Boston Fed president Eric Rosengren, “with a straight face” talks about how the FED can affect the economy with nominal interest rates at zero:
I’ve called this talk “How Should Monetary Policy Respond to a Slow Recovery?” My answer to that question is: vigorously, creatively, thoughtfully, and persistently, as long as we have options at our disposal. And we do have options, despite having pushed short-term rates to the zero lower bound.
We think the FED’s options have been whittled away like the Black Knight’s in the Monty Python Movie:
Besides the obvious things the healthcare bill does (artificially increasing demand for healthcare services while causing the supply of healthcare services to fall: INCREASING PRICES), here are a few less known points:
• Page 22: Mandates AUDITS of all employers that self-insure!
• Page 29: Admission: your health care will be rationed!
• Page 30: A government committee will decide what treatments and benefits you get (and, unlike an insurer, there will be no appeals process)
• Page 42: The “Health Choices Commissioner” will decide health benefits for you.
• Page 50: All non-US citizens, illegal or not, will be provided with free healthcare services.
• Page 58: Every person will be issued a National ID Health card.
• Page 59: The federal government will have direct, real-time access to all individual bank accounts for electronic funds transfer.
• Page 65: Taxpayers will subsidize all union retiree and community organizer health plans (read: SEIU, UAW and ACORN).
• Page 72: All private healthcare plans must conform to government rules to participate in a Healthcare Exchange.
• Page 84: All private healthcare plans must participate in the Healthcare Exchange (i.e., total government control of private plans).
• Page 91: Government mandates linguistic infrastructure for services; translation: illegal aliens.
• Page 95: The Government will pay ACORN and Americorps to sign up individuals for Government-run Health Care plan.
• Page 102: Those eligible for Medicaid will be automatically enrolled: you have no choice in the matter.
• Page 124: No company can sue the government for price-fixing. No “judicial review” is permitted against the government monopoly. Put simply, private insurers will be crushed.
• Page 127: The AMA sold doctors out: the government will set wages.
• Page 145: An employer MUST auto-enroll employees into the government-run public plan. No alternatives.
• Page 146: Employers MUST pay healthcare bills for part-time employees AND their families.
• Page 149: Any employer with a payroll of $400K or more, who does not offer the public option, pays an 8% tax on payroll.
• Page 150: Any employer with a payroll of $250K-400K or more, who does not offer the public option, pays a 2 to 6% tax on payroll.
• Page 167: Any individual who doesn’t’ have acceptable healthcare (according to the government) will be taxed 2.5% of income.
• Page 170: Any NON-RESIDENT alien is exempt from individual taxes (Americans will pay for them).
• Page 195: Officers and employees of Government Healthcare Bureaucracy will have access to ALL American financial and personal records.
• Page 203: “The tax imposed under this section shall not be treated as tax.” Yes, it really says that.
• Page 239: Bill will reduce physician services for Medicaid. Seniors and the poor most affected.”
• Page 241: Doctors: no matter what specialty you have, you’ll all be paid the same (thanks, AMA!).
• Page 253: Government sets value of doctors’ time, their professional judgment, etc.
• Page 265: Government mandates and controls productivity for private healthcare industries.
• Page 268: Government regulates rental and purchase of power-driven wheelchairs.
• Page 272: Cancer patients: welcome to the wonderful world of rationing!
• Page 280: Hospitals will be penalized for what the government deems preventable re-admissions.
• Page 298: Doctors: if you treat a patient during an initial admission that results in a readmission, you will be penalized by the government.
• Page 317: Doctors: you are now prohibited for owning and investing in healthcare companies!
• Page 318: Prohibition on hospital expansion. Hospitals cannot expand without government approval.
• Page 321: Hospital expansion hinges on “community” input: in other words, yet another payoff for ACORN.
• Page 335: Government mandates establishment of outcome-based measures: i.e., rationing.
• Page 341: Government has authority to disqualify Medicare Advantage Plans, HMOs, etc.
