US Daily Review » Kevin Price

So Obama says he wants “Broad Economic Growth”

Kevin Price — Tue, 23 Nov 2010 12:00:53 +0000

Recently President Obama has been beating the drum on what is necessary to achieve economic prosperity. At a press conference he mentioned that it was important to “focus” on what was needed to achieve “broad economic growth.” With the highest unemployment in 30 years, that is certainly a message that resonates with most Americans, however, his approach versus the classic ones that have worked historically differ greatly.

I have talked about this often on the radio, Fox News’ Strategy Room, and in this column. On a visit to the Fox News network there was a discussion on the consequences of economic policy that reminded me of the situation today. The debate focused on the approaches the Administration was taking and the results they were producing. Some of the issues discussed continue on today.

Tax cuts vs. tax credits. The President has been emphasizing short term and often politically convenient “tax credits,” when what is actually needed are deep and across the board tax cuts, if we are serious about creating more jobs. There are, of course, various types of tax cuts. “Demand side” or “consumer driven” tax cuts are geared towards the middle class. They are designed to increase consumer demand and votes for those who offer them, but in an economy such as this, they are used to pay bills and little else. This is why they have little or no impact. Supply-side tax cuts, made famous by Calvin Coolidge, John F. Kennedy, Ronald Reagan, and even George W. Bush are across the board and proportional in their reach. These cuts lead to significant wealth (and job creation). The reason for this is simple, they make it cheaper for businesses to create more jobs and to participate in economic activity. If the cost becomes too high, businesses do as little as possible to handle economic uncertainty. This was the exact topic of a recent Price of Business program in which I interviewed Brian Sullivan of the Fox Business Network.
If the President is serious about spurring broad economic growth, he should be very worried about his own banking regulation. The recent bill passed by Congress and signed into law by him has added hundreds of new regulations, with thousands of pages of bureaucracy, and promises to raise the price of banking and the cost of employment.
The current administration seems to have open hostility towards small to medium businesses. Virtually all of its policies seem designed to pity the poor and will likely create more of them and his policies seem to desire mega corporations, because they are easier to control. What the Obama Administration seems to despise are the small businesses and entrepreneurs that drive the vast majority of job creation in this country. Approximately 80 percent of all jobs are created by small businesses, it should be no surprise that unemployment has practically doubled in the last few years as the war on entrepreneurship continues.

If Barack Obama is serious about correcting the weak economy and anemic job growth, he is going to have to be diligent about attacking the forces that are causing such — excessive taxation and regulations. Unfortunately, productive economic reform seems far from his policy priorities.

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Kevin Price is a syndicated columnist whose articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Kevin Price is also host of the Price of Business (M-F at 11 AM on CNN radio). Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here.

Why “Intent” and “Results” are not always the same in Public Policy

Kevin Price — Mon, 22 Nov 2010 12:00:16 +0000

Liberal policy makers seem to live in a dream world. “It is terrible that the working poor have to live on such a low minimum wage,” they say. They address this problem by arbitrarily raising the minimum wage, although many jobs are worth less than the amount they set. This leads to employers laying off many of the people this policy was intended to help. Fundamentally, most policy makers have failed to realize that those who are affected by laws, respond to the laws accordingly. After all, if business owners wanted to raise the income of employees, they would do so without government coercion. Not all of them want to change salaries and they are naturally resistant to policies that make them do so. Again, the victim of that are those who were suppose to benefit from such.

So what would be a logical alternative to minimum wage? The answer is simple, policy makers need to increase the demand for employment, which will naturally make the amount people can charge for their services go up. Increasing the demand on labor would lead to higher income for all, and would require several strategies:

Eliminate the federal minimum wage and return this function to the states. It needs to be done in the states because that is where unemployment problems can be found. It is ridiculous that cities like Cleveland, Detroit, and East St. Louis — which have real unemployment of over 20 percent — to be additionally saddled with a large minimum wage.
Eliminate taxes on businesses entirely. This would lead to a more responsible government as voters would be forced to pay taxes, instead of the government using businesses as “middle men” for its dirty work. Businesses do not pay taxes, they are merely tax collectors. If we eliminated taxes on businesses, America would become one of the cheapest countries in the world to do business and demands on jobs would explode.
Reduce regulations on most sectors of the economy. The cheapest way of achieving this is to restore the state government’s role in this area so that they would become competitive in providing the best number of regulations, while making sure they do not chase off industry to other states.

