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.

Big Picture Perspective

I think this piece from the Wall Street Journal provides a nice frame of reference (click here).

U.S. Official Resigns in Protest of Afghan Strategy

Foreign Service Officer Matthew Hoh, a former Marine officer in Iraq, has resigned in protest over our planned escalation in Afghanistan. His background is impressive and his reasons are troubling.

But many Afghans, he wrote in his resignation letter, are fighting the United States largely because its troops are there -- a growing military presence in villages and valleys where outsiders, including other Afghans, are not welcome and where the corrupt, U.S.-backed national government is rejected. While the Taliban is a malign presence, and Pakistan-based al-Qaeda needs to be confronted, he said, the United States is asking its troops to die in Afghanistan for what is essentially a far-off civil war.

Hat tip to Polipundit.com

U.S. Dollar in Decline

As the world begins to to talk about pricing oil in a currency other than the dollar, the dollar has also lost its status as the reserve currency of the world.

Over the last three months, banks put 63 percent of their new cash into euros and yen -- not the greenbacks -- a nearly complete reversal of the dollar's onetime dominance for reserves, according to Barclays Capital. The dollar's share of new cash in the central banks was down to 37 percent -- compared with two-thirds a decade ago...

...Economists believe the market rebellion against the dollar will spread until Bernanke starts raising interest rates from around zero to the high single digits, and pulls back the flood of currency spewed from US printing presses.

"That's a cure, but it's also going to stifle any US economic growth," said Schiff. "The economy is addicted to the cheap interest and liquidity."

Economists warn that a jump in rates will clobber stocks and cripple the already stalled housing market.

"Bernanke's other choice is to keep rates at zero, print even more money and sell more debt, but we'll see triple-digit inflation that could collapse the economy as we know it.

"The stimulus is what's toxic -- we're poisoning ourselves and the global economy with it."

Our rapidly increasing national debt along with expansionary spending policies (causing the U.S. government to print more money while keeping interest rates near zero) is leading the world to believe that we are no longer a reliable source of investment.

Global Warming

Are you feeling the global warming effects? Here in in Illinois we are not....Doesn't seem like the world is experiencing it either...

For the last 11 years we have not observed any increase in global temperatures.

And our climate models did not forecast it, even though man-made carbon dioxide, the gas thought to be responsible for warming our planet, has continued to rise.

U.S. Currency and Financial Stability

The World Economic Forum has come out with their rankings...the U.S. is now ranked 50th in currency stability and 38th in financial stability.

And our Congress continues to spend money that we don't have....don't look for these numbers to get any better any time soon.

Has the Stimulus Bill Helped the Economy?

Early in the year we were told that the massive, pork-laden stimulus bill had to be passed immediately so that our economy could rebound more quickly. The Obama Administration showed us graphs of what would happen with and without the stimulus package. They promised it would "create or save" millions of jobs (never mind that you can't measure "saved" jobs).

Well, if you go back and look at that graph, we WORSE OFF than we would have been WITHOUT that massive spending bill. Except, of course, that our government is further in debt...

click here for graph

Quid Pro Quo...The Washington Way

GE has been closely tied to the government on both climate change and economic recovery issues...now they will benefit if the new Climate Bill passes.

Sen. Barbara Boxer’s climate bill set to be released today contains a provision that will compensate General Electric quite nicely for its lobbying and media efforts promoting climate legislation.

Section 821(c) requires that, by December 12, 2012, the EPA set standards for greenhouse gas emissions from “new aircraft and new engines used in new aircraft.”

General Electric is the world’s largest manufacturer of commercial and military jet engines, a business worth about $12 billion in annual revenues.

So the Boxer bill would compel airlines and the military, when purchasing new aircraft and new aircraft engines, to purchase more expensive “green” engines made by GE, according to standards set by the current and GE-lobbied Obama administration.

Keep in mind that GE CEO Jeff Immelt is member of President Obama’s Economic Recovery Advisory Council.

More evidence that GE’s political action committee (GEPAC) meant what it said in its August 19, 2009 e-mail to employees:

The intersection between GE’s interests and government action is clearer than ever.

Other payoffs to GE will likely be unconvered as Boxer’s bill virtually requires the purchase of other GE products including wind turbines, solar panels and water products.

Payoff? Wall Street Gives Money to Key Senators

From Politico:

Wall Street has showered nearly $11 million on the Senate since the beginning of the year, and more than 15 percent of it has gone to a single senator: Democrat Chuck Schumer of New York.

Schumer’s $1.65 million take from the financial services industry is nearly twice that of any other senator's — and more than five times what the industry gave to any single Republican senator.

...Of the $10.6 million the industry has given to sitting senators this year, more than $7.7 million has gone to Democrats. Schumer got his $1.65 million; his New York colleague Kirsten Gillibrand took in $886,000; Senate Majority Leader Harry Reid of Nevada received $814,000; Senate Banking Committee Chairman Chris Dodd of Connecticut scored $603,000; Colorado freshman Michael Bennet got $401,000; and Agriculture Committee Chairman Blanche Lincoln of Arkansas— who will have a big say on the derivatives portion of regulatory reform — got $336,000.

