Birth Control, choice, insurance - your money
Rush Limbaugh’s statement about birth control was wrong and directed incorrectly. Birth control is not a right. In fact it is not a medical necessity. The premise that Federal and State Governments can dictate what insurance offers and what must be covered is just plain wrong to begin with. Why is it governments’ role to restrict or expand health insurance?
When it comes to auto insurance I have the ability to choose liability, collision, compressive and each with different limits of coverage. States set minimum coverage for liability to make sure some amount of liability will be available to compensate others for your errors or accidents you cause. In fact many states will allow you to submit a bond to cover the place of insurance; if you have no accidents you end up keeping your bond and paying no insurance – self insured. However, state and federal governments now seem bent on specifying specific coverage and and now must provide “X” for free when it comes to health insurance.
In fact we can extend the debate to life insurance. I know of no Federal or State law/regulations that require anyone buy life insurance or that require insurance companies to cover specific losses. So I ask once again, why is government interfering with private business in a matter that is an individual choice? Clearly if insurance companies thought it was a good marketing tool to offer birth control, they would offer this on their own. In fact private insurance coverage can be obtained that does not cover the birth of a child if one so chooses. Again this is a choice, not a requirement.
The debate between Rush and the woman is that the woman thinks someone else should pay for her birth control – she wants them for free, in fact every insurance company she approaches should offer it for free. This makes life easier for her in that she does not need to sort through the myriads in differences between insurance companies and prices; simply put it reduces choice and so now all she has to do is compare price.
Are people that foolish that they believe things mandated by government are free? Pretty soon we will not be able to pick and choose what we want to buy, but it will be mandated for us.
Irnorance does not equal Smart Money
Jack Hough of Smart Money has not through his article on How to Outsmart Social Security.
The statement “Social Security is designed to be fair” is totally false. If it actually had a design behind it, there would be no unfunded liability. Had it been fair, the yearly statements I received from SSA would not be telling me of impending inability to pay 100% of scheduled benefits. If there was a design behind SS-OASI, then the money paid as to a collective cohort would be in direct proportion to the value of contributions paid plus the credited interest earned on these contributions which in turn would have been used to pay the collectives benefits.
In addition “But Social Security isn't nearly as sophisticated in its pricing as the annuities offered by private companies. The latter adjust payments according to changes in interest rates to keep the benefits of waiting fairly stable, but Social Security ignores interest rates.” This contradicts the implied statement “Social Security is designed” by stating it is not sophisticated in its pricing.
Social Security did not have a design, there was no thought as to how the program would actually pay benefits nor was there any mechanism in place that would regulate benefits except Congress retained the authority to change alter or abolish any portion of the Social Security Act without liability.
"In general, gains from delaying Social Security payments are greater during periods of low interest rates, all else held equal. They're also greater "for married couples relative to singles, for single women relative to single men, and (at most interest rates) for two-earner couples relative to one-earner couples," according to the study."
This is truly amazing news. When interest rates are low, SS-OASI's trust fund earns less, thus reducing the ability to pay scheduled benefits. So with lower interest rates does it reason that the scheduled benefit payment may drop from 76% to 60% or even less? Who is this guy writing for; Social Security or Dumb Money? By law, general revenues cannot be used to fund Social Security. This reasons when there is not enough funds to pay benefits, benefits are cut. The writer is basing his analysis on the premis that full scheduled benefits will be paid and that you were born prior to 1948.
If we were really talking about smart money, we would be talking about repealing the Social Security Act pertaining to Old Age Survivors Insurance. The reason simple, a person born after 1985 can expect at most to receive 29 cents in benefits for each dollar paid in contributions and US Treasury Paid Interest.
Robert Ball
Commissioner of Social Security
1962 and 1973,Wrote June 2005
“When Social Security began, benefits for those nearing retirement age were much higher than could have been paid for by the contributions of those workers and their employers. This was done so that the program could begin paying meaningful benefits even though workers nearing retirement would have only a short time to contribute.”
“Instead, the impression is left that the program was sound only when 16 paid in for every one taking out. Thus, of course, when the ratio changed to 3.3 to 1, the program became “unsustainable.”
“They ignore the fact that in 1950 only about 15 percent of the elderly were eligible for benefits and that it was expected by all who were acquainted with the program that the ratio would, of course, change dramatically as a greater proportion of the elderly became beneficiaries.”
“What in fact happened is that when just about all the elderly first became eligible for Social Security benefits, about 1975, the ratio was 3.3 contributors to each beneficiary and the ratio has stayed that way for the past 30 years. As the baby boom reaches retirement age, as the administration says, the ratio is expected to drop for the long run to 2.0 or 1.9 workers to each retiree”
http://www.tcf.org/Publications/RetirementSecurity/ballplan.pdf
Tax Rates: Warren Buffett and his secretary
Warren Buffet, media and pundants seem unable to perform simple math. The single person pays the highest tax of al filers. The tax rates are pretty straight forward for a single person;
2011 Tax rates
15% on over $0 to under $8,375
25% on over $8,375 to under $34,000
28% on over $34,000 to under $82,400
33% on over $82,000 to under $171,850
35% on all amounts over $373,650
For the secretary to pay 35% tax, would require she make far greater than $373,650. She must be no ordinary secretary. Even if she had some portion of income taxed at 35%, she would have had to make $373,650, but her total tax on this $373,650 would be only 29% overall. To even get to 34% would require an income, after deductions and exemptions, of $2,235,625.00
Formula is simple:
34% = ($108,421.25 + 35% x (taxable income - $373,650)) divided by (taxable income)
Does he pay his secretary this much?
Then there is the issue of risk. Investing capital to make money is a bit different than going to work and performing a task. An investor has the potential to lose a substantial amount of their capital. The worker works an hour, gets paid for that hour. The risk to the worker is that they get laid off, but the worker has no capital at risk. This is the simplistic reasoning of capital gains tax and taxes on earned income. There is also a different tax rate for dividends that come from capital that is at risk. Earned income is taxed at a higher rate because it is least at risk.
Decades ago, capital gains were taxed in the following way: 40% of gains were taxed at the ordinary tax rate. This means that if the ordinary tax was 28%, your capital gains tax was 14%. If you were in the lowest tax bracket of 15%, your capital gains tax rate was 7.5%. The change from this method to the current benefited the highest income brackets at the expense of the low income brackets. I think the old method was fairer and easier to calculate.
The Fair Tax
The majority of Americans support a balanced budget amendment. They expect congress to live within its means. At the same time Senator Lugar and Representative Stutzman, two out of many elected representatives both support the fair tax measure, specifically the national sales tax of 23%. This tax would combine the Social Security Old Age Survivors Insurance tax of 10.6%, Social Security Disability tax of 1.8%, Medicare Tax of 2.9% on wages with the death tax, and Federal Income tax which has tax brackets of 10%, 15%, 28%, 33% or 35%. In essence it would do away with the Internal Revenue Service.
It does not surprise me that the Fair Tax of 23% would conflict with the majority of Americans who support a balanced budget. Two of the largest programs already have balance budget statutes. Both Social Security and Medicare cannot borrow money nor can Federal General Revenues be used to support these two programs. These programs can only consume their respected dedicated payroll taxes and the funds in their respected trust funds. United States Code Title 42, Chapter7, Subchapter VII, Sec. 911 (a). This statute was passed in 1984 after the Big Fix of 1983 which raised the social security based, tax, retirement age and began subjecting social security benefits to federal taxation. This statutes primary goal was to restrain both Social Security and Medicare from consuming all federal revenues.
The fair tax would remove the balanced budget statute from these two programs. We have seen how congress is inadequate to cut just $120 Billion a year from $1.5 Trillion deficits. Combining these dedicated payroll taxes with Federal General Revenues will cause even more budget constipation. We should be focusing on the General Budget separately, not combined with two programs with very difficult ideologies. When attempting to solve a problem, you separate the problem into its basic parts, not combine many different problems. This only leads to pointing fingers.
However, the national sales tax has other problems. Workers who have saved money to make a purchase of a home, car, etc in the future have paid payroll taxes and these funds have been subjected to federal income taxes already. The national sales tax would now tax them once again. For 50% of workers, they have already paid 7.65% payroll tax and had no federal income tax liability. This would be like paying 31% tax on each dollar earned. For those other 50% of the people this savings was most likely taxed at a minimum of 10%. This other 50% of the work force would be then have 41% of each dollar they saved subjected to 41% federal tax.
However, there are those who would fair just slightly better. Those who set aside pretax money in 401K’s or IRA’s would not have paid tax on this income and with the Federal Income Tax eliminated would escape subject to the current tax when withdrawn. Granted, 23% would be far greater than the current federal income tax structure, but less than after tax savings.
Municipal bonds are generally free from all state and federal income taxes. One reason for government to do this is to lower their cost of borrowing. With a national sales tax, there is no incentive to invest in municipal bonds that pay a lower rate if in the end a taxpayer ends up paying 23% tax on it.
We then have to ask the question, what about Veterans Disability payments for service connected injuries? Those who are injured in the line of service and receive disability payments currently pay no federal or social security taxes on these payments. With the fair tax, these funds would now be taxed when spent at 23%. We also have insurance payments that are currently untaxed as well as pain and suffering payments from law suits where negligence of another party caused injury now being taxes at 23%. It is very possible while trying to simplify the tax structure of the US; we create a nightmare of other problems, Unintended Consequences.
Yard/garage sales would see a boom as a way to escape 23% sales tax. I would predict automobiles would see the average age on the road increase by 20%. Currently the there are 14 million cars sold in the US. These owners keep cars about 4 years and then are sold as used. I could envision that these new car buyers would now keep their cars 5 or even six years, reducing sales to fewer than 11 million cars, possibly even more. Used cars would see a boom as well as auto maintenance suppliers and services.
Americans are resourceful and this sales tax would lead to more conservation of resources by utilizing produced goods for a longer period of time. This would reduce manufacturing jobs and innovation as the market adjusts to less demand.
Then there is the question about Social Security. Social Security is paid to those who have wages subjected to the Social Security base. If you have no wages, you are not eligible for social security unless you qualify as a spouse or dependent. The elimination of the payroll tax and the enacting of a sales tax would have all people supporting social security, even those who paid and are now beneficiaries. Would everyone now be covered since they now support the program through sales taxes? How would benefits be calculated. Currently there is no link between taxes paid and benefits received. Combining these revenue sources into one may result in either faster means testing of Social Security and reducing it to a welfare program, outright repeal of the program and combining it with the current welfare programs or the near total consumption of all revenue and cuts to all other programs.