These few steps alone would eliminate many of the barriers between people and job. In a very short period of time, the demand for jobs would go up as the number of available workers would shrink. In no time it would be an employees’ market.

It would be very similar to what happened in Japan. Following World War II, Americans complained about how cheap labor in Japan took American jobs (today the complaint is China and India). Following the war, that nation eliminated the barriers between people and jobs, which resulted in huge demand on employment to where today, Japan has among the highest personal incomes per individual in the world. Unfortunately, in recent years Japan has been modeling itself increasingly after the US and its economy has become quite weak. It, too, should have a discussion about eliminating the walls between people and jobs.

The reason politicians don’t quickly approve such a logical approach is because of rhetoric, not reality. The rhetoric argues that low wages make people poor. The reality is, artificially high wages make everybody poor. Market priced jobs, on the other hand, generates demand, increases productivity, and gives everyone more for less dollars. Rhetoric argues that we should heavily tax those who can “afford” it, such as business. Reality tells us is that corporations are clever, they will simply move to where they can do business at a lower cost. They are in the business of getting customers and price is a driver for such. All artificially high wages do is drive prices up, forcing businesses to move somewhere else. The list goes on, but what we need is more reality and less rhetoric. We need to understand the results of policies, no matter how good the intentions.

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Obama’s Continued War on Job Creation

Kevin Price — Sat, 20 Nov 2010 12:00:43 +0000

It is just like the Great Depression. We have a passionate, but misguided, President who is bent on an agenda of “doing something.” That “something” has been an agenda that members of his own Administration have described as a means of making it worse, in order to change the role of government. Obama and his staff want to see the economy weaken, it appears, in order for government to be able to do more. More tax, more regulation, and less economic freedom. In the words of Eric Holder, “Positive change is the consequence of unfavorable and not favorable circumstance. Progress is the product of darkness, not light. Whenever you look into our past, this is true… It was economic turmoil that brought us the progressive era and the New Deal.”

This philosophy may explain the reasons why Obama is pursuing policies that destroy jobs and he is doing such on many fronts. The Financial Post gives several examples of the government’s war on employment:

Obama knows that his political success was linked to the unions and that is why he is carrying that movement’s water, no matter the cost in jobs and dollars. The Post article notes that, by “gaining a bargaining monopoly in workplaces, labor unions have negotiated above-market compensation and benefits for their members, which have driven governments toward bankruptcy, priced unionized businesses out of markets and destroyed jobs.”
Government take over and restructuring of GM. Under US bankruptcy law, everyone, including the unions, pay the price of a business failure. This is among the many reasons GM should have gone into traditional bankruptcy. Under Obama’s deal, unions received a “sweetheart deal and subvert the rights of bondholders. The union had US$20-billion of claims and was awarded a 39% stake in the company plus a US$10-billion payment into the UAW health care trust fund. The bondholders had US$27-billion of claims and ended up with only 10% of the company. The administration’s abuse of power discourages investors from making capital available to companies that might be targeted for government intervention.”
Federal regulations have long been harsh on businesses with over 50 employees. Many Americans have believed that there was something unique about the US character, that 80 percent of all businesses were small (under 50 employees). The reality is that laws that are targeted against companies with 50 employees or more force many businesses to never grow to that number or beyond. The new “Patient Protection and Affordable Health Care Act of 2010″ adds to that problem. The Post notes that ”ObamaCare’s mandates, taxes and penalties kick in when an employer has more than 50 employees, and they apply to all employees, so one effect of the law is to discourage small businesses — which create most American jobs — from hiring more than 50 people.”
I really enjoyed the libertarian classic, Restoring the American Dream by Robert Ringer. In it, he proposed a radical theory to eliminate unemployment virtually overnight. He called it the “Quick as hell employment theory.” Simply put, eliminate all benefits and watch people get jobs “quick as hell.” This may seem too harsh for you, but it is certainly better than extending unemployment benefits to 99 weeks, or almost two years, like the current government is doing. Besides costing a fortune, it is creating an entitled nation that is less than motivated to find work.
The list goes on, such as minimum wage laws that create barriers between the less skilled and the jobs they greatly need (minimum wage is roughly 50 percent higher when the Obama Administration began). Then there is the stimulus package that cost almost $800 billion. This stimulus was necessary, we were told, to prevent unemployment from going above 8 percent; with it, joblessness is pushing 10 percent. The so-called financial “reform” act of 1,408 pages that nobody (including the chair of the Senate Finance Committee, Chris Dodd) has any idea exactly what it will do. This much we do know, is that it is adding thousands of pages in regulations for financial institutions to navigate through that will cost businesses and jobs dearly. We have all heard about the moratorium of offshore drilling costing upwards of $3 billion in revenue and tens of thousands in jobs. If this continues, the permanent job loss could reach as high as 400,000. Spending that scares investors and the death of tax cuts that would spur growth round out the list of the Obama job killers.

