No Runny Eggs

In his weekly radio address, President Obama shocked the American public with the results of a study that will dramatically change not only the health care discussion but in fact, will likely change the foundation of all economic theory more than anything since Adam Smith identified “The invisible hand”:

Obama released a study today by the White House Council of Economic Advisers that concluded that many of the nation’s 27 million small businesses don’t have the bargaining power of corporations and as a result pay as much as 18 percent more for employee health insurance plans.

Oh my goodness!  Say it ain’t so!

Someone, or a company that buys a few of something is paying more for each of those items than someone who buys many of those same items? 

With this new information I have to wonder whether the local burger joint we frequent might be paying more for their hamburger than McDonalds? 

Is it possible that I pay more for raw chicken wings than the folks at Buffalo Wild Wings?  Is it true even if I buy my wings at Sam’s Club?  If so, I’m clearly being gouged!

Warning, extreme sarcasm alert.

I have to say that I am a bit skeptical of the report that President Obama references.  After all, the White House Council of Economic Advisers is led by Christina Romer who we all know from my previous posts, has research that says that tax cuts are more effective than government spending in stimulating the economy and that stimulus programs always fail for a host of reasons.  Clearly, with President Obama declaring “Mission accomplished” on the economy just this week, Ms. Romer’s research is highly suspect!

We now return you to our normal level of sarcasm.

I’d like to say that I’m somehow shocked or just surprised at the lack of economic understanding that Obama has.  I’d like to say that, but clearly when Obama oversees a  government that thinks paying twice the going rate of the local grocery store for ham purchases is OK, I’m not.

There’s lots of bad news today for President Obama.  Gallup’s recent polls show that by any measure, President Obama’s policies  are now being considered a failure by the American people:

• By 49%-47%, those surveyed disapprove of how he is handling the economy, a turnaround from his 55%-42% approval in May. The steepest drop came from conservative and moderate Democrats.
• By 50%-44%, they disapprove of how he is handling healthcare policy.
• A 59% majority say his proposals call for too much government spending, and 52% say they call for too much expansion of government power.
• Expectations of the economy’s turnaround are souring a bit. In February, the average prediction for a recovery was 4.1 years; now it’s 5.5 years.

Some are referring to this sudden drop and his chips all in approach to passing health care reform, as being the President’s Waterloo, the moment at which he wins no more.  I’m betting however, that with his enormous ego and narcissism, if asked, President Obama would refer to this as his Arnold Schwarzenegger moment.  If questioned about whether he might need to change his position on some of these issues I have no doubt the President would answer, “I’ll be Barack!”

For those who have read this blog for a while, I’ll give you a moment to put your teeth back in and pick yourself up off of the floor.

Ready?

In a speech to AARP about the proposed national health care plan, Joe Biden said:

“And folks look, AARP knows and the people with me here today know, the president knows, and I know, that the status quo is simply not acceptable,” Biden said at the event on Thursday in Alexandria, Va. “It’s totally unacceptable. And it’s completely unsustainable. Even if we wanted to keep it the way we have it now. It can’t do it financially.”

For once, I absolutely agree with Joe.  The current course is unsustainable.  We need to make changes soon or we’re going to be in a whole heap of trouble!

Think I’m just some two bit blogging hack who’s just throwing another opinion to the ether?  Don’t think my opinions is that valuable?  Well, don’t trust me then, trust the head of the Congressional Budget Office. 

In his testimony to Congress and in his blog, the Director of the CBO said:

the federal budget is on an unsustainable path, because federal debt will continue to grow much faster than the economy over the long run. Although great uncertainty surrounds long-term fiscal projections, rising costs for health care and the aging of the population will cause federal spending to increase rapidly under any plausible scenario for current law. (emphasis mine)

That’s right, shocking isn’t it.  The federal budget is on an unsustainable path.  The CBO goes on to explain what the problem with the budget is….take one guess at what is causing the unsustainable problem:

Measured relative to GDP, almost all of the projected growth in federal spending other than interest payments on the debt stems from the three largest entitlement programs—Medicare, Medicaid, and Social Security. For decades, spending on Medicare and Medicaid has been growing faster than the economy. CBO projects that if current laws do not change, federal spending on Medicare and Medicaid combined will grow from roughly 5 percent of GDP today to almost 10 percent by 2035. By 2080, the government would be spending almost as much, as a share of the economy, on just its two major health care programs as it has spent on all of its programs and services in recent years.

And this is before putting another $1.5 Trillion minimum of additional costs into the budget for the national health care program!

Later in his speech, Joe went on to lie again telling the folks that they would be able to keep their existing health plan if they wanted:

“They’ll be a deal in there so there’s competition, so what you’ll have in there is you’ll have the ability to go in there and say, ‘Now look, this is the policy I want. This is the one,” Biden said.

Someone should get Joe a copy of the House bill or a subscription to Investors Business Daily.  If he had either, he would note the following:

When we first saw the paragraph Tuesday, just after the 1,018-page document was released, we thought we surely must be misreading it. So we sought help from the House Ways and Means Committee

It turns out we were right: The provision would indeed outlaw individual private coverage. Under the Orwellian header of “Protecting The Choice To Keep Current Coverage,” the “Limitation On New Enrollment” section of the bill clearly states

“Except as provided in this paragraph, the individual health insurance issuer offering such coverage does not enroll any individual in such coverage if the first effective date of coverage is on or after the first day” of the year the legislation becomes law.

Joe did have one last comment that I agree with him on:

“We’re going to go bankrupt as a nation,” Biden said.

Yes, Joe.  If we continue down this path and are lucky, we may only go bankrupt as a nation.  My bet is that if we follow the advice of you and yours, we’ll commit national suicide!

Massachusetts is the state whose health care model that is being used for much of the Democrat’s plan.  When Massachusetts plan was proposed, it was supposed to cost the State a few hundred thousand dollars each year.  It is now costing more than twice what it was proposed to cost.

From the NY Times:

BOSTON — A hospital that serves thousands of indigent Massachusetts residents sued the state on Wednesday, charging that its costly universal health care law is forcing the hospital to cover too much of the expense of caring for the poor.

The central charge in the suit is that the state has siphoned money away from Boston Medical to help pay the considerable cost of insuring all but a small percentage of residents. Three years after the law’s passage, Massachusetts has the country’s lowest percentage of uninsured residents: 2.6 percent, compared with a national average of 15 percent.

Sound Familiar?

One of the state’s reimbursement rates to Boston Medical, dropped from $12, 476 in 2008 to $9,323 by 2009, the suit says.

Folks, this is one way that government rations.  By reducing their payments to providers, for no reason other than they can, providers begin reducing the number of patients they will see or reduce the care the patients get.  Is it lost on the D.C. crowd how many providers no longer accept Medicaid patients?

State officials have suggested that Boston Medical could reduce costs by operating more efficiently. The state has also pointed out that the hospital has reserves of about $190 million, but Tom Traylor, the hospital’s vice president of federal and state programs, said the reserves could only sustain the hospital for about a year.

Translation:  You have money, therefore you can afford to get paid less or pay more to be a part of the program.

If the State is so good at identifying where cost reductions can be attained, why is it that they have a budget shortfall of $5 Billion?  Can’t they state turn their own folks inward to find the waste and inefficiency in the State’s budget?