As an engineer, I would prefer keeping the programs and dedicated taxes separated. Review the programs effectiveness based on its needs alone. If the program is not self supporting by its revenue source, then the decision to raise taxes or cuts benefits does to become more of a political nightmare that we have now.
Myth 6
High deficits in the future make it difficult to pay social security benefits
Social Security by law cannot borrow money. It has statutory authority to spend only those funds received from the dedicated social security tax on wages, tax on benefits and funds in the trust fund. Federal Law prohibits transferring general revenues to any trust fund. [4]
By law the trust fund cannot be drawn down to zero. The trustees must submit a report promptly to congress detailing benefit cuts or tax increases when in any given year the trust fund is projected to fall below 20% of that given years expenses. Social Security's ability to pay future promised benefits is dependent solely on the ability to raise social security taxes. [5]
4] United States Code Title 42, Chapter7, Subchapter VII, Sec. 911 (a),
http://www4.law.cornell.edu/uscode/42/911.html
[5] United States Code Title 42, Chapter7, Subchapter VII, Sec. 910 (a),
http://www4.law.cornell.edu/uscode/42/910.html
FWPD - Were here to Serve and Protect?
It is amazing how some government agencies just seem to not think ahead, even when it is their responsibility to think ahead. The 4th of July is a time of celebration, but that does not mean Mother Nature or life itself comes to a standstill. Having lived here since 1963, I know how many people go to the fireworks. They used to be held at McMillen Park where I as many other scouts would sell hot dogs, drink, candy and other “fine” snacks. The next day the area was a mess and we would be there bright and early to begin picking up all the trash.
They are no longer held at McMillen Park, but at Johnny Appleseed Park. This area is probably better suited with far more parking, but less sitting area than McMillen Park. With more people comes a bit more planning that is necessary. With thousands of cars exiting and the new stop light on Coliseum due to the removal of the tunnel which allowed those turning left onto Coliseum, there is a basic 15 car limit that can turn on a single light change. The Fantastic Fort Wayne Police Department however makes this look like a cake walk when they begin to close down south bound lanes north of Coliseum.
Did anyone think about the location of either Parkview Hospital or the Veterans Hospital off both State and Lake Streets and how closing south bound traffic on St. Joe Road and Clinton might hamper those needing emergency care? After speaking with Marty Bender on the phone for a short period of time, I got the distinct impression from his response and words used “evacuation of the area” was their main concern. I interpreted this to mean the FWPD's main concern was the evacuation of the Coliseum Parking lot. What I do not understand is how limiting south bound traffic and routing them further east or further west, actually they did not reroute, they simply waved their lights to keep moving, keeping you from making a turn south, would actually cleared the coliseum parking lot any quicker, safer or efficiently.
For those unlucky enough to have a medical emergency, trying to get to either Parkview or the VA Hospitals was very difficult. Even when you waved to a FWPD officer, they simply could care less. They walked like it was out of their way to come close enough to hear your need. “We are here to serve and protect” takes on a whole new meaning in a situation like this. First the officer asked the others where the medic had gone. Getting no response from the other non caring FWPD officers, the officer made a call to dispatch or someone on the radio to find out if an EMS unit could be sent or where the medic was. A transport by TRAA can exceed $1,400. A minute had gone by and still the officer was trying to divert a driver carrying a person in need of medical attention further away from the hospital it self when there was not a single car traveling south on St. Joe Road. The officer said the driver should wait for an EMS. How would an EMS get through all this traffic they created? The hospital was less than five minutes south. Finally, the officer motioned another officer to move their car out of the way to allow the driver to make a right turn. The entire distance between Washington Center and State Street had not a single car going south, but the north bound lane was bumper to bumper both lanes. In addition Washington Center Road east was bumper to bumper because the street narrows to one lane at the next stop light. So instead of utilizing several south bound streets, FWPD diverted these drivers east and west to basically two lane roads with half the capacity and shorter traffic light intervals resulting in compounding the traffic problem.
You would think that this would be the end, but two more sets of “FWPD” police car road blocks were blocking the road. What is simply amazing is that the Crescent Street and St. Joe road intersection had no police there directing any traffic. So who made the big decision to block south bound traffic? Clearly any theoretical traffic traveling south on St. Joe Road was not going to create a problem simply because Traffic Lights were being used to control flow, not FWPD.
My question is simple; Do police officers know how to direct traffic of this magnitude and if so, where do they learn the basics? Maybe traffic engineers should be consulted on tasks of this size?
The Heratige Foundation
Over the past week, an individual contacted me about Social Security and what I thought of the Heritage Plan. The plan is 50 pages in length. After reading it I am very disappointed that those names on the plan, who endorse the plan did so.
The plan has no validity period. It does not use an independent model or provide any assumptions. It refers to CBO reports and from this speculate what changing table values by assuming different growths such as inflation, wage, GDP, productivity, etc will some how filter back into the original algorithum used to analyze a set of assumptions and create a new projection that is accurate. This is far from the truth. Projecting the cash flow of social security is a non linear process.
Population distribution or demographics are not linear. Each cohort has their own unique total numbers. A boom begets a boom and a bust begets a bust. As people turn 18, they generally begin to work and somewhere at age 65 they begin to retire or are retired. This is certainly not a linear progression, more like a big python eating a dog that can be seen from the outside as a lump moving down. Wages increase and then stagnate as you reach a particular age. The number of workers in each cohort for each year change slightly resulting in different non linear OASI revenues. Each working cohort will have their own replacement factor set when they turn age 60. This is used to determine that cohorts initial OASI benefit. Clearly this is non linear and assuming wage growth increases at a faster growth will increase revenues,but at the same time it increases the initial OASI benefit for each cohort at the same exact rate. By not using the same algorithum (assuming the CBO model is correct) there is considerable error.
The Heritage Foundation asserts that doing nothing to fix Social Security and Medicare will lead to economic collapse. They support this by stating that the trust fund for OASI will be exhausted in 2037 and there after will require more than $350 Billion of borrowing or funds from the general revenue fund. This is not true. Based on current legislation passed in 1984, neither social security or Medicare may borrow funds and general revenues may not be used to fund these programs. The simple fact of the legislation of 1984 clearly identifies that when a trust fund (either program) reaches 20% of any given years expenses, across the board takes place. Clearly there is no borrowing. The Heritage foundation cites a cut in OASI benefits of 22%, but fails to identify this as a benefit without COLA.
The Heritage Foundation then uses GDP as the benchmark for Social Security revenues and expenses. Table 6 in their plan clearly shows current benefits as a percent of GDP is far greater now than in the future. In fact the Heritage plan states they want a flat benefit for everyone, eliminating the link between wages and the initial OASI benefit. They state this benefit at $12,000 a year adjusted by wage growth. In addition their plan is to divert 6% of payroll taxes to a workers account such as an IRA. They make no changes to current or soon to be beneficiaries. but only to those in the future. Retirement age will be increased by a month every two years. This is about the rate of growth in life expectancy at age 67, but it far exceeds the actuarial basis of the cash flow. A person who delays retirement by one year, can be retired for 2.5 years more or it takes 2.5 years worth of additional benefits to recoup the delay in retirement and extra taxes paid.
However, the single largest sin I see in their report is the claim that they improve benefits. From table 6 they clearly show the benefit costs being reduced by 55%,far more than the 22% under current legislation. So is the Heritage Foundation attempting to con the American People with a plan to get something from nothing?
They say a flat tax of 18.5% of GDP will limit spending. The last time I checked, I do not pay income taxes, payroll taxes or excise taxes as a percent of GDP. I pay income and payroll taxes based on wages earned. GDP is nearly twice that of all income reported to the IRS for tax purposes. Clearly this would indicate that the true tax they wish to impose is 39%. They would eliminate the legislation of 1984 that separates the budgets and revenues for Social Security, Medicare and General budget. No longer would there be a mandated cap on Social Security or Medicare expenses. In fact much of the unfunded liability would be transferred to the General Budget that is already running $1.7 Trillion deficits and has a national debt of $14.3 Trillion.
The Heritage Foundation thinks they are saving or fixing Social Security and Medicare for future generations. Maybe they should ask these future generations if they want these programs. The Heritage Foundation proposes that $55,000 a year income for seniors is the point at which OASI Benefits would be taxed and when their non OASI income reaches $110,000 a year, their OASI benefits are 100% taxed away. This makes OASI a welfare program,clearly not want FDR envisioned.
The Heritage Foundation does not provide any information on how the transition between diverting 6% of payroll tax to individual accounts gets paid. A 21 year old today will work ~45 years before reaching retirement age. Clearly diverting and investing 6% will be more than enough to replace the OASI benefit, yet these workers may not save a dime in excess of the 6% and receive the equivalent $12,000 flat OASI benefit in the future. I see no basis on how this transition period is paid for over 45 years or how in 45 years the OASI benefit which higher than today's benefit can be paid.
As an engineer I have seen proposals that insinuate perpetual motion is viable, but in the end they have all failed. Social Security is no where near being viable. I have lost all respect now for the Heritage Foundation. I simply cannot trust what they present any longer. I suggest you ask them the hard questions as well.
My plan can be found at http://www.justsayno.50megs.com/ss.html
Just 18 cents per American per day employes 200,000
Last night on channel ABC World News Tonight, Diane Sawyer, had a piece on buying American. The cost to employ 200,000 workers is just 18 cents per day per American. The hype is that this is just a small price to pay. The question I have is, who says it is such a small price to pay?
There are 330 million Americans in the US per the last census. There are 365 days in a year. Pretty simple math to take 330 x 365 x 0.18 right? The answer is $21,681,000,000 or $21.681 Billion. If we divide this by the 200,000 that would be employed, we find the cost to employ one person is $108,405. This is a lot more than I make in a year.
There are seven in my family and the cost to my family would be $459.90. Now I am a pretty frugal person. $459 would pay the public school tuition for my minor children. It would also be enough to pay the cost of the used college text books for a year. It would also allow my family the luxury of buying pizza about twice a month. It would also allow me to save $459 more in a given year to help secure my retirement.
The problem is employing 200,000 out of the more than 14 million unemployed really does very little. If the goal is to employ all, then we need to spend $1.52 trillion more in a year or for my family of seven would be $32,193 a year. Sorry, this is not possible for me or for that matter very many American Families.
