Ronald Reagan Was No Conservative: He's Responsible For The Healthcare Mess

Treatment regardless of ability to pay is all his fault, along with a number of other things:

The Emergency Medical Treatment and Active Labor Act (EMTALA) is a U.S. Act of Congress passed in 1986 as part of the Consolidated Omnibus Budget Reconciliation Act (COBRA). It requires hospitals to provide care to anyone needing emergency healthcare treatment regardless of citizenship, legal status or ability to pay. There are no reimbursement provisions. Participating hospitals may only transfer or discharge patients needing emergency treatment under their own informed consent, after stabilization, or when their condition requires transfer to a hospital better equipped to administer the treatment.

EMTALA applies to "participating hospitals." The statute defines "participating hospitals" as those that accept payment from the Department of Health and Human Services, Centers for Medicare and Medicaid Services (CMS) under the Medicare program. However, in practical terms, EMTALA applies to virtually all hospitals in the U.S., with the exception of the Shriners Hospitals for Children, Indian Health Service hospitals, and Veterans Affairs hospitals. The combined payments of Medicare and Medicaid, $602 billion in 2004, or roughly 44% of all medical expenditures in the U.S., make not participating in EMTALA impractical for nearly all hospitals. EMTALA's provisions apply to all patients, and not just to Medicare patients.

"In God We Trust" Passed the US House 396-9 on November 1

Even liberals like Nancy Pelosi, Jan Schakowsky, and Barney Frank voted FOR it, along with a boat load of other Democrats and Republicans.

This mostly blue map shows the very few pockets in red which voted against the national motto, as reaffirmed, supported and encouraged by House Continuing Resolution 13:

Here are the nine members of the US House who just had to vote AGAINST it, all Democrats except for Amash, last pictured (MI-3): Ackerman (NY-5), Honda (CA-15), Stark (CA-13), Judy Chu (CA-32), Scott (VA-3), Johnson (GA-4), Cleaver (MO-5), and Nadler (NY-8):

Consumers Increase Spending in 2011 From Savings and Social Security Tax Holiday

Net real retail spending looks set to come in up 2.9 percent in 2011 over 2010.

Per the data here from the Census.

Average monthly retail and food expenditures in 2010 came to $363 billion per month, or $4.4 trillion overall.

Through October 2011 average monthly retail and food expenditures are running at $389 billion per month, or $4.7 trillion annualized.

That's a 6.8 percent increase so far, or about $26 billion more per month.

Less inflation running at 3.9 percent, the net real increase appears to be 2.9 percent.

$billions monthly

Unfortunately, about $14 billion of the $26 billion nominal monthly increase could be attributed to a reprieve on Social Security taxation of 2 percentage points on employee compensation running at an annualized rate of $8.3 trillion as of October. That extra money in paychecks is simply being spent.

Where did the remaining $12 billion per month come from?

From savings.

The savings rate has plummeted since January, from a rate of 4.9 percent to 3.5 percent. In January we were saving nearly $47 billion per month, but now only $33 billion, a difference of $14 billion per month.

Add the pernicious work of inflation on top of all that, and the rosy scenario of increased consumer spending doesn't look so good after all, especially since incomes are stagnant to falling. Hours worked year over year are flat, and real average hourly earnings overall are down 1.6 percent, according to the BLS here.

When the Social Security tax holiday expires on December 31, there will be less money available to spend, automatically. Robbing from Social Security for such temporary gains is a gimmick, but don't underestimate the politicians' and the voters' eagerness to repeat it under these grim circumstances. They'll take the money, even if it means saving less, because they need it.

Interest on Federal Debt Topped $454 Billion in Fiscal 2011

So says the US Department of the Treasury here.

With fiscal 2011 receipts running at $2.3 trillion according to Treasury here, interest payments now represent 20 percent of federal revenues. Since we're spending $1.5 trillion more than we presently took in, you could say that almost a third of this deficit spending is interest payments.

Total US government debt is running at approximately $15 trillion, so an interest payment of $450 billion per fiscal year implies an interest rate of about 3 percent.

