One of the best lines used against Romney was “Obamanycare,” It captures the essence of what is wrong with Mitt. He is a liberal at heart, believes in Paternalism and is an empty suit.
Now we have confirmation that Romneycare was instrumental in the formulation for Obamacare.
Taken together, Massachusetts’s experience under the 2006 reform initiative, which became the template for the structure of the Affordable Care Act, highlights the potential gains and the challenges the nation now faces under federal health reform.
The rest of the study is interesting though. They basically confirm that people are using more health care, which is expected. When it comes to affordability they say this:
Consistent with that expectation, there have been gains in the affordability of care for adults since 2006, as evident in a lower burden from out-of-pocket health care spending (excluding premiums) and less unmet need for care because of cost (Exhibit 4; additional measures in Appendix Exhibit 4; simple [unadjusted] estimates in Appendix Exhibit 8).9
Why are they excluding premiums? Maybe because premiums have risen more rapidly in Masachusetts than anywhere else in the country?
As highlighted in Figure 1, in the absence of policy change, health care spending in Massachusetts is projected to nearly double to $123 billion in 2020, increasing 8 percent faster than the state’s gross domestic product (GDP).
Take out most expensive portion and of course it’s “affordable.” Hell if you don’t count all the beer I drink, I never drink alcohol either! Only Academics and Politicians think that is good policy (see how they measure CPI).
January 19, 2012
On a seasonally adjusted basis, the Consumer Price Index for All Urban Consumers was unchanged in December, as it was in November. The index for all items less food and energy rose 0.1 percent in December after increasing 0.2 percent in November.
All in all, Romneycare is a disaster. The economics are wrong. I’m not even going to get into the Mandate, which was also used for Obamacare. Obamanycare is a great word to use to describe MassCare. It needs to be hung around Romney’s neck. Thankfully Newt is doing just that.
h/t: James Pethokoukis <—Read his story. It’s much better written than mine.
From a Quote taken from post by Bob Higgs:
The worst to be feared and the best to be expected can be simply stated.
The worst is atomic war.
The best would be this: a life of perpetual fear and tension; a burden of arms draining the wealth and the labor of all peoples; a wasting of strength that defies the American system or the Soviet system or any system to achieve true abundance and happiness for the peoples of this earth.
Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed.
This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals.
It is some 50 miles of concrete highway. We pay for a single fighter with a half million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people.
This, I repeat, is the best way of life to be found on the road the world has been taking.
This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron.
This is true of all Government spending whether it is under the guise of defense or “Social Justice.” The money has to come from somewhere, and that somewhere probably had a drastically different use for it.
This is scary, just in time for Tax Day.
The Treasury Department recently issued the 2009 financial report of the United States government. Whereas there is lots of talk in Congress and in the press about the federal budget, the annual report was released to near silence. That’s too bad, not only because the annual report is untainted by creative accounting but also because its message is too important to ignore.
Read the whole thing, then check out the Federal balance sheet, here.
United States Government
as of September 30, 2009, and September 30, 2008 (in billions)
Total assets………………………………………………………………………. 2,667.9 1,974.7
Total liabilities …………………………………………………………………. 14,123.8 12,178.2
Yeah it’s that scary. And remember that’s not even counting the unfunded entitlement liabilities, Medicare, and Social Security.
Add in Social Security, this is just for 2009:
Present value of future expenditures in excess of future revenue …………………………………………………………………. -7,677 billion
Gives us 21,800 billion in the hole for 2009 (Not counting Medicare).
“Social security is an obligation the government has to it’s people.” I agree, but the Government isn’t above the law of finance. If they can’t pay for it, then they will default; either through outright default ( say “tough shit and deal”) or through inflation.
The “tough shit” approach will hurt seniors but that’s it, anyone not getting SS benefits will just have to start saving themselves, which will lead to economic growth, under a simple Solow model. But, it’s politically unfeasible. Seniors are a dedicated voting block and have their own self-interest first and foremost.
I don’t blame them either. They paid in, with the promise of a return by the Fed Government. In theory, that promise should have been good. In practice, that promise was meaningless as soon as the Government started paying other people off with SS money.
Inflation will hurt everyone and in the long run is more harmful than anything else. Unfortunately, it’s the most politically appealing path. Inflation is a creeping tax. Government use it because it decreases the purchasing power of the currency, so a Government pays off it’s debts with worthless paper.
Charles Rowley, economist at GMU , explains it well.
There are only three ways for a government to cover the cost of its spending: debt, regular taxes, and inflation. Because regular tax increases cannot be hidden, at least easily, they tend to be vote losers, to be resorted to only as a last resort, and even then, only in a discriminatory manner designed to impact adversely on a small minority of voters. Because increased debt is less transparent to the voters, and therefore, politically feasible, deficit-financing tends to be the preferred instrument, up to the point where its burden becomes apparent to the international community. At that point, inflation tends to comes into play, as governments scramble to reduce the real burden of the debt by debauching its currency.
When the currency is worth less and less, those on fixed incomes are hurt more and more. Prices go up in times of inflation, ask anyone around during the Carter years. Fixed incomes do not. The Government does not index SS benefits with inflation, they merely vote in a cost of living increase.
Here is some news for you, that COL increase is worthless. It’s measured using a flawed CPI number. I say flawed because it excludes such trivial things as energy and food. We all know how meaningless those things are right?Also, the weighting of the basket of goods is all off. It give a higher weight to goods that are falling in price rather than those rising in price. It’s akin to having 100 people; 90 Democrats, 4 Greens and 6 Republicans and finding the average approval for Bush. It’s not going to be an accurate representation.
The Boskin/Greenspan argument was that when steak got too expensive, the consumer would substitute hamburger for the steak, and that the inflation measure should reflect the costs tied to buying hamburger versus steak, instead of steak versus steak. Of course, replacing hamburger for steak in the calculations would reduce the inflation rate, but it represented the rate of inflation in terms of maintaining a declining standard of living. Cost of living was being replaced by the cost of survival. The old system told you how much you had to increase your income in order to keep buying steak. The new system promised you hamburger, and then dog food, perhaps, after that….
The BLS initially did not institute a new CPI measurement using a variable-basket of goods that allowed substitution of hamburger for steak, but rather tried to approximate the effect by changing the weighting of goods in the CPI fixed basket. Over a period of several years, straight arithmetic weighting of the CPI components was shifted to a geometric weighting. The Boskin/Greenspan benefit of a geometric weighting was that it automatically gave a lower weighting to CPI components that were rising in price, and a higher weighting to those items dropping in price.
Once the system had been shifted fully to geometric weighting, the net effect was to reduce reported CPI on an annual, or year-over-year basis, by 2.7% from what it would have been based on the traditional weighting methodology. The results have been dramatic. The compounding effect since the early-1990s has reduced annual cost of living adjustments in social security by more than a third.
People on fixed incomes or low incomes spend the majority of their money on food and energy. So an increase in those two things, which aren’t part of CPI or COL, will negatively impact the standard of living of those people. Are seniors better off with that?
It’s a difficult question to face; default or inflation. I’m more inclined to argue for default. Sovereign default means that the people in charge and the people the caused the mess will be held accountable, to a certain extent. Inflation just mean pawning it off on the next guy.