As Obama threatens to veto budget cuts, Treasury Secretary Tim Geithner admits that Obama’s proposed budget is unsustainable:

With the president’s plan, even if Congress were to enact it, and even if Congress were to hold to it and reduce those deficits to 3% of GDP over the next five years, we would still be left with a very large interest burden and unsustainable obligations over time.

Watch Treasury Secretary Tim Geithner’s testimony here:

Furthermore, as Obama claims his budget “puts us on a path to pay for what we spend by the middle of the decade,” Budget Director Jack Lew admits it does no such thing. Instead, the budges is considered balanced only if we ignore interest payments on the debt.

Here’s what Lew says:

This budget would get us to the point where in the middle of the decade, we will be paying for our current expenses and we will be in what’s called ‘primary balance’. That means that the only thing that’s putting us into deficit is payments of interest on the national debt.

And the interest portion of the budget is huge. It’s the 4th largest budget item and in fiscal year 2009 amounted to $381 billion (see here). And now we’re in a time when interest rates are rock bottom. If those go up, we’ll see the interest on the national debt balloon enormously.

See Budget Director Jack Lew’s testimony here:

I propose they give away their fortune to the government, just like they want the rest of us to be forced to do. I also propose they give up their fortunes down to the $250,000 per year level, the level at which the politicians they support claim that you’ve got too much.

Having ten billion dollars and giving up nine is no big deal in my book because you’re still left with more money you can reasonably spend in a lifetime. I want to see them give up their lavish lifestyles and get knocked down to the middle class level.

President Obama and other Democrats such as Nancy Pelosi are proposing to extend the tax cuts for the middle class only, i.e. to individuals with incomes of less than $200,000 per year or households with less than $250,000 per year.

For starters, there’s an instant red herring that comes to mind here. For years, my liberal friends were telling me that the EVIL, rich, scheming, menacing George W. Bush gave tax breaks to the filthy rich (i.e. his equally evil oil buddies) while leaving the poor and middle class out in the cold, enslaving them even more as they are forced to pick up the slack. So Obama and Pelosi’s proposal is a direct admission that all of this was utterly untrue. (But then again, I’m sure the liberals can find a million ways to re-spin their former spin.)

In fact, the Bush tax cuts skewed the tax burden even further toward the rich than before. How can this be true? It’s simply because the lower tax brackets where cut more than the upper ones.

Another question that comes to mind is why let any part of the tax cuts expire at all. The liberals love to cite the deficit as the reason, however the likely truth is more in line with the liberal ideology of class warfare. That’s because at best, the Bush tax cuts to the “wealthy” can account for only a tiny fraction of the budget deficit.

According to CBO data, Bush’s tax cuts account for 14% of the deficit. And the 14% figure is based on static scoring that assumes people do not change their behavior due to different tax rates.

However, in the real world, whenever there is a tax cut, at least some of it is recovered from an increase in the activity that’s being taxed. A decrease in income tax for example, encourages more income earning and less tax avoidance. And therefore, the actual figure assgning blame to the Bush tax cuts is even lower, if not arguably zero as tax cuts may spur enough new taxable activity to completely compensate for the decrease in tax rate.

At any rate, if we’re just talking about tax cuts to the top earners as defined by Obama, the 14% is cut in four to arrive at 3.5%, since those tax brackets account for only 25% of the cuts in dollar amount.

So eliminating the Bush tax cuts to the walthy can at most help reduce the deficit by 3.5%, a puny amount.

But doesn’t every little bit help?

Yes, it does, but if eliminating the tax cuts for the top brackets helps reduce the deficit, wouldn’t eliminating the tax cuts for the lower brackts help reduce the deficit even more since their share of the cut is 75%? Therefore, shouldn’t we let the Bush tax cuts expire for everyone then?

At this point economically minded liberals are almost certain to reply that raising taxes on the non-wealthy is likely to hurt the economy since they are more likely to spend any extra money they have, and therefore we shouldn’t do it.

But this does not satisfy the question because even if so, the wealthy earners are then the ones who are more likely to invest, expand or start a business, and create jobs. So why is household spending more important than investment and business development for the good of the economy? It’s not!

And in conclusion, that’s why letting the Bush tax cuts expire only for the upper tax brackets is pure hogwash based on class warfare ideology alone.

References (well worth a complete read):
Ten Myths About the Bush Tax Cuts
The Tax Cuts Didn’t Cause the Budget Deficit

See Obama promise:

But now starting July 1, 2010, a new 10% federal tanning salon tax goes into effect. This tax is part of the new health care law.

