Our Unhealthy Financial Future: Looters enjoy your seeds of distruction

[chris]

We needed a health care bill; but the "soon to be out of office" politicians should have figured out a "pay as you go" plan.

And don't give me any LBJ or Bush or whomever nonsense about spending more than Obama....... regardless, a lot of people are going to be hurt.


With health bill, Obama has sown the seeds of a budget crisis

By Robert J. Samuelson | Newsweek Web Exclusive

Mar 29, 2010 | Updated: 11:55 a.m. ET Mar 29, 2010

When historians recount the momentous events of recent weeks, they will note a curious coincidence. On March 15, Moody's Investors Service — the bond rating agency — published a paper warning that the exploding U.S. government debt could cause a downgrade of Treasury bonds. Just six days later, the House of Representatives passed President Obama's health-care legislation costing $900 billion or so over a decade and worsening an already-bleak budget outlook.

Should the United States someday suffer a budget crisis, it will be hard not to conclude that Obama and his allies sowed the seeds, because they ignored conspicuous warnings. A further irony will not escape historians. For two years, Obama and members of Congress have angrily blamed the shortsightedness and selfishness of bankers and rating agencies for causing the recent financial crisis. The president and his supporters, historians will note, were equally shortsighted and self-centered — though their quest was for political glory, not financial gain.

Let's be clear. A "budget crisis" is not some minor accounting exercise. It's a wrenching political, social and economic upheaval. Large deficits and rising debt — the accumulation of past deficits — spook investors, leading to higher interest rates on government loans. The higher rates expand the budget deficit and further unnerve investors. To reverse this calamitous cycle, the government has to cut spending deeply or raise taxes sharply. Lower spending and higher taxes in turn depress the economy and lead to higher unemployment. Not pretty.

Greece is experiencing such a crisis. Until recently, conventional wisdom held that only developing countries — managed ineptly — were candidates for true budget crises. No more. Most wealthy societies with aging populations, including the United States, face big gaps between their spending promises and their tax bases. No one in Congress could be unaware of this.

Two weeks before the House vote, the Congressional Budget Office released its estimate of Obama's budget, including its health-care program. From 2011 to 2020, the cumulative deficit is almost $10 trillion. Adding 2009 and 2010, the total rises to $12.7 trillion. In 2020, the projected annual deficit is $1.25 trillion, equal to 5.6 percent of the economy (gross domestic product). That assumes economic recovery, with unemployment at 5 percent. Spending is almost 30 percent higher than taxes. Total debt held by the public rises from 40 percent of GDP in 2008 to 90 percent in 2020, close to its post-World War II peak.

To criticisms, Obama supporters make two arguments. First, the CBO says the plan reduces the deficit by $143 billion over a decade. Second, the legislation contains measures (an expert panel to curb Medicare spending, emphasis on "comparative effectiveness research") to control health spending. These rejoinders are self-serving and unconvincing.

Suppose the CBO estimate is correct. So? The $143 billion saving is about 1 percent of the projected $12.7 trillion deficit from 2009 to 2020. If the administration has $1 trillion or so of spending cuts and tax increases over a decade, all these monies should first cover existing deficits — not finance new spending. Obama's behavior resembles a highly indebted family's taking an expensive round-the-world trip because it claims to have found ways to pay for it. It's self-indulgent and reckless.

But the CBO estimate is misleading, because it must embody the law's many unrealistic assumptions and gimmicks. Benefits are phased in "so that the first 10 years of [higher] revenue would be used to pay for only six years of spending" increases, a former CBO director, Douglas Holtz-Eakin, wrote in the New York Times on March 20. Holtz-Eakin also noted the $70 billion of premiums for a new program of long-term care that reduce present deficits but will be paid out in benefits later. Then there's the "doc fix" — higher Medicare reimbursements under separate legislation that would cost about $200 billion over a decade.

Proposals to control health spending face restrictions that virtually ensure failure. Consider the "Independent Payment Advisory Board" aimed at Medicare. "The Board is prohibited from submitting proposals that would ration care, increase revenues or change benefits, eligibility or Medicare beneficiary cost sharing," says a summary by the Henry J. Kaiser Family Foundation. What's left? Similarly, findings from "comparative effectiveness research" — intended to identify ineffective care — "may not be construed as mandates, guidelines or recommendations for payment, coverage or treatment." What's the point then?