• Page 354: Government will restrict enrollment of SPECIAL NEEDS individuals.
• Page 379: More bureaucracy: Telehealth Advisory Committee (healthcare by phone).
• Page 425: Government will instruct and consult regarding living wills, durable powers of attorney, etc. Mandatory. Appears to lock in estate taxes ahead of time.
• Page 425: Government provides approved list of end-of-life resources, guiding you in death.
• Page 427: Government mandates program that orders end-of-life treatment; government dictates how your life ends.
• Page 429: Advance Care Planning Consult will be used to dictate treatment as patient’s health deteriorates. This can include an ORDER for end-of-life plans. An ORDER from the GOVERNMENT.
• Page 430: Government will decide what level of treatments you may have at end-of-life.
Robert J. Samuelson has a good article at the Washington Post on some of the Illusions of Cost Control. He makes a pretty good point about politics in this country: We ALWAYS take the easy/obvious way out:
There’s a parallel here: housing. Most Americans favor home ownership, but uncritical pro-homeownership policies (lax lending standards, puny down payments, hefty housing subsidies) helped cause the financial crisis. The same thing is happening with health care. The appeal of universal insurance — who, by the way, wants to be uninsured? — justifies half-truths and dubious policies. That the process is repeating itself suggests that our political leaders don’t learn even from proximate calamities.
Argument 1: The uninsured use expensive and ineffective emergency rooms for primary care. Once they’re insured, they’ll have regular doctors. Care will improve; costs will decline.
A study by the Robert Wood Johnson Foundation found that the insured accounted for 83 percent of emergency-room visits, reflecting their share of the population. After Massachusetts adopted universal insurance, emergency-room use remained higher than the national average, an Urban Institute study found. More than two-fifths of visits represented non-emergencies. Of those, a majority of adult respondents to a survey said it was “more convenient” to go to the emergency room or they couldn’t “get [a doctor's] appointment as soon as needed.” If universal coverage makes appointments harder to get, emergency-room use may increase.
Argument 2: Insuring the uninsured will dramatically improve the nation’s health and thus decrease healthcare costs.
Medicare’s introduction in 1966 produced no reduction in mortality; some studies of extensions of Medicaid for children didn’t find gains. In the Atlantic recently, economics writer Megan McArdle examined the literature and emerged skeptical. Claims that the uninsured suffer tens of thousands of premature deaths are “open to question.” Conceivably, the “lack of health insurance has no more impact on your health than lack of flood insurance,” she writes.
How could this be? Possible explanations include: (a) many uninsured are fairly healthy — about two-fifths are age 18 to 34; (b) some are too sick to be helped or have problems rooted in personal behaviors — smoking, diet, drinking or drug abuse; and (c) the uninsured already receive 50 to 70 percent of the care of the insured from hospitals, clinics and doctors, estimates the Congressional Budget Office.
Here’s the bottom line on healthcare cost control:
Unless we change the fee-for-service system, costs will remain hard to control because providers are paid more for doing more. We have to change the provider INCENTIVE! Just giving people free health insurance makes the problem worse. Healthcare providers will be able to continue doing more and getting paid more because there will be NO INCENTIVE for consumers to shop for the best prices OR control their own costs!
The U. S. Geological Service issued a report in April 2008 that only scientists and oil men knew was coming, but man was it big. We have plenty of oil right here within the borders of the United States. The report was an updated one to the old 1995 version on how much oil was in the area of the western 2/3 of North Dakota, western South Dakota, and extreme eastern Montana known as the “Bakken”. The Bakken is the largest domestic oil discovery since Alaska ‘s Prudhoe Bay and has the potential to eliminate all American dependence on foreign oil. The Energy Information Administration (EIA) estimates it at 503 billion barrels. Even if just 10% of the oil is recoverable… at $107 a barrel, we’re looking at a resource base worth more than $5..3 trillion.. “When I first briefed legislators on this, you could practically see their jaws hit the floor. They had no idea..” says Terry Johnson, the Montana Legislature’s financial analyst…
The problem is the environmentalists won’t let us drill for it and the foreign oil producers don’t want us to access it either. Whose side are they on – the terrorists? Hmmm….
