More on budget & healthcare

In a previous blog, I wrote that we need to focus on budget cuts to help balance the budget. This means a reduction in military spending by 30%, and reducing Social Security retirement benefits. The military, Social Security and Medicare/Medicaid make up a little more than 60% of the US federal budget. My concern about reducing Medicare/Medicaid outlays is because of the amount of people unemployed. This translates to loss of medical insurance for several reasons. When this happens, people turn to emergency rooms for either primary medical care, or even housing. This hurts state, city and county budgets, as many hospitals are financed through these governments.

Now of course budget cuts go along with letting the Bush tax cuts expire, and raising the gas tax a dime per gallon.  I’m not suggesting this will fix all problems, and I’m open to different ideas (limiting or eliminating the mortgage interest deduction for example), but relying on budget cuts to simply balance the budget will strain state budgets further. We’ve had the Bush tax rates in place for years, along with cuts to interest/dividends tax rates, and we’ve not been able to produce anything near a balanced budget.  I’ve heard the argument many times that raising taxes on the upper income brackets will impact the “job creators”. As I drive around Roseville, I notice how the parking lots at Rosedale and Target are packed. My guess is that the parking lots aren’t packed with people making over $500k per year. I think a great question to people opposed to trying to increase government revenue is: What will generate more economic activity, 10 people making $1 million per year, or 200 people making $50k per year? While these two will naturally exist in a free market, I have a hard time believing that the impact of paying an income tax rate of 39% versus 35% on income over ~$380k will destroy job creation. Raising the gas tax will cause incomes across the income spectrum to be involved in helping to balance the budget.

Anyway, states have been forced to cut budgets too, and naturally medical services have been cut to help balance state budgets. One area this impacts is preventive medical services, especially for people who are mentally ill. As I mentioned above, when people lose medical insurance, the emergency room becomes the default insurer. Emergency rooms are costly parts of a hospital, and are more costly than running a clinic. So a result of the slow economy is that there has been an increase in mentally ill patients coming to emergency rooms. The web link below is to a report describing this issue.

http://www.msnbc.msn.com/id/45790987/ns/health-mental_health/#.TvlEMvKx4mE

While this report isn’t scathing, I think it supports the idea that we’re seeing a negative impact of state budget cuts on mentally ill people and local hospitals.

Currently the list of plausible GOP presidential candidates is shrinking, with Ron Paul, Newt Gingrich and Mitt Romney being the top three, based on news reports I’ve seen. Of these three, according to their websites, only one of them mentions how Medicare is currently funded; rather all three address reform. I don’t see how taking the time to reform healthcare policy will help the immediate need for emergency rooms seeing the increase in mentally ill patients. But the bigger issue I see with the promises these three are making is that the immediate priority is repealing the Patient Protect and Affordable Care Act (PPACA), which with the exception of the individual mandate, is a more free-market policy than Medicare, attempts to finance itself, and actually covers people better than the current laws have set up.

So if it bothers you that your current premiums and state or local taxes are increasing, you can expect more of it. If you also oppose PPACA, then I ask you to consider what the alternative is? As states and localities cut budgets, hospitals and clinics will either need to find funding elsewhere, or they will reduce services.

My suggestion is that we write our legislators or support politicians who in the near term will work to keep Medicare and Medicaid from cuts but also support targeted budget cuts I listed above. Would this require us to pay more in taxes? Yes. Will the economy be impacted? I have a hard time believing it. Medicare and Medicaid taxes are monies spent here in the US. Emergency rooms (and homeless shelters) will see some reprieve, or at least hopefully won’t see more increases in demand. It seems to me that preventing ER visits will cost us less in our health insurance premiums and local taxes.

I’m not really surprised by much these days. I think a line from the movie Christmas Vacation sums it up well.
Eddie: You surprised to see us, Clark?
Clark: Oh, Eddie... If I woke up tomorrow with my head sewn to the carpet, I wouldn't be more surprised than I am now.
Do you believe a major hospital would refuse ER services to people? If their budgets become so constrained, I wouldn’t rule it out. Do you want that? Would you be surprised if you heard that on the evening news?

