Obama’s Deficit
Obama has announced his budget for 2011 and he is proposing to spend $3.83 Trillion. To many this is a meaningless number, but to put this in some sort of context consider that the 2008 budget was a mere $2.9 Trillion. The intervening years had TARP and the bailouts, but those are over. This budget reflects the new base level of spending. Yet at $3.83 Trillion, this represents a 32% increase in just 3 years. This is not just an increase in spending, this is an explosion, and one guaranteed to reduce people’s standards of living. There is simply no way that the economy could ever catch up with such an huge increase for this is the new baseline from which government will grow even further. As such it marks a permanent decrease in people’s standard of living, or at least those not lucky enough to have government jobs.
This will be paid for with a record $1.56 Trillion deficit, which in and of itself should be a cause of great concern. Just a few short years ago Democrats were warning us of the dangers of deficits 1/10 this size. One could have a serious debate over whether the government could safely handled the pre-Obama level deficits, but not deficits at these levels, which risk currency collapse and hyper-inflation.
So while people are struggling, the best case scenario is that they will have to tighten their belts even more so government can live large at our expense. As for the worst case, well, let’s hope it is only the best case…
Obama and Scaling Back the Federal Bureaucracy
President Obama and the Democrats may be setting the nation up to accomplish something conservatives have been advocating for decades, the scaling back of the federal bureaucracy, and on a scale more massive than conservatives may have even wished. This is not, of course, Obama’s intention. Far from it. Nor will it be for the reasons or in a fashion conservatives wanted. But it may very well be the result of his heretofore unimaginable budget deficits and the looming short falls in Social Security and Medicare.
It is hard to believe that only a few short years ago democrats were railing about the deficit spending under George W Bush. Personally, I and many other conservatives agreed with them, and excessive spending was a significant factor in the Republican’s loss of Congress in 2006. But while we agreed that spending under Bush and the Republican Congress was excessive, it was still hard to take the Democrat’s complaints seriously. After all, many conservatives characterized the Republican spending as Republicans acting like Democrats. I was firmly convinced that if the Democrats regained control, spending and therefore deficits would go up, not down.
Still in my wildest dreams, or nightmares, I did not imagine the deficits would rise to the levels they are now. I thought they might go up some, maybe 10% – 50%, but never did I imagine they would go up 3-4 times. Last year’s budget deficit was 1.42 trillion, This year’s is projected to be 1.35 trillion. That is $4,500 for every man woman and child in the country, and that is just one year. That means in just the last two years the Federal government has saddled the average family of four with over $36,000 in debt.
This just cannot go on. Even if the President’s projections hold up, after 5 years the deficit will still be $480 billion, well above the norm that Democrats were railing against just a few short years ago. But some budget experts see Obama’s projections as wildly optimistic and “most budget experts see deficits nearing or exceeding $1 trillion each year over the next decade once tax cuts and other policies are factored in.”
The cost just to service this rapidly growing debt is likewise growing. Combine this with the fact that within a few years the surplus generated by Medicare and Social Security will change to a deficit, and the Federal Government will have to start redeeming all those IOUs it has been filing away and there is going to be a huge money crunch.
Future Presidents and Congresses will not really have a choice but to drastically scale back or even eliminate a whole range of federal programs. Sure they can, and undoubtedly will, raise taxes, and a lot. But taxes depress the economy and thus there is a limit to how much money can be raised.
Programs such as the National Endowment for Arts and Public Broadcasting are sure to go. There simply will not be enough money. But those will be just some of the visible casualties. There are hundreds and probably thousands of smaller programs buried in the budget that are also certain to go, scarified to feed the ever growing debt. Even if the current deficit is finally brought under control, there will still be the ever increasing burden of Social Security and Medicare as it falls deeper and deeper into the red, and demands more and more IOUs be repaid.
Eventually even departments will be drastically cut back and perhaps even eliminated. First in line will be the Department of Education, which was only created in 1980. But other departments will take serious hits as well. So will the states, as monies to the states are cut back as government continues to strain just to meet the demands of the debt, Social Security and Medicare.
So the Democrats under Barack Obama may be setting up the country for the paradox of the both the largest increase in federal spending, and the greatest cutback in federal programs in our history. Anyway you look at it, it will not be a pretty sight.
Why The Dems Health Care Plan Is Doomed To Fail
Henry Neufeld’s post today touched on Health care and spurred me to write something I have been thinking about for several days. While it is true that so much of the Democratic health care plan is based on guesses, as serious a flaw as that is, that is not the biggest problem. The real problem is that it is doomed to fail regardless of the guesses about it.
This is not to say that it will not pass. It very well may. Democrats, not Republicans will determine this as Republicans do not even have enough votes for a filibuster. It is doomed to fail, because it cannot work. To be clear, it is not that it will not work, it cannot work.
