The Affordable Health Care Act is Dishonest, Starting with the Individual Mandate

Previously posted at Redstate.com as

The Mandate Raises Prices, It Doesn’t Reduce Them

April, 2012

Why do we believe the individual mandate is necessary to pay for “universal” health care?

The Administration has told us repeatedly that the mandate is necessary to help hold down the cost of health insurance. Nobody has objected yet; we should have.

The mandate is supposed to hold down costs by forcing everybody to buy health insurance whether they want to or not. Supposedly, fifty million (or ten or twenty or thirty or forty million) additional people added to the books of various insurance companies will carry a significant part of the health cost burden for the rest of “us,” but it really can’t work that way.

First, let’s consider what makes health insurance expensive.

It’s primarily the health care it pays for (a Homer Simpson moment there). In fact, the government has decreed that 80% to 85% of each premium dollar must be paid out in benefits. And of course health care itself is expensive because of all the facilities, time, equipment, education, training, research, and expertise it requires. That leaves 15% to 20% available to the insurance company for its fixed and variable costs, and for profit. (And don’t forget that the more covered benefits that are included in the insurance policy, the more it costs.)

Then consider the ten to fifty million people who will be forced to buy insurance.

Those who are healthy, strong, perhaps young, those people will definitely be helping to pay our bills. But how “fair” is that? Someone who doesn’t really need something is being forced to pay for it, just so our cost will be lowered. The obvious bet is that enough healthy people will be added to the rolls to significantly reduce the total cost of underwriting both them and the rest of us. There are about 255,000,000 of us who are already insured, and about 51 million more who are in the pool and considered to be “uninsured.”

That 51 million breaks down this way: About 4 million are the above referenced “young and healthy.” Seven million are “temporarily  uninsured,” that is, uninsured for less than a year, most likely between jobs. Another 10 million are non-citizens, and 17 million are already eligible for government sponsored insurance but have chosen to refuse it.

Who will be subsidized?

That leaves only about 13 million who are truly Americans in need of help buying health insurance. We are told that they want to buy insurance but can’t afford it or are uninsurable. They’ll be subsidized. So actually, their premiums will be paid by us, as taxes or as premium increases or surcharges, indirectly adding to our health care costs, and offsetting some or all of the savings provided by the “healthy” insured. While we’re at it, we might as well add the 10 million uninsured non-citizens back into this number, because it’s reasonable to expect that almost all of them will also be subsidized. So we will end up subsidizing or outright paying for the insurance of 23 million people, while forcing another 28 million to buy insurance they don’t want and maybe don’t really need.

Who will pay?

Looking at those groups a bit differently, we have only four million who will actually help reduce insurance premium net benefit costs, because they’re the only ones who are likely to use a below-average amount of health care resources. All the rest can be reasonably expected to access health care at average or above-average frequencies and quantities, so we are apparently expected to believe that by forcing four million healthy people who presently self-insure to buy insurance, we will make insurance rates significantly lower for the other 302 million. It isn’t possible. (I say significantly because one doesn’t go through an upheaval like ObamaDon’tCare for a trivial improvement.)

As a prominent cable news network host likes to say, “Let’s look at the numbers” for the answer. For simplicity, let’s say that the average health insurance plan premiums will be $100 per year, even though we know it will be many times this amount; it’s just a way to make it easier to state as a percentage at the end. Now let’s assume that the four million healthy people who will be insured actually have only 10% of the risk that the rest of us have, meaning that their actuarially true premium should be $10, yet they will be paying $100. That leaves about $90 from each one of them to apply to our premiums.  So $90 times 4 million equals $360 million. Divide that by $100 (average premium cost), and that is enough money to pay for the insurance of 3.6 million others. From above, we need to subsidize or fully pay for insurance for 23 million people. That means we have to find the money for 19.4 million someplace else, and that means higher taxes or higher insurance premiums or surcharges for the rest of us.  That’s right.  We will all pay. I’ll show you. I’ll even suggest how much more it will be.

Putting taxes aside for a moment, a bill for $100 times 19.4 million is $1.94 billion. Divide that by everybody else, and it means $1,940,000,000 divided by (306,000,000-23,000,000), or $1,940 divided by 283, or $6.86 per person. Put another way, insurance premiums would have to go up about 7%, not down at all. (This is a rough approximation, of course, because it leaves out several factors that would add even more expenses, and it doesn’t adjust for those in the group who could pay for part or all of their own premiums.) And if we try to use taxes to pay the additional cost instead of putting a surcharge on each premium, it’s even more for each taxpayer because there are fewer taxpayers to share the total cost, which itself wouldn’t change.

So the mandate does not, in fact, make the Unaffordable Health Insurance Act affordable.

It makes health insurance more expensive. What else does it do? It guarantees health insurance companies 50 million new customers, and each of them will add to a company’s profits. Now, I am not an anti-business person, not even an anti-insurance person (as long as the customer is not forced to purchase), so don’t take this that way. I am a free market person, the freer the better, and I believe in profits. Even I can see that the mandate, rather than being a vehicle installed to eliminate “free riders” and make them pay their “fair share,” was in fact a vehicle to get the insurance companies on board with UHIA and convince them to forgo their Harry and Louise advertisements, the ones that demolished HillaryCare twenty years ago, by guaranteeing them more profits through more customers.

Other considerations in the UHIA.