What is the answer to our unemployment problem? First we have inefficient tax laws. It rewards spenders and punishes savings. The fair tax law is not the answer, but an elimination of all exemptions and credits is. What you do with your money is up to you. The market place is the responsible entity for rewarding creativity, invention and efficiency. If solar power is better than burning coal then coal will go the age of dinosaurs. If wind power is cheaper than nuclear, then nuclear plants will not be built. If electric cars are truly the future than gas powered cars will slowly go away.
What we need is the best products making it to the market based on their merits, not some government mandate, tax credit or incentive. We should not be subsidizing workers by simply buying American. This means our products are more expensive and not competitive abroad. We need to be competitive with all other countries. The day of high standard of living is gone due to government spending and continual annual deficits since 1958. We need to spend less, save more and be the capital market of the world.
Bomertime - Social Security
In Friday’s paper I found a paid advertisement inside the “Boomertime in Northeast Indiana vol3, issue 2, 2010.” The paid advertisement was titled “Social Security What you need to know today for tomorrow and the future.” It states Social Security the most successful domestic government program in our nation’s history. I am not sure of their definition of successful, but mine is one that works, not one that has unfunded liabilities exceeding $23 Trillion, unable to pay full benefits to those after 2037 and then can pay but 73% of promised benefits under current law (no COLA) and requires changing the “rules” after the fact and more. To put it bluntly the article calls Social Security an “Intergenerational Contract.” I never signed a contract to participate in a ponzi scheme. I certainly have not signed my children up to participate in the Social Security ponzi scheme and I will not. It is not right to ask others to pay for a program that we ourselves were not willing to fund ourselves.
The article presented all the things Social Security does, but nothing about the inability, problems it faces in the future without raising the retirement age, taxes, base or cutting future benefits or how these problem will affect you. The only ones Social Security OASI has benefited are those who have retired. They have benefited at the expense of the American Worker who now suffer higher taxes than required to fund their own retirement, lower take home pay, less disposable income leading to longer term mortgages, lower saving rates and dependence on government.
On November 27, 1944, A. J. Altmeyer, Chairman reported to congress; “There is no question that the benefits promised under the present Federal old-age and survivors insurance system will cost far more than the 2 percent of payrolls now being collected. As I pointed out in my testimony of last year, none of the actuarial estimates which have been made on the basis of present economic conditions and other factors now clearly discernible result in a level annual cost of this insurance system of less than 4 percent of payroll.”…“Indeed, under certain assumptions the level annual cost has been estimated to be as much as 7 percent of payrolls. On the basis of a 4-percent-level annual cost it may be said that the reserve fund of this system already has a deficit of $6,600 million. On the basis of 7-percent-level annual cost it may be said that the reserve fund already has a deficit of about $16,500 million.” The payroll tax did not reach 8% until 1968 and by this time Social Security benefits had been expanded even more.
There has been decades of talk The only action taken is raising the payroll tax, base, retirement age, enrolling non covered workers and taxing benefits. The can has been kicked down the road long enough. When do we wake up and face the fact Social Security is the worse failure in American History?
To make things worse the American worker paid Boomertime of Northeast Indiana to print this garbage.
GULF OIL SPILL; DON'T SPILL THE OIL
This Gulf Oil spill is really making me upset on several fronts. First the technical aspects are criminal. A company decides to drill for oil in 5,000 feet of ocean. On land, the question asked is what is done to contain spills or blow outs, fires, etc. At sea, what were the potential problems? As an engineer, I know that submarines do not go below 2,000 feet or if they do not much more, definitely not 5,000 feet. There are small submersibles that go that deep.
Question one is how do they put equipment on the sea floor? Do they weld under water? Do they use fasteners under water? Do they just use mechanical fit ups to make seals? How on earth do they lay miles of pipe down 5,000 feet?
Looking at the blowout preventer and the associated pipe, it seems to be on top of the sea bed. Clearly they did not lower this as a single unit.
Three companies are involved BP, Transocean and Halliburton. Deepwater Horizon is a floating drilling platform owned by Transocean. Halliburton was the brains behind the drilling and provided the necessary expertise. British Petroleum leased a floating oil rig. BP hired Halliburton to drill the well. BP held the lease for the section of ocean floor.
One employee alleges that rubber was found in core samples after a test of the emergency blowout preventer. During the test an operator error caused a section of pipe to be extracted through the rubber sealed blowout preventer. The rubber found in the core sample was disregarded by others.
Not knowing much about drilling, but have experience with pumps, I wonder why we have such a problem.
THE PROBLEM:
Broken 21 inch diameter pipe located 5,000 feet below the ocean surface on the sea floor. It appears to be jagged and not vertical. The oil seems to be exiting the pipe and makes a directional change upwards. The oil is under pressure which causes the oil to seek an outlet (broken pipe).
ATTEMPTED SOLUTIONS:
BP has tried pumping mud into the blow out preventer. From all the diagrams I have seen, the inside piping is smooth and straight. I find that pumping mud into this unit with an unblocked exit un promising at best. The mud may prevent the oil from escaping, but as soon as the mud is consumed, the oil will no longer be blocked by the mud.
BP then tried a junk shot with the intention of blocking, stopping up the exit. Again they used gulf balls and other objects. What I find interesting is all the objects seemed to be round which means they would not tend to lodge against each other and form a mechanical blockage. Furthermore, since the outlet is open and the oil has created a good lubricant on the inside of the pipe walls, I would think the chances of a frictional interference slim.
MY TOUGHTS:
My first thought was to lower 5,000 feet of large diameter culvert down over the exit. It would be difficult to pump oil up a hose, pipe or tube and keep it located close to the exiting oil let alone collecting the majority of the oil. The concept was to contain the oil and channel it under low pressure in respects to the sea water pressure up to the surface where it could be pumped into ships. Clearly the oil is leaking. Clearly the oil is rising. Clearly the oil goes with the current. Therefore, why fight the buoyancy aspect of the oil? Clearly the methane in the oil when it contacts sea water is causing a chemical reaction and freezes creating ice. How much ice? How large a chunks are we talking about? A diameter large enough could channel the oil to the surface, at least containing it to a smaller area.
My second thought was try and plug the outlet. The pipe is open and oil is gushing out. The diameter is 21 inches or 346 sq inches. If you were to attempt to block the exit, how close could you get to the outlet before the pressure would keep you from getting any closer? Maybe you could get within six inches of the outlet with a flat plate? This would not stop the flow, but it may allow the junk shot to work by creating a choke point of six inches not the 21 inch diameter outlet. A better idea would be to not block the outlet with a solid, but to put a titanium net, mesh, screen, lattice work or, grate at the outlet and then use the junk shot. The junk shot would have to be pieces larger than the mesh, grate or what ever at the outlet in order to capture/trap it. This would then begin to block the outlet. Clearly as the oil is blocked the pressure inside the pipe would rise. Design parameters of the pipe would have used total blockage using the blowout preventer and there should be no risk of a pipe rupture.
My third thought was to use under water robotics to saw a clean edge on the outlet of the pipe. Clamp/weld/bolt a coupling to the outside of the pipe with a new blow out preventer open. This would be needed so that the oil would not dislodge the blow out preventer from being secured to the broken pipe. Once secured, close the new blow out preventer.
If no one who is in the business of drilling for oil 5,000 feet down has thought about these and come up with reasons why these would not work, then these people need to find a new line of work. I am not an expert in oil drilling, but I have a lot of experience in fluid flow. I know how hard it is to block a raging torrent of water. The only way I found to control this type of situation was to build two bastions on either side and lower a gate between them. You can build the supports outside the confines of the flow and once secured, can lower the gate. To me the oil spew is a similar problem.
Who is at fault in my opinion is all three. I think all three companies will cease to exist. This oil spill will cost the sum total of BP’s assets. BP is larger than Transocean and Halliburton combined. If you wanted to make money, selling these companies short might make you very wealthy.
House Candidate Phil Troyer
Candidate Phil Troyer for Congress is a conservative who explicitly identifies his beliefs and values. He supports term limits for congress. This clearly would provide the mechanism for new ideas, to limit the power of seniority of any one representative and let’s face it, if a problem has not been solved within 12 years, we need new representation.
Troyer supports limiting a bill’s length to 200 pages and requiring it be made public five days prior to any vote holds our representative accountable for any vote they make on our behalf.
Troyer has indeed provided true leadership in supporting that all proposed legislation actually cite the Constitutional authority empowering Congress to enact any legislation. The power of Congress is limited by Sections 8 and 9 of the Constitution. Too many representatives have forgotten this.
Congress passes legislation and the president makes this law by signing it. Government agencies then write Federal Regulations interpreting this legislation and in many cases, these Federal Regulations misinterpret or totally disregard the Federal Statutes as written and passed by congress. Troyer supports legislation that prohibits regulations from taking effect until they are reviewed by Congress. We need to eliminate the “Vote and Forget” mechanism.
The Federal Government continues to take rights (OUR RIGHTS) away from the states. They take our taxes and then write laws on how the states can get a portion of OUR taxes back. Troyer supports legislation to ensure our states rights are protected. This will keep government local.
Troyer does not support Earmarks and proposes to prohibit any entity that receives $1 million or more in federal funds from contributing to any campaign for a period of (2) years before or following the receipt of federal funds. Legislation should be based upon our national interests and not upon the parochial interests of individual Members of Congress.
Troyer supports a prohibition of the Federal Government in owning Stock in private companies such as Fannie Mae, Freddie Mac, Banks and Automakers. Troyer supports Free Enterprise, not socialism.
Troyer pledges to vote against any bill that does not reduce spending by at least 5%. The last general budget surplus was in 1958. Congress continues to spend ever more; creating ever larger deficits; the national debt will grow past $14 Trillion this year. It is time to think of our children instead of ourselves.
Troyer promises to co-sponsor legislation to eliminate the Departments of Energy, Education, and Housing and Urban Development.
Troyer supports tax reform. Our federal tax laws have become far too complicated and now require even many middle-class taxpayers purchase professional assistance to prepare their returns.
Troyer promises to oppose any federal funding of abortions, either in this country or through funds provided to foreign countries or international agencies.
In this day and age of technology, our vote should not be based on which candidate bashes the other more or who has raised or spent the most money, but on ISSUES alone. Based on Troyer’s written and oral presentation of the issues, I support Troyer for Indiana’s 3rd Congressional District.