Double that interest rate to 6 percent and interest payments balloon to $900 billion and 40 percent of current revenues.

Mark Steyn recently had some unhappy, pornographic thoughts about that, here:

R.I.P.

[W]ere interest rates to return to their 1990-2010 average (5.7%), debt service alone would consume about 40% of federal revenues by mid-decade. That's not paying down the debt, but just staying current on the interest payments.

And yet, when it comes to spending and stimulus and entitlements and agencies and regulations and bureaucrats, "more more more/how do you like it?" remains the way to bet. Will a Republican president make a difference to this grim trajectory? I would doubt it. Unless the public conversation shifts significantly, neither President Romney nor President Insert-Name-Of-This-Week's-UnRomney-Here will have a mandate for the measures necessary to save the republic.








(source)

Tax Reform Should Come Off The Table: Spending Cuts Only Are Acceptable

To Sen. Reid and Pres. Obama, tax reform means tax increases.

So fuhgeddabowdit. 

Automatic cuts to defense and social spending it should be.

GDP, Q3 2011 First Report, at 2.5 Percent; Personal Savings Drop Big

See the full pdf at the Bureau of Economic Statistics, here.

Personal savings fell a full percentage point, or $116 billion, while personal disposable income went up $17 billion, matching exactly the increase in personal outlays of $133 billion.

Get it? People are saving less and spending any increases just to get by because of . . . increasing prices.

A falling savings rate, now at 4.1 percent, is woefully inadequate. A person saving at that rate making $50,000 per year would need over 12 years to save just 6 months' expenses.

Tariffs on Imports at 100 Percent Wouldn't Be Enough to Cover Federal Spending

Here are the import numbers (rounded) for the last three years for all goods and services, according to the latest revision from the US Census Bureau, here:

2008 = $2.5 trillion

2009 = $2.0 trillion

2010 = $2.3 trillion.

Federal revenues in 2008 equaled $2.5 trillion, coming mostly from income and social insurance taxes, as well as a more modest contribution from corporate and excise taxes.

To completely replace that income from tariffs would imply a 100 percent tariff, which is unimaginable.

Presumably at least some of our trade with the world is reciprocally fair, excluding it from such a punishing rate.

At some point along the tariff scale as you rise toward that extreme level, otherwise off-setting import revenues will fall as retaliatory tariffs are imposed by the global marketplace.

A 25 percent tariff on Chinese imports, as The Donald recommends, in 2010 could have generated only in our dreams something around $91 billion in revenues.

At a minimum, a vigorous reliance on tariffs for federal revenues today implies a much reduced size of the federal state.

'Social Security's Long-Term Shortfall Grows About $1.2 Trillion Annually'

And by "long-term" the meaning is about 18 years.

So said Dennis Cauchon late in the spring for USA Today, here:

Social Security's long-term shortfall grows about $1.2 trillion annually — a sign of an imbalance between the number of young workers and older beneficiaries, according to the Social Security trustees' annual reports. The $21.4 trillion unfunded liability represents the difference between all taxes that will be paid and all benefits received over the lifetimes of everyone in the system now — workers and beneficiaries alike. This is the measure corporations and insurance companies use to assess financial adequacy of their retirement programs.

What this means is that this year and every year for the next two decades or so social security will be in the red annually to the tune of about $1.2 trillion, and government will have to borrow the funds to pay for that annual deficit spending.

Put another way, the social security scheme is a Ponzi scheme writ large. The pool of early fools putting up the dough for the few early, and very lucky, investors has now dried up so much that the program will run in deficit mode annually going forward, just like the rest of government has for years.

This will add significantly to the national debt, driving up interest payments on that debt and severely crimping the government's other spending options without massive injections of new revenues, aka higher taxes on the people.

In the short term, the $2.6 trillion in the social security trust fund (intragovernmental debt) would disappear in relatively short order under this analysis, say roughly in just over two years from now, except that the monies are invested in a mix of shorter and longer US Treasury securities which will reach maturity over a more or less longer period of time and thus force the program into deficit much sooner because redemptions are barred, compounding the pressure on the availability of funds for current year government spending.