We are told it eliminates the “free rider” problem–folks who use emergency services in place of standard palliative or preventive care. But we aren’t told how much that costs every year. Using the low numbers I used to estimate above, it would have to cost  (and be therefore available to be saved) 51 million times $100, or $5.1 billion for the new plan to be a net saving for the country as a whole, and my estimating number is probably only 10% or less of the real number.  So we’re really faced with the need for a present cost of $51 billion before ObamaDon’tCare even deserves consideration.

We are told, “everyone will be insured.” Only they won’t. There will still be those who self-insure but can’t pay for their own care, and there will still be those who just won’t participate. Even in Massachusetts, where almost everybody was already insured before the advent of MassCare, that has proven to be true. In the end, we’ve turned our health care system on its head to insure about 20 million more people, some of whom don’t even want it. Is the goal to insure those people, or to make their necessary health care affordable? Whichever it is, there are much better and less expensive ways to accomplish it than what we’ve done so far.

The new system is full of incentives for employers to terminate employee health insurance plans–high expenses on the horizon and a low penalty for non-compliance. Top-end plans are mandated; no low-budget plans are available because everybody must have the same coverage that the richest of us can pay for. This is a recipe for destruction of the private health insurance market, leading directly to a Medicare-like government controlled plan in which, eventually, little care is available. And it has already eliminated some customer-friendly, low-cost, Medicare Advantage plans in states like Arizona.

Built-in provider (doctor) reimbursement restrictions are counter-productive as well.  They tend to reduce the number of providers, yet universal coverage increases the need for more providers.

One type of health insurance that is true insurance, “Major Medical,” is severely restricted in the UHIA (I believe–I haven’t read the thing, either). Instead, we will be forced to buy what is really a health maintenance plan, which is sure to increase usage and demand, therefore putting even more strain on the system.

If the program were as good as the Administration claims, businesses would be petitioning to get into it, rather than get out of it.

What happened?

Even though the data behind this analysis weren’t available at the time, we knew all this before Obama was elected, anyway. When he said we could add 40 million people to the insurance rolls without paying “a single dime” more in premiums, we knew he wasn’t being truthful. At least, those of us who don’t believe in the Tooth Fairy Free Lunch Delivery Service knew it. Some closed their eyes to what they knew was wrong as they “hoped” it would magically become right. We the people made our decision based on several false premises that we chose not to examine closely.  We voted for hope but we got hype instead.

Congress failed to represent all the people in its effort to give special attention to some of the people. And the criticism for lack of curiosity and skepticism that I accuse the press of below doubly applies to the Republicans and honest Democrats in Congress in 2009 and 2010.

The free press failed to notice that it was being fed a fanciful story and was simply regurgitating it on the people instead of doing any real analysis. Or it intentionally withheld facts from the public in order to help Barack Obama win his election. I’m not an expert in the health care field by any means, and I was able to write this article within the span of less than a week, in my spare time. More than a few paid reporters should have conducted this same exercise (only with much more exacting research and in much more stringent detail) while ObamaDon’tCare was being debated, whether my conclusions are right or wrong. It’s a Constitutionally protected professional industry and has no reason to be in the pocket of any administration or party. It simply wasn’t done; the press became PR flacks for the Democrat President. The fact that the research still hasn’t been conducted is disgraceful.

What can be done?

No matter what the Supreme Court rules in June, the Obama Administration  and the Democrat Congress needs to be replaced in November, and the UHIA must be fully repealed. It does nothing that it claimed to do, and it gives the government power over many things that will be harmful in both the long and the short run. To leave any part of it in place would be a mistake.

Then, with calm deliberation and without hysterical claims that women and minorities will die in the streets if something isn’t passed NOW!, some changes to health care and health insurance law can be considered.  Multi-state policies can be expedited. Individual, stand-alone Major Medical policies can be authorized. Tort reform can be passed. Deregulation of what must and what simply may be covered by policies can be debated. Formation of groups to buy group insurance policies can be facilitated, similar to credit unions. Allow, but don’t mandate, extended coverage of adult children on parents’ policies with proper underwriting protocols. If coverage of pre-existing conditions is desired (although it isn’t really insurance, it’s welfare), provide a means whereby the insurance industry as a whole can cover the individual insurance company’s excess benefit costs that result, with government backup as a last resort if necessary.

Most importantly, any and all of these changes should be passed individually, in small, understandable laws, not as part of a gigantic tidal wave of health-related legislation that drowns the health care industry in red ink and paperwork and “must be passed in order to be read.”

Addendum:

Beyond what I wrote above, providing insurance to cover free riders, even if they pay for the insurance themselves, doesn’t reduce health care costs at all.

The ObamaDon’tCare claim is that because they would have insurance, they’d no longer be a drain on the “free” emergency services provided by hospitals and emergency rooms. This doesn’t stand up to scrutiny.

The real emergencies will still go to the same places and still use the same resources. Instead of being “paid for” at wholesale rates by the hospital (perhaps to receive some reimbursement from the community), the service will be charged to the insurance company at benefit rates.

Some non-emergencies will still go there, too. Same results.

Other complaints will go to other doctors. Again, paid at benefit reimbursement rates. But these ailments were never that expensive to treat in the emergency rooms, anyway. They just sat in the waiting room until a doctor was available, were seen for a few minutes, treated if necessary, then sent home, with the treatment “cost” either paid by them or eaten by the hospital or E-care facility.

But… what is seldom mentioned is that when people have insurance that covers something, they tend to get the “something” fixed more often than when they don’t have the insurance. Also, there now may be some hesitation by some people to ask for free service at a hospital, but there is no stigma attached to being treated and paying with an insurance card. This all means that ODC will increase demand, and we know that increased demand results in higher prices overall.

