Sunday, October 19, 2008

Unitended Consequences - compiled

The U.S. economy is suffering and most and if not all is due to the unintended consequences of Congress.

Congress passed the last budget surplus we in 1957. Since 1958 our elected Congress has spent $9.33 Trillion more than they extolled from us in taxes resulting in continued deficits. The result is devaluation of the Dollar and record $145 barrel oil that has now shoved the U.S. economy into the worst recession in decades if not worse.

Congress in an attempt to reduce oil imports and fund an alternative to oil has given our money to ethanol producers in the form of tax credits. The result is they compete for corn that livestock producers use as feed. This has in turn raised beef, poultry and pork by 50% and caused farmers to switch from wheat production to corn production driving bread prices to over $3 per loaf.

Congress in attempt to increase home ownership passed legislation to increase home ownership without addressing the ability to pay for and maintain a home. The result is the latest $810 billion bailout to investment banks, $225 billion to Fannie Mae and Freddie Mac, $85 billion for AIG and the amount grows.

Congress in an attempt to help seniors passed Social Security and Medicare. The payroll tax has increased from 2% in 1937 to 15.3% today. The result is a U.S. savings rate close to zero, inability of families to save for retirement, pay for college, pay for healthcare, and buy a home.
The vast majority of Americans pay far, far more in payroll taxes than Federal Income Taxes. 75% of all Americans have no federal income tax liability at year’s end.

Congress passed the Earned Income Tax Credit in the 70’s to compensate low wage earners for high payroll taxes. This tax credit is paid for out of the general revenue fund, not payroll taxes adding over $1 trillion to the national debt.

Congress passed the Child Tax Credit in 1996 to reduce the tax burden on working families. The payroll tax became so high that families were struggling. This tax credit is paid out of the general fund, not payroll taxes adding nearly$1 trillion to the national debt.

Congress in an attempt to compensate for high payroll taxes Congress borrowed $120 billion from foreigners to give a stimulus check to taxpayers, adding to a $700 billion deficit in 2008.

Congress created Medicare in an attempt to help seniors pay for healthcare. The result is the finest medical technology and best treatment known to man. Engineers and entrepreneurs saw Medicare as a new customer with unlimited resources. They built MRI machines, developed new drugs, implants such as knees and hips, diagnostic tests and treatments for wide range ailments. Congress continued to pay 100% of costs until the late 70’s and early 80’s when it became prohibitively expensive to the taxpayer. Congress in attempt to control cost reduced reimbursement rates to providers to 70%. Providers then shifted unreimbursed cost to everyone else. Healthcare costs rose, administrators negotiated with providers for reduced rates, resulting in further cost shifting. Companies unable to afford all this cost shifting have dropped healthcare coverage for employees. At the same time insurance company premiums have sky rocketed. Now providers discriminate by charging different groups, a different rate for the exact same service. The result is over 45 million without health insurance.

Clearly Congress cannot budget our tax dollars. They make bad decisions resulting in unintended consequences. Even if many Americans cannot save, the U.S. would be far better off if those who know how to save were given the opportunity. Under our leadership, all of us are dependent on Congress to make the right decisions.

I will restore the American Dream where in a land of opportunity a person can work hard and prosper. It is not right for politicians to create deficits, borrow the money and give the bill to our children and grandchildren to pay.

1 Comments:

At 12:35 PM, Anonymous Anonymous said...

Have seen your name in the paper a few times lately you are a good man hope you can survive you have a lot on your plate.

 

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