So Obama is flirting with a future budget crisis. Moody's emphasizes two warning signs: rising debt and loss of confidence that government will deal with it. Obama fulfills both. The parallels with the recent financial crisis are striking. Bankers and rating agencies engaged in wishful thinking to rationalize self-interest. Obama does the same. No one can tell when or whether a crisis will come. There is no magic tipping point. But Obama is raising the chances.

Find this article at http://www.newsweek.com/id/235588

[HonestChieffan]

Obama wants a crisis so he can expand government and take more from working people.

[CoMoChief]

THe HC bill has never been about health.....it's about having more control.

[mlyonsd]

Originally Posted by chris

We needed a health care bill; but the "soon to be out of office" politicians should have figured out a "pay as you go" plan.

And don't give me any LBJ or Bush or whomever nonsense about spending more than Obama....... regardless, a lot of people are going to be hurt.


With health bill, Obama has sown the seeds of a budget crisis

By Robert J. Samuelson | Newsweek Web Exclusive

Mar 29, 2010 | Updated: 11:55 a.m. ET Mar 29, 2010

When historians recount the momentous events of recent weeks, they will note a curious coincidence. On March 15, Moody's Investors Service — the bond rating agency — published a paper warning that the exploding U.S. government debt could cause a downgrade of Treasury bonds. Just six days later, the House of Representatives passed President Obama's health-care legislation costing $900 billion or so over a decade and worsening an already-bleak budget outlook.

Should the United States someday suffer a budget crisis, it will be hard not to conclude that Obama and his allies sowed the seeds, because they ignored conspicuous warnings. A further irony will not escape historians. For two years, Obama and members of Congress have angrily blamed the shortsightedness and selfishness of bankers and rating agencies for causing the recent financial crisis. The president and his supporters, historians will note, were equally shortsighted and self-centered — though their quest was for political glory, not financial gain.

Let's be clear. A "budget crisis" is not some minor accounting exercise. It's a wrenching political, social and economic upheaval. Large deficits and rising debt — the accumulation of past deficits — spook investors, leading to higher interest rates on government loans. The higher rates expand the budget deficit and further unnerve investors. To reverse this calamitous cycle, the government has to cut spending deeply or raise taxes sharply. Lower spending and higher taxes in turn depress the economy and lead to higher unemployment. Not pretty.

Greece is experiencing such a crisis. Until recently, conventional wisdom held that only developing countries — managed ineptly — were candidates for true budget crises. No more. Most wealthy societies with aging populations, including the United States, face big gaps between their spending promises and their tax bases. No one in Congress could be unaware of this.

Two weeks before the House vote, the Congressional Budget Office released its estimate of Obama's budget, including its health-care program. From 2011 to 2020, the cumulative deficit is almost $10 trillion. Adding 2009 and 2010, the total rises to $12.7 trillion. In 2020, the projected annual deficit is $1.25 trillion, equal to 5.6 percent of the economy (gross domestic product). That assumes economic recovery, with unemployment at 5 percent. Spending is almost 30 percent higher than taxes. Total debt held by the public rises from 40 percent of GDP in 2008 to 90 percent in 2020, close to its post-World War II peak.

To criticisms, Obama supporters make two arguments. First, the CBO says the plan reduces the deficit by $143 billion over a decade. Second, the legislation contains measures (an expert panel to curb Medicare spending, emphasis on "comparative effectiveness research") to control health spending. These rejoinders are self-serving and unconvincing.

Suppose the CBO estimate is correct. So? The $143 billion saving is about 1 percent of the projected $12.7 trillion deficit from 2009 to 2020. If the administration has $1 trillion or so of spending cuts and tax increases over a decade, all these monies should first cover existing deficits — not finance new spending. Obama's behavior resembles a highly indebted family's taking an expensive round-the-world trip because it claims to have found ways to pay for it. It's self-indulgent and reckless.

But the CBO estimate is misleading, because it must embody the law's many unrealistic assumptions and gimmicks. Benefits are phased in "so that the first 10 years of [higher] revenue would be used to pay for only six years of spending" increases, a former CBO director, Douglas Holtz-Eakin, wrote in the New York Times on March 20. Holtz-Eakin also noted the $70 billion of premiums for a new program of long-term care that reduce present deficits but will be paid out in benefits later. Then there's the "doc fix" — higher Medicare reimbursements under separate legislation that would cost about $200 billion over a decade.