This government needs to get serious about job creation, not only for political expediency, but for the long term prosperity and fiscal responsibility of our government.

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GDP Numbers Raise Questions about the Value of the Stimulus

Kevin Price — Fri, 19 Nov 2010 08:47:28 +0000

Recently I interviewed Gerri Willis of the Fox Business Network on my program, the Price of Business (on CBS Radio) about the number one business story of the third quarter of the year. One area she pointed to was the decline in the Gross Domestic Product in the second quarter. She noted that, after over $700 billion in stimulus money we had less than a 2 percent increase in the Gross Domestic Product. She sarcastically proclaimed “woohoo” as she expressed the frustration of millions of Americans. The vast majority of the increase in the GDP in the first quarter (which was 3.7 percent) was driven by government expenditures. The proof is in the pudding as the projected growth for the entire year is only 1.6 percent, in spite of the artificially high first quarter. The first quarter offered promising growth because of the hundreds in billions in government spending. It appears very little of it had much traction.

People have sacrificed a great deal to achieve very little. Deficits that took 200 years to accumulate into the total national debt just a couple of decades ago, are now being done annually by this current government. This is driving the largest tax increase in US history starting in 2011, if the Congress does not take actions to protect President Bush’s tax cuts. With the ability of capital to easily move from a country, and the US about to have the highest taxes of any industrialized country in the world, the future does not bode well in our ability to keep businesses and those who create them in the United States.

One of the factors that separates advanced economies from developing ones is a predictable business environment. The current one we are in is anything but predictable. Changes in tax, regulatory, and licensure laws, both real and projected, create fear in the hearts of business owners of all sizes. The woman who owns a company with around 40 employees knows she can significantly increase her income and expand her footprint with ten more hires. Thanks to Obamacare, ten more employees would put her at fifty and will then have her saddled with $150,000 in fines because she does not have “qualifying coverage” according to the new law, for an employee group of that size. Fifty is a key number with government regulations. Once businesses reach that level, they are pounded with no bureaucracy.

The Obama administration has added thousands of pages to the Federal Register of Regulations. The 1,408 page financial reform act alone added 243 bureaucratic regulations that should run to thousands of pages. These create uncertainty for investors and employers. The Chairman of the Senate Finance Committee, Christopher Dodd (D-CT) said he had “no idea” what this bill will do. Neither do businesses, which is why real economic activity is stagnant.

If the administration wants to increase real GDP growth, this will only be accomplished through lower taxes on the businesses that create jobs and produces goods and services, reducing regulations and treat such as deterrents to economic growth, and fostering an economic environment that encourages growth.

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What Causes Unemployment?