Sen. Rob Portman Will Shill for Gang of Six Taxes on Gang of Twelve

There's Portman on July 21 giving aid and comfort to the Gang of Six enemy while the US House is trying to push the only true plan to cut spending:

The bipartisan “Gang of Six” proposal on the deficit continues to draw attention from rank-and-file senators, even as House leaders come out in opposition to any plan that includes new revenues as part of a deal.

“It's a step in the right direction,” Sen. Rob Portman, R-Ohio, who was budget director under President George W. Bush, told us on ABC’s “Top Line” today. “It's the one effort out there where you've got Republicans and Democrats coming together. And I think it could actually mesh well with what I think is the ultimate solution here with regard to the debt limit increase.”

While many Republicans are pushing back against the notion of including revenues as part of any deal, Portman said tax reform must be built in to a bipartisan solution.

“We've signed up to the concept that we do need a bipartisan approach here, and it's got to deal with tax reform, and it's got to deal with the long-term problem -- which is sustainability of these entitlement programs,” Portman said.

Post-War Doubling Times For Federal Spending: Every 9 Years at 8 Percent per Year

US government spending on World War Two reached a crescendo in 1945 at $107 billion, after which spending reset to a post-war low of $36 billion in 1948.

Within 4 years, spending had doubled to $72 billion, in 1952.

It took more than 14 years for federal spending to double again, sometime between 1966 and 1967, when spending shot up on the Vietnam War and the Great Society programs under President Johnson. Spending in 1966 was $135 billion.

By 1974, just 8 years later, spending had nearly doubled again to $269 billion.

Under Jimmy Carter it took just over 5 years for spending to double again, sometime between 1979 and 1980. Federal spending reached $504 billion in 1979.

By 1987, 8 years later, federal spending had doubled again to $1 trillion under Ronald Reagan.

Federal spending did not double again until sometime between 2001 and 2002. It took more than 14 years to do so going through the Bush 41 and Bill Clinton presidencies to the presidency of Bush 43. Federal outlays reached $1.9 trillion in 2001.

Which brings us down the pike to today, when spending is projected to finish the fiscal year at $3.8 trillion, doubling in the 10 years since 2001.

That's 7 doublings in 63 years, or a doubling of US government spending every 9 years since World War Two.

According to the Rule of 72, a doubling every 9 years implies an interest rate of 8 percent per year.

In other words, federal spending has an effective rate of built-in spending increases at 8 percent per year every year since 1948.

When you consider that real GDP growth from 1930-2000 has been 3.5 percent and only slightly better than half that in the decade just past, our spending is completely out of step with reality.

(data from usgovernmentspending.com)

What Baseline Budgeting Does to Spending in Ten Years

If you listen to Larry Kudlow, you know that he believes that baseline budgeting contributes only as much as 4 percent to the annual increase in spending built-in to the process.

Many others assert the number is more like 7 percent.

Let's see what 7 percent does to a budget over ten years.

Obama submitted a budget for fiscal year 2012, which was defeated in the Democrat-controlled Senate 97-0 in the spring. It called for $3.729 trillion in spending for the fiscal year 2012, set to begin in October 2011.

Let's assume his spending proposal had passed both houses of Congress without objection, and then add 7 percent to the total spending to get the next year's budget, also passed without objection, and so on for ten years.

Here are the ten annual increases, in billions of dollars: 261, 279, 299, 320, 342, 366, 392, 419, 448, and 480. The built-in new spending after ten years totals $3.606 trillion. (Coincidentally, to keep the AAA bond rating from Standard and Poor's, its Sovereign Ratings Committee was looking for $4 trillion in spending cuts today as a first step. It didn't get them.)

That gives you a total budget in 2022, ten years later, of $7.335 trillion, just $123 billion shy of a doubled budget in 10 years, and just what you should expect under the rule of 72.

This kind of doubling is fairly typical for actual spending for any ten year period you pick in the last forty or fifty years, and explains how we got into the pickle in which we presently find ourselves.