The AHCA may be many things, but it isn’t a vehicle to reduce health care costs from free riders.

Postscript:

I was advised by a friend that the term ObamaDon’tCare is just too flippant and distracting for a serious discussion.  I used the term for a specific reason--President Obama himself has decided to adopt the position that he likes the AHCA to be called ObamaCare, because he says, "I do care."  I disagree.  He doesn't care, or he would have accepted some input from Republicans and dissenting Democrats before forcing the AHCA through Congress.  Rather than use the more grammatically correct but stuffy "ObamaDoesn'tCare," I chose ObamaDon'tCare to acknowledge the effectiveness of the Honey Badger don't care videos.

The Special Report We’d Like to See

02/08/2012

A breaking news story, ripped from the pages of Redstate.com:

Bret Baier on Fox News Channel’s Special Report reported today that

”Congressional Budget Office figures indicate the deficit is increasing at a slower pace.  The CBO says the federal government accumulated a budget deficit of 349 billion dollars in the first four months of the fiscal year 2012.  That is 70 billion less than the shortfall reported for the same period last year.  The deficit for the year is still predicted to be almost 1.1 trillion dollars.”

At that point, he threw the page he was reading over his shoulder and declared, “I’m sick and tired of reading c**p like this.  Give me a break!  We’re reporting about rearranging g*dd*m deck chairs while the f***ing Titanic is in full dive mode.  What the h**l difference does it make that we’re going over the cliff at 99 mph instead of 100?  The splatter will be just as big.  Instead of worrying about the speed of our demise, ladies and gentlemen, you better be worrying about just who is driving the bus.  The guy driving it now needs to learn that the steering wheel turns right as well as left.  If he’d do that just a little, maybe we’d avoid the cliff.  But it looks to me like we need a new driver; he doesn’t have a clue where we’re headed, what the brake is for, or how to use it.  He’s driving on cruise control with his legs crossed at the ankles, listening to his own speeches on his iPod, f’gawd’s sake.

My sincere apologies for the mixed metaphors.”

At this point, the camera started shaking (as if the cameraman had lost control) and Charles Krauthammer could be seen rolling in with a hypodermic needle in his hand.  The show went to break, and when it came back Geraldo Rivera was sitting in the host chair, muttering something about “(I thought that weed I gave him was the GOOD stuff.  Sorry, Bret.  Maybe not the best time to get in touch with your inner Howard Beale.)  [aloud]  Speedy recovery, Buddy.  And to the rest of you, Welcome now to Geraldo’s World, LIVE FROM LAS VEGAS!”

My apologies to any who are offended by Bret’s language; it’s just so not like him, but I did clean it up, after all.


The news report that he read was real.  The rest of this is just wishful thinking.

We do big things.

(Previously posted at Redstate.com)

We do big things.


There are no caps in that title.  No exclamation point.  None was present in the president’s State of the Union speech as he delivered those lines last week.

President Obama is supposed to be The Great Orator, but lately he seems to be missing the mark.  Why in the name of William Jennings Bryan did he wind up his address with a reference to the heroic story of Brandon Fisher and his “small business,” Center Rock?

To remind you, Fisher and his company envisioned, designed, manufactured, delivered, and operated the equipment that rescued 33 miners trapped in Chile last year.

President Obama quoted a Center Rock employee,

    …”We proved that Center Rock is a little company, but we do big things.” 

    We do big things. 

    We are a nation that says…. 

    We do big things.

In doing so, he missed the irony of using that story to support his idea that the US Government “does big things.”  He didn’t specifically say that–he used the royal “We” to recognize the American people–but it was clear from what went before and by his use of “We are a nation…” that he meant “We, the government.”

But Fisher’s is a story of personal enterprise and individual effort; it has nothing to do with government programs and if anything it illustrates what can be accomplished if government gets out of the way.  Had the incident been a different kind of emergency, one that required the effort of any industry that is highly regulated, perhaps the rescue would never have been completed.

Consider the Deepwater Horizon explosion and oil spill.  Rules and regulations did not prevent the accident but federal government regulation then prevented the states from protecting their own beaches, prevented European allies from helping mitigate the damage with their ships and sailors who were already experienced in and equipped for that kind of situation, and prevented American entrepreneurs just like Center Rock from applying their talents to speed the cleanup.  Instead of doing big things, the Obama administration did every nit-picking little thing it could do to prevent ingenuity from winning the battle.  To this day, it leaves in place a court-rejected moratorium on offshore drilling, or the threat of one, that keeps American oil companies from full recovery.

What “big things” lie ahead?

He asks Harvard to allow the return of ROTC to campus.

He has traveled around the world, and he’ll do so again to make more speeches, and to stand with “those who take responsibility.”  He’ll insist that Iran meets its responsibilities, and “that North Korea keeps its commitment to abandon nuclear weapons.”

He’ll reduce troop strength in Iraq.

He’s going to give us a “21st century government that’s open” and “a government that’s more competent and efficient.”  He seemed to say that he’d do something so that government could regulate salmon better, whether it’s in fresh water, salt water, or a nice fume.  But he wasn’t specific about just what that was.  And he says that “[v]eterans can now download their electronic medical records with a click of the mouse.”  Efficient!  His “administration will develop a proposal to merge, consolidate, and reorganize the federal government.” That is big, but hardly new.

And he’ll

pick projects based on what’s best for the economy, not politicians. 

