Sticker shock
Chicago Tribune
The following editorial appeared in the Chicago Tribune on Monday, June 22:
___
Talk about bad timing for President Barack Obama.
There he was on Monday, exhorting doctors at an American Medical Association confab to join his once-in-a-generation overhaul of health care in America. He drew several standing ovations, even as he told them things that would probably cut their pay.
But then, on the same day, came an astonishing Congressional Budget Office analysis of what all this could cost.
The CBO analyzed the first major health-care proposal introduced, by Sen. Edward Kennedy, and concluded that it would cost more than $1 trillion over 10 years. That sent a jolt of sticker shock through Congress.
But hold on. Here's the kicker to that breathtaking figure: Even after spending all that money, 37 million Americans still wouldn't have health insurance.
Yes, that's a tentative analysis, as the CBO warned. It will change as the bill is fleshed out. And the Kennedy bill is only one of several health-care reform proposals now percolating in Congress.
But the analysis sure seemed to rattle advocacy groups and the White House. "This is not the administration's bill and it's not even the final Senate committee bill," a White House spokesman said.
Ooh, chilly.
So, OK, this is a work in progress, things will change, blah blah blah. But the point here is that the CBO analysis tells us three things that probably won't change, no matter how a major health-care reform law is crafted.
It will be:
_Complicated.
_Extremely expensive.
_Full of unforeseen consequences.
Congress doesn't have to take our word for it. Lawmakers can learn from the experience of Massachusetts, the first state to mandate health insurance coverage.
How are things going there? We'd say it's mixed.
At last count, the Bay State had the lowest rate of uninsured people in the nation, 2.6 percent. That's compared to the national average of 15 percent. Those holdouts are either unwilling to pay for insurance (and willing to incur the penalties assessed by the state) or they can't afford the insurance (even with state subsidies) and aren't required to buy it. Conclusion: Even if coverage is mandated, Congress will have to settle for something less than universal coverage.
Then there's the budget. The state expected to spend $472 million in fiscal 2008 for its health-care plan. The actual cost: $628 million. Budget projections for fiscal 2010 range from $750 million to $880 million. The state is struggling because it underestimated the number of adults who would sign up for subsidized insurance, which under some circumstances covers a family of four that earns up to about $66,000.
Conclusion: Congress has considered subsidizing American families earning up to $110,000 to buy insurance. That would be too broad and too expensive. It appears that lawmakers are moving away from such a commitment.
Beyond the numbers, what about suddenly insured patients who need care? A recent report by the Urban Institute wasn't too reassuring. It found that even those who got health-care coverage in Massachusetts found they couldn't afford needed treatments. It's not clear why.
The sudden influx of the insured has strained the health-care system in the Bay State. Patients report long waits to see doctors. One in five patients has reported being told that a doctor was not accepting new patients, or not accepting patients with their type of insurance, according to the report.
The upshot: People still wound up in emergency rooms for routine care. That undercuts a major premise for covering all Americans, which is to stop them from going to the emergency room for routine care that could be less expensively dispensed in the doctor's office.
Obama wants to push a bill through Congress before the August recess. That deadline may be slipping, thanks in part to this bolt of fiscal reality from the CBO.
News > Business
U.S.'s debtor status worsens dramatically
Foreigners hold 50 percent
By David M. Dickson (Contact) | Saturday, June 27, 2009
At the end of 2008, America's net international investment position was minus $3.47 trillion, the Commerce Department reported Friday. That represents the difference between the value of U.S. assets owned by foreigners ($23.36 trillion) and the value of foreign assets owned by Americans ($19.89 trillion).
At the end of 2007, the U.S. net international investment position was minus $2.14 trillion. Thus, America's net indebtedness with the rest of the world increased by $1.33 trillion, or 62 percent, during 2008. It was by far the biggest annual increase in data that go back to 1976.
Foreigners now hold nearly 50 percent of the federal government's publicly held debt. If foreign investors significantly reduce their purchase of future U.S. Treasury debt securities, without even dumping their current holdings, U.S. interest rates could soar and the dollar could collapse, analysts fear.
At minus $3.47 trillion, America's net debtor status with foreigners represents nearly 25 percent of U.S. gross domestic product, the highest level in history.
"Three decades of massive [trade] deficits have converted the United States from the world's banker - able to 'pay any price and bear any burden in the cause of freedom' - to the world's largest debtor, utterly dependent on China and other foreign interests," said Charles McMillion, chief economist of Washington-based MBG Information Services.
Essentially, America's net international investment position is driven by what the United States borrows from the rest of the world to finance its ongoing trade deficit, said Brad Setser, a fellow for geoeconomics at the Council on Foreign Relations.
Over the 2003-07 period, however, foreign equity markets outperformed the U.S. stock market, and the dollar steadily depreciated. These two factors reduced the annual deterioration in America's investment position that otherwise would have been dictated by massive U.S. trade deficits during this period.