Kevin Price — Wed, 13 Oct 2010 15:10:56 +0000

Daily we see news headlines of an unemployment situation that is only worsening. It is not unusual to see nearly a half a million signing up for unemployment benefits on a single week. People keep asking, “Why doesn’t the government do something about it?” It is a fair question. However, a better question is “What causes unemployment?” The failure to understand this is why the American people continue to stand on the sidelines of government’s policy battles as victims of plans that have gone awry. There are many factors to both job creation and job loss. This article will focus on some of the more obvious ones.

We all know that if there was no cost to hiring people, there would be no unemployment. But there are costs, some natural and some of them government created. In a world without government, the only cost would be the price that an employer would be willing to spend and employee would be willing to receive in exchange. If there were no wage limits set by the government, no payroll tax for employers in hiring, and no negative government intervention in other areas of market exchange, it is safe to assume we would generally have near full unemployment. Therefore, every time there is a cost to hiring outside of the voluntary relationship between employers and employees, there is a barrier to job creation.

• Minimum wage is one of the more obvious job deterrents. Companies hire based on the value of the work to be done and not the person doing it. If it costs more to hire someone than the job is worth, the job will not exist. That is just reality. Interestingly, there has been a huge jump in unemployment every July for the last three years following an increase in the minimum wage. Ironically, those hit the hardest by minimum wage generated unemployment are the same ones who were suppose to benefit from such artificial increases – minorities and youth. Minimum wage is a serious job killer.
• Taxes on corporations and businesses. The most frustrating aspect of these taxes is that they are a mere fixed cost of doing business. If the costs become too high, businesses move their companies – and the jobs they create – to other parts of the world. Eliminate this barrier to job creation, tax individuals directly through their purchases, and enjoy a more fiscally sound and accountable government.
• Reform regulatory and licensure laws. These are both common barriers to job creation, particularly regulations. The Federal Register of Regulations is a source of nightmares for businesses of all sizes. Everyday business owners live in fear of violating the law, which puts pressures on them to have as few employees as humanly possible. The recent health care law of the Obama administration is a shining example of this. According to attorney Judith Sadler, a Price of Business Radio Show Contributor, among the perplex provisions in the legislation is a requirement that companies with fifty are more employees must have a designated room in their offices just for breastfeeding, regardless if there is a need for such. “Fifty employees” is often the threshold for many regulations. The vast majority of businesses (approximately 80 percent) have fewer than 50 employees; this is not only because of the virtues of small business, but the fear of being too successful in the eyes of the government.

These are just a few of the things that stand between Americans and jobs. Ronald Reagan once said that the best “social program is a job.” That type of “social program” provides revenue to the government in the form of taxation, rather than consumes money when people are on the dole. The government should get out of the way and let the job creating economic engine roar.

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Tea Party Movement should ask Tough Questions to Candidates for Congress

Kevin Price — Wed, 06 Oct 2010 13:13:18 +0000

One of the most exciting things I have seen in years is the rise of the “Tea Party Movement.” I have been afforded the opportunity to speak at many forums of the organization and I like to remind them of how important the up coming elections are going to be. I told a crowd of 11,000 in Houston, Texas that in 2010, the US House and Senate will be the center of the political universe. Most in the movement believe that, which means it is time to prepare as if that statement is true.

The Tea Party has been a sleeping giant that has abruptly waken after years of allowing the government to grow to its current ominous state. Sincere members of the movement are as angry at the American people as they are those that govern, because they know our mess is as much due to voter neglect as anything else. Some have not voted in years, if at all, and they in particular are going to need to know the tough questions to ask aspiring candidates. Here are just a few suggestions of what a candidate should be asked:

What is your employment history? In my opinion, if a candidate has never owned a business and has never been subject to the payroll, regulations, taxation, and licensure laws that comes with it, they should not be taken seriously as a candidate. Empathy is an important characteristic to leadership and I want a leader that understands what the engines of prosperity go through.
What is your view of the Constitution? The tasks of a member of Congress are numerous, but the single most important duty is to carry out the responsibilities in the Constitution they have sworn to defend. They need to explain what the enumerated powers in Article I, Section 8 of the Constitution mean. They need to articulate the role of the Tenth amendment in limiting federal power. If a candidate does not answer these questions in a manner in line with the Constitution, they have no business running for such an important office. This is the most important question to ask someone running for federal office, in my opinion.
What other elected offices have you been in? The US House and Senate are pretty significant offices. In my experience it takes politicians a significant period of time to “get their legs” in Congress. When I worked for the US Senate I was surprised by how little members knew when it came to conducting their duties. I believe that career politicians are a problem, but I also believe it makes sense for the House or Senate to be the “next step” after serving in a state legislature or similar position and not the first “step.” If you have not held any office at all, try city council or the school board, before the US Congress.
What other positions have you held? I think that many Americans will be a little reluctant to elect a career “community activist” to any office after the Barack Obama experience. For a long period of time people on every level of government (federal, state, local) were reluctant to elect attorneys to office because they did not want to elect individuals who make a living off the proliferation of laws. That certainly makes sense. To me, the best candidate is the one who is most sympathetic and empathetic to the plight of all Americans and understand the challenges of job creation and economic growth. Furthermore, they believe in the concept of rule of law. The US government today is ran by a lawless crowd with their own agenda and it has little to do with the Constitution they swear to defend.

2010 could mark the beginning of a great era in American politics. It could set the stage for a turn around and a move back to limited, constitutional, government. However, if this is to happen, voters are going to have to be smart and ask the tough questions that politicians must honestly answer. Voters must also have the courage to hold these politicians accountable and to the highest standards.

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“Job creation policies” should address causes and not symptoms

Kevin Price — Fri, 01 Oct 2010 13:10:11 +0000

Recently the Obama Administration navigated another “jobs creation” bill through Congress. Correction, it was a “jobs preservation” bill designed to bailout fiscally irresponsible states that are about to pursue massive layoffs to get their spending back in line. If the Federal government “should” help the states, shouldn’t it be for the important functions that would be lost if the governments were forced to do massive cuts? Instead, it is all couched in job protection and an opportunity to pursue efficiency in government is eliminated thanks to Uncle Sam and at the expense of the American Taxpayer. It is the continued demise of moral hazard that is further destroying our free market economy.

If Obama and Congressional leaders were serious about job creation, they would take a decidedly different approach. The following are just a few suggestions:

Eliminate the barriers between people and jobs. This isn’t done through temporary government jobs that will run out with the recent bailouts (like the bill passed this week), but through real jobs that create revenue for them to grow in number and in quality. Although I oppose a federal minimum wage, you are not going to make one go away. However, the federal government could mandate that each state have its own minimum wage law and allow them to set it based on the needs of the people and the cities. This would not cost the federal government a penny, but would spur economic activity immediately. Certain cities, such as Camden (New Jersey), East St. Louis (Illinois), and Detroit each suffer from an unemployment of around 20 percent. they need help like this immediately. In addition to creating jobs and solving employment problems where they are — locally — it would also help to restore the Federalism system that helped make this country great.
Since businesses do not pay taxes (they are only tax collectors through higher prices or lower quality products), we should eliminating taxes on them. Taxes are simply a fixed cost for doing business, nothing more. If taxes are too high, businesses have no choice, but move to other countries where the rate is less so they can lower prices and be more competitive. Businesses do not take these actions because they are not patriotic. In the words of The Godfather, “it isn’t personal, it’s just business.” Eliminating taxes on business would have a profound impact on high quality job creation. This policy would also encourage an increase in productivity and soften the blow of inflation. Finally and, maybe most importantly, it would help restore honest government when the voters face the brunt of the taxes directly.
Ending taxes on wealth (and job) creation and replace income tax with a sales tax. This would eliminate the economic genocide against job creators we are seeing today and would more fairly spread the financial burden of government on all economic groups. If every economic group shared the burden of funding the government, that would encourage all groups to make government fiscally accountable.