Within 25 years, our goal is to give 80% of Americans access to high-speed rail, which could allow you go places in half the time it takes to travel by car. For some trips, it will be faster than flying – without the pat-down. As we speak, routes in California and the Midwest are already underway.

Yes, he really had those two sentences back to back.

Enough, already.  Most of these are small-ball items, either essentially insignificant in a grand view of the world, or little white-lie gifts to the cockeyed optimists among us who still believe that a government the size of the combined moons of Jupiter can be made open, competent, and efficient, and that multi-billion-dollar projects can be paid for by eliminating the same waste, corruption and loopholes that paid for the last twenty unwanted government boondoggles.

“Big” in this context does not equal “expensive,” it equals “very important and good for America.”  And to be fair, he did have a few items that might qualify, but he didn’t seem to realize it.  He merely mentioned them and continued on, or qualified them to such an extent that it guarantees failure.  Examples:  Fix Social Security, reduce spending, simplify the tax code, eliminate loopholes and tax preferences, and reduce tax rates.  It’s clear that he either didn’t really mean what he said, or that he intends to stay back and follow while somebody else leads the way, letting them take the arrows from HIS party while doing so.*  He has no intention of leading us anywhere.

But he could, if he really wanted to “do big things.”  Some suggestions:

Cut spending.

“Big” would be to accept the Republican challenge to return to the 2008 budget and go them two better.  Propose the 2006 budget.

Bipartisan effort and openness.

Recognize that the individual mandate in Obamacare is unconstitutional, and that while it is indeed “big,” the law is NOT self-financing, and that a big part of our deficit problem is the result of the fact and the manner it was forced upon us, creating huge fear among businesses that their employee health benefits are no longer under their control.  Join with Republicans and call for its repeal, to be replaced with several smaller, manageable laws covering a lot less ground but hashed out in open session in Congress.  Smaller in size, but bigger in importance.

Cut the deficit and amend the tax code.

Refer to the true results of the Reagan tax cuts–Huge increases in tax revenues, exceeded by huge increases in spending.  Start with one of the deficit reduction commission’s income tax plans.  By following a lower-spending budget (2006) the deficit will quickly start to shrink.

Illegal immigration.

Don’t just talk about it.  Do it.  Work with both parties as he said in his speech.  But don’t insist that every foot of border fence come with concessions to the illegal immigrant lobby.

Social Security.

Lead.  Don’t follow.  And don’t lay down conditions that guarantee failure, because Social Security is a problem that CAN be solved.  With a split Congress, he could actually do something BIG!

I’m sure you can read the speech and come up with more suggestions that are far “bigger” than his.

We Do Big Things!

See.  It’s better in bold, with caps and the right punctuation.  He should have delivered it that way and backed it up with proposals that were BIG.  Instead, he followed it with clumsy aphorisms and glittering generalities.  He came darned close to saying “the future lies ahead of us.”

If President Obama were a truly great orator, that phrase would be household words by now.  It would have joined “Mr. Gorbachev, tear down this wall!” because it would have been followed by important new ideas, and not preceded by everyday boilerplate.  Instead, it’s been forgotten, as his speech will be.

He might as well have closed with, “After all, tomorrow is another day.”

*UPDATE:  This was written before the phrase "leading from behind" was coined by an Obama minion.

Stimulus? We don’t need no stinkin’ stimulus.

(Previously posted with comments, at Redstate.com.  See Author's NOTE below.)

Why another stimulus package would be a mistake

Whether the stimulus package didn’t work, or worked, is still working, worked but then quit working, was too little, too big, needs a second phase, or was juuuust right, is again becoming a matter of discussion among the ruling class.  No, I must amend that.  They are sure that at some level it worked.  For them the only question is how much to expand it and they don’t care much about those other questions.

For us in the country class the questions are more important, because we like to know if and why something works or doesn’t.  You know, so we can decide whether to do it again or not.

I’d like to offer a few ideas and ask some questions about The Stimulus.

What was the stimulus supposed to do?

Jump start the economy, or at least rev it up a little, and “save” jobs and create jobs.

It did none of that very well.  After the appropriation of over $800 billion, with the Administration demanding that it be passed immediately because the situation was dire, official unemployment rates are still at almost ten percent.  A good chunk of it (more than $300 billion) isn’t even in the economy, having not yet been spent for anything.  Forecast economic growth has just been adjusted downward by the Federal Reserve, from over 3% for 2011 to 2.7%.  That estimate is probably optimistic.  But enough of the numbers.

The real point is that a stimulus by definition is a short-term remedy.  It is supposed to work NOW, not next year.  It’s supposed to be, no, it has to be temporary.  If it’s to save jobs, it has to save them NOW.  It can’t be strung out over 2, 3, or 4 years.  Otherwise, it’s just another way for the government to overspend for the Administration’s own pet projects.  Yet, that’s the way the money in this stimulus package has been spent.

There are some requirements for success.

Any stimulus must come from borrowed funds.

No stimulus can work if it has to be paid for by collecting taxes at the same time to replace it.  That is just a game of taking money from one pocket (the taxpayer’s) and putting it in another one (the pockets of favored interests), with a good bit of it taken off the top to pay the bureaucracy.  So a successful stimulus has to be from borrowed funds. Remember this for later.  The idea is that we are borrowing from the future to avert catastrophe now, and we will pay it back after things are stabilized.  We are creating jobs now that will contribute to the growth of GDP now, which helps to repay the borrowed money in the future.  If that isn’t what happens, it doesn’t make sense to borrow the money and pay interest on it.  And the idea of paying for the stimulus by cutting some other program doesn’t make much sense either, even if it moves the spending up from the end of the year to the front.  It’s still moving money between pockets.