6 Weeks

6 Weeks

What were you doing 6 weeks ago? It’s kind of hard to remember if you just sit and ask yourself. It was August 31^st. State Fair time. The end of the summer. I’d say in the past 6 weeks I’ve gotten a lot done, though I’m not sure what it is. Painted a few rooms, put together some closet organizers, got some stuff done at work.

But why is 6 weeks a relevant time to blog about? Because 6 weeks from now is the deadline for the Stupid Committee to agree upon recommendations to fix the US budget problems. My guess is that 95% of the people out there don’t know who is on the Stupid Committee. The best known is probably John Kerry. One sad reality is that 4 of the members of the Stupid Committee were on the President’s Debt Commission, and they all voted against its recommendations. I think this panel is designed to fail.

And when I say fail, I don’t mean that they won’t come to a compromise. They very well might come to a compromise, but I think it will be like the MN legislature’s compromise with Gov Dayton. Instead of finding true budget and policy reform, they’ll come up with some way to continue to defer paying our bills.

Here’s the funny part. They can all win with their ideas. They’re politicians – when questioned they won’t give a straight answer anyway. If they support something that has some of their {insert ridig failed ideology}, it’s not the end of their careers. They’ll get re-elected anyway. So why are they afraid to put their necks on the line? A recent AP report indicated they haven’t made much progress. We didn’t need the AP to tell us that; it was a forgone conclusion they’d be at a standstill at this point. But here’s the best part (better than the aforementioned (thank you Dan Simmons for that word) funny part). They can support a compromise, but vote against it when it actually goes to Congress for a real vote. I mean it’d be nice if they’d at least pretend to care by passing something in six weeks. Sooner is better, because then it gives Congress more time to not look at it.

Our best hope unfortunately lies in Wall Street. If the markets respond negatively to inaction, hopefully they will become more willing to comrpomise. The reality is tax rates will have to go up, and not just on the “rich”, probably on the middle class too. Military spending will have to see significant cuts. Gas taxes may have to go up. Social Security benefits may have to be cut. Obamacare may have to stay as it is.

So please, please, please, write the members of the Stupid Committee. Don’t go to your own representative – he/she doesn’t care. Email them. They are:

Patty Murrary - http://murray.senate.gov/public/index.cfm?p=ContactMe

Max Baucus - http://baucus.senate.gov/?p=contact

John Kerry – http://kerry.senate.gov/contact/

James Clyburn – https://clyburn.house.gov/contact-me

Xavier Becerra – http://forms.house.gov/becerra/webforms/issue_subscribe.html

Chris Van Hollen – http://vanhollen.house.gov/Contact/

Jeb Hensarling – http://hensarling.house.gov/contact/

Dave Camp – http://camp.house.gov/Contact/ ->This guy appears to only want to hear from his constituents. Look up zip code in MI and tell him not to be so picky because he’s part of the super committee.

Fred Upton – https://upton.house.gov/Contact/default.aspx -> Another MI guy who thinks he’s above having to be responsible to his constituents. Remind him that he poops like the rest of us, so he has to listen to you.

John Kyl - http://kyl.senate.gov/contact.cfm

Pat Toomey – http://toomey.senate.gov/?p=contact

Rob Portman – http://portman.senate.gov/public/index.cfm/contact?p=contact-form

Let them hear your voice. They have 6 weeks.

A local conservative blogger recently wrote a blog titled "I like big trucks and I cannot lie". This blog is a counterpoint to the article.

The article is available at http://katiekieffer.com/2011/08/15/i-like-big-trucks-and-i-cannot-lie/


The first point is that we (the US) must drill for more oil. Let's clarify a few things about oil. First, the US is the world's third largest producer of oil (source wikipedia). More than Iran, Canada, Mexico, Venezuela, or Iraq. Second, the US is by far the largest consumer of oil. But here's the topping on the ice cream: the US has the 14th largest proven reserves of oil.

Back to drilling for oil. There are advancements in drilling techniques of which I know nothing about, but oil production can increase if we are willing to pay more for oil. Higher oil prices, which translate to higher gas prices, guarantee more oil because it is becomes economically feasible to drill miles below the oil floor when we pay $100/barrel.

