Posts Tagged ‘bend the curve’

China Fears ObamaCare Causes Economic Cancer

November 17, 2009

The Chinese have a little different medical philosophy than Western doctors.  But when it comes to dollars and cents, Chinese math and Western math are very much alike.

The Chinese are looking at the numbers of dollars (trillions of dollars, mind you) of ObamaCare.  And they do not like the rapidly growing economic cancer that they see.

From Reuters:

James Pethokoukis
November 16th, 2009
China questions costs of U.S. healthcare reform

Guess what? It turns out the Chinese