Stimulus funds must be spent quickly.

No stimulus can work if the funds that are supposed to be spent are not spent.  In fact, unspent appropriations work against a recovery by creating negative expectations.  They become part of the anticipated debt without contributing to any increase in economic activity.  Public expectation of higher government debt without realization of greater economic activity leads to anticipation of higher future tax collections and/or inflation, which depresses the current economy.

Governments make bad decisions regarding how to spend stimulus money.

They have already prioritized what they thought our taxes were going to be spent on.  Now they’ve appropriated billions of dollar more and they have to decide where to spend it.  The answer ALWAYS is to spend it on the administration’s and Congress’s pet projects:  Green energy projects.  Subsidies paid to individual states to prop up their payrolls, which amounts to subsidies to state employee union members.  Payments to states to cover expenses they can no longer afford, which delays their attempt to solve the underlying problem–excessive spending.  Payments to cities to hire more police or fire or garbage men.  Moving forward purchases of goods and capital improvements that had been planned for later years.  (That one isn’t too bad.  At least we would have something to show for the expenditures.)  The money NEVER goes where a consumer would spend it.

The trouble with these ideas and the others they come up with is that once the stimulus money is gone, they aren’t self-sustaining.  The states and cities still don’t have balanced budgets, corrective changes haven’t been made, and now they have even higher expenses (larger payrolls) and greater deferred obligations (pensions).  Now IF the economy has turned around in a year maybe that’s not too bad, but if it hasn’t it just makes things worse, and the economy is in a downward spiral.

Trusting the country class is the answer.

IF there is a true need to boost the economy, we should keep in mind that we have a consumer economy.  It’s driven by 300 million consumers, and those millions of consumers have more effect on the economy than any one-year infusion of even $600 billion by the government into specific industries, states, or companies.  $600 billion is only $2000 times our 300 million population.  Of course they haven’t even spent $600 billion yet.  Maybe just barely $400 billion.

But–had our government simply given rebates to taxpayers that come to a total of a few hundred billion dollars, the people would have been able to decide where that money would be spent.  It would have stimulated the businesses that the consumers wanted, and ignored the ones they didn’t.  There would be no false support for profligate state or city governments–they’d have to get their own spending under control.  Government worker and teacher unions would face the right questions–do they accept change, or do they accept unemployment?  Cutting edge technology companies would have to convince investors that they were developing a good product, one that people would want to buy.

What’s the theory behind a stimulus?

The theory is that a short-term infusion of a large amount of additional money into our economic system can sustain it past a temporary crisis caused by an anomaly:  The sub-prime mortgage crisis, made either better or worse by TARP funds, leading to the near-collapse of the world financial system and several US financial entities, rising unemployment, the government takeover of two bankrupt car companies primarily at the expense of their creditors, government direction oversight of those financial entities, doubling of the previous annual deficit leading to a runaway increase in the national debt.  Only all that’s clearly not an anomaly.  It’s a whole bagful of mistakes, most of them instigated by government intervention in the economy.  Still, it might be controllable, IF it were just a one-time event.  However, the government’s insertion of itself into the health care industry has guaranteed that deficits will be astronomical by historical standards for the foreseeable future.  Although true-believers might argue that point, sensible people will not.

Our national debt has just reached $13 trillion, while our GDP is in the $14 trillion range.  Debt will soon exceed GDP, perhaps by the end of this year.  For comparison, national debt was less than half that at the end of 2002, and it was less than 60% of GDP.  More interestingly, just one month before the elections in 2008 debt was a full $3 trillion less than it is now.  Debt increased by $4 trillion from January 1, 2003 to October 2008;  it increased almost as much from October 2008 to August 2010–70 months compared to 22 months.  It’s predicted by the Administration to hit $20 trillion within ten years, and it may not take that long.

At this point, anything that increases government debt that isn’t absolutely necessary makes the recovery more remote, the situation worse.  Much worse.  The effect of galloping deficits and mushrooming debt is to destroy confidence in both the government and the economy.  When consumers and producers and employers lose confidence in the economy, they quit buying, cut production, and cease hiring if they aren’t firing.  The only solutions for such deficits and debt levels are Draconian taxes at levels that will kill economic growth, or worse; high inflation as the government monetizes its debt; and/or massive cuts in government spending.  Since massive cuts in spending have never happened in recent history, private expectations are for either or both of the first two alternatives.

Off topic?

Not really.  A stimulus package cannot possibly counter all those negative factors.  The only thing that can is to restore confidence.  In the environment I just described, the single biggest boost to confidence would be delivered by the cancellation of ObamaCare, which won’t happen until Obama leaves office (another boost).  In the meantime, defunding it  would help.  Cut the budget and we cut the need for higher tax receipts.  A good beginning would be to return the unspent stimulus funds back to the Treasury.  Freeze the size of the civilian government workforce, and freeze government pay schedules in place.

If we do that, the future will look better and confidence will start to improve because the government will be displaying fiscal restraint.  The deficit will shrink.  GDP will grow, shrinking it faster.  Eventual inflation will start to look manageable.

And remember what I wrote above–to even have a chance for success a stimulus package must be paid for with borrowed funds.  In this environment, more borrowing would be counterproductive.  The next-to-last thing we need now is for unnecessary expenditures that add to the deficit.  The last thing we need is tax increases that take money out of consumers’ and producers’ pockets for redistribution by bureaucrats.  So no, we don’t need no stinkin’ stimulus.