So spending increases are built-in at about 7 percent, and Kudlow is underestimating.

Growth to pay for these increases, however, is not built-in, and can never be. It's highly unpredictable and for that reason alone baseline budgeting should be abandoned.

But there's another reason. There hasn't been a single decade since the 1930s where average real growth has come even close to 7 percent, as Louis Woodhill has shown here. Our best decade was way back in the 1940s, when real growth measured 5.57 percent. We haven't done as well since.

There's only one word for what passes for America's spending policy: insanity.

We haven't ever been able to afford what we've been doing.

Republicans Should Have Demanded Far More Than Reid's Cuts Because They're the Last

(Have you noticed that just like with ObamaCare, it's the Senate calling the shots on everything?)

Senator Reid's cuts are the last spending cuts anyone's going to be seeing for the foreseeable future.

From TheHill.com here:

“The numbers relative to the problem are minimal, but the directional change is huge,” said Rep. Jeb Hensarling (Texas), the chairman of the House Republican Conference.

Yeah, right.

The opposite is more like it. The next fight will be over the 2012 fiscal year budget, and Republicans will die on that hill, after which it's a long way to the election.

Democrats will dig in, having compromised on the Bush tax rates extension, new revenues in the debt ceiling debate, and spending cuts. Their attitude will be that it's time for Republicans to give in on something.

More spending cuts before the election aren't going to happen.

Let's Index the Federal Budget to Existing Housing Prices

Existing housing prices are down roughly 32 percent from the highs (see here). Many are underwater on their mortgages, but people are making do, muddling through, because they have no other choice.

Why can't government do the same?

A 32 percent cut to federal spending currently at $3.819 trillion dollars would be $1.22 trillion. That would reset the budget to $2.6 trillion.

Freeze the federal budget there and index it to the Case-Shiller housing price index. When housing recovers in value, the feds can have a similar raise. If housing values continue to decline, the feds get a similar cut.

Linking the federal budget to the health of the American dream?

Sounds fair to me.

Maybe those SOBs might do their jobs for a change.

The Tea Party Has Already Made The Democrats Blink on Tax Increases

"They’ve moved in other words, the Senate Majority Leader, far in their direction."

-- George Will, here

An excellent point, the premise of which is that politics is the art of the possible.

In point of fact not just once, either. The extension of the Bush tax rates from this crowd of left wing fanatics was no mean achievement.

The Tea Party speaks for many in wanting the deficit spending to stop. In view of the fact that deficit spending and enthusiasm for taxation are the cornerstones of the opposition, getting Democrats to relent on taxes late last year and again now is pretty good for just 20 or 30 fiscal extremists in the US House.

It should remind us all that imagination is important to political success. Michael Steele didn't have any in early 2010 when he opined that Republicans probably couldn't take back the House. Boy was he mistaken.

It would be a mistake to stop imagining that we can reduce spending. The only caveat is whether Obama  possesses enough character to refrain from defaulting on the debt. If he doesn't and does default, it could be blamed on overreaching by the Tea Party.

At a minimum, Obama's persistent extreme rhetoric threatening such a default should trouble more people. Even left of center types here and there are upset by his behavior, which is a good sign. It is nothing short of disgraceful that a president should talk this way, and it gives everyone over the age of forty pause.

I say that's a tactic, not a promise. Obama is going outside the experience of the enemy, one of Alinsky's rules.

The Tea Party should keep pressing the issue. And Republicans need to buck up and go on the rhetorical offensive. The farthest they should go is a clean debt ceiling increase of $1 trillion, which buys more time but doesn't give the president the space he wants, and needs.

The next crisis date is October 1, by which time we must have a budget agreed to by the Democrats to fund the next fiscal year. 

Another Voice Wrongly Claiming 'The Money is in the Middle'

Brian Wesbury at The DC, here:

What most people don’t realize is that the U.S. has gorged so much (boosting spending from roughly 18% of GDP in 2000 to 24% of GDP today), that the only way to pay for it is to tax the middle class. ...

