. This is the so-called "mandate" which would require everyone to have health insurance. Anyone failing to do this would pay a fine to the U.S. Treasury.

Originally, the fines were set at relatively high levels, but fine levels were subsequently watered down.

Now, with the potential fines dropped so low, few of the healthy uninsured are likely to buy insurance. They'll just pay the much less-expensive fine. If the majority of new customers the insurance companies get are the ones who are already sick, insurers' costs are going to explode with very little offsetting additional income. That's where you — the currently insured, reasonably healthy person or family — come in. You're the key to all these pieces fitting together.

The insurers need more money to pay the claims of new sick customers? Check — they can get it by raising your premiums. Lower-income families can't afford the premiums of their new coverage? Check — they will be subsidized by raising your taxes to pay for them.

Middle class citizens will pay both higher premiums and higher taxes to fund the "reform". For an added poke in the eye, health care quality will also plummet.

The Democrats are eager to sell you on the idea that health care "reform" will help "other people" and won't cost anyone anything. Don't believe it.

Orange County has long been one of the few conservative counties in California where ordinary citizens -- not only celebrities, politicians, and their cronies -- could obtain permits to carry concealed weapons. Recent Orange County sheriff appointee Sandra Hutchens has decided to change that long-standing policy and the citizens she hopes to win election from are not happy.

During the 15 minute video, citizen gun owners who attended a hearing before the Orange County Board of Supervisors testified their dissatisfaction with the Sheriff, a political appointee and her new policy. Many speakers suggested that she has her own agenda, is intending to impose the undesireable policies of Los Angeles County on the citizens of Orange County. The Board of Supervisors came under fire for having appointed someone who does not represent the concerns of the citizens.

Sheriff Hutchens stood her ground refuting the interpretation of her new policy saying “I do not see this as a Second Amendment Issue. The policy does not impact the right to have a gun at home or in a place of business.”

Bill Hunt, who is expected to challenge Sheriff Hutchens in the 2010 election was critical of Sheriff and other Police Chief’s who do not share the fundamental beliefs in values held in the communities which they serve.

The following points were made during the citizen testimony:

• Why should permits be given only to those who transport large sums of money?
• Personal protection and family protection should be considered as primary issue
• Restricting use of Concealed Carry Weapon permits does not make the county safer.

I personally doubt that the last bastion of conservatism in California can be saved, but I hope I'm wrong!

Joseph Antos explains that health care "reform" will ad hundreds of billions of dollars to our national debt because none of the promised cost savings will be realized.

A careful reading of the evidence suggests that the Baucus bill will add as much as $376 billion to the federal deficit through 2019. And that figure understates the full impact of the bill on the budget. If the big-spending parts of the proposal started next year rather than in 2014, the fiscal damage would be much greater.

Can anyone guess why the most expensive parts of the plan won't kick in until 2014? Maybe so that Obama and Congress won't have to face reality until after as many re-elections as possible.

At face value, the Baucus bill seems to be close to what the president ordered. According to the CBO, the bill gives coverage to 29 million uninsured Americans for less than $900 billion while simultaneously reducing the deficit. The problem is that the bill counts as savings large cuts to Medicare providers that will almost certainly never happen.

The Congressional Budget Office has to pretend that they believe that future Congresses will decide to keep these cost savings in place, even though they certainly won't.

The most blatant example is the annual cut in fees paid by Medicare to physicians. The cuts started out small, about 5% a year, but even that was unsustainable. To "solve" the political problem without having to admit to a big increase in the deficit, Congress has given doctors a series of one-year fixes. The foregone payment reductions add up, and next year Medicare is supposed to slash doctor's fees 21%.

Clearly, that will not happen. At the urging of the American Medical Association, Democrats in the House decided to end the charade by permanently granting fee increases to physicians at a 10-year cost of nearly $230 billion. Sen. Baucus accepted responsibility only for the usual one-year fix, at a cost of almost $11 billion. That means he is being credited with $218 billion in savings at which future Congresses will chip away, a year at a time.

There is another $240 billion in cuts to hospitals, home care providers, nursing facilities and hospices that are destined to go the way of those physician fee savings. If none of those reductions are implemented, Medicare spending will increase $458 billion over the next decade, and the deficit will grow by $376 billion.

The "savings" are due to counting promises to save money as actual saved money. The promises will be broken by a future Congress, but the current Congress still wants to get credit now.

These budget games are so obvious that the CBO blew the whistle--but scored the savings anyway. The CBO scores bills as they are written, without trying to second-guess Congress even when there is plenty of reason to do so. The agency explained that their estimates assume that the proposals are enacted and remain unchanged over the next two decades. In a masterpiece of understatement, the CBO pointed out that such provisions are often over-ridden by future Congresses.