NOTE:  Some valid points were made by commenters.  A stimulus would work best (if it can work at all) if it came from money "in the bank," rather than borrowing or taxes.  A stimulus has an uphill battle if it follows years of deficit spending--deficit spending is a type of stimulus in itself.  And although it isn't mentioned, ultra-low market interest rates might diminish the stimulative aspect of paying off debt unless the repaid funds are again loaned out quickly--that is not happening today.  Other comments are also informative.

Who says Obama can’t govern?

(Previously posted at Redstate.com in June, 2010, but still very much relevant.)

A response to Vassar Bushmills' scurrilous attack on our duly-elected President

One thing we might all agree on:  He’s doing the best he can.

Now that we’ve dispensed with that–why are we in the mess we’re in today?  Doing the best he can at what? I think the answer lies somewhere along a continuum.

A. He’s incompetent and clueless.  That is, he doesn’t know what he doesn’t know, and even if he did, he wouldn’t know what to do about it.

B. He’s just incompetent.  He’s trying to solve all these problems, he knows something must be done, he just doesn’t know how to do it.

C. He is very competent, but events and the Republicans have conspired against him to make everything he does turn out wrong.  None of his mistakes are his fault–they aren’t really mistakes, they’re good ideas that just haven’t worked because he had to follow eight years of Bush’s failed policies, and he’s stuck with a Congress full of and directed by Democrats who don’t know their should-be-kicked-a**es from leaking oil wells in the Gulf and are no help whatsoever.  Even John McCain isn’t reaching across the aisle these days.  And there are so many disasters happening all at once.  Nobody could keep his attention on more than one at a time.  It’d be like asking a President to both walk and chew gum at the same time.

D. He’s not too concerned about these incidents and developments because he has bigger fish to fry.  He’d prefer that these things didn’t happen, but they’re not that important to him.  He is occupied with a desire to centralize our economy and nationalize key industries.  Or, as Maxine Waters said for him, “socializing” America.

E. He feels serendipity all around him.  Every one of these incidents gives him an opportunity to move the US closer to a centrally-directed economy, and he’s done so.

F. Not only are they serendipitous, he wants to make them last.  Again, he’s been very competent at doing so.  And he’s had help and direction from very powerful, very rich people.

Now, an ordinary optimist would wish that C were the right answer, or if not C, it’s A or B.  In all those cases, things can still be turned around in 2012, and mainly the voters are to blame.  A hard-core optimistic socialist would hope that the answer is D, E, or F, and those would also be the answers given by an average, ordinary pessimist.

But what of us, the great unwashed public, trying to make sense of him without letting our optimism or pessimism take over?

Although A looks like a strong contender, nobody could be that far out in left field, could he?  This is the choice for those who like Obama personally, but can’t stand any of his policies.  It’s actually a pity choice.

B is a possibility, but we must ask ourselves about the probabilities of his making the wrong decision (for the People) every time.  The odds against that must be astronomical.  But this seems to be the answer selected by Vassar Bushmills in his excellent column, Why can’t Barack Obama Govern? I don’t think Vassar considered the odds when he made his choice.  And his predictions later seem to indicate that he truly believed the answer is elsewhere.

C seems to be what Obama wants us to think.  It’s the least objectionable of all the choices, filled as it is with “politics as usual” and “ObamaCompetency.” And it’s the answer that the MSM keeps whispering to us, “Pick C, pick C, C is it,” liberal optimists that they are.

D, E, and F are just the spectrum of the darker side of the Obama presidency.  (THAT IS NOT A RAAAACIST COMMENT!)  People who think he’s a well-meaning socialist vote for D.  They know that what’s really important are the ends, not the means.

E is the “Rahm Emanuel answer.”  Obama is just making sure each crisis doesn’t go to waste.  Vassar’s prediction that in the wake of a Republican avalanche in November, “Obama will unilaterally attempt to seize control of as much of the government as he can, by executive order, and pass it over to the bureaucracy….” fits nicely here, or even with answer F.  [See UPDATE below.]

F is the favorite of the conspiracy theorists.  They say, the only way anybody could be that cold would be on purpose, or if George Soros had his boxers in a vise, ready to apply the world’s biggest wedgie if Barack were to stumble.

In case you didn’t notice, A, B, and C are practically benign compared to the sinister implications of D, E, and F.  Unfortunately, the first three are the least likely answers, given the circumstances and the position involved. Could a clueless dunce be elected President?  Maybe, but highly unlikely unless an element of answer F were also involved.  Again, could anybody graduate from Harvard Law School and come out so pathetically incompetent?  Even if he could, wouldn’t happenstance cause him to choose at least a few good policies?  That’s the problem with B.  As noted, C is the Obama choice, but how likely is it that everybody is conspiring against him?  How likely is it that even our maverick Republican Congresscritters wouldn’t reach across the aisle to help him if they thought one of his policies were at least salvageable?  The appeal of the first three choices is that in all of them, the President is occupied with doing the Peoples’ business for their benefit.  He isn’t trying to advance his own agenda.

That leaves D, E, and F, and all three of them are pretty scary.  That scariness is why so few non-conservatives (and not even very many conservatives) are willing to commit themselves to these propositions.  They all imply that our President cares more about his own ideological agenda than he cares about being a President of all the people, more than he cares about taking care of the Peoples’ business.  That would make him a Congressionally enabled Dictator rather than a President.  Who wants to believe that?

So, you make the choice.  Will you believe your heart (choices A, B, or C) or your own lyin’ eyes (D, E, or F)?  Remember it in November.