"Both of those factors reversed themselves last year," Mr. Setser said. The dollar appreciated, and foreign stock markets suffered bigger declines than America's. As a result, America's net debtor status worsened significantly more during 2008 than its nearly $700 billion trade deficit would have dictated, Mr. Setser explained.
Over the years, America's status as a creditor or debtor has changed enormously. In the early 1980s, America's net international investment position averaged $350 billion, or 11 percent of GDP, making the United States the world's largest creditor. Today, it is the world's largest debtor - by far.
As recently as 1996, America's net debtor status was minus $456 billion. Since 1996, it has increased by more than $3 trillion, or 660 percent, as America's 12-year cumulative trade deficit soared by $5.7 trillion.
Foreign governments have taken notice - in particular, China, which now holds more U.S. Treasury debt than any other country. In the 12 months through April, China's portfolio of Treasury debt securities has soared by more than a quarter of a trillion dollars to nearly $800 billion.
In its annual financial stability report issued on Friday, China's central bank once again declared there were serious problems with the global monetary system's reliance on a single dominant currency - the dollar. An estimated 65 percent to 70 percent of China's $2 trillion in foreign exchange reserves, the world's largest stockpile, is held in dollar-denominated assets.
The People's Bank of China also warned the United States on Friday about its very expansionary monetary and fiscal policies.
"We are so deeply in debt and this money is so liquid that it hamstrings our monetary, fiscal and trade policies," Mr. McMillion said. "We've really mortgaged our financial future."
@au1929,
This is another government irresponsibility that left things to their own devices (the conservatives's lassize faire) which looks ominous today, and will burn us tomorrow.
The business media also failed us by not informing the consumers that they can't continue to borrow to purchase goods and services hoping to pay for it tomorrow. The debt increases not only from the accumulated interest rate, but from the devaluation from our currency.
What happened to all those economists who failed to rain in all that credit spending? They should have known what the long-term consequences of it will bring.
*****
Today's newspaper has two interesting articles about the booming birth rate in our country as consumers tighten their spending for fear of losing their jobs. Those are two more whammies that we will have to contend with for many years that will impact our economy.
We have become a debtor nation from a lender, and the debt continues to increase as a percentage of our GDP. Not good.
When inflation will hit is anybody's guess.
The argument that yes, things are worse, but if we weren't spending billions and billions of taxpayer monies, things would be much worse, continues. And even that message they're putting out there is inconsistent.
Rasmussen headlines over the last week:
31% Say Stimulus Plan Has Helped Economy, 30% Say It Hurt
74% Trust Their Own Economic Judgment More Than Congress’
37% Say Country Heading in Right Direction
76% Say Government Likely To Waste Stimulus Money
More Voters See Their Taxes Increasing Under Obama
41% Say Congress Has Most Control Over Economy
55% Say Business Leaders, Not Government, Will Help Economy Most
Voters Now Trust Republicans More than Democrats on Economic Issues
Only 17% Rate Government A Wiser Spender Than Private Business
Cheerios 87, FDA 4
http://www.rasmussenreports.com/
Quote:Moving the Stimulus Goalposts
June 29, 2009 11:18 AM
ABC News’ Rick Klein reports:
With public confidence in the stimulus package showing signs of ebbing, the Obama administration is continuing to sell its impact with nation-wide events and press appearances.
Today brings this explanation, from Christina Romer, the chairman of the president’s Council on Economic Advisers: Stimulus spending, Romer told the Financial Times, is “going to ramp up strongly through the summer and the fall.”
“We always knew we were not going to get all that much fiscal impact during the first five to six months. The big impact starts to hit from about now onwards,” Romer said.
We’ve known for some time that the money takes a while to get out the door.
But top Obama advisers haven’t always been so cautious in predicting how the long the stimulus would take to be felt.
Back in February, with Congress moving swiftly to approve President Obama’s $787 billion stimulus package, White House budget director Peter Orszag said the benefits of the stimulus would be “take weeks to months” to be felt.
Larry Summers, director of the National Economic Council, was even more optimistic: “You'll see the effects begin almost immediately,” Summers told CNN in February.
Just last month, Jared Bernstein, Vice President Joe Biden’s top economic adviser, joined administration officials in asserting that the stimulus was already working, despite rising unemployment rates.
“The idea here is that, yes, the unemployment rate is rising, but it would be rising more quickly [without the bill],” Bernstein said on ABCNews.com’s “Top Line.” “We're spending about $1 billion a day -- and, by the way, with very careful oversight -- and that's creating, again, economic activity that would not have occurred in the absence of this plan. That's the essential point.”
Then there’s the case of the now-famous chart, prepared in January by the Obama transition team to forecast employment rates with and without a stimulus bill in place.
Obama’s economic advisers saw unemployment cresting at just below 8 percent with the stimulus in place; without it, they forecast the national rate topping out around 9 percent.
The stimulus, of course, did pass, though the national unemployment rate is now 9.4 percent. Two weeks ago, President Obama predicted that unemployment will top 10 percent this year.
http://blogs.abcnews.com/thenote/2009/06/moving-the-stimulus-goalposts.html
It would appear that Obama and company are bent on changing us from the USA to the USSA. Just kidding I hope.