That's the trick: when it comes time to actually stop spending the money, Congress will attempt to tug at our heartstrings and show us all the poor people who will be hurt if we don't spend more money. People will buy these "arguments" and the cost savings will never be actualized.

We citizens don't need to be bound by the same foolish assumptions that constrain the Congressional Budget Office. They have to believe Congress because they work for Congress. We don't need to be that gullible.

The Associated Press is fabricating reality by labeling a health care takeover bill as "middle-of-the-road" while acknowledging that it only garnered one Republican vote in committee.

With support from a lone Republican, a key Senate committee Tuesday approved a middle-of-the-road health care plan that moves President Barack Obama's goal of wider and affordable coverage a giant step closer to becoming law.

Maine Republican Olympia Snowe said she was laying aside misgivings for now and voting to advance the bill, a sweeping $829-billon, 10-year health care remake that would help most Americans get coverage without creating a new government insurance plan. "When history calls, history calls," said Snowe.

Finance Committee Chairman Max Baucus, D-Mont., called his bill "a commonsense, balanced solution." A distance runner, Baucus has endured months of marathon meetings to get this far. It's not the finish line.

Well if the bill's author, Max Baucus, calls his bill "a commonsense, balanced solution" then how dare the Associated Press be skeptical? I suppose "reporter" Erica Werner couldn't be bothered to notice that Republican Olymbia Snowe is the most leftist Republican in the Senate and tends to vote with the Democrats on controversial issues. Her support is hardly enough to qualify any left-wing proposal as "middle-of-the-road".

The bill will never get to the floor of the Senate, but the AP and the rest of the leftist media is desperate to portray it as "middle-of-the-road" and the Republicans as obstructionists who oppose "commonsense, balanced solution[s]". Unfortunately for the AP, we're not all idiots.

Does anyone really think that President Obama deserves the Nobel Peace Prize?

A beaming President Barack Obama said Friday he was both honored and humbled to win the Nobel Peace Prize and would accept it as a "call to action" to work with other nations to solve the world's most pressing problems.

Obama told reporters in the White House Rose Garden that he wasn't sure he had done enough to earn the award, or deserved to be in the company of the "transformative figures" who had won it before him.

Even the meglomaniacal Savior himself is unsure of his worthiness. If he were at all in touch with reality he would have scored major kudos by refusing to accept the award. As it is, I expect the prize will hurt him more than it helps him by drawing attention to the hyped-up aura he exudes.

Oh, and maybe it's unconstitutional?

Article 1, Section 9:

No Title of Nobility shall be granted by the United States: And no Person holding any Office of Profit or Trust under them, shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State.

Well Obama is the constitutional scholar, so I'm sure there's no problem.

The fewer days per week the House of Representatives works, the better for America.

Like most Americans, members of the House are expected to report promptly — no excuses — when summoned by their bosses for the start of another workweek. One difference: For lawmakers, starting time doesn’t come until about 6:30 Tuesday evening.

After taking control of the House in 2006 — and again when President Barack Obama was elected president in 2008 — Majority Leader Steny Hoyer (D-Md.) boasted that lawmakers would work four or five days a week to bring change to America.

But midway through Obama’s first year in office, Hoyer’s House has settled into a more leisurely routine. Members usually arrive for the first vote of the week as the sun sets on Tuesdays, and they’re usually headed back home before it goes down again on Thursdays.

Since the House returned for its fall session on Sept. 8, it has stuck around to vote on a Friday just once: to approve a 5.8 percent increase in Congress’s own budget.

Why not just cancel House sessions for the rest of the year?

Is it the end of the California dream? I think so, which is part of why we left in 2006.

But the state that was once held up as the epitome of the boundless opportunities of America has collapsed. From its politics to its economy to its environment and way of life, California is like a patient on life support. At the start of summer the state government was so deeply in debt that it began to issue IOUs instead of wages. Its unemployment rate has soared to more than 12%, the highest figure in 70 years. Desperate to pay off a crippling budget deficit, California is slashing spending in education and healthcare, laying off vast numbers of workers and forcing others to take unpaid leave. In a state made up of sprawling suburbs the collapse of the housing bubble has impoverished millions and kicked tens of thousands of families out of their homes. Its political system is locked in paralysis and the two-term rule of former movie star Arnold Schwarzenegger is seen as a disaster – his approval ratings having sunk to levels that would make George W Bush blush. The crisis is so deep that Professor Kevin Starr, who has written an acclaimed history of the state, recently declared: "California is on the verge of becoming the first failed state in America."

Lots of statistics and depressing stories at the link.

California's problems are entirely due to California's Democrat politicians and the people who continually re-elect them. They've spent decades making their bed, and now they have to lie in it. I love the state, but it's like an addict who thinks that just one more pill and everything will be ok.

(HT: JW.)