UPDATE: Subsequent events have demonstrated that the Obama has behaved exactly as Vassar predicted.  What he can't get passed through Congress he tries to force by executive order.  Given the compliant press and the reluctance of anybody to go to court to stop him (and the reluctance of courts to stop him when they do), he is running circles around the spirit of the Constitution and the laws.

What Obama's Deepwater Horizon Response Tells Us

(Previously posted with further commentary at Redstate.com)

We Should Be Thankful, and So Should Obama 

We have been studying petroleum, intensely, for over 100 years.  We know what it is, how it behaves, and what it can do.  We have many years of experience with it.  There are thousands of people with BS, MS, and PhD degrees in Petroleum Engineering.

Therefore, when a deep-sea well failed in a way that left a gaping hole in a pressurized oil deposit, it shouldn’t have surprised anybody that the oil came out fast, in great quantities, and that it could rather quickly flow through the Gulf of Mexico, perhaps towards our coastline.  We knew that it wouldn’t shut itself off, yet President Obama seemed satisfied to sit back and wait for BP Oil to “handle” the situation.

True, BP did have the most expertise regarding this particular well, but there are thousands of other human resources available to the President who could have helped him set up the task force necessary to keep a tragic accident from developing into the disaster it has now become.  It’s known now that this event isn’t unique–other oil companies in other parts of the world have had even worse accidents.  Yet day after day, week after week, for more than a month, the President did little more than threaten BP while at the same time he allowed BP to set the priorities for whatever mitigating actions were being taken.  Today, near the 50-day mark, he still hasn’t announced anything about any extensive use of government resources to remove the oil from the Gulf water or haul it away.  And BP is doing all the work of capping the well to stop the flow at its source.

Early in the morning of June 10, the June 4 press release was still featured on the White House website.  It mostly covered legal issues, and how there were

federal folks [assigned] to look over BP’s shoulder and to work with state and local officials to make sure that claims are being processed quickly, fairly, and that BP is not lawyering up, essentially, when it comes to these claims.

That’s nice, but it doesn’t prevent any beaches or birds from becoming oil-covered.  Obama mentioned there was lots of boom deployed in Louisiana, but not necessarily in the right places.  He was concerned because “we’ve got limited resources.”  (Sounds like an excuse to me.)  The June 9 White House blog starts its substantive report with

Today, National Incident Commander Admiral Allen meet[sic] with BP claims officials to assert claims oversight and ensure BP meets commitments to restore Gulf Coast communities….

And

At the President’s direction, Admiral Thad Allen today met with top BP claims officials to assert the administration’s oversight of BP’s claims process in order to ensure that every legitimate claim is honored and paid in an efficient manner. He expressed the American people’s urgent need for additional transparency into BP’s claims process, including how the process works, and how quickly claims are being processed for both individuals and businesses impacted by the oil spill. Additional meetings will be held in each of the four impacted states from June 11-13.

The emphasis still seems to be on legalisms and clean-up and recovery after the fact, political grandstanding, paper-pushing and meetings, not mitigating the oil damage before more occurs.

So why do I say we and Obama should be thankful?

Oil is an inanimate object.  It can’t think.  It can’t plan.  It can’t observe, learn and adjust its behavior.  It must follow the laws of physics and chemistry in all respects.  That means it floats, it dissolves, it forms solutions and compounds, it dissipates, it clumps, and it coats, but mainly it just “is,” and whatever it “does” is the predictable result of whatever comes in contact with it.  It really can’t surprise us very much.  Yet this President has found it beyond his ability to get a working plan set up in less than 50 days to stop it.  Nobody would expect him to do it personally, but he couldn’t even get it in gear to delegate to the Coast Guard immediately the task of assembling the right “panel of experts” to attack the entire problem before the disaster could develop.  If he wants an “ass to kick,” perhaps he should look behind him.

We should be thankful because this wasn’t an attack by our sentient enemies. In many respects it’s a static incident.  Only one source is spewing oil into the Gulf, and it’s flowing in a fairly predictable stream from there.  Yet its systematic containment is still baffling to this President.  That the oil slick has attained the size of South Carolina just makes matters worse.

If it were of human origin, we’d have new “leaks” springing up in other places.  Instead of one, there’d be many.  Whatever we would do to defend our shore, the enemy would know it and take countermeasures.  While an enemy would of course not use oil wells to attack us, we know they could use many other weapons, and the response so far to this much simpler challenge indicates they would do a lot of damage before the administration knew what hit us.  The response so far seems to be, “I hope, I hope, I hope BP can fix things before they get really, really bad.”  That wouldn’t work against a human enemy any better than it works against an oil slick.

I am thankful this wasn’t an enemy attack, and if the administration and President learn something from it, maybe that will be its silver lining (I don’t have any real expectation that learning will take place).

But consider events of the past year.

The uproar over Arizona’s new immigration law leaves the impression that all immigrants illegally entering the state are Mexicans. But according to a 2006 report from the House Committee on Homeland Security, an increasing number of illegal immigrants from nations known to produce, train and harbor Islamic terrorists are using the Southwest border as a gateway to the United States.

Hundreds, more likely thousands of illegal migrants from Middle Eastern countries, Europe, and even China have been captured crossing into the US over the Texas-Mexico border since 2001.  We don’t know how many have escaped detection.