Update: the US Geological Service report referenced above refers to 3.65 billion barrels of recoverable oil —not 503 billion…
In the president’s SOTU last night, he said regarding health care:
But if anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors, and stop insurance company abuses, let me know.
Here is a simple approach that will work:
- A. ELIMINATE ALL EMPLOYER PAID HEALTH INSURANCE and group rates
- B. ELIMINATE ALL INTERSTATE OBSTRUCTIONS TO SALE OF HEALTH INSURANCE
- C. CAP MALPRACTICE LAWSUITS
- D. INCREASE THE SUPPLY OF HEALTH CARE PROVIDERS.
Part A. will:
- because all workers will be required to pay for 100% of their insurance out of their own pocket, they will have shop and negotiate for the lowest insurance rates.
- remove the disparity between what the self employed pay for insurance and what regular, previously employer-subsidized workers pay.
- Just as self-employed workers presently do, to keep their insurance premiums low, all workers will negotiate larger deductibles, giving them a strong incentive to question and negotiate the charges of their healthcare providers…driving down costs.
Part B. will:
- remove in-state and regional monoplies of insurance companies … increasing competition and driving down rates.
Part C. will:
- drive down the cost of insurance since legal fees that need to be paid by that insurance will be less.
Part D. will:
- make health care providers have to reduce the charges for their services because they have to compete for business with more providers.
This 4 point approach will accomplish the goals the president outlined, but it requires real change, the kind of change that Mr. Obama’s special interest backers (like unions and banksters) will not support. McCain had a proposal in his campaign to tax the employer paid part of health insurance, but the special interests and Mr. Obama shouted it down. McCain ran a poor campaign and deserved to lose, but this proposal was on the right track. Too bad, Obama’s offer for real change is a farce…
A female Democratic lawmaker in footage released Sunday said Congress could pass healthcare if female lawmakers “sent the men home.”
“We go to the ladies room and the Republican women and the Democratic women and we just roll our eyes,” she said. “And the Republican women said when we were fighting over the healthcare bill, if we sent the men home…” at which point she was interrupted by loud applause.
“You know why? I’m not trying to diss the men but I’m telling you it’s the truth that every single woman there has been responsible for taking care of a [relatives] and so we think we can find a common ground there,” she said.
Boy, they sure are getting desperate.
If you are underwater on your home loan and can’t afford to make the mortgage payment, give the TBTFs the keys rather than “cooperate” with them. You are better off AND the TBTFs are then forced to write down the value of your mortgage on their asset list. This helps the country, in the long run. As Denninger argues, while commenting on this NYT piece, the current extend and pretend policy is designed to hide the TBTFs financial problems -NOT TO HELP YOU!
This is the reason for “HAMP” and all of the other silliness. It is not to “protect” homeowners, it is to prevent banks from having to recognize punishing losses that, in point of fact, they should have to recognize due to their own idiotic lending practices.
Treasury knows this – that their entire “TARP” recapitalization and “stress test” game was nothing other than a sham intended to pump confidence so that these institutions could issue stock into the market and try to “rebuild” their balance sheets.
If this didn’t actually hurt the public I wouldn’t care. But it does severely damage the public in multiple ways, specifically:
- These “modification” programs in the general sense do not and cannot lead to sustainable mortgages for the vast majority of homes at risk. The reason for this is simply that the person who bought the house did so at a radical premium to what they could actually afford. That “premium” was there as a consequence of intentional speculative activity and outright fraud in underwriting that pumped “home values” – premium that has now disappeared and cannot come back by anything short of more fraud! Therefore these “homeowners” cannot be “saved” – any change that simply reduces payments but doesn’t get rid of the negative equity problem only extends and increases the damage ultimately done.