So in fact, this is yet another example of the welfare state being supported by people other than “the rich.” A major theme on this website is that it’s impossible to support a large welfare state without putting the heavy burden on the middle class. Yet in every election cycle the Socialists/Democrats keep claiming just that, and people somehow buy into this deception!

The tanning tax is just the tip of the iceberg. There’s a slew of new taxes (on non-rich people) coming up in 2011 as the “Bush tax cuts” expire in addition to more “Obamacare” taxes down the line.

The Obama Administration represented the moratorium as a safety recommendation suggested in a report drafted by Interior Secretary Ken Salazar and peer reviewed by experts associated with the National Academy of Engineering. However, those same experts are saying that they have been misrepresented, and that the moratorium was added to the report after they had signed off on it. They noted that they agreed to a moratorium on drilling of new wells, but not on shutting down existing operations.

A June, 17th Wall Street Journal op ed piece chronicles this and explains why the drilling moratorium is actually detrimental to safety:

A big reason why those experts would have balked is because they recognize that the moratorium is indeed a threat to safety. Mr. Arnold offers at least four reasons why.

The ban requires oil companies to abandon uncompleted wells. The process of discontinuing a well, and then later re-entering it, introduces unnecessary risk. He notes BP was in the process of abandoning its well when the blowout happened.

The ban is going to push drilling rigs to take jobs in other countries. “The ones that go first will be the newest, biggest, safest rigs, because they are most in demand. The ones that go last and come back first are the ones that aren’t as modern,” says Mr. Arnold.

The indeterminate nature of this ban will encourage experienced crew members to seek other lines of work—perhaps permanently. Restarting after a ban will bring with it a “greater mix of new people who will need to be trained.” The BP event is already pointing, in part, to human error, and the risk of that will increase with a less experienced crew base. Finally, a ban will result in more oil being imported on tankers, which are “more likely” to spill oil than local production.

This is a prime example of how those who control government operate to perpetuate their own self interests rather than act for the “good of the people.”

Watch Pelosi’s comments here:

“This legislation will have an effect of addressing that mal-distribution of income in America…”

To answer this question, let’s first put the size of the healthcare problem in the U.S. into perspective.

Counting the Number of the Uninsured in America

When Obama ran for president, he touted health care reform as a big issue because there were 47 million people uninsured in America.

This figure comes from the Census Bureau. And according to the Census Bureau there were 47 million people without health insurance in the United States in 2006.

But out of those, 9.3 million live in a household with an income of $75,000 a year or more, and also 10.2 million are not citizens of the U.S.

Let’s discount those from the uninsured figure to arrive at a number encompassing people we’d sanely expect to have a claim for receiving government assistance, (which is always funded by money that’s reluctantly taken away from someone else.)

47 – 9.3 – 10.2 = 27.5 million.

However, there may be some who are non-citizens and are in households making more that $75,000 a year, and we don’t want to double subtract those. Since the latter are 1/3 of the population, with no further information, we can expect the double counting to be 3.3 million. So 27.5 + 3.3 = 30.7 million.

So now we’re at a point where the number of the uninsured we’d sanely expect to be given government assistance in the matter is no more than 30.7 million or about 10% of the population in the United States.

But the problem posed by the above figure of 10% is much further diminished by the following fact:

Not Having Health Insurance Does Not Necessarily Mean You Are Sick or Can’t Get Healthcare If You Are!

Let’s see why:

• 8.5 million of the uninsured live in households of incomes between $50,000 and $74,999. Like those in households making over $75,000 per year, at least some are able to afford insurance, but just choose not to get it. Still others in America, especially those making between $50,000 and $74,999, may also afford to pay for doctor visits and medication out of their own pocket should the need arise, though admittedly probably not for major illnesses.
• 19 million of the uninsured are young adults between the ages of 18-34. I would venture to guess that most won’t encounter anything but a minor illness until they’re older, at which point many would be earning more money and able to afford insurance anyway. And in addition, high deductible health insurance for this demographic is inexpensive… well, at least in states whose government does not interfere and allow such coverage.
• By law, emergency room care has to be provided to anyone walking in. The patient is still liable for the expenses incurred, and often hospitals work out discounts and financing, but good luck to hospitals trying to collect from those who truly can’t afford it.
• There are those who are uninsured and qualify for a government plan (Medicare, Medicaid, etc.), yet have not signed up.
• Many government assistance programs, provide healthcare to the uninsured. Those don’t count as insurance, but still give healthcare in certain instances.

  For example, the Prenatal Care Assistance Program (PCAP) in New York, is a “comprehensive prenatal care program that offers complete pregnancy care and other health services to women and teens who live in New York State.” To qualify, the woman can earn up to 200% of the federal poverty level, which means this is available to many who don’t qualify for Medicare.