The “band aid” approach of bailouts and short term fixes are only making our situation worse. There is a root cause to our current economic situation. Employing the strategies above would put the United States on the fast track for recovery and would lead to a more accountable government.

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The Obama economy: a report card from America’s Heartland

Kevin Price — Mon, 27 Sep 2010 13:07:26 +0000

I have been seeing several “reports cards” recently by political pundits, policy institutes, journalists and others who are all over the map on how to grade the President’s performance when it comes to the economy. The vast majority are providing rather low scores. I think the highest I have seen was a “C+” by a very liberal think tank. What I wanted to do was get the opinion of real Americans who are living through this administration’s policies on a daily basis. With that, I got the views of friends and fans of my Price of Business radio show on CBS radio at Facebook. Their responses provide real insight on what is going on in this economy and the role Obama is playing.

“President Obama’s answer to everything is “spend more money.” He appears never to have looked at the ways lower taxes and a tightened budget could benefit the economy. His economic philosophy is “more,” not “less,” and the effect has been only failure at every turn. (Michele Samuelson, Austin, freelance political writer).

Christine Marks (Jenks, Oklahoma) wrote “I am 53 years old. I have no recollection of the economy being even close to what it is now and has been for the last 2 years. I am a nurse and thank God I chose this profession as I feel there isn’t any other professions that are safe from layoffs. I go to bed every night and pray for all the people, just that I know personally, that are unemployed. There are five nurses that I work with that have a spouse that has lost their jobs and they are the sole support of their families. Before I got my license reinstated after my divorce, I looked for 2 years for another job, ANY JOB, from pushing a lawn mower around to washing windows and was lucky if anyone could afford the extra money to hire me until I got back on my feet.”

Annette Marie Jones (Dallas, Texas). “I work as an Account Representative for a career and technical school. I am probably one of the few individuals who just recently graduated from college that did NOT vote for him and become “mesmerized” by his “Hope” and “…Change” campaign. I do not see this administration addressing the unemployment or the devastated economy. Instead, I see an administration that wants to spend our nation into a bankrupt oblivion by passing this new health care reform, is out of touch with reality and the American people, is simply just set on progressing past the constitution and everything our nation was founded on. Please do cite me…I could write a lot more on here…if you need me to go further I will. Oh, and I will give Obama an F for a grade.”

Ed Merkel (Lincoln, Nebraska). “I’m now convinced the President believes he can spend and tax the nation into equalized prosperity. I’ve been employed in the financial sector for three decades. And no, I’m not wealthy, not even close. I deal with businesses across the county, and have yet to hear a positive comment about the direction of the economy. And these are unsolicited comments. Beyond that, I’ll give him a “D”, because the country hasn’t collapsed yet. But let them pass Cap & Trade and it likely will plummet further.”

Nick Carbine (Houston, Texas) writes, “Kevin, the Obama administration’s handling of the economy exposes a fundamental conflict of interest in a government “handling” an economy. Unleashing the economic might of the United States calls for dramatic tax cuts, reducing onerous regulations, and confidence that one’s economic moves will not be arbitrarily undone. As fixing the economy calls for less of themselves, Congress and the administration are fighting against our economy rather than helping it. They would much rather siphon borrowed trillions to themselves and their pet projects. Better the whole country suffer than Washington insiders do without the lifestyle they have grown accustomed to. So for actual handling of the economy, a very predictable F.”

These are the comments of real people, trying to pursue economic prosperity in very trying times.

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Where has all the Stimulus gone?

Kevin Price — Tue, 21 Sep 2010 13:04:38 +0000

Sen. Tom Coburn concerned were all the stimulus funds went.

President Barack Obama has consistently defended the quality of the spending that has taken place in the stimulus package. He has repeatedly told voters how impressed he is that there has been so little waste in the spending. “If there has been any waste,” it was “miniscule,” according to the Administration.