Proposals to control health spending face restrictions that virtually ensure failure. Consider the "Independent Payment Advisory Board" aimed at Medicare. "The Board is prohibited from submitting proposals that would ration care, increase revenues or change benefits, eligibility or Medicare beneficiary cost sharing," says a summary by the Henry J. Kaiser Family Foundation. What's left? Similarly, findings from "comparative effectiveness research" — intended to identify ineffective care — "may not be construed as mandates, guidelines or recommendations for payment, coverage or treatment." What's the point then?

So Obama is flirting with a future budget crisis. Moody's emphasizes two warning signs: rising debt and loss of confidence that government will deal with it. Obama fulfills both. The parallels with the recent financial crisis are striking. Bankers and rating agencies engaged in wishful thinking to rationalize self-interest. Obama does the same. No one can tell when or whether a crisis will come. There is no magic tipping point. But Obama is raising the chances.

Find this article at http://www.newsweek.com/id/235588

Excellent take on an ugly situation.

Right now liberals are enjoying their health care victory like they just purchased a brand new Lamborghini. They're sitting in it smelling the new car smell, running their hands across the leather. They are absoulutely oblivious to what will hit them when they receive the car payment book in the mail.

[Amnorix]

We were already facing a looming budget crisis. The HC reform package only accelerates it. While I favored HC reform, the number one priority for me was that it be revenue neutral, which it is not.

Gross mismanagement in Washington for 30+ years is starting to result in a bill we might not be able to pay.

[mlyonsd]

Originally Posted by Amnorix

We were already facing a looming budget crisis. The HC reform package only accelerates it. While I favored HC reform, the number one priority for me was that it be revenue neutral, which it is not.

Gross mismanagement in Washington for 30+ years is starting to result in a bill we might not be able to pay.

Bingo. Only a fool believes HC reform is revenue neutral.

[The Mad Crapper]

It's a glorified expansion of medicaid. Now, not only does the whore and her illegitimate brood get covered, but so does the absentee "baby daddy".

[patteeu]

Every democrat who voted for HC reform should be branded with a scarlet letter and every person who says that Republicans are just as bad as democrats when it comes to fiscal responsibility should too, so we know who to blame when it all comes tumbling down. Republicans were bad, but democrats (with a few exceptions) are and have always been far worse on this score.

[Taco John]

Originally Posted by patteeu

Every democrat who voted for HC reform should be branded with a scarlet letter and every person who says that Republicans are just as bad as democrats when it comes to fiscal responsibility should too, so we know who to blame when it all comes tumbling down. Republicans were bad, but democrats (with a few exceptions) are and have always been far worse on this score.

To steal a quote: "Better than bad does not equal good."

Brand away.

[petegz28]

Originally Posted by Amnorix

We were already facing a looming budget crisis. The HC reform package only accelerates it. While I favored HC reform, the number one priority for me was that it be revenue neutral, which it is not.

Gross mismanagement in Washington for 30+ years is starting to result in a bill we might not be able to pay.

Queue Orange and a Google paste...

in

3...
2..
1.

[The Mad Crapper]

Hopey Change™

[chris]

Originally Posted by petegz28

Queue Orange and a Google paste...

in

3...
2..
1.

I find it extremely amusing that he and the "others" have not been by to share their words of wisdom and superior knowledge.

Truth hurts sometimes. We all are going to get screwed; some more than others.

[LOCOChief]

Originally Posted by chris

I find it extremely amusing that he and the "others" have not been by to share their words of wisdom and superior knowledge.

Truth hurts sometimes. We all are going to get screwed; some more than others.

Liberals / progressives are chickenshits, always have been and always will be.

[The Mad Crapper]

[RaiderH8r]

Originally Posted by mlyonsd

Excellent take on an ugly situation.

Right now liberals are enjoying their health care victory like they just purchased a brand new Lamborghini. They're sitting in it smelling the new car smell, running their hands across the leather. They are absoulutely oblivious to what will hit them when they receive the car payment book in the mail.

They don't care because they won't be writing the checks to cover it. That will be someone else's responsibility. And when it shits the bed it will be someone else's fault.