- A huge percentage of the people trapped in these loans are cajoled or outright threatened into doing things that are severely against their own interest. I hear daily of people who have raided 401ks and IRAs to try to remain in their homes and make these “trial payments” or participate in other similar schemes. Retirement accounts are privileged in a bankruptcy and cannot be taken; it is essentially NEVER the correct thing to do to raid such an account to try to prevent a foreclosure or bankruptcy filing! This sort of underhanded “suggestion” occurs all the time and in my opinion constitutes raw predatory conduct for which there should be felony legal sanction – but of course there isn’t.
- The artificial propping up of home prices severely damages those Americans who would like to buy a house but cannot afford one at the present price. If you do not own a car, you obviously want prices on cars to be low, not high. The same applies if you don’t currently own a house – you want prices low, not high. The only people who benefit from prices that are pumped up out of whack with fundamental values are those who lent money at bubble prices and will lose that money if prices contract, along with those who build more houses at bubble prices and thus skim off unreasonably large “profits.”
The power is still with the people, we just have to wake up and do the right thing as individuals for ourselves. The right thing is to take full advantage of the law of the land and to ignore pressure and threats from the TBTFs that your credit will be damaged if you don’t work with them. The truth is this: YOUR CREDIT IS ALREADY DAMAGED AND IT’S TIME TO BEGIN THE REPAIR PROCESS! Get yourself back on track, forget about government sponsored loan modification farces. Jacking around with the TBTFs only postpones the inevitable – for you and for them…
This list provides a brief but we know, incomplete description of the corrupt deals for special treatment of SOME states for their senator’s support of the Obamacare takeover of 17% of the US economy. If these deals are not unconstitutional, we need to amend the constitution so that they are.
The Weekly Standard:
The Democrats are irresponsibly and disingenuously claiming that the bill would cost $871 billion over 10 years. But that’s not what the CBO says. Rather, the CBO says that $871 billion would be the costs from 2010 to 2019 for expansions in insurance coverage alone. But less than 2 percent of those “10-year costs” would kick in before the fifth year of that span. In its real first 10 years (2014 to 2023), the CBO says that the bill would cost $1.8 trillion — for insurance coverage expansions alone. Other parts of the bill would cost approximately $700 billion more, bringing the bill’s full 10-year tab to approximately $2.5 trillion — according to the CBO.
In those real first 10 years (2014 to 2023), Americans would have to pay over $1 trillion in additional taxes, over $1 trillion would be siphoned out of Medicare (over $200 billion out of Medicare Advantage alone) and spent on Obamacare, and deficits would rise by over $200 billion. They would rise, that is, unless Congress follows through on the bill’s pledge to cut doctors’ payments under Medicare by 21 percent next year and never raise them back up — which would reduce doctors’ enthusiasm for seeing Medicare patients dramatically.
And what would Americans get in return for this staggering sum? Well, the CBO says that health care premiums would rise, and the Chief Actuary at the Centers for Medicare and Medicaid Services says that the percentage of the Gross Domestic Product spent on health care would rise from 17 percent today to 21 percent by the end of 2019. Nationwide health care costs would be $234 billion higher than under current law. How’s that for “reform”?
Even MoveOn.org says that the bill is “a massive giveaway” to private insurance companies. The CBO estimates that, from 2015-25, private insurers would receive $1.0 trillion in subsidies from the American taxpayer — the insurers’ apparent price for giving up their freedom and being controlled by the government. Congress would mandate that Americans buy the insurers’ product and would redirect massive sums of taxpayer money to make that mandate more feasible. So, if insurance companies are your idea of a worthy object of philanthropy, then Obamacare is for you.
This Obamacare vote is a clear indicator that our country has really taken a turn for the worst. Can we undo this? Can we get these bums out of office now? Any incumbent, Republican or Democrat who voted for any two of these three measures: the .700 trillion TARP, the $.787 trillion Pork Stimulus or the $2.5 trillion Obamacare … should be removed from office.