The money is in the middle. And the only way our politicians can get it is to follow Europe’s lead and institute a national sales tax or Value-Added Tax (VAT). This is the elephant in the room that is never talked about. Those who are using the debt ceiling in an attempt to cut spending are actually saving the middle class from tax hikes — not the millionaires and billionaires.


It's a frequently repeated claim that the money is in the middle, but it's just not true, no matter how often  it is said.

If all the (reported) income in America were poured into a giant hour glass, you'd have to start it and wait about twenty minutes to begin to visualize how all the money is actually distributed.

A snapshot taken at that moment would show $5.7 trillion in adjusted gross income still in the top, and $2.8 trillion in AGI in the bottom. The kicker is that 35 million tax returns split what's on top, while the remaining 105 million tax returns, 75 percent of the total, divvy up what's on the bottom.

The money's definitely not "in the middle."

It's hard to get agreement on what's middle class in America, especially since it is a conceit of our society that everyone is middle class. The rich aspire down to it to escape notice, the poor up to it to escape the indignities of dependence.

But no matter what smoke anyone tries to blow up your bottom, the biggest single pile of money remains with the top 25 percent:

Top 10 percent = 14 million tax returns (10 percent of the total) = $3.9 trillion in AGI
The next 25-10 percent = 21 million tax returns (15 percent of the total) = $1.8 trillion in AGI

The next 50-25 percent = 35 million tax returns (25 percent of the total) = $1.7 trillion in AGI
The bottom 50 percent = 70 million tax returns (50 percent of the total) = $1.1 trillion in AGI.

It's ridiculous to think that a VAT tax will somehow generate huge piles of new tax revenue on the backs of the middle class.  The VAT will hurt them just like Social Security and Medicare taxes hurt them because it's regressive, not because they have a lot of untapped money they're going to be parting with.

Considering how much tax evasion there already is in America of the unreported income variety, variously estimated (here at $2 trillion, resulting in a tax gap of $500 billion), a VAT will fail simply because it will drive more and more of the economy underground where cash is king and credit cards, checks, invoices and receipts are anathema. Think of it as the inverse of how the rich escape high rates of taxation, for example by shifting to capital gains away from ordinary income. A quicker way to become Greece I cannot think of.

Setting money free to move around openly is the key to an effective tax policy. But bringing it out into the open where it can be captured and taxed depends on perceptions of fairness.

As long as too many people think some people should pay taxes at a higher rate just because they have more, we're not going to get there. 

Why Isn't Sen. Reid's Bill DEAD ON ARRIVAL IN THE HOUSE?

Well, why isn't it?

The Republicans haven't been doing this right at all. They continue to act like earnest young men who believe if they keep acting, keep trying, keep changing, keep talking, they'll somehow convince the upper chamber to move.

Instead all they've proven is that they don't mean business.

They pass a budget which gets tabled in the Senate, A BUDGET WHICH ISN'T BALANCED, and assumes a revenue shortfall of $1 trillion in fiscal 2012.

Then they suddenly feel compelled to pass a debt-ceiling measure to cut spending, which gets tabled in the Senate. The time to cut spending and balance the budget was in the budget phase, not the debt-ceiling phase. Had they passed a balanced budget, they could have legitimately claimed to have no need even to address the debt-ceiling issue. 

Now they're going to pass an alternative to the debt-ceiling measure, which is going to get tabled in the Senate, after which the Senate will finally pass something of its own.

The House should declare it dead on arrival, pass a simple debt-ceiling increase of, say, $1 trillion in response, adjourn and call it a day.

Let the Senate table that. Or Obama veto it. Either way, the LACK OF SERIOUSNESS of the Dems and this regime would finally be exposed.

That's how you play chicken, and win. 

Democrat Intransigence: To Go On Spending As If There Were No Problem

Jack Kelly notes here that revenues have never been enough to match spending, going all the way back to WWII:

The problem is spending. Outlays rose from $1.863 trillion in FY 2001 to an estimated $3.819 trillion in this fiscal year, 105 percent in 10 years. The federal government now consumes 24 percent of the gross domestic product. (Since 1903, federal spending has averaged a hair over 20 percent of GDP). ...

