Obama on Health Care - Above the Bickering but What About the Facts

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Long on hyperbole and short on specifics, did the president connect to the public on his health care speech? Well, he spent 10% of the speech glorifying America's most liberal former Senator Ted Kennedy, a man who spent 46 years in the Senate accomplishing just about nothing on health care. I'm sure the liberal left in Boston was pleased but middle America was probably left wondering why far more time was spent on Kennedy than on financing health care.

Obama did promise he would consider tort reform to stop the proliferation of legal fees to his trial lawyers supporters but considering is hardly endorsing. He did wallow around on the public option but in the end who knows if he does or does not want it in the final bill. It would seem at a minimum he will have some trigger mechanism to implement it when the opposition dies down.




Of course if I was talking and the evil eye of Nancy Pelosi was burning holes in my back I might dance around the subject she declared essential to any bill coming out of Her House. If he does compromise with the concern of the people and drops the public option he will spend the rest of his presidency fighting her and not the Republicans.

There have been many presidential addresses to a joint Congress in our nation's history. This was just the third on health care. Yet the only time health care reform has been approved was when presidents did not address a joint session of congress on the subject, under Franklin Roosevelt and Lyndon Johnson.




Some lingering questions:

How will it be financed? He acknowledged it will cost at least $900 billion over ten years. Government has never even been close to accurate on projected spending and when it comes to health care government projections have been a joke. So it will most likely cost far more.

Obama says he will not sign any bill that raises the national debt by one dollar. The Obama gang was quite shrewd in crafting a bill and identifying the cost over ten years, long after he has left the presidency. But in truth the explosive cost will be at the front end of the time period when he thinks he can add millions of uninsured people and build 54 new governmental agencies without increasing the deficit. America is so broke already they can't even give a pay raise to congress without adding to the deficit so this language is deceptive at best, dishonest at worst.

Obama says there is nearly $500 billion in fraud in our current health care system. If that is true then why is the Obama government not prosecuting the crooks stealing billions of dollars from the public treasury right now? Why not prosecute the crooks first, save the $500 billion and then fund health care reform?




How are we ever going to stop the insurance companies, stop the trial lawyers and stop the medical industry from overcharging us and restricting competition when those very industries and their lobbyists already own the president and congress? Nearly every politician in Washington is dependent on those very same bad guys to fund their upcoming reelection campaigns. Are they really going to slap the hands that feed their insatiable appetite for campaign money?

More importantly, how in the world can we spend any more money on anything when the economy is teetering, unemployment is still rising, China holds the mortgage on America, our wars have become an endless pit of money and deaths, the annual debt has hit astounding new records, the national deficit has hit staggering new levels and nothing has been done to stop Wall Street, the banks, the credit card companies and Heaven knows who else from ripping off the unsuspecting American consumer?




As long as the foxes remain in the hen house of our nation's capitol the American public does not have a chance. Obama, Pelosi, the Democrats and the Republicans have created an green environment alright, one that lines their pockets and the pockets of their lawyers, lobbyists, accountants, advisors, stock brokers and bankers with greenbacks sucked right out of your very own pockets. Reform Washington style sucks.

Deflation - An Economist's Illusion or the Real Deal?

Okay, so the Obama administration says we are in a period of deflation as opposed to the typical inflation we normally see. Deflation, a rather pathetic word that reminds me of a flat tire. But deflation should be great because it means prices are going down, not up. But there is one problem, some major price categories seem to be going up to me.

To understand what people are talking about let us take a look at the Ask.com definition of the term "deflation" and what it really means.

Question: What Is Deflation?

Answer: The definition of deflation is when asset and consumer prices continue to fall. This may seem like a great thing to consumers, except that the cause for deflation is a long-term drop in demand.

Unfortunately, a drop in demand means that a recession is already underway, with job losses, declining wages, and an ongoing decline in the value of your home and your stock portfolio. Deflation is a result of businesses dropping prices in a desperate attempt to get people to buy their products.

Officially, deflation is measured by a decrease in the Consumer Price Index. However, the CPI does not measure stock prices, which retirees use to fund purchases, and businesses use to fund growth. It also does not measure housing prices, instead using rental equivalent. This often lags home price declines, and underestimates deflation in the CPI.

To combat deflation, the Federal Reserve executes an expansionary monetary policy. It reduces interest rates, and increases the money supply in an attempt to jump-start economic growth. In addition, the government can offset deflation with expansionary fiscal policy. It can put more money into circulation by lowering taxes, increasing government spending, and incurring a temporary deficit to do so. Of course, if the deficit is already at record levels, that tool may no longer be available.

Like inflation, deflation is very difficult to combat once it is entrenched. As businesses and people feel less wealthy, they spend less, reducing demand further. Prices drop in response, giving businesses less profit.

I don't know about you but it seems to me gas has started rising again. In fact the price per barrel of crude oil, which impacts on many supplemental products from transportation to fertilizer, has increased 90% since the beginning of this year alone and now stands at about $62.00 a barrel. No wonder OPEC did not reduce the amount of oil produced this week when the price now is above the 2007 prices in place before the outrageous price spiral.