Phil Troyer gets my vote.
Senate Candidate Bates
I have a couple of problems with Senate Candidate Bates.
- The combined state and federal corporate tax rate is 39.9% - the second highest such tax rate in the world. I propose that we slash the federal corporate tax rate from 35% to 24%, and then down to 20% as soon as possible after that. That would be an immediate tax cut of 31% for all employers in America. Additionally, this tax rate would be a flat tax that would reduce the tax compliance burden of companies, thereby freeing up more resources for job creation.
- The bailouts must stop; the government takeovers must end. The federal government needs to shed the ownership and creditor positions that it has with many large companies. Tax cuts and the elimination of unnecessary regulations will help individuals, families, and businesses recover from the economic downturn. I will work to eliminate the death tax, reduce the capital gains tax, cut the recently raised payroll tax, make the 2003 income tax cuts permanent, and permanently index the Alternative Minimum Tax for inflation. Lower taxes give you more control over your future, and that, in turn, makes our economy stronger.
- Federal spending is out of control. Our deficit for FY2009 was $1.4 trillion, and our national debt currently stands at $12.6 trillion and is growing every day.
This would be nice, but with trillion dollar deficits, does he actually believe we can grow our way out of it? The Deficit for 2009 was over $1.9 Trillion. Bates being a financial adviser uses the government published value instead of the US Treasury published values. Missing a half trillion in one year is a pretty large financial error. What I want is a representative that will tell expose and tell the truth. This is not a very good start.
- I also support the development of nuclear power plants and coal-to-liquid fuels, the expansion of our nation’s oil refining capacity, and the pursuit of alternative energy sources such as wind, solar, and ethanol, free of government subsidies.
What we have is a non technical person speaking about a subject he has no concept of. Nuclear power created highly radioactive waste. What does he plan to do with it? Before some one states he supports nuclear power, they better have an idea of the cost. Nuclear power will cost 14 cents a Kw-hour. You could build four windmills for this cost and have them run 25% of the time and still produce more energy, cleaner and no waste. I agree with is position that all energy development must be free of government subsidies. May the best energy source win.
- Social Security, Medicare, and Medicaid are all on an unsustainable path that will wreck our economy if nothing is done to address them. Reforming these programs, particularly Social Security, starts with protecting current beneficiaries benefits. After insuring that current benefits will not be reduced, we must move these programs towards a more personal, individual-focused system.
Wow, this is a mouth full. After insuring that current benefits will not be reduced. How does he plan to do this? He is a financial planner. Maybe the numbers are just too large for him to comprehend. To pay just those who are age 65 and over, would require a down payment deposit into Social Security of over $8 Trillion!! That means no one under age 65 gets a dime. Now if you want to pay those over 50 their promised benefits, you still must maintain a SS-OASI tax of over 8% This means there is only 2.6% for individual accounts. Yet I hear that current benefits would include those over age 40. Sorry Bates, but this is automatic out.
Senate Candidate Hotstettler
Hotstettler issues:
- John has voted to repeal the Sixteenth Amendment to the United States Constitution which authorized the income tax. As a senator, John would vote for repeal again in order to move the country to a national retail sales tax similar to the type used in Indiana to fund state government.
A national sales tax would be extremely costly. The general budget is roughly $2 trillion. National income is around $7 trillion. Assuming a 3% savings rate, we spend roughly $6.79 trillion which would require a sales tax of over 29%. This would not cover Social Security or Medicare. However, it would eliminate; tax credits of college and children; dependency exemptions; over age 65 exemptions and more. The problem is many families would simply be unable to pay a 29% sales tax. If you exempt food (6% of our economy) and Healthcare (17% of our economy) the sale tax rate rises to over 38% and this does not include Social Security and Medicare. I am not sure he has thought this through. Though I strongly believe this would provide a very strong rally by the people to cut spending.
- Building on the success of Health Savings Accounts by making 100% of health insurance premiums either deductible or a tax credit
Providing health savings accounts deductible or a tax credit would have no affect with a national sales tax. These types of credits reduce general revenues and drive up deficits. Tax credits are nothing more than another form of bailout or preferential treatment (earmark).- Creating Association Health Plans which allow individuals and families to negotiate, collectively, for health care services based on an association defined by profession, religion, membership in an organization, etc.
Allowing different entities the ability to negotiate a price with a healthcare provider does little to reduce cost. What it does is produce different price structures within the same provider for the same service. When a person goes to a store to buy something, the store does not charge different prices to each customer. The same should be for healthcare. Our healthcare problem was created by cost shifting that was the result of government dictated payments to providers. It was later excererbated by individual health plans negotiating for lower rates due to cost shifting. This left the small and individual picking up the tab.
Candidate Hostettler appears to be conservative but blurs the line between bailouts, subsidies, tax reform and spending cuts. In my oppinion he does not have a clear distinction of how he would vote for legislation.
Senate Candidate Behney
I went to Behney's webiste and saw a list of issues, but none of it is written down. He does have short video clips. This may be nice to those who have high speed internet or while at the library have head phones, but to me at home, I have no idea what his main issues are.
I did record the channel 15 interview with the candidates and found him to be appealing. However, with only addressing two issues (limited by channel 15) I can not comment on what he truly believes. The written word may have swayed me. Too bad.
Senate Candidate Stutzman
I have some major issues with Senate Candidate Stutzman. He writes "I would never support a federal bailout of private business" but is he really?
- I support expanding free market solutions such as Health Savings Accounts to include all citizens, increasing tax credits for businesses that provide healthcare, and comprehensive tort reform that will lead to increased access to health care and a decrease in premiums and overall cost.
- I support expanding free market solutions such as Health Savings Accounts to include all citizens, increasing tax credits for businesses that provide healthcare, and comprehensive tort reform that will lead to increased access to health care and a decrease in premiums and overall cost.
I am all for cutting spending and bailouts, but providing a tax credit for a particular entity is a bailout. It is bailing out a company or simply subsidizing a companies costs. Ethanol is not economically viable and artificially prices energy far cheaper than reality. Providing tax credits for Health Savings Accounts will decrease federal tax revenues, adding to deficits and the national debt. We as Americans all face Healthcare costs. We all need to take care of our own healthcare costs. Providing tax credits is not the way to do it. So my question to Marlin is; "are you truly against bailouts?"
If you are truly free enterprise, you simply let the market price energy, healthcare and governments only role should be to keep it fair. In the case of Medicare and Medicaid, why should they be allowed to pay pennies on the dollar for services that everyone else pays full price for? This is like China dumping products in the US below cost. The only problem with this is the rest of us pay through cost shifting, a government slight of hand.
I like the rest of Stutzman's plat form, but the big problem I have is his ability to diferentitiate between tax credits, incentives and bailouts.
The 2009 Officual National Debt
Those who have stated the Official Debt of 2009 is $1.4 Trillion must have failed math. A simple first grader given the time can calculate the difference between two numbers. The two numbers I refer to is the total debt reported by the US Treasury Department on September 30, 2008 and September 30, 2009.
It does not take a rocket scientist or college graduate to calculate the difference between two values. In fact, it does not take even a high school graduate. In fact this math is taught in first grade.
The national debt on September 30, 2008 stood at $10,024,724,896,912 ($10.024 Trillion).
The national debt on September 30, 2009 stood at $11,909,829,003,512 ($11.909 Trillion).
Total 2009 deficit of $1,885,104,106,599 ($1.9 Trillion)
Historical Debt - http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt.htm
Daily debt history to the penny - http://www.treasurydirect.gov/NP/BPDLogin?application=np
Trust but Verify, obviously something the news media does not do.
Social Security Sucks!!!
Today the SSA states Social Security’s Old Age Survivor’s Benefit Program will run a $10 Billion negative cash flow instead of the $80 billion surplus. However, this is a spin on a bad situation. The only reason why they report it as a negative $10 billion is that $80 billion in interest is being used to pay benefits this year. The actual difference between payroll tax and benefits paid is $90 billion in the red.
Under ideal circumstances (which SS has never had);
- 100% of benefits would be paid using the trust fund
- 100% of all payroll taxes would be invested to pay future benefits
- 100% of current beneficiary cohorts’ interest on their payroll taxes would be used to pay current beneficiaries
- 100% of current non beneficiary cohorts’ interest on their payroll taxes would not be used to pay current beneficiaries, but accumulated compounding yearly until the cohorts retired.
So how bad off is Social Security? Before the recession, total liabilities of SS-OASI were over $23 Trillion. SS-OASI had just over $2.5 Trillion in securities. (Special US Treasuries, payable on demand). This means the unfunded portion is over $20 trillion. This is based on earning 5% a year on the trust fund. Given that inflation is lower, we still need 3% return on the trust fund.
In 2009 SS-OASI should have collected $690 Billion from the treasury in interest plus another $500 billion from payroll taxes. In simple terms under the SSA math, SS-OASI should have had a surplus of close to $700 Billion. So the net actuarial deficit for SS-OASI for 2009 is $710 Billion give or take a few billion.
Our kids are so hosed!
Healthcare Reform v Free Speech
Tuesday Night I heard that Health and Human Services issued a ruling to insurance providers to stop misleading Medicare beneficiaries. The dispute is over the Healthcare Reform act where some companies are saying “Benefits could be cut.” It does not say they will be. Based on the Baucus bill, there is little way for Medicare to stay solvent unless expenses are cut. How do you cut expenses or the growth if you do not cut benefits?
Apparently it is just fine for President Obama and members of congress to say their reform bill does not include tax increases, but is this not misleading the public when you say you are going to levy a fine if you do not have health insurance? The fine has been dropped from $3,800 a family to $1,900.
Political free speech is what made this country great. Now our own government is attempting to squelch free speech. How stupid do they think we are? I find it despicable that a judge issued a temporary injunction to stop the insurance companies from sending information to beneficiaries.
Hey, maybe this is not a bad idea. We could get an injunction on the government from sending us SSA wage and benefit statements stating what our benefits will be in the future. We might even be able to site this in political debates and adds as well. Maybe we can stop politicians from lying?
Automobile v Health Insurance
President Obama is comparing the mandatory requirement for automobile insurance with that of Healthcare insurance. He sees no difference. However, there is a big difference. In many states, such as Indiana, an automobile must be insured with a minimum amount of LIABILITY insurance to be registered. There is no requirement for collision insurance.