Since World War II, federal tax revenues have averaged 18 percent of GDP. Income tax rates varied widely during this period, and there were both booms and busts. But tax revenues never exceeded 20.6 percent of GDP. That seems to be a ceiling -- no matter what economic conditions are or how high rates are raised -- and it suggests the budget cannot be balanced unless spending is held below 20 percent of GDP.

So tax hikes can't close the budget gap. But they could clobber the moribund recovery, making the deficit worse.

Democrats want Republicans to accept real tax hikes in exchange for mostly phantom spending cuts. Because they are unwilling to do so, many journalists describe Republicans as "intransigent." But the truly intransigent, it seems to me, are those who want to go on spending as if there were no problem.

Spending Cuts, Not Default, Are What Obama and Democrats Fear, and Loathe

American news organs appear to be incapable of the accurate formulation.

You won't find it put better anywhere than here:

Without agreement by August 2, the U.S. government will have to impose immediate spending cuts of about 44 per cent to stave off a default on its huge debts.

House Defiant, Passes Cut, Cap and Balance 234-190

Presidential candidates Bachmann and Paul were among nine Republicans who voted against the plan because it raises the debt ceiling:

The measure, to be taken up by the Senate next, would impose statutory spending caps to wring $5.8 trillion in unspecified savings from the government over the next decade — twice the $2.4 trillion debt ceiling increase that is allowed. Nondefense appropriations face a 30 percent cut from what the Congressional Budget Office now projects for the same period, and even SSI (Supplemental Security Income) payments for the elderly and disabled are exposed to across-the-board sequesters to enforce the reductions.

Read the rest here.

Will Government Be Short $134 Billion In August as Bob Brinker Claims Today?

He made the claim on his radio show, "Money Talk." See the recap here.

Others, as for example here, maintain there's plenty of cash flow to pay for everything critical both in law and for creditworthiness:

"The Daily Treasury Statement for June 30—which any American, including the president, can look up on the U.S. Treasury Department’s website at this link—says the government took in $196.994 billion in revenue during the month ... more than enough to pay not only all Social Security benefits and veterans benefits and programs for the month, but also, on top of that, the interest on the federal debt, Medicare, Medicaid, the Indian Health Service, Temporary Assistance to Needy Families, all federal workers’ salaries, federal workers’ insurance benefits, Justice Department programs, and Defense Department venders.

"The combined costs for all of these federal expenditures in June was $195.502 billion.

"That means that out of the federal government’s $196.994 billion in revenue in June, the government would have had a surplus of $1.492 billion after it had paid the interest on the national debt, plus all Social Security benefits, veterans’ benefits, veterans’ programs, Medicare, Medicaid, the Indian Health Service, Temporary Assistance to Needy Families, federal workers’ salaries, federal workers’ insurance benefits, Justice Department programs, and Defense Department vend[o]rs."


Isn't it the potential of cutting off the cash cow for extraneous government spending which really has liberals like Brinker in a fit? After all, he called Senator Harry "The War is Lost" Reid of Nevada "a good man" more than once on his show. Brinker loves the guy.

How is it that Brinker can assert, as he did today, that advocating against raising the debt ceiling, as certain Republicans are doing presently, disqualifies one for the presidency when Obama actually voted against raising the debt ceiling in 2006, along with all the rest of his Democrat colleagues in the Senate? The Roll Call vote is here.

The minions of liberals in the federal workforce might actually have to THINK going forward and prove their competence for their exorbitant salaries by PRIORITIZING spending for a change if Republicans muster the courage to force them TO DO THEIR JOBS and leave the debt ceiling where it is. Raising the debt ceiling is the true default: It means you can't pay your bills without more borrowing.

Maybe Bob Brinker is afraid the Democrats are not really up to it. They certainly haven't been in the past. We're still waiting for a budget proposal from the Senate. The Senate under Reid hasn't passed one in over two years.