  Another example is the HIV Uninsured Care Programs (ADAP), which provides “access to free healthcare (HIV Drugs, Primary Care, Home Care, and APIC) for New York State residents with HIV infection who are uninsured or underinsured.”

• There are clinics across the USA providing free healthcare for the uninsured.

  For example, the New York City Free Health Clinic is a private clinic providing healthcare to uninsured people in NYC.

  Here’s the Web site of Georgia’s free clinic network.

  And here’s the Web site of the National Association of Free Clinics (NAFC), “whose mission is solely focused on the issues and needs of the more than 1,200 free clinics and the people they serve in the United States.”

• There are resources of financial aid for those who are uninsured and fall victim to serious illness.

  For example see the Memorial Solan-Kettering Cancer Center’s financial assistance program.

Therefore, the problems with the healthcare system in the U.S. may be a government actionable “crisis” for a percentage of the population that’s well into the… single digits!

Just looking at the Census Bureau report, it’s not possible to calculate exactly for how many of the 10%, not having insurance is a big problem or a problem at all, but one thing is for sure, all the above factors mean that for quite a large number of the uninsured, not having insurance is NOT a big problem. Therefore, for simplicity, let’s say of the 10%, it’s a problem for half. Maybe a little more, maybe a little less.

Therefore, all the panic, crisis, “people are dying on the streets”, “we should join every other civilized nation”, “in America people have to choose between food and healthcare” rhetoric of the left, in reality is actually referring to about 5% of the population who don’t have access to all the healthcare they need, but they do have access to some!

Reality Check: What This Debate Really Comes Down To

We all know that liberals and socialists demand government intervention in private industry because of their compassion for others, or at least that’s what some of them claim.

And as such, the following sentence comes out the mouths of proponents of national healthcare very frequently: “How can we live in a country where some people don’t have access to basic healthcare?”

First of all, the premise of the question is flawed. As shown above, we’d be hard pressed to find people unable to receive any basic healthcare at all in the U.S. should they seek it.

Is it good that 5% have problems getting full access to healthcare they need? Of course not.

However, and this is key, in countries that have a national healthcare service, a.k.a. single payer systems, people do not get access to all the healthcare they need either! Otherwise, there wouldn’t be a need for private supplemental health insurance in the U.K., and there wouldn’t be a need for average Canadian citizens to seek treatment across the border in the United States at their own expense.

No government healthcare program we can implement is ever going to give all the healthcare anyone needs to everybody. The NHS (National Healthcare Service) in the U.K. doesn’t do it, the Canadian system doesn’t do it, the French don’t do it, and Medicare and Medicaid in the U.S. don’t provide comprehensive healthcare for those who are covered.

Michael D. Tanner of the Cato Institute, a libertarian think-tank, writes the following points about government controlled healthcare systems around the world:

• Health insurance does not mean universal access to health care. In practice, many countries promise universal coverage but ration care or have long waiting lists for treatment.
• Rising health care costs are not a uniquely American phenomenon. Although other countries spend considerably less than the United States on health care, both as a percentage of GDP and per capita, costs are rising almost everywhere, leading to budget deficits, tax increases, and benefit reductions.
• In countries weighted heavily toward government control, people are most likely to face waiting lists, rationing, restrictions on physician choice, and other obstacles to care.
• Countries with more effective national health care systems are successful to the degree that they incorporate market mechanisms such as competition, cost sharing, market prices, and consumer choice, and eschew centralized government control.

You can access Tanner’s full analysis of international health systems here on the Cato Institute’s Web site.

You may also read this December 2008 New York Times article about Bruce Hardy, an NHS cancer patient in the United Kingdom, who was deprived of life saving, yet costly, medicine because “at that price, Mr. Hardy’s life is not worth prolonging.”

And you may read this March 2010 Daily Mail article about how thousands of NHS cancer patients are denied life saving drugs:

Last year the Government’s drugs rationing body, NICE, promised to make it easier for patients suffering from rarer cancers to receive life-prolonging drugs on the NHS.

Today, we reveal just how hollow that pledge has proved.

Since it was made, ten drugs – which could have provided as many as 20,000 cancer sufferers with precious extra months or years – have been rejected on the grounds they are too expensive.

I suppose the British government just doesn’t have enough money to pay for everyone’s care after all!

Therefore this debate is really about whether approximately 5% of the population in the United States should receive somewhat more healthcare than they do now. And it’s not whether they would go from no healthcare to complete coverage, just whether they’ll get somewhat more… at the expense of others. No, not the rich “others”, everybody! That includes you and me and all of middle class America.

So What’s Wrong With Providing More Healthcare to Those 5%?