Collision insurance insures you against a loss if you are the at fault driver. If you run off the road, rear end another car, you are insured. However, if you wave collision insurance coverage, you are insuring yourself against a loss.
Liability insurance covers the person you injure or the property you damage. Collision insurance which is not mandatory in any state insures you, the driver, against yourself. If you choose to not buy Collision insurance, you hurt no one but yourself if you have a loss. Health insurance is to protect you against a loss. If you choose not to have healthcare you hurt only yourself. However, in our country hospitals and providers treat anyone including those who do not have health insurance or who cannot pay. Maybe providers should carry uninsured coverage to protect themselves from a loss?
Healthcare insurance is no different than collision insurance, but is nothing like liability insurance. To mandate healthcare insurance may seem like a good idea, but you may make more people/families destitute and impoverished by mandating it. Sure they are covered by healthcare for potential sickness, but in the mean time food, shelter and clothing may take second seat and actually cause a worse outcome.
In any survival situation, the first thing you do is seek shelter, then water, then food. Few people will last two weeks without water, shelter or food. However, millions have gone years without ever seeing a doctor. What we need to do is stop allowing providers or the government from mandating treatment for all without regard to paying for. It may sound heartless, but is it the responsibility of the government to take from one to give to another without regard for ability to pay?
Indiana Court strikres down the Voter ID Law
An Indiana Court struck down the Voter ID Law even after the U.S. Supreme Court had ruled it was constitutional. The problem that I tried to identify years ago when this was being proposed was that it violated some people’s individual rights. I know personally two people who are denied Indiana Driver’s licenses and State ID’s because they do not have a social security number. I also identified to the state of Indiana that the Voter Registration law does not require a Social Security Number and that it could not require it under Federal Statute.
The state attempted to circumvent Federal Statutes concerning the SSN by requiring a State issued ID. A U.S. Passport is a valid photo ID for voting, but it costs over $100 to obtain. The U.S. State Department cannot require the person have a SSN to obtain a U.S. Passport. If the state were to require a SSN they would be imposing a hardship on people who do not have a SSN.
A year later I was told that absentee ballots could be sent without the photo ID to the voter’s address under certain circumstances; health reason, out of the state at the time of the election and military. When I said this did not cover all circumstances I was told the county does not verify the request is valid, but simply sends the absentee ballot out. In other words lie to get an absentee ballot.
William Sherman Smith used valid names and SSN’s to obtain 149 different Indiana Driver’s licenses. The Social Security Online Verification System verified the name and SSN matched, but cannot identify if a driver’s license had already been issued and Indiana’s BMV could only verify if a driver’s license had been issued using that SSN. As long as you had someone’s SSN and name who had not obtained an Indiana ID or driver’s license (use out of state ID’s), the Indiana BMV issued these types of identifications without question.
Indiana began using photo recognition programs and found numerous people like William Sherman Smith who had obtained multiple ID’s. So how well did asking for a SSN work? It did diddly squat for fighting Identity Theft, while infringing on the RIGHTS of U.S. Citizens.
What is the answer? How many times will a person performing a repetitious task make an error? From my experience and what others have found, people will make an error 5% of the time. Therefore, requiring a SSN and utilizing this one ID, that has no method of being traced to the particular person presenting it as ID, will result in errors of 5%. Now what happens when you ask for more than one ID that must be verified? With each subsequent person looking at the information, there is less chance the error will go unnoticed. We know that photo recognition worked better than using the SSN. However, photo recognition is not fool proof and can be manipulated fairly easily. When you fill out the voter registration card, they should take a photo of you and issue a voter ID card. Every time you move, you need to obtain a new card. Voter registration already assigns a unique number to the individual. How hard is it to track the replacement, issue and movement of a person if a unique secure number is used?
We are chasing a ghost. With each advance in technology, the identity thieves or voter fraudsters will use future technology to continue to steal and violate laws. Criminals have been around since day one. We are treating everyone now as a potential criminal instead of a citizen.
Whe cares enough?
I had a call from a person who reads the Fort Wayne Politics blog. He wanted to know if I was the William Larsen who posts there. We have a lot in common and agree on many things. He asked if I knew of a federal law, statue or prohibition that prevented the U.S. Government from competing with private enterprise. For example, could the government open gas stations and sell gas to the public for a profit? Could they open up grocery stores to compete with Kroger?
I was taught in my class on U.S. Government that they could not compete with private companies. It was prohibited from owning equities/companies and competing with private busniess. The question then arose, how could government offer public insurance if it was prohibited from owning and competing against companies? This is an excellent question. I like to think that I question the validity of many things government does. It is my right and civil responsibility to question the Government. It is the only way we keep tabs on what they do and to expose wrongs.
In the past year the government has bailed out banks taken ownership in banks, insurance companies, mortgage companies and even two of the big three automobile companies. I would think everyone of these actions would violate some law, statute or regulations. However, I like many others have taken for granted they could not do so, but I have never actually verified the existence of this. My question is who cares enough to challenge this? We are beginning down a slippery slope. Is there a means to stop this before it is too late?
After a quick search on the subject I found 20 §437.32 Equipment
(3) Notwithstanding the encouragement in §437.25(a) to earn program income, the grantee or subgrantee may not use equipment acquired with grant funds to provide services for a fee to compete unfairly with private companies that provide equivalent services, unless specifically permitted or contemplated by Federal statute.
Though this does not deal with subject directly, it would lead me to believe that there is in fact some statute that prevents government ownership from competing with private companies. I did find a Supreme Court Case that leads me to believe the court would not strike down Public supported Health Insurance.
SUPREME COURT OF THE UNITED STATES
UNITED HAULERS ASSOCIATION, INC., et al.,
PETITIONERS v. ONEIDA-HERKIMER SOLID
WASTE MANAGEMENT AUTHORITY et al.
“Flow control” ordinances require trash haulers to deliver solid waste to a particular waste processing facility. In C & A Carbone, Inc. v. Clarkstown (1994) , this Court struck down under the Commerce Clause a flow control ordinance that forced haulers to deliver waste to a particular private processing facility. In this case, we face flow control ordinances quite similar to the one invalidated in Carbone. The only salient difference is that the laws at issue here require haulers to bring waste to facilities owned and operated by a state-created public benefit corporation. We find this difference constitutionally significant. Disposing of trash has been a traditional government activity for years, and laws that favor the government in such areas—but treat every private business, whether in-state or out-of-state, exactly the same—do not discriminate against interstate commerce for purposes of the Commerce Clause. Applying the Commerce Clause test reserved for regulations that do not discriminate against interstate commerce, we uphold these ordinances because any incidental burden they may have on interstate commerce does not outweigh the benefits they confer on the citizens of Oneida and Herkimer Counties."A - The Commerce Clause provides that “Congress shall have Power … [t]o regulate Commerce with foreign Nations, and among the several States.” Although the Constitution does not in terms limit the power of States to regulate commerce, we have long interpreted the Commerce Clause as an implicit restraint on state authority, even in the absence of a conflicting federal statute.B - To determine whether a law violates this so-called “dormant” aspect of the Commerce Clause, we first ask whether it discriminates on its face against interstate commerce. In this context, “ ‘discrimination’ simply means differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter.” Discriminatory laws motivated by “simple economic protectionism” are subject to a “virtually per se rule of invalidity,” which can only be overcome by a showing that the State has no other means to advance a legitimate local purpose....C - The flow control ordinances in this case benefit a clearly public facility, while treating all private companies exactly the same. Because the question is now squarely presented on the facts of the case before us, we decide that such flow control ordinances do not discriminate against interstate commerce for purposes of the dormant Commerce Clause.Compelling reasons justify treating these laws differently from laws favoring particular private businesses over their competitors. “Conceptually, of course, any notion of discrimination assumes a comparison of substantially similar entities.” But States and municipalities are not private businesses—far from it. Unlike private enterprise, government is vested with the responsibility of protecting the health, safety, and welfare of its citizens. These important responsibilities set state and local government apart from a typical private business.Given these differences, it does not make sense to regard laws favoring local government and laws favoring private industry with equal skepticism. As our local processing cases demonstrate, when a law favors in-state business over out-of-state competition, rigorous scrutiny is appropriate because the law is often the product of “simple economic protectionism.” Laws favoring local government, by contrast, may be directed toward any number of legitimate goals unrelated to protectionism. Here the flow control ordinances enable the Counties to pursue particular policies with respect to the handling and treatment of waste generated in the Counties, while allocating the costs of those policies on citizens and businesses according to the volume of waste they generate.Finally, it bears mentioning that the most palpable harm imposed by the ordinances—more expensive trash removal—is likely to fall upon the very people who voted for the laws. Our dormant Commerce Clause cases often find discrimination when a State shifts the costs of regulation to other States, because when “the burden of state regulation falls on interests outside the state, it is unlikely to be alleviated by the operation of those political restraints normally exerted when interests within the state are affected.”
Here, the citizens and businesses of the Counties bear the costs of the ordinances. There is no reason to step in and hand local businesses a victory they could not obtain through the political process....Finally, it bears mentioning that the most palpable harm imposed by the ordinances—more expensive trash removal—is likely to fall upon the very people who voted for the laws. Our dormant Commerce Clause cases often find discrimination when a State shifts the costs of regulation to other States, because when “the burden of state regulation falls on interests outside the state, it is unlikely to be alleviated by the operation of those political restraints normally exerted when interests within the state are affected.” Here, the citizens and businesses of the Counties bear the costs of the ordinances. There is no reason to step in and hand local businesses a victory they could not obtain through the political process.Justice Alito, with whom Justice Stevens and Justice Kennedy join, dissenting.This Court long ago recognized that the Commerce Clause can be violated by a law that discriminates in favor of a state-owned monopoly. In the 1890’s, South Carolina enacted laws giving a state agency the exclusive right to operate facilities selling alcoholic beverages within that State, and these laws were challenged under the Commerce Clause in Scott v. Donald (1897)....Thus, were it not for the Twenty-first Amendment, laws creating state-owned liquor monopolies—which many States maintain today—would be deemed discriminatory under the dormant Commerce Clause. There is, of course, no comparable provision in the Constitution authorizing States to discriminate against out-of-state providers of waste processing and disposal services, either by means of a government-owned monopoly or otherwise.Nor has this Court ever suggested that discriminatory legislation favoring a state-owned enterprise is entitled to favorable treatment. To be sure, state-owned entities are accorded special status under the market-participant doctrine. But that doctrine is not applicable here.Under the market-participant doctrine, a State is permitted to exercise “ ‘independent discretion as to parties with whom [it] will deal.’ ” The doctrine thus allows States to engage in certain otherwise-discriminatory practices (e.g., selling exclusively to, or buying exclusively from, the State’s own residents), so long as the State is “acting as a market participant, rather than as a market regulator.”Respondents are doing exactly what the market-participant doctrine says they cannot: While acting as market participants by operating a fee-for-service business enterprise in an area in which there is an established interstate market, respondents are also regulating that market in a discriminatory manner and claiming that their special governmental status somehow insulates them from a dormant Commerce Clause challenge....The dormant Commerce Clause has long been understood to prohibit the kind of discriminatory legislation upheld by the Court in this case...............................................