Foreign Policy Wakeup Call From the French

After last week's speeches at the UN meetings, French President Sarkozy issued a wakeup call to President Obama and other UN figures....

“We are here to guarantee peace. We are right to talk about the future. But the present comes before the future, and the present includes two major nuclear crises. The peoples of the entire world are listening to what we are saying, including our promises, commitments and speeches. But we live in the real world, not in a virtual one. (emphasis added)

We say that we must reduce. President Obama himself has said that he dreams of a world without nuclear weapons. Before our very eyes, two countries are doing exactly the opposite at this very moment. Since 2005, Iran has violated five Security Council Resolutions. [Ed note: Sarkozy then listed international proposals for dialogue with Iran attempted in 2005, 2006, 2007, 2008, 2009.] I support America’s extended hand. But what have these proposals for dialogue produced for the international community? Nothing but more enriched uranium and more centrifuges. And last but not least, it has resulted in a statement by Iranian leaders calling for wiping off the map a Member of the United Nations. What are we to do? What conclusion are we to draw? At a certain moment hard facts will force us to take decisions.

… Secondly, there is North Korea — and there it is even more striking. It has violated every Security Council decision since 1993. It pays absolutely no attention to what the international community says. Even more, it continues ballistic missile testing. How can we accept that? What conclusions should we draw? …”

3 Days to Review Bill Seems Reasonable to Me..

...But apparently not to Senate Democrats. See below. I continue to wonder "what is the rush"? and like many of my fellow citizens, I prefer that my legislators read and ponder bills before voting on them.

Senate Finance Committee Democrats have rejected a GOP amendment that would have required a health overhaul bill to be available online for 72 hours before the committee votes.

Republicans argued that transparency is an Obama administration goal. They also noted that their constituents are demanding that they read bills before voting.

Democrats said it was a delay tactic that could have postponed a vote for weeks.

The Democrats noted that unlike other committees, the Finance Committee works off conceptual language that describes policies — instead of legislative language that ultimately becomes law, and which the GOP amendment would have required.

Democrats accepted an alternate amendment to make conceptual language available online before a vote.

It's great that conceptual language will be available, but that is not the same as the actual law. What is the problem with reading the bill carefully and thinking about it before voting?

CBO: Medicare to Reduce Benefits Under Senate Health Reform Bill

Congress' chief budget officer is contradicting President Barack Obama's oft-stated claim that seniors wouldn't see their Medicare benefits cut under a health care overhaul.

The head of the nonpartisan Congressional Budget Office, Douglas Elmendorf, told senators Tuesday that seniors in Medicare's managed care plans would see reduced benefits under a bill in the Finance Committee.

The bill would cut payments to the Medicare Advantage plans by more than $100 billion over 10 years.

Source: AP

Obama Open to Tax Breaks for Newspapers

This speaks for itself...

The president said he is "happy to look at" bills before Congress that would give struggling news organizations tax breaks if they were to restructure as nonprofit businesses.

"I haven't seen detailed proposals yet, but I'll be happy to look at them," Obama told the editors of the Pittsburgh Post-Gazette and Toledo Blade in an interview.

Sen. Ben Cardin (D-Md.) has introduced S. 673, the so-called "Newspaper Revitalization Act," that would give outlets tax deals if they were to restructure as 501(c)(3) corporations.

See this earlier post for more information.

Barack Obama ready to slash US nuclear arsenal

Scary stuff...

Obama has rejected the Pentagon's first draft of the "nuclear posture review" as being too timid, and has called for a range of more far-reaching options consistent with his goal of eventually abolishing nuclear weapons altogether, according to European officials.

Those options include:

• Reconfiguring the US nuclear force to allow for an arsenal measured in hundreds rather than thousands of deployed strategic warheads.

• Redrafting nuclear doctrine to narrow the range of conditions under which the US would use nuclear weapons.

• Exploring ways of guaranteeing the future reliability of nuclear weapons without testing or producing a new generation of warheads.

The review is due to be completed by the end of this year, and European officials say the outcome is not yet clear. But one official said: "Obama is now driving this process. He is saying these are the president's weapons, and he wants to look again at the doctrine and their role."

The move comes as Obama prepares to take the rare step of chairing a watershed session of the UN security council on Thursday. It is aimed at winning consensus on a new grand bargain: exchanging more radical disarmament by nuclear powers in return for wider global efforts to prevent further proliferation.

President Obama on ACORN

When questioned by George Stephanopoulos today about ACORN, the president responded:

STEPHANOPOULOS: How about the funding for ACORN?

OBAMA: You know, if -- frankly, it's not really something I've followed closely. I didn't even know that ACORN was getting a whole lot of federal money.

He would not commit to cutting funding for ACORN.