@au1929,
au, I also do not approve of everything Obama is doing, but he is also trying to reverse this economic crisis. Most people are impatient to see improvements after five months that Obama's been in office, and much of that time was to get legislation through congress; this economic devastation is world-wide, and started in 2007. People are just not thinking rationally or with any sense about how bad this economy has impacted the whole world. Their reality is more religious than common sense.
If they want miracles, they need to pray to their god. Even then, it's not going to happen overnight (or within the next six months).
Quote: It found that even those who got health-care coverage in Massachusetts found they couldn't afford needed treatments. It's not clear why.
Why? It's because cheap health insurance is worthless when it comes to good health care. Do you really think a policy payment of $10/month will buy you a heart transplant or pay for many drugs costing $12,000/month?
@cicerone imposter,
How can one man, President or otherwise, reverse a process caused by greed and irresponsibilty on a national scale? It was impatience with natural growth which caused the popularity of hot-housing it.
If he tried anything serious his popularity ratings would tank.
There's no devastation here. And the circus around the Jackson case suggests there's none there.
You're a scaremonger ci.
@Miller,
As the old saying goes, you get what you pay for. Those $10/month premium barely pays the commission who sells those policies.
However, I have a bridge in Montana I can sell you for $5/month.
@cicerone imposter,
The reason people expect miracles, IMHO, is ecause Obama promised them.
He promised in January that if his stimulus plan passed, unemployment wouldnt go over 8%.
Its now close to 10%.
He promised that his stimulus plan would provide jobs, but where are they?
He made many promises aboput what would happen, but many of those promises either arent being kept or are slow to materialize.
People are starting to wonder about his promises, because they arent seeing the results.
@mysteryman,
That's a lie; Obama repeated said things will get worse better it gets better. Are you deaf and dumb, or just like to spread rumors?
mm wrote:
Quote:People are starting to wonder about his promises, because they arent seeing the results.
Same problem; they want miracles, because they didn't really listen to Obama's message.
From Money:
Quote:Money/ Breaking News
Obama on economy: Worse before better
Agence France-Presse
First Posted 21:03:00 01/10/2009
Filed Under: World Financial Crisis, Politics, Economy and Business and Finance
WASHINGTON D.C., United States of America -- US president-elect Barack Obama sought to cool down expectations from his incoming administration Saturday, saying the most serious crisis since the Great Depression gripping the United States will probably get worse before the economy starts to improve.
But he expressed confidence Americans will overcome the current difficulties.
"Recovery won't happen overnight, and it's likely that things will get worse before they get better," Obama said in his weekly radio address.
"But we have come through moments like this before ... And I am confident that if we come together and summon that great American spirit once again, we will meet the challenges of our time and write the next great chapter in our American story."
@cicerone imposter,
http://blog.al.com/businessnews/2009/06/obama_unemployment_to_rise_nee.html
Quote:In January, Obama's economic team predicted unemployment would rise no higher than 8 percent with the help of $787 billion in new government spending. The unemployment rate in May reached a 25-year high of 9.4 percent. Obama aides have said that the economy took a turn for the worse since their initial forecast.
So, am I lying about what he said???
And the economy has "taken a turn for the worse" under Obama's watch, so you cant blame Bush for that.
Quote:Earlier this month, Obama promised to speed up the outflow of money and create or save 600,000 jobs by the end of the summer. But spending of the stimulus money had been expected to rise in the summer anyway and the 600,000 jobs had been a target for a month.
Tell me, how will he prove that he "saved" any jobs, let alone any part of 600,000 jobs.
Quote:For the second time in a month, Obama voiced unease over the results of a $787 billion economic stimulus that he pressed Congress to pass as one of his first acts as president.
He fought for it, he passed it, and now he is" uneasy" about it?
That really instills confidence.
@cicerone imposter,
Quote:WASHINGTON D.C., United States of America -- US president-elect Barack Obama sought to cool down expectations from his incoming administration Saturday, saying the most serious crisis since the Great Depression gripping the United States will probably get worse before the economy starts to improve.
When did he say that exactly?
Saturday, January 10th, 2009.
@realjohnboy,
Sadly, the way these things go, he'll continue to say that until there is some improvement. And though I think he'll have absolutely nothing to do with that improvement he'll take full credit for it.
But, as a politician, he isn't necessarily unique in that regard.
@realjohnboy,
Quote:Saturday, January 10th, 2009.
Was that after the election?
This was the best bit--
Quote:"But we have come through moments like this before ... And I am confident that if we come together and summon that great American spirit once again, we will meet the challenges of our time and write the next great chapter in our American story."
That's earth shaking.
@spendius,
As I remember it the last time we had a moment like this it took a war to get us out of it. Someone should enlighten the kid
@realjohnboy,
He also said it during the campaign through December. Don't forget, January 10th, 2009, is still under Bush's presidency.
