Monday, April 25, 2011

Sarah Palin On The Budget Wars

Sarah Palin said recently that, in their budget battles, the Republicans in Congress need to learn how to fight like a girl.

Now that is a great line.

Thursday, April 21, 2011

Straight Talk On The Budget

Yes, we do have a serious federal budget deficit problem. The deficit this year alone is $1.5 trillion. The entire federal debt is close to $14 trillion, and it has tripled since Obama took office.

That level of debt is unsustainable.

Let’s get back to basics for a minute. A “deficit” occurs when you spend more than you have.

Consider credit cards. A person can go on a shopping spree and run up a big credit card bill without actually having the money in hand. Afterwards, they will have a bunch of goodies, but they also have a big bill to pay. Maybe next month, they do the same thing. Now they have even more goodies, but an even bigger credit card bill. At some point, the whole operation collapses. They hit the limit of their credit card, they can’t pay the monthly payments, collection agencies are calling, and it’s a huge mess.

That’s what’s happening in Washington, except that when the government hits it’s credit limit, they just raise the limit.

President Obama gave a speech recently outlining his proposal to significantly reduce the federal budget deficit. In that speech, he made a point of saying that politicians are prone to talking about reducing waste as a way of cutting spending, but that, realistically, the budget deficit now is so large that just cutting waste will not solve the problem. He then went on to say that a key component of his deficit reduction plan is to reduce the cost of Medicare, Medicaid, and the military by finding ways for them to operate more efficiently. Reducing waste, in other words. So in the first part of his speech, he said that focusing on waste won’t do it, and then he outlined a plan that is primarily based upon reducing waste.

The President’s plan also calls for raising taxes on those despised “rich”. Obama talks about the “rich” as though they hit the jackpot in Las Vegas or something. He says things like “those who are most fortunate in our society”, and other such polemics. He seems to feel that the “rich” are somehow bad people, that they got where they are by nefarious means, that their money is tainted. He apparently has no concept of that great American phenomenon of upward mobility. He seemingly cannot relate to people who start with little, work hard their whole life, manage to get a little bit ahead, and then enjoying the fruits of their labor. Obama regards them as fair game.

But as you see Obama up there demonizing the “rich”, and saying they can easily afford to pay “a little more”, just remember that it only a matter of time until whatever he does to the rich will also apply to you. The “rich” in his world are anyone who actually has a job and pays taxes, rather than being on the government dole. Today, Obama says the “rich” is anyone making more than $250,000; before long it’ll be anyone making over $$200,000, or $150,00, or $100,000. The cut-off point is completely arbitrary.

The cold hard facts are that the rich already pay the bulk of federal income taxes, which Obama doesn’t want you to know, because then he couldn’t demonize them as a diversionary tactic.

IRS data from 2008 (the last year data is available) show that the top 1% of income earners paid 38% of all federal income taxes. Yes, 1% of the people are paying 38% of the total federal income tax. In that same year, the top 10% of income earners paid 69%, and the top 50% paid 97% of the total federal income tax burden. The bottom 50% of earners paid only 3%.
The reality is that the “rich” can’t be taxed enough to solve the federal budget deficit problem. If the government took all of the taxable income of the top 1% of earners, it would generate $938 billion, which wouldn’t pay the current year’s $1.65 trillion deficit out of a $4 trillion budget, much less the total $14 trillion federal debt.

For Obama to stand there and say we can solve this problem if only the “rich” would pay “a little” more is completely dishonest, as the facts show. It tells you that he really has something else in mind.

And what might that something else be? The only way to solve the federal government debt and deficit problem via taxes is by drastically raising taxes on the middle class. This talk about soaking the rich is to make the middle class think they won’t be paying higher taxes, while Obama is covertly scheming to do just that via a European-style value added tax (VAT) which would hit everyone, or cap and tax which would hit everyone, or something else.

The real problem with the federal budget deficit, though, is not that taxes are too low on some people, it’s that the government spends too much. How long would any off us as individuals or companies last financially if we consistently, month in - month out, year in - year out, spent more than we had? A very basic principle of sound financial management is to stay within your means spend only as much as you have. But the federal government seems totally incapable of doing this, or even understanding the concept.

The U.S. Treasury Secretary recently said that we can’t solve the government debt problem by cutting spending. Oh, so I guess we solve the debt problem by continuing to spend money like a drunken sailor, in his mind.

Another dose of reality is that the federal budget deficit and debt problem can be addresses only by restructuring Medicare, Medicaid, and Social Security, because that’s where the bulk of the money goes.

It would be immensely helpful if the President of the United States would have an honest, frank, adult discussion with the American people on all of this rather than the demagoguery, deception, double-talk, and posturing that we have gotten from him so far.

Sunday, April 10, 2011

ObamaCare and Cynthia

We recently marked the first anniversary of the greatest single assault on individual liberty in my lifetime, and maybe since the founding of the country: ObamaCare. As we continue to debate what the real effects of that law will be, I think back to an episode that occurred almost twenty years ago and which has special meaning to me.

Twenty years ago a fragile, extremely premature baby girl was born. That person is now a normal, healthy, bright, energetic young woman in college studying creative writing and journalism, getting ready to go out into the adult world on her own.