Major Doctor Nidal Hasan killed 13 people at Ft. Hood before he was stopped by city police.  The Christmas airline bombing was thwarted by civilians.  A May 1 bombing disaster in Times Square was averted only by incompetence on the part of the bomber and sheer luck.  In all three cases, the first thing the administration announced was “It isn’t al Qaeda, it’s not part of a coordinated attack, the perpetrator was acting alone and on his own, it might not even be connected to radical Islam, maybe it was a right-wing wacko.”  In the first two cases, there were warning signs that officials both missed and ignored, yet seemingly nothing has been done to improve the system.  They were all connected to radical Islam.  None of them were prevented by federal procedures or personnel.  And the debate about border security almost never mentions the high number of OTM’s (Other Than Mexicans) captured by the Border Patrol.

How do we know that they weren’t separate but coordinated attacks designed to test our defenses and our preparedness?  How do we know the “flying Imams” weren’t the first test?  How do we know that al Qaeda operatives are not crossing into Arizona still?  We don’t.  All we know is that our legislative, executive, and judicial responses have all been inadequate and misdirected.  I’d bet that al Qaeda is watching us bumble around in the Gulf and using what it sees to plan its next attack.  And for that I’m not thankful.

Deepwater Horizon is NOT Comparable to Hurricane Katrina

(Previously posted at Redstate.com)

The news readers and pundits keep trying to draw parallels between the Deepwater Horizon oil gusher and Hurricane Katrina.  The way they look at it, they both have to do with water and Louisiana, and with the federal government’s ability to solve a problem or at least ameliorate a bad situation. They’re looking at the politics of Presidential action, not the physics of the two “disasters.”

Of course, they also note the differences–Bush was too slow to visit the scene (2 days), while Obama’s measured response time of 12 days was about right.  Bush’s FEMA botched the response and recovery process, but FEMA is rarely mentioned this time, while blame is heaped upon BP Oil and (gasp) George W. Bush.  Bush didn’t care about the black residents of New Orleans, but Obama cares so much about all the residents of southern Louisiana that he thinks about them and the oil spill when he wakes up in the morning and when he goes to bed each night, and every minute of the day between.  (That’s a rough quote from this morning’s radio news or hyperbole; it doesn’t show up on the internet.  I wonder when he has time to think about North Korea, golf, Iran, dinner dates in New York, Israel, vacation, Arizona laws, visiting basketball teams, Cap and Tax, Memorial Day tributes, Osama, playing basketball, Major Hasssan, trials in New York….  I guess that’s why he has geniuses like Eric Holder working for him–so he doesn’t have to think.)

Nevertheless, they are missing the obvious.  There is a corresponding disaster which compares quite nicely to the Deepwater Horizon oil gusher–illegal immigration.  They both originate from a high-pressure force which pushes something valuable towards our shores, but not in a controlled manner.  The lack of control turns the valuable resource into an overwhelming deluge.

In both cases, the problem divides itself neatly into two sub-problems–How do we stop the flow? and What do we do with the resource that’s already escaped/broken through?

Strangely, Obama recognizes that in the case of oil, the first step necessary is to “Plug the da** hole!” yet he refuses to acknowledge that the same is true of the immigration problem.  In both cases he has no idea that he’ll share with us about what to do with the deluge that’s already here, nor does he have any idea about how to prevent more of the same in the future.

So far, he’s addressing both problems with the same weapon, that of threatening lawsuits, threatening jail time, threatening fines, and generally interfering with the attempts others are making to really solve the problems or at least mitigate their effects.  Like the Chicago pol that he is, he’s looking for scapegoats, not solutions.  He is in fact treating both problems as if they were political in nature, rather than one being based on engineering design shortcomings (possibly) and the other being a dilemma of human psychology.  Because he’s trying to reach an acceptable political goal rather than correct the problems, he isn’t getting anywhere, and it’s painfully obvious.

Of course the two disasters are only superficially parallel (although closer to each other than to Katrina).  Each eventually will be solved by different approaches.  Deepwater Horizon will be solved most quickly if Obama lets as many engineers as possible try as many ideas as possible all at once.  We should be trying to stanch the flow of oil, ASAP, of course, and we appear to be doing that.  But there’s no reason we shouldn’t be trying to soak up, sop up, suck up, and round up the oil that’s in the water at the same time.  Better that it is removed from the water before it hits land than have to clean it from the beaches.  The resources are available to take this two-pronged approach to protect the Gulf Coast.  This part of the solution is NOT being carried out.  There’s no political downside to this approach, and it’s mind-boggling that Obama is flubbing another opportunity to improve his personal approval numbers.*

The resources are not available to treat illegal “immigration” “comprehensively.”  Oil doesn’t know what is happening.  It just gushes, floats, and coats.  People aren’t that simple.  There are both psychological and political aspects to stopping illegal “immigration.”  Simply put, to address the problem of those who are already here before we permanently and credibly stop the flow of new illegals would be counterproductive, given our lack of will to fund the process.  Psychologically, it would increase the pressure driving Mexicans to enter the US illegally, and it wouldn’t be supported by a skeptical US electorate.  To convince Americans that we are serious about the bigger problem (a political necessity), we must solve the inflow problem first, and do it in a way that can’t be easily reversed.  That will “cap” the psychological and social pressure that is pushing foreigners across the border and into the US.  Then and only then can the question of what to do with present illegals be answered.

Because Obama isn’t willing to take the political heat such an effective psychological solution would entail, he also can’t employ an effective political strategy.  The result?  Finger-pointing, threats, and dithering.

*The fact that he hasn’t taken charge in this respect and doesn’t even recognize what’s happening proves that he has neither natural leadership ability nor competent advisors that he listens to.