It seems to me the U.S. Supreme Court would be divided on whether U.S. Government could compete with private insurance companies in providing healthcare to the public. On one hand the Court says the "state" can regulate as long as they are equitable upon all private parties (treat them the same). On the other hand it implies it would not be acceptable saying the "state" would not be insulated from a dormant Commerce Clause challenge.
My take is as long as the "federal" government discriminates equally and causes all insurance companies and employers equal harm, the "federal" government can survive a challenge to the Healthcare Reform proposed by Obama. The way the court sees it, is we as a people get what we vote for. We have the power to stop this with our RIGHT TO VOTE.
Can anyone provide information on the subject?
Social Security – Who would have guessed?
The Social Security Administration has finally placed on their website information on multiple different “fixes” for Social Security’s solvency over the next 75 years.
They look at seven different areas:
- COLA - Cost of living adjustment
- Taxation of Benefits
- Payroll Tax
- New Enrollies
- New Investment Vehicles for Trust fund
- Change the full retirement age
- Change the Benefit Formula
Each one of these catagories have multiple variations. There are both charts and tables identifying a year by year projection. The tables I believe are more useful since they provide an actual value. There are two values to pay particular attention to:
- Annual Balance (revenues minus expenses)
- Trust Fund Ratio
SSA looks at a solvency period over 75 years. Doing this has several flaws:
- It includes all revenues from all cohorts Those who turn 65 after the 75 year solvency period have their contributions consumed by those who receive benefits during the 75 yea period. The solvency period ends in 2084. With a full retirement age now at 67 for those born after 1970, this means any person who is born after 2017 will pay into Social Security, have their contributions used to pay current beneficiaries only to relive the same problem we have today.
- It only includes those liabilities that must be paid within the 75 year period. Those born after 2017 earn credits yearly toward Social Security Benefits, but they do not accrue a liability and is therefore not included in the evaluation. In simple terms those who retire prior 2063 are fully evaluated (though they may not be able to pay benefits). Those who retire between 2063 and 2084 are evaluated partially. For example; for those born in 2016, they represent just one full year of liabilities instead of 21 to 22 years.
What is very obvious is that no matter how many different ways SSA looks at the problem, there is not one solution that makes Social Security Solvent. The trust fund ratio decreases quickly and goes to zero in all cases. A zero trust fund ratio means the trust fund is exhausted. In addition the annual social security balance goes negative in all situations. This means expenses exceed revenues.
What the different scenarios point out vividly is the magnitude of the problem. Even raising the pay roll tax in two increments over a decades does not solve the problem long term. This is referred to the cliff effect. The 75 solvency period is a moving target. If today we look at 75 years into the future, then we are looking out till 2084. In 2010 they are looking at 2085 and in 2011 they are looking at 2086. This means if we decide to do anything, we fall off the cliff the year after the solvency period ends. It is like starting a whole new social security program with a full compliment of beneficiaries and no trust fund.
Is there a way to get a truer idea of the problem, yes? The SSA has done the difficult task of creating the algorithum and collecting the data needed for the calculation. However, they have failed to exclude the revenues from those who are working, but who are too young to receive benefits during the 75 year evaluation period. If they did this, you could calculate the unfunded liability very closely. In addition, you would not have too look out 75 years, but simply 25 years.
They have the data, they simply need to refine the parameters of who is included. They know by SSN applications who was born when. They get yearly information on wages earned subjected to the SS-OASI tax. This is not rocket science, just plain simple high school math.
Why won't they do this? IF they did this, the payroll tax would have to go to over 18.5% from 10.6% today. This is a very signficant hike and would most likely meet more challenge than Healthcare Reform. Therefore, it is better for them (worse for the worker) to take baby steps and bait us into paying a little bit more, cutting benefits, raising retirement age and changing the benefit formula. In this way they lead us to the ulimate outcome where we pay 4 times more for a benefit than it is worth and they (politicians) never have to face the public.
It is the frog who jumps into a pot of cold water that is slowly heating up.
I used the word fix because that is what it is. It is like any addict. Social Security needs a fix and takes what it needs without asking, thinking or realizing the consequences. Can you stop your craving for Social Security? Who can you just say no to Social Security?
National Healthcare: The chains that will bind all
What is the definition of a RIGHT? A right is anything that does not require a sacrifice from another person or places a burden on another person to fulfill. Is Healthcare a right, no? It requires sacrifice by others and places a burden on others for it to take place.
Is healthcare a moral obligation? If it is a moral obligation, then what are food, shelter and water? Are these moral obligations and if so are they more important or imminent than healthcare? What we have never created as a nation is a set of priorities. We have many programs that are failures such as Medicaid, Medicare, Fannie May, Freddie Mac, the U.S. Treasury, Federal Pension Guaranty program, Social Security and more.
Now the nation is debating healthcare, another program. The first question that should be asked is, is this a function of government? If it is, then we should look at Medicare, Medicaid and Veterans Healthcare as teachable lessons. Both Medicare and Medicaid have shifted trillions of dollars of costs from a few to everyone else. The payroll tax of Medicare is inadequate and the trust fund will be exhausted in 2017, then what? What about those born after 1952? Do we raise the payroll tax even more; do we charge those born prior to 1952 a higher premium to recoup what congress failed to charge them?
As a parent I am responsible for my families well being FIRST! My first priority is to take care and provide for my family FIRST. However, the government believes my first priority is to support Medicare and Medicaid and takes without asking dollars out of my paycheck. I then compete against those on Medicare and Medicaid for healthcare using my own dollars! Because Medicare and Medicaid cost shift, I pay more for my healthcare. In addition I compete against employer subsidized healthcare insurance when they negotiate rates nearly as low as Medicare again shifting cost to all others.
Government has artificially stimulated the healthcare industry: pharmaceuticals, medical implants, technology, procedures, diagnostics and more. Individuals who work in the healthcare industry are engineers, janitors, maintenance, data processors, nurses, doctors, specialists and more. They are neighbors, parents, brothers and sisters. They all provide labor and as such want raises like everyone else. Healthcare is labor intensive and there is no force multiplier, a doctor treats one person at a time. This makes healthcare costs rise at wage rates, not inflation. In addition the US has primarily private hospital rooms instead of four to a room increasing costs by 300% and decreasing efficiency. The US has the highest ratio of MRI, CT, diagnostic equipment, hospital rooms than any other country. The US System is based on “waiting for a patient to arrive” rather than other countries based on “patients waiting to be treated.” The US has lower utilization rates, yet this technology must be paid for, resulting in higher per service costs.
Medicare began with good intentions. Medicaid began with good intentions. Social Security was begun with good intentions, yet good intentions have never produced a single government program that did not become costly.
The U.S. has not had budget surplus since 1957. Every single stimulus package, tax reduction or fix to government programs that borrowed money to do so has never been repaid. In fact the interest paid on these borrowed funds was in fact borrowed, compounding the problem.
Employers are allowed to provide health insurance to employees in lieu of paying higher wages. This is nothing more than a tax subsidy. The government does this with IRA’s, education credits, charitable deductions, child tax credits, mortgage interest and 401-k’s. The government has been so good at doling out special tax breaks to groups that everyone has a hand out. Who is paying the cost of all these hand outs, the economy? We all want lower taxes and more benefits. The only question is how much are you willing to pay for a new program, or should I say how much are you willing to saddle your children with?
The solution is simple. No healthcare provider can charge different entities, that it sees, different prices for the exact same service (CPT code). This would eliminate the cost shifting of Medicare, Medicaid and insurance (both private and company sponsored) to all others.
The definition of insurance is where a group of people pool resources together where the risk of occurrence is low, yet the loss could be great if it occurred. Insurance does not work when the risk of a loss is great. The risk that people go to the doctors for flue, vaccinations, broken bones and other ailments are frequent. Do you really want to pay an extra fee to cover the cost of administration in paying for these? The simple truth is healthcare costs money and each of us needs to face the fact we are responsible for the basic costs. With that said, the deductible should be about $2,000 per person. This provides incentive not to over use the system, reduced processing and puts controlling cost in the hands of the consumer. It would also provide catastrophic coverage for the low risk occurrences that if they did happen could bankrupt you.
Who Caused the Healthcare Crisis?
Who caused the Healthcare Crisis? If we go back to the days before insurance, who paid for Healthcare? Prior to the 50’s few had Health insurance. Wage freezes were enacted by congress and signed into law by the president. This was done to curtail inflation. This was an artificial means of controlling inflation. Employers were allowed to offer Health insurance to employee’s tax free as an inducement to work for a company. Pre tax Health insurance is much better than after tax Health insurance.
This caused a decrease in Federal Tax Revenues as taxable income became pre tax benefits. In 1965 Medicare came along and placed a burden on workers. Though small at the time, Medicare could only grow in size and cost. During the 70’s Medicare’s growth was no fast that to save this “efficient” and “great” program from bankruptcy, congress passed legislation that defined Medicare reimbursement rates. These rates have gone from 100% in 1965 to a low of 70% today.
The reduction in reimbursement had to be paid by someone; otherwise the provider would go out of business. The provider than created two tiered pricing: Medicare and private. When Medicaid was passed, a third tier pricing was added. The result was escalating costs. Employers were paying more and so a new market was created, Health Plan Administration. These plans allowed companies to pull their collective size and negotiate with providers for lower rates. This created another pricing level within our healthcare system.
Is it appropriate for a provider to have different pricing levels based on quantity? Yes, when they can save money, increase efficiency and quality based on economy of size. However, when it comes to healthcare, economy of size is a very small component of the cost. A provider sees and treats one patient at a time. Though the more patients he sees increases utilization of staff, material purchases and consumable, it does little for overall efficiency of providing healthcare.