At the time of her birth, it was not at all a given that she would make it this far. You see, Cynthia was born at twenty-four weeks gestation, and weighed in at one pound eleven and a half ounces. The birth was life threatening to mother and child. After she (and her mother) survived the birth, it was unclear whether Cynthia’s life span would be measured in hours, days, months, or years. She was right at the edge of what was considered to be somewhat viable for prematurity at the time.

The doctors in the Stanford Children’s Hospital neo-natal intensive care unit told her parents that her chances of long term survival were somewhere around twenty-five percent, but that even if she made it for the long term she would most likely have some serious problems of one sort or another with brain development, eyes, heart, lungs, digestive system, or just about anything.

Cynthia spent the first five months of her life in the hospital. That’s not five days or five weeks, but five months. She had highly specialized medical care around the clock. There were many ups and downs. The doctors more than once signaled to Cynthia’s parents that she might not live through the next twenty-four hours.

But a miracle started unfolding. Every day that Cynthia lived without a serious incident improved her chances of a more positive outcome. And gradually, ever so slowly, she started getting better. Some of the major health threats began to fade. Brain bleeding did not occur; instead, her brain slowly developed normally. Her heart grew and functioned properly. Her digestive system improved. Her eyes progressed and it started to look as though she would not be blind; that she might even see normally.

One significant milestone was when she got off of the respirator and started breathing on her own. Then she was able to be taken out of the incubator and be held by her mother. She started being fed orally instead of intravenously. She followed an object with her eyes. Then she actually cried out loud, a major developmental achievement.

Another major milestone was when she got out of the neo-natal intensive care unit and went to the regular neo-natal unit.

And on one glorious day, little baby Cynthia, at the tender young age of five months, was well enough to go home for the first time. By this time, she had fattened up to a whopping four and a half pounds.

Although the major dangers were behind her, Cynthia was still not completely out of the woods. She had an oxygen tube under her nose and a tank at home and one that was portable. She used this for several more months, but her lungs continued to develop and she got off of the oxygen.

Cynthia continued to grow, but faced more health challenges. She showed a profound lack of speech development, but responded to speech therapy. At toddler age, she started walking on her knees, but couldn’t stand up due to some ankle problems. She had progressive casts put on both legs; these are casts that bend the foot upward thus stretching the tendons in the ankle. The “progressive” part is that the casts were taken off every couple off weeks and new ones were put on that bent the foot and stretched the tendons even more. The she moved to progressive braces that work in the much the same way except that instead of being replaced, they were tightened up periodically by her parents. Finally, she walked normally.

As she went through school, there were learning issues. Specialized tutors and other programs addressed these, and Cynthia did well in school. In some areas, she excelled, particularly languages.

Cynthia played Little League Baseball and then softball, all the way through high school. She played some basketball. She learned to swim.

Now, Cynthia is a sophomore in college studying creative writing and journalism.

And as you have probably figured out, this story is dear to me because Cynthia is my daughter.

I am a religious person, and I still think about what role God played in all of this. I am sure there was a role, but I don’t claim to know what and why. I’ll find out someday.

But one thing I am sure of is that the miracle of Cynthia came about here on Earth because she had access to the best, most advanced medical care in the world. Her years of treatment were paid for because her father had a medical insurance plan available to every employee where he worked, from the president of the company on down. The various specialists that saved her were there not because of some government bureaucrat or some government mandate or some government run health care system, but because of a free market health care system that is the envy of the world.

A few days after Cynthia was born, I thought I had better find out what this was all going to cost. I called the hospital billing department and asked. They said her treatment would cost an average of $5000 per day. The doctors had told us that Cynthia would be in the hospital for a minimum of 90 days. Do the math. The first three days of her life cost $27,000. The final bill, years later, was over $800,000, plus what we had spent on our own for tutors and such.

And through it all, I was never asked by anyone, anywhere, how I was going to pay all of those bills. Not once. Cost or how the bills were going to be paid was never a consideration of the doctors or hospital in deciding what treatment Cynthia would receive.

I do not want to think what this ordeal would have been like if some nameless, faceless government bureaucrats in a far off city were making decisions about how much my daughter’s life and well being were worth given how many other people the government had to take care of with a limited budget.

Yes, Cynthia’s story is a medical miracle. But America has always been a place of medical miracles. Since 1970, American doctors have won more Nobel Prizes for Medicine than all other countries combined. According to McKinsey and Co., thousands of foreigners come to the United States every year for medical treatment they cannot get at home – due to rationing or simply because it is just not available.

Consider cancer, as just one example. Compared to the U.S., breast cancer mortality is 9% higher in Canada (according to the government statistics of each country), 52% higher in Germany and 88% higher in the United Kingdom (according to studies published in Lancet Oncology). Prostate cancer mortality is 604% higher in Britain.

Other studies show that patients who need knee and hip replacement, cataract surgery, and radiation treatment wait months longer in the United Kingdom and Canada than in the United States.

The facts and history are irrefutable. The American health care system is far better at fostering innovation and responding to patient needs. On the other hand, the history of government run health care systems is there for all to see. Are we going to learn from that history or are we doomed to repeat it?