There’s nothing wrong, as long as you can actually do it in a way that doesn’t make things worse overall. And, experience has shown this is extremely difficult or impossible to do so with more government involvement in the health care industry.

I just gave examples of cancer patients in the U.K. being denied care by the NHS. But, as some may say, healthcare is also being denied by the “evil” insurance companies in America. That sometimes happens, however despite that “evil”, cancer treatment outcomes, for example, are better in the United States than anywhere else in the world, even if you count those with no insurance.

The following is from the National Center for Policy Analysis Web site:

According to the survey of cancer survival rates in Europe and the United States, published recently in Lancet Oncology:

• American women have a 63 percent chance of living at least five years after a cancer diagnosis, compared to 56 percent for European women.
• American men have a five-year survival rate of 66 percent — compared to only 47 percent for European men.
• Among European countries, only Sweden has an overall survival rate for men of more than 60 percent.
• For women, only three European countries (Sweden, Belgium and Switzerland) have an overall survival rate of more than 60 percent.

These figures reflect the care available to all Americans, not just those with private health coverage. Great Britain, known for its 50-year-old government-run, universal healthcare system, fares worse than the European average: British men have a five-year survival rate of only 45 percent; women, only 53 percent.

You can find the full article here.

U.S. cancer survival rates are also higher than those in Canada.

So I suppose the “evil” private insurance industry indeed fairs better at providing care than the “benevolent” governments around the world.

And there are concrete reasons for that. Primary among those is that once the health care system is opened up to strong government influence, the decision making process starts running on political merits and not on the merits of science or quality of care.

Obamacare isn’t even in effect and this is already happening! This past week, the vote of Democratic Senator Mary Landrieu from Louisiana (to start debate on the Senate health care bill) was bought off with $300,000,000 of state aid. The following is from a Wall Street Journal article dated November 22, 2009:

Take Louisiana Democrat Mary Landrieu, who claims to have grave concerns about the bill’s cost. Those worries became less pressing when Majority Leader Harry Reid added language on page 432 of the 2,074-page opus that would raise the bill’s cost by increasing federal Medicaid subsidies for “certain states recovering from a major disaster.” Guess which state is the only one that would qualify under that wording?

This political gratuity was quickly reported as costing $100 million, but Senator Landrieu made clear after her floor speech that her vote couldn’t be bought that cheaply. “I will correct something. It’s not $100 million, it’s $300 million, and I’m proud of it and will keep fighting for it,” she told reporters.

Was Senator Landrieu’s vote cast on the health care quality or finance merits of the bill? No! It was cast on the merits of a dollar taken from each and every person in the United States to increase her chances of reelection in Louisiana. So that’s how socialized health care reduces costs! What a plan!

I can already hear liberals saying “but private health care isn’t about quality care either, it’s all about PROFIT!” To that I say that even assuming the motivation is all about profit, there is far more direct connection between profit and quality of product in private industry than between political gain and quality of product in the government sector. And I dare anyone to demonstrate otherwise!

Therefore, instead of legislating government takeovers of an industry, perhaps we should do something else.

Senator Ben Nelson for example, got a $100,000,000 exemption from new state Medicaid spending mandated by the bill for his state of Nebraska. How swell for just those living in Nebraska. Hurray for the liberal principle of equality!

These political bribes are a glimpse into how this type of health care legislation is going to transform the handling of health care in the U.S.

If you’re a liberal thinking that the ends justify the means, consider this:

The UK first passed its National Health Service Act, nationalizing health care, in 1946. And until this day they are still constantly debating, legislating, and changing how the National Health Service works.

If we go down this path in the U.S., there will be no end to health care legislation, and this wheeling-and-dealing bribery type government spending will go on forever.

But, but, but… the Republicans do it too you may say. Yes, that’s right, and Harry Reid, the Democratic Senate Majority Leader, seems to agree…

From the Wall Street Journal:

Democrats defended the provisions and said this was how lawmaking has always worked, including when Republicans controlled Congress. “That’s what legislation is all about — it’s the art of compromise,” said Senate Majority Leader Harry Reid (D., Nev.). “It’s no different than other pieces of legislation.”

Wow, that’s an amazing revelation, Mr. Reid! “It’s no different than other pieces of legislation.” So this means this is how government normally operates… on special interests and political bribes! Who would have thought! And with Obamacare we’re going for a WHOLE lot more of that.

So now we’re supposed to believe that legislation born in special interest and political bribes that mandates there would be no limits on health insurance payments and “insurance” of preexisting conditions would somehow cut the budget deficit and reduce premium costs.

To anyone who does believe that, I have some highly desirable beach front property to sell you in Nebraska… for 10 cents on the dollar… a real bargain!