The cause of our healthcare problem is congress. They created the different pricing tiers, removed consumers from evaluating and choosing providers and now want the American people to let them do the same across the nation.
They tax 100% of our economy today. What happens when they are allowed to run 16% of economy?
What happens when they are allowed to run 16% of economy? Can anyone name one government agency that works?
- Social Security
- Medicare
- Post Office
- Security and Exchange Commission
- U.S. House of Representatives
- U.S. Senate
President Obama’s speech
President Obama’s speech last night highlighted many different things.
The United States is one of the wealthiest countries in the world.
If this is true, why do we have deficits? Why do we have an $11.7 Trillion debt? Why can’t people pay for their own Healthcare?
If Medicare spending is not slowed, then it will consume the entire federal budget.
If Medicare is such a well run program with lower administration rates, then why do studies identify fraud in the hundreds of billions a year? Do they not add fraud to the administration costs? Maybe if they added more oversight (higher administration costs) they would have less fraud, comparable to private insurance.
The U.S. is the only industrialized country without national Health coverage.
This sounds like a lemie statement or keeping up with the Jones’s. Should we copy what others do? Should we give into peer pressure?
Medicare is a success.
If it is such a success, why is it devouring the Federal Budget?
Pre- existing conditions are not covered by private insurance because of higher risk.
Insurance is based on risk. The higher the risk potential, the higher the premium. Oil tankers pay a high premium traveling through the Hormuze Strait. Insurance can be obtained for just about any type of loss. The problem is the cost will be appropriate for the risk. A national Healthcare program that covers all without regard for risk must cover this increased cost. Obama has not said what the premium will be. He has failed to identify the cost to each person and using spin leaves it up to the individual to interpret. Each individual's interpretation will be different. Does your interpretation match with President Obama's?
What is a RIGHT?
What is the definition of a RIGHT? A right is anything that does not require a sacrifice from another person or places a burden on another person to fulfill. Is Healthcare a right, no? It requires sacrifice by others and places a burden on others for it to take place.
Cash for Clunkers Allowed by we are stupid!
Congressmen authorized the treasury to spend $1 billion to subsidize buyers of a particular makes of cars from $3,500 to $4,500. The clunkers are to be scrapped/destroyed. The idea is to remove low fuel economy cars from the market. What did it do? From the data thus far, most of the cars are SUV’s, people paid cash for them and the cars were not totally junk. In essence we gave money to those who had money to replace a car they no longer wanted for a car they did. On top of this, we borrowed money to give to these few select out of 310 million and will forever have to finance this $1 billion we did not have. A better idea would have been to take and sort through the clunkers and have an exchange for clunker program where you take a really bad clunker and exchange it for a more efficient clunker for those who cannot afford to anything.
I was and still am against the Cash for Clunker sale. It took future sales and brought them forward. The people who would have been in the market for a new car within the next year just bought new cars and their clunker, which were not as bad as true clunkers go were scrapped. Now those with true clunkers who trade up their really environmental foul polluting clunkers have two options: keep their fowl clunkers or buy a new car. The problem is they cannot afford a new car and the clunker they would have traded up to is now destroyed. On top of this six of the top ten selling new cars bought under Cash for Clunkers were foreign cars. We have a trade deficit and we just made it worse.
Now the Obama Administration has signed onto another $2 billion Cash for Clunkers. Can we have a program, Cash to get rid of Elected Idiots? These are the very same idiots who brought us Social Security, Medicare, Medicaid, Supplemental Security Income, FDIC, Pension Guarantee Company, Fannie Mae, Freddie Mac and trillion dollar deficits. They now want to give everyone government mandated Healthcare.
Professor Gates V Officer Crowley
For over two weeks the media has focused on Professor Gates and Officer Crowley. There are two sides? Which do you side with?
911 OPERATOR: All right, tell me exactly what happened?
FEMALE WITNESS CALLER: Um, I don't know what's happening. I just had an older woman standing here and she had noticed two gentlemen trying to get in a house at that number, 17 Ware Street. And they kind of had to barge in and they broke the screen door and they finally got in. When I had looked, I went further, closer to the house a little bit after the gentlemen were already in the house. I noticed two suitcases. So, I'm not sure if this is two individuals who actually work there, I mean, who live there.
911 OPERATOR: Were they white, black or Hispanic?
FEMALE WITNESS CALLER: Umm, well there were two larger men, one looked kind of Hispanic but I'm not really sure. And the other one entered and I didn't see what he looked like at all. I just saw it from a distance and this older woman was worried thinking someone's breaking in someone's house, they've been barging in. And she interrupted me and that's when I had noticed otherwise I probably wouldn't have noticed it at all, to be honest with you. So, I was just calling 'cause she was a concerned neighbor, I guess.
Officer Crowley: “A (inaudible) gentleman says he resides here, but uncooperative. Uh keep the car’s coming.”
“The arresting officer alleges that Gates shouted at him and threatened to speak to his "mama." He then arrested Gates for disorderly conduct.” The police report identifies there were seven individuals on the seen.
Officer Crowley’s Probable Cause - “When I left the residance, I noted that there were several Cambridge and Harvard Univeristy police officers assembled on the sidewalk in front of the residense. Additionally, the caller, Ms. Walen and at least seven unidentified passer-by were looking in the direction of Gates, who had followed me outside of the residence.”
Was it Gates who was attracting the attention of passerby's or was it the multiple police cars in front of his residence that was attracting attention? Could anyone actually hear Mr. Gates? Did Mr. Gates have a right to verbally respond to Crowley, yes?
Professor Gates presented his Harvard ID as identification. Some like Pat White think this is not enough. The question I wish to raise is what identification do you need to have in the U.S.? Neither my grandmother nor grandfather who lived in Providence ever had a driver’s license and state ID’s were never issued, but they did have library cards. So how would a person truly identify themselves and that they live there? Yet, Crowley took his ID and called Harvard Campus.
A police officer can request your presence outside your home or ask you questions, but he does not have authority to force you to identify yourself or come out of your home without probable cause. All you need to do is ask them to leave. If they do not leave, then ask if you are free to go, if the police say no, then you are now being detained and the officer must acknowledge and abide by your civil rights, (Miranda warnings) if he intends to ask you any questions.
The police violated Mr. Gates constitutional rights. The police tapes verbally identify that Sgt. Crowley after he had identified the person as the home owner told dispatch to keep the cars coming.
The police, under the cover of an invalid law, do not have "unfettered discretion to arrest individuals for words or conduct that annoy or offend them." See City of Houston, Tex., supra at 465. Nor can they ignore or unreasonably apply a valid law in order to arrest someone who annoys or offends them. These are clearly established constitutional principles, and no reasonable police officer could have believed to the contrary. Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982).
If Gates was disturbing the peace, then the charge should have been disturbing the peace, not disorderly conduct.
Crowley should have excused himself from the residence once he identified Mr. Gates. Furthermore, the caller said there were suitcases on the front porch. How many people seeing suitcases on the front porch or inside the house was there without permission during lunch time? How many break and entering occur during lunch in broad daylight with people walking on the side walk? Mr. Crowley should have apologized for the intrusion and left the premise.
The Massachusetts statute on Disorderly conduct excludes political speech from the statute because of the First Amendment. Alleging racial bias, as Gates was doing, and protesting arrest both represent core political speech. Was Gates unwise, rude, yelling and obnoxious, possibly? But did Gates commit a crime? Do you place handcuffs on a person for questioning the police in your home? Gates asked officer Crowley for his name and badge number, but officer Crowley refused according to Professor Gates. Officer Crowley states he told him several times.
Professor Gates then asked officer Crowley for the names and badge numbers of all officers on his property, again it was refused. Gates was arrested for saying something rude towards a police officer on his property. The police sole role in this matter was to determine if a crime had been committed.
I have heard people say the teachable moment was lost when the mother didn’t teach Gates the lesson that every responsible parent teaches their kids and that is if you have an issue with a copy, it is yes sir, no sir and you keep your damn mouth shut.
Police departments across the country support the police department. Lawyers and judges support Professor Gates. Who is right? In this country we have separation of powers; Judicial, executive and legislated branches. In this particular case, courts have routinely ruled against police officers. The district prosecutor dismissed charges shortly after Gates was arrested. Does this indicate the police acted wrongly for if Gates did break the law, why not prosecute him? This case is a good case that highlights the problem people have with police abuse of power? Police have the authority to arrest people, but can only do it if they have probable cause a crime has been committed.
The real question here that needs to be answered is “was a crime committed?”
I listen to the Pat White show often because he presents good topics, but on this topic I take issue. Pat White an Air Force veteran like any other person who served his country took an oath to preserve, protect and defend the constitution of the United States against all enemies foreign and domestic. Did Pat's oath end when he left the military? He like I served our country, we took the same oath as millions of others and I would imagine he was instructed in what is and is not a lawful order. My oath to my country has not ended. I will continue to question the authority of police, politicians and government agencies. I do this because I have a moral obligation to my children to ensure the Constitution and our rights are not trampled and disappear over time.
We say we do not live in a police state, but why then do people feel you do not have the right to question the police? They believe the only correct answer is “yes sir - no sir” and you never ask for their names and badge numbers. In this country we have constitutional protected rights, freedom of speech, freedom of the press, the right to assembly, the right to redress grievances of the government and freedom of religion. This first amendment right gives every one of us the right and constitutional authority to question the state when they extend by implication a statute beyond its plain and literal meaning given it by our elected representatives and signed into law by the executive branch.
Pat White contends law enforcement does not have to identify them. I checked Massachusetts law on this issue. “Yes. Massachusetts law requires police officers to carry identification cards and present them upon request. Officers are also required to wear a "badge, tag, or label" with their name and/or identifying number. The law is aimed at precisely the situation in question-suspects who feel their rights are being violated.
Massachusetts Officer ID law
Officer Crowley’s report
Healthcare Debate and some Facts
Healthcare in the United States by some respects is in a crisis. When you speak to people, they say it has gotten too expensive. They point to 50 million uninsured and an increase in bankruptcies. I attended a forum at St. Mary’s Wednesday evening and listened to several commenters’. There was a 30 minute video clip that was shown. It was done by a person traveling the globe researching other countries healthcare systems.
