Options

I am not fond of Republicans or Democrats - both have had their chances to get our government under control, and both have instead chosen to increase the size and scope of our government.
However, I am tired of hearing Democrats paint Republicans as the "party of no" and say that Republicans have not offered alternatives. This is simply not true.

For a look at some Republican alternatives and ideas, check out their "Better Solutions" package and also Paul Ryan's op-ed piece in last week's Wall Street Journal.

There are lots of options for dealing with the issues that face this country - not just one.

Deficits and More Deficits

The Congressional Budget Office predicts the 2010 budget deficit will be $1.35 TRILLION, after a budget deficit in 2009 of $1.4 TRILLION. Yes, that is PER YEAR.

Compare that to the $455 Billion deficit the last year of the Bush Administration, which at that point was the largest deficit in history. That was a horrible deficit - it just looks tiny now in the face of annual deficits that are more than 3 Times the magnitude.

Since 2006, when Democrats took control of Congress (which is where money is spent), the deficit has increased 38%. It took us 60 years to get to a $10 Trillion deficit - we will be at $20 Trillion before you know it!!.

What is sad but funny about the new "spending freeze" proposed by President Obama is that the tiny part of the budget that it will affect (roughly 13%) will be "frozen" at the inflated spending levels of the last year!!

Health Care Reform - Common Sense

I really hope that Congress abandons both of the mammoth versions of Health Care Reform and starts over. Health care is an important issue that needs to be addressed but we need to use common sense when changing the system. An iterative approach makes more sense because the system is complex, most people are happy with their current coverage, and we need to be careful of the “law of unintended consequences.” There are two main problems that need to be fixed: high costs and lack of access.

Rather than have increased government supervision and control of our health care system, there are several things that could be done quickly that would begin to reduce costs. After implementing them, we can then see what further measures would be helpful.

1. Tort reform – health care costs are inflated by the high cost of malpractice insurance plus the need for doctors to practice “defensive medicine” by ordering tests and procedures solely to avoid lawsuits.
2. Increased competition among insurance companies – if we allowed insurance companies to compete across state lines, there would be more options for consumers to choose from and prices would go down. In order to foster this, a role for the federal government might be to profile 10 or 12 standard plans (with a variety of benefit levels and deductible options) that insurance companies would underwrite to, so that consumers could be better able to compare plans and see what they are really getting.
3. Allow smaller companies to band together to get cheaper and better insurance for their employees. Right now, they and their employees are at a huge disadvantage.
4. Continue to encourage people to use Health Savings Accounts to pay for their insurance and medical costs. For people who don’t have employer-provided insurance, this is one way to make buying insurance more feasible.
5. Deal with the issue of preexisting conditions. This can be tricky for a few reasons:
a. Insurance by its very nature is a way of managing risk. Companies in all kind of insurance (auto, life, etc.) charge different rates for those who pose different levels of risk. Without being able to do this, everyone pays a higher price for insurance.
b. If you just say that insurance companies can no longer rate for preexisting conditions or refuse coverage, then people will wait to buy insurance until they are sick (and why wouldn’t they?). This also will increase costs for those who are insured. And I don’t that forcing people to buy insurance just for being a citizen of the U.S. is constitutional.
c. The current system is unfair to those who have kept insurance coverage all their lives, done the right things, but lost their coverage due to loss of employment or other reasons. These people need to be able to get continuation of coverage without being subjected to preexisting conditions carve-outs. Likewise, children should be able to get health insurance (if their parents have it) without being subjected to preexisting conditions.

You could make a law that says if you have had insurance but lost coverage (due to unemployment or early retirement or whatever) then you cannot be refused or penalized for preexisting conditions. I’m sure there are other ideas and options on dealing with this critical issue.

I encourage everyone to contact your Representative and Senators and urge them to take a common sense, iterative approach to Health Care Reform.

Bank Tax - Beware

The new word from Washington is that we need to tax big banks to pay for TARP. While this may feel good from an anger standpoint, we should consider this carefully.

1. This tax would go on banks who did not participate in TARP at all. It would also go on banks who have repaid their TARP money (with interest). And remember that the government forced healthy banks to participate in TARP so that we wouldn't have a "run" on the unhealthy banks.
   
2. The tax would do nothing to get AIG and GM and Chrysler (along with GMAC) to repay the hundreds of billions of dollars we taxpayers loaned them through TARP.
3. The tax would do nothing to get back the hundreds of billions of dollars we taxpayers gave Fannie Mae and Freddie Mac in the past year, nor will it fix the problems in Fannie Mae & Freddie Mac that keep them coming back to us for more bailouts.
4. While it sounds good to tax big banks, guess who ends up paying? When entities have increased costs (like taxes) they pass them along to their customers (you and me).
5. Not only that, but if you want banks to lend more, then why are you taking away from the amount of money that they have to lend?
6. There are no restrictions on what is done with the money raised by this proposed tax – it will just go in the big pot of money that Congress likes to spend.
   

What is really sad about this is that the politicians are trying to make us feel they are doing something by blaming the big banks….all the while their friends at Goldman Sachs and AIG and Fannie Mae continue to rake in the money.

Don’t be fooled by this misdirection.

Openness and Transparency.....

This is unbelievable....makes you wonder what they are hiding. By the way, the reason they are talking about putting a new tax on banks is to help subsidize the bailouts they gave to AIG and the auto companies. (I'm sure you can figure out that any new tax on banks will be passed on to banking customers - we paid the first time in the bailouts and we will get to pay again!).

It could take until November 2018 to get the full story behind the U.S. bailout of insurance giant American International Group (AIG.N) because of an action taken last year by the Securities and Exchange Commission....

....The SEC's decision to approve AIG's request for confidential treatment got scant attention at the time. But it could spark controversy now following the release last week of 14-month-old emails that reveal that some at the New York Fed had discussions with AIG officials about how much information should be disclosed to the public about the Maiden Lane III transaction.

The New York Fed, then led by Treasury Secretary Timothy Geithner, plays a critical role in the world of finance given its close dealings with all the major Wall Street banks, many of which were counterparties of AIG.

SEC spokesman John Nestor declined to comment on the reasons for granting AIG's request to treat the exhibit as confidential.

Bad News for All of Us

There are now more government workers than "goods producing" workers (e.g. manufacturing). In the past year, the only area of job growth in the country has been government jobs.