Senators Tom Coburn (R-OK) and John McCain (R-AZ) beg to differ and do so in a recent report they released entitled “Summertime Blues,” in which they examine widespread waste in the various stimulus programs. This is the third in a series and in this most recent report they write: “Eighteen months since the passage of the stimulus bill, millions of jobs are still gone and the economy is as uncertain as ever. The only thing getting a boost is our national debt. The stimulus has helped push it 23 percent higher, to $13.2 trillion, a new record.” Coburn went on to talk about the specifics of the waste, saying that he “expected to get criticism for pointing out ‘stupid and inappropriate” expenditures from the 2009 stimulus bill, whose cost is now estimated at $862 billion.”

Here are a few examples of the incredible numbers:

• $554,763 for the Forest Service to replace windows in a closed visitor center at Mount St. Helens

• $762,372 to create “Dance Draw” interactive dance software

• $62 million for a tunnel to nowhere in Pittsburgh, PA that even Governor, Ed Rendell called “a tragic mistake”

• $1.9 million for international ant research

• $1.8 million for a road project that is threatening a pastor’s home

• $308 million for a joint clean energy venture with…BP

• $89,298 to replace a new sidewalk that leads to a ditch in Boynton, OK

• $3.8 million for a “streetscaping” project that has reduced traffic and caused a business to fire two employees

• $16 million to help Boeing to clean up an environmental mess it created in 2007

• $200,000 to help Siberian communities lobby Russian policy makers

• $39.7 million to upgrade the statehouse and political offices in Topeka, Kansas

• $760,000 to Georgia Tech to study improvised music

• $700,000 to study why monkeys respond negatively to inequity

• $193,956 to study voter perceptions of the economic stimulus

• $363,760 to help NIH promote the positive impacts of stimulus projects

• $456,663 to study the circulation of Neptune’s atmosphere

• $529,648 to study the effects of local populations on the environment…in the Himalayas

The waste is not so small that is is “difficult to measure,” as apologists for the President would claim, but so obvious that every politician that has supported such programs should fear for their political lives.

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Savings from Obamacare?

Kevin Price — Wed, 15 Sep 2010 13:10:24 +0000

The Obama administration has continually boasted about the huge savings that the American people would receive from it sweeping health care legislation. What kind of savings is it claiming? The National Center for Policy Analysis states that the Obama government is arguing that the “reform” will reduce “the federal budget deficit by $100 billion over 10 years and 10 times that amount in the second decade of implementation. They cite the Congressional Budget Office’s (CBO) cost estimate to back their claims.” These are dream numbers that do not line up with reality according to many policy experts.

Obama and Congressional Democrats only want to discuss the CBO numbers, but that agency is not the only one monitoring the fiscal and economic impact of Obamacare. The chief actuary of Medicare has an opinion on Obama’s health law too. His assessment is that the gap between the CBO’s numbers and reality is quite significant.

For example, Obama says that the law will slow drive down the increase in costs. However, the chief actuary of Medicare says it will not have such an effect. In fact, any person who has taken high school economics know that this cannot be the case. With tens of millions more added to the health care demand and as many as 33 percent of doctors saying they will get out as a results of the legislation, the pull on the costs will explode.

Obama argues that people will get to keep their work related plans if they want, while the actuary says that as many as 14 million people will lose their employer coverage. Many, if not most, of these people would prefer the company plan rather than going to one that resembles the Department of Motor Vehicles. I believe 14 million to be a very conservative number. Obama’s plan is modeled after the state of Massachusetts and they have seen an exponential increase in companies killing their private plans because they know they can get on a cheaper government plan. This shift from private to government is among the reasons Obamacare will not lower the deficit over time.

Finally, Obama says that his health care agenda will improve the budget outlook. I doubt it and so does the chief actuary. The Joint Tax Committee has chimed in with estimates of its own, noting that the tax provisions missing from the chief actuary’s study shows approximately $50 billion of deficit reduction alleged in the CBO report will not hold up in reality, notes James Capretta of the Heartland Institute.

Obama may not know much about economics, but he is very proficient when it comes to smoke and mirrors. Unfortunately, these do not hold up over time.

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