Taxes are certainly up, especially state and local taxes, and you can bet the aftermath of the incredible federal spending will be substantial future price increases. Obama has already set a new record for the annual federal deficit and the stimulus and bailout programs are just starting to spend money with multi-billion dollar bailouts waiting in the wings for a bankrupt Chrysler and General Motors and a teetering AIG insurance giant.

A lot of food prices are up or they have cleverly repackaged items so we are paying the same for less goods, thus really increasing the price. Organic foods are not dropping either even though there has been a push to be healthy and sales are up.

Certainly restaurant prices do not seem to be falling. In fact with the addition of designer coffee in McDonald's some prices are actually going up as well. When there are "specials" it usually means you get a silver dollar sized hamburger instead of the meat eaters delight we've grown to love.

Medical and health insurance rates continue to spiral in spite of the Obama efforts to overhaul the health care industry. After a decade of double digit annual price increases this year prices are expected to drop down to just a 7% increase. Only in our nation's capitol could a 7% increase be treated as a drop in prices.

As the definition said, two of the most important cost factors missing from the deflation figure are stock prices and housing prices. No one will question that these two have dropped with stocks, and your retirement funds, still about 40% less in value than a year ago.

Housing prices have also gone down, a lot in some areas. But the national market tends to be local market driven so one area may have no loss in value over the recent years (2006 - 2009) while a neighboring area could have substantial loss of value.

Take, for example, the case of Coltons Point. The Washington, DC metro area including Northern Virginia and Maryland has suffered an overall loss of value of about 24% the past year. However, a Washington Post survey of all home sales in the metro area the past year shows there are a few locations where prices have actually increased. One of these unique areas is the riverside resort of Coltons Point where values have increased by over 3% the past year.

Still nationwide stock and housing prices have dropped but neither is even factored into the deflation model which makes me wonder just what value is the economic news on deflation? It is distorted since it missed two of the biggest cost factors. The Consumer Price Index which is the basis for determining inflation or deflation is often a lagging indicator of economic performance much like unemployment figures. Conversely the stock market is a forward indicator of economic growth having already factored in jobs reports before they are even released.

The Labor Department figures on new unemployment claims this week dropped well below analysts expectations for the 2nd time in three weeks yet the unemployment rate climbed to 8.9% and the lagging figure could reach 10% later this year even if the economy is in a full recovery cycle as the Coltons Point Times and more recently other financial news services are beginning to predict.

In light of all this conflicting information and simultaneous upward and downward economic pressure my advice is for you to ignore deflation and inflation reports and the endless speculation about them as it is something the Federal Reserve must manage and we the people have no role in what the Federal Reserve does with our money anyway.

The Health Industry Capitulation - This Sure Ain't No Pythagorean Theorem

This week Obama announced that members of the doctors, pharmaceutical, hospital and insurance industry involved in health care have agreed to give up 1 1/2% of their future price increases. Man would I like to be a hero for giving up 1 1/2% of what I don't even have and may never get.

That is a slick math move like many we have already witnessed from these clever craftsmen of New World economics. We are going to save $2 trillion over the next ten years in health care costs, $2 trillion in price increases that haven't even been approved. Is that a negative attitude or what. If you buy the language we already have the 7% a year in price increases guaranteed for the next ten years.

Obama isn't even going to be president for ten years unless that is another law they intend to disregard. Anyway, the problem with health care is that we already have the most expensive system in the world and still 46 million Americans don't have health care and we are far from the healthiest people on Earth. I guess money not only can't buy you love but it can't buy you quality health care either.

Now 12 million of the 46 million uninsured are illegal aliens. Most already have insurance so we really should not count them as uninsured. Of course the liberals still think our social programs are inadequate but they don't understand how many people have already figured out how to take advantage of the programs.

Another 10 million uninsured are college students but they could be covered by family or school insurance programs. That leaves 20 million Americans really uninsured, not 46 million. In spite of the generous cut in future increases by the health industry, it means health care costs will still increase by billions of dollars a year in the most expensive but not the best health care program in the world.

If the program is already too expensive then cut the budget, don't let it increase. Believe it or not that is how you get budgets into balance. Obama has got a 1 1/2% reduction in future costs leaving a 5.5% annual cost increase that he says is acceptable. He has asked for $750 billion more in health care spending next year alone.

So why is it costing us billions more to reduce the cost of health care? I say a 7% annual increase on top of the astounding increase in health care costs the past two decades is ridiculous. Just eliminate the 7% we don't even have and cut the fraud, corruption and waste in what is here right now. We should be able to cut the budget and still expand coverage to everyone. Does that sound too American and not enough socialist, I mean liberal?

If you really want to cut health care costs stop prescribing prescription drugs to our children and seniors and we can save billions. Do you know the average senior in America has 6-8 drug prescriptions? Then there are estimates that up to 6 million kids are taking Ritalin prescriptions for attention deficit disorder though less than half that number have been diagnosed with the problem.

Prescribing unnecessary drugs does have a multiplying effect in terms of a stimulus program however. The excessive payment to the pharmaceutical company that makes it, the payment and/or kick back to the doctor who prescribes it, the insurance company for processing fees for the claim, why even the patient who is transformed into a Zombie by the tranquil illusion from the drug.

You could eliminate half the cost of prescription drugs and have no effect on the health of the patients. Better still go to a Medicine Man or Woman and actually get healed. What a concept!