So we are supposed to produce more oil, even though we have the 14th largest reserves in the world, and we are already third in production. As an analogy, Warren Buffet is the third richest person in the world, Babe Ruth is the third leading home run hitter of all time, the third  fastest mile ran of all time is 3:46, and the world's third largest economy is China. Third isn't bad. That doesn't mean we shouldn't push for first. But oil production isn't sky-rocketing, not like the consumption of it.

So we can drill for more oil, fair enough, but most of the cheap oil is already found. The US will be drilling for off-shore oil, and tapping more expensive forms of oil. Additionally, we are depleting our reserves, and have been doing it faster than other countries. It's difficult to argue that gas prices will go down.

The next claim of this joke of a blog is that environmentalists are "behind the times", suggesting that the environmental movement is disconnected from reality. I'm wondering where the disconnection from reality was last summer when the largest oil spill in the world's history happened in the Gulf of Mexico. In my previous paragraph, I pointed out that offshore oil will continue to be a larger portion of the oil we recover. so while I don't expect there to be more oil well blowouts, I do expect that the US to do what the blogger bemoaned: enforce regulations that will better prevent oil spills.

The next concern is that President Obama's proposals for 54.5 mpg for cars doesn't rely on "natural, free-market" competition, and the "technology requires time to develop and become affordable". Unfortunately, that's the opposite of what's been happening in the US. Gas prices have been rising and the efficiency isn't much higher than it was in 1980.

I can go on. I've had the concern for years that the US needs to take relevant steps to decrease gas consumption. This blog and attitude it enforces does not accept the realities of the US oil reserves, worldwide oil consumption increasing, the environmental impact of oil consumption, and how the free market has not produced cheap gas. I actually don't think increasing CAFE standards is the best way to  address gas prices. I think increasing the gas tax will do a better job of it. Instead of relying on auto-makers to make more efficient cars, consumers can decide which car to drive based on their driving needs and ability to afford it. It can be argued that high consumer taxes impact poor people, but in the last 10 years, we've already endured large increases in gas prices. Also, it's hard to argue that there will be a negative impact to the oil industry by taxing gas more. Oil is one of the most precious natural resources on the planet. Rather than cheering on to drill for more oil that's running out and believing the foolhardly lie that gas prices will fall significantly, I think we need to accept the economic reality that there's a limited amount of oil underneath the planet, and that it's not going down in price. The better approach is to start re-working our society and economy to not rely on cheap oil.

Thursday Night Ramblings and Thoughts

So first it was the 9/11 Commission. Next it was Bowles-Simpson. Then it was the "Gang of Six". Now it's the super-committee. Too often these committees' recommendations are ignored. Do we honestly believe that by November this group will find a way to cut nearly $1.5 trillion from the budget for the next ten years? I'm not suggesting we don't support this decision, but realistically, I don't think Congress will support their decisions.

In Minnesota, the Gov. Pawlenty used unallotment to balance the state budget a while back. This included $1.4 billion not paid to schools. This money has not been paid back yet. The recent budget agreement between Dayton and the Republicans delays another $700 million to schools. Based on the current economic situation, I don't see the MN budget finding a surplus anytime soon. This unallotment and borrowing from a future budget effectively works as a tax cut. The state is claiming it's delaying this payment, but never does. So taxpayers are not on the hook for paying this. It's a de facto tax cut.

Out for a while

It's been a while since I've written anything to bore people with, but I'll get something out soon.

It'll likely have to do with the rapture, elections, gay marriage, budget deficits, and my normal rant.

Thanks for hanging with me. More bad opinions on the way.

Word of the day, 3/27/2011

Morass.

1: marsh, swamp

2 a : a situation that traps, confuses, or impedes <a legal morass> b : an overwhelming or confusing mass or mixture 

Word of the day, 3/26/2011

Philistinism. 

a : a person who is guided by materialism and is usually disdainful of intellectual or artistic values 

b : one uninformed in a special area of knowledge