The US is ranked 37th in the world in terms of providing healthcare. Two criteria repeatedly indentified were a higher infant mortality and lower life expectancy. Several countries rated higher were identified, but were not quantified as to just how much better they were. I swam competitively years ago swam the Huntington Mile a year ago. My older brother swam as well, but in a different heat. He beat me by less than 0.06 seconds. There was no actual finish line, just an imaginary line of sight. Yes, I was second, but does that really make me that much slower than my brother? When the US is ranked 37th, what exactly is 36th? Were they a year longer in life expectancy or was it a day or fractional day. The US has the highest diet of red meat in the world as well as drinking soda. We also rank towards the bottom in exercise and have a high drug risk. Crime is also a bit higher which will life expectancy. Too me ranked 37th is no reason to investigate healthcare, it is a red herring.
The video looked at England, Germany, Switzerland, Japan and Taiwan. All had different variations of a universal plan. All have one common theme to theme; the government sets the price of all providers. In England they set the salary of every doctor. They work 10 to 14 hours a day and make half what a doctor in the US makes. Emergency care is rated good while elective care is rated poor. They have higher taxes and no provider is allowed to make a profit. Administrators are not allowed to make a profit. This means everyone who works in the healthcare industry works for the government. Waiting lists exist with waits of up to seven months. The cost is to each person is about $50 each just for the general practitioner who has 1,800 patients. Lastly, they tend to attract lonely people more. That’s right because healthcare is free; many people tend to go just to speak with someone.
Japan has 130 million people and spends 8% of GDP on healthcare. They have a longer life expectancy and lower infant mortality rates, but also eat more fish, less meat and is attributed to lifestyle, not healthcare. 80% of all hospitals are private, citizens have are three times more likely to seek healthcare than anywhere in the world. A hospital room with 4 people costs $10 a day while a private room is $80. 50% of all hospitals in Japan are in financial deficit. Doctors bare the brunt of costs with a doctor’s visit reimbursed at 450 yen or $4. Again the Government dictates what every procedure costs. Every provider is paid the same for the same procedure.
Germany uses the Bismarck model. 90% of the country in enrolled in national system with 10% opting for private coverage. Everyone pays a premium based on income. A worker making $60,000 pays $600 a month. The insurance premium rises with income. There is a 15 Euro co-pay. Again insurance companies and providers are not allowed to make a profit. Administrative costs run 6%, doctors make $80,000 a year and work longer hours. Doctors went on strike for higher wages for one day recently
Taiwan began their healthcare system in 1980. They looked at over ten countries and took what they thought was the best of each. No one can opt out and there is one collector. There is no waiting or referrals. They use information technology giving every citizen a smart card. The government keeps tabs on who uses healthcare – if you use it more than 20 times, you get a visit. This program costs 6.2% of GDP, yet it does not cover all the costs. The government instead of raising the taxes has been borrowing money to cover the 1.8% of GDP shortfall. Actual costs are closer to 8% GDP.
Switzerland has 8 million citizens. Medical insurance is required and voted in by a very slim majority. Insurance companies are not allowed to make a profit, no cherry picking of insured and view healthcare as a “Human Right.” All procedures have a standard price. Their system costs 5.5% of GDP. Drug companies make just 1/3 of the profits they did prior to the mandatory healthcare program. The premium is $750 a month and is the second most costly program in the world with the US the most costly. There is significant pressure to raise the premiums to cover costs.
There are three basic concepts to Universal healthcare;
Insurance companies cannot make a profit
All must be insured
Government sets the reimbursement rate providers are paid for each service provided and no provider may make a profit.
The closest system in the United States to any of these countries programs is Medicare.
In the United States, there is a proposal for universal coverage. To pay for this there is an incremental tax based on income. All employers will pay 4.75% of wages into the insurance pool. The bottom 95% of employees will pay 3.3% of wages into the insurance pool. Those making more than $1 million a year will pay 10% into the insurance pool while those in the top 5% income level, but less than $1 million a year will pay 5%.
In simple terms 95% will pay 8.05%, 4.8% will pay 9.75% while 0.2% of workers will pay 14.75%. On top of this will be the existing 2.9% Medicare tax. Based on income alone, the cost to the workers is 10.95% of wages. Again, many will say the employer pays 1.45% of the Medicare tax and they will pay 4.75% for the universal insurance cost as well. However, we all know that the companies will just add this additional cost of doing business onto everything they sell and in the end we as consumers end up paying for it either in lower wages or higher prices.
I did a back of the envelope calculation using 2008 reported $7.2 Trillion in wages. Based on 10.95% healthcare insurance on $7.2 Trillion raises just $788.4 Billion. I am not sure who came up with this proposal but the total cost of healthcare in 2007 was $2.6 Trillion. Unless those proposing this tax rate believe current healthcare providers will take a 70% cut in wages, this is not going to work. In addition, 10.95% of wages is not the same thing as 10.95% of GDP. This is comparable to 6% GDP.
What I am more interested in is trend and root cause, not overall dollar cost per capita. I have looked at data for different age groups
· All Ages
· Under age 65
· 0-18
· 19-64
· 19-44
· 45-54
· 55-64
· Age 65 and older
· 65-74
· 75-84
· 85 and older
I have looked at individual categories
· Hospital
· Physician & Clinical Services
· Prescription Drugs
· Nursing Home
· Dental Care
· Other Professional
· Other Personal Health Care
· Home Health Care
· Nondurables
· Durables
Is there any type of trend over time, yes? It is a fact that both Medicare and Medicaid shift costs to all other payees regardless of if they are covered by employer insurance, individual insurance or uninsured. It is also a fact that the baby boom or what I refer to as the Baby Bust began in 1963. There was also an explosion in technology beginning after the inception of Medicare. We have three large causes to our increase in healthcare costs and our government has not been totally honest with the American People.
1. The advent of Medicare and Medicaid has funded the technology boom we have in healthcare. It provided dedicated “customers.” This is similar to mandating the use of ethanol in gasoline. It creates a demand, regardless of efficiency, cost effectivness or need. In the case of Medicare, it provided funds to those who could come up with a better diagnostic, test, procedure, drug and treatment.
2. The baby bust or the end of the baby boom lowered the population growth rate to nearly zero. This in affect stopped the dilution of the population age. A birth rate that increased population artificially lowered the over all age of the population. A birth rate that yields a zero population growth causes the average age of the population to increase and over a period of about 85 years stabilizes. The change in the population age after this point in time is caused by increased in life expectancy only.
3. It Is a fact the younger you are, the lower the healthcare costs. For those age 0 to 44, the increase in healthcare costs has been about 6.8% a year over 12 years. For those 45 to 54 the increase has been 10.2%. As one ages the cost per year increases dramatically.
| Personal Health Care Expenditures (billions) |
| Amount | Average Annual Growth |
| 1987 | 1996 | 1987 | 1996 | 1987 | 1996 |
| All Ages | $443.4 | $911.2 | $1,065.0 | 8.30% | 5.30% | 7.60% |
| Under age 65 | $285.7 | $570.0 | $678.4 | 8.00% | 6.00% | 7.50% |
| 0-18 | $57.9 | $115.2 | $131.0 | 7.90% | 4.40% | 7.00% |
| 19-64 | $227.8 | $454.9 | $547.4 | 8.00% | 6.40% | 7.60% |
| 19-44 | $127.0 | $241.5 | $278.4 | 7.40% | 4.90% | 6.80% |
| 45-54 | $42.3 | $105.8 | $135.8 | 10.70% | 8.70% | 10.20% |
| 55-64 | $58.5 | $107.5 | $133.2 | 7.00% | 7.40% | 7.10% |
| Age 65 and older | $157.7 | $341.1 | $386.5 | 9.00% | 4.30% | 7.80% |
| 65-74 | $70.1 | $135.8 | $149.5 | 7.60% | 3.30% | 6.50% |
| 75-84 | $56.1 | $128.9 | $148.4 | 9.70% | 4.80% | 8.40% |
| 85 and older | $31.5 | $76.4 | $88.6 | 10.30% | 5.10% | 9.00% |
| Per Capita Personal Health Care Expenditures (dollars) |
| Amount | Average Annual Growth |
| 1987 | 1996 | 1999 | 1987-96 | 1996-99 | 1987-99 |
| All Ages | $1,799.0 | $3,373.0 | $3,834.0 | 7.20% | 4.40% | 6.50% |
| Under age 65 | $1,319.0 | $2,416.0 | $2,793.0 | 7.00% | 4.90% | 6.50% |
| 0-18 | $809.0 | $1,480.0 | $1,646.0 | 6.90% | 3.60% | 6.10% |
| 19-64 | $1,570.0 | $2,878.0 | $3,352.0 | 7.00% | 5.20% | 6.50% |
| 19-44 | $1,278.0 | $2,339.0 | $2,706.0 | 7.00% | 5.00% | 6.50% |
| 45-54 | $1,790.0 | $3,200.0 | $3,713.0 | 6.70% | 5.10% | 6.30% |
| 55-64 | $2,650.0 | $4,944.0 | $5,590.0 | 7.20% | 4.20% | 6.40% |
| Age 65 and older | $5,288.0 | $9,958.0 | $11,089.0 | 7.30% | 3.70% | 6.40% |
| 65-74 | $4,021.0 | $7,235.0 | $8,167.0 | 6.70% | 4.10% | 6.10% |
| 75-84 | $5,964.0 | $11,265.0 | $12,244.0 | 7.30% | 2.80% | 6.20% |
| 85 and older | $10,548.0 | $18,921.0 | $20,001.0 | 6.70% | 1.90% | 5.50% |
4. Looking at two different tables, one of overall expenditures and one dealing with per capita costs, one would think the growth in cost of per capita would match that of expenditures, but it does not. The cost per capita has held relatively steady over 12 years at 6.5% or less, yet the expenditure growth is 50% greater. The reason is the compounding affect of inflation, aging and cost shifting.
5. Cost shifting can be indentified easily by comparing the two tables. The growth in expenditures and per capita for those under age 45 correspond well. However, when you look at the growth in expenditure and per capita for those age 65 and over, they do not. They differ greatly. When you look at shear numbers and weighted averages, you find that the reimbursement rate of Medicare and Medicaid in the range of 60 to 70% will cause the other age groups to see a cost shift of about 20%. Those over age 65 expend 37% of total healthcare dollars, yet represent just 13% of the population. This is a 3:1 leveraging affect.
Historical National Health Expenditure Data