The democrats are claiming that their plan will cover everyone while reducing costs and improving health care. Now those goals are achievable. And even the Democratic plan might, if they are lucky, achieve two out of the three. But it cannot achieve all three. To see why, let’s consider the goal of reducing costs.
Set aside what is meant by costs for the moment, there are only two ways to reduce costs. First, you could simply dictate lower costs. This can be done in a number of ways, such as reducing the amount paid for individual procedures, or by reducing the number of procedures preformed, or some combination of the two. While this would certainly reduce costs, it will also negatively affect health care. This method is how most countries who have government run health care work and is the reason such systems have such long waits.
The other way to reduce costs is to come up with new and innovative ways to deliver those services. Granted some of these innovative ways may also lead to a reduced level of health care. But they could also lead to an improved level of health care, and thereby achieve the goal of improved health care at a lower cost. If the savings were enough, you could also achieve the third goal of covering everyone. Since innovations can either improve or degrade health care, an additional component is needed to make innovation effective, and that is consumer choice.
The problem is that while politicians often speak of streamlining the process, of cutting out waste and abuse, or other things that could be consider innovations, governments rarely, if ever, innovates. In fact governments have a very difficult time of even keeping up with the innovations of market place. Instead of innovating, they regulate. Worse, regulations, by their very nature, stifle innovation. The more regulation you have the less innovation you will have. In addition, consumer choice is severely restricted as what consumers can choose is restricted to what the regulations will allow.
The health care and health insurance industry is the one of the most heavily regulated sectors in the country. While there are a thousand health insurance providers in the country, most consumers can at best choose from a handful. So it is not at all surprising that we are in the current predicament of increasing costs and declining service.
The democratic health care plan seeks to solve this by adding over 1000 pages of new laws, which will then be multiplied many times over in the form of implementing regulations. In short, they will stamp out any remaining vestiges of innovation.
Democrats counter that they will be supporting competition by including a government option that will increase competition. This is silly. For one, the increased regulation will limit innovation and thereby further reduce what little competition there is. As companies change their plans to conform to the new regulations the plans will look more and more alike and real effective choice will be reduced.
Even worse, to be an effective competitor would require the government option be responsive in the market place in a way that is just impossible for government. In the end, either the value of the government option to consumers will be so low as to have no effect on the market place, or and far more likely, the value of the government option will be so high as to draw (or have employers force) people into the government option. It will in effect be running the other providers out of business. So a government option cannot improve competition, it can only hurt it.
Thus the Democratic Health care bill will increase regulation and reduce effective choice even if it doesn’t end in single payer. While in theory it may be able to reduce cost and expand coverage, it cannot do this while improving health care. In short, it is doomed. And this is best case. Given the past record of government programs, the actual likelihood is that it will not even be able to control costs and we will be left with worse health-care and even higher costs and a system that is even more difficult to change.
The only real solution is to look to reform that will encourage both consumer choice and competition and thus will spur innovation. Not only can such an approach work, it has already worked even in the area of health care. This can be seen in that much of the innovation that has occurred over the last few decades has come from the area of plastic surgery, an area that insurance rarely covers and thus must compete in the market place to exist.
Spirituality & Religious Behavior & Life
There is a direct correlation between spirituality and religious behavior and how we see and feel and react to the world around us. Those who pray on a daily basis, and attend religious intuitions on a weekly basis, are happier, healthier, more content, more satisfied in their job, closer to their families, and have a better outlook towards the future. If you ever wanted evidence that spirituality and religiosity has a direct impact on how we regard life, its right there in the book for you.
Frank Luntz, discussing his book “What America Really Want … Really” with Dennis Prager Sept 15, 2009 Hour 2 on Prager’s paid site .
911 and Revenge?
Henry Neufeld’s recent post has a common but fundamental misunderstanding of the reaction to 9/11 and the subsequent actions, which included Afghanistan and Iraq. Revenge had little to do with it. As one who has support both actions, and continue to do so, revenge has never entered into my thinking, not in my writings at the time, which unfortunately were on a site which has since closed down, nor in a multi-part reappraisals written during one of the most difficult time on Should We have Gone? and Should We Leave? While revenge probably has been a factor for some, I do not believe it has been a major factor, or even a significant factor for these policies.
Frankly the main justification was found in a different answer to the question Henry asked about the safety of his family and the country. I do believe those efforts as painful and difficult as they are did in fact make us safer. I also believe that the current weakening of those efforts by the administration is rapidly undermining the small gains we have made and thereby putting us at much greater risk.
In short I do not believe these were acts of revenge but battles in a larger War on Terror. I agree that as Christians we should not be acting on revenge, but I just do think that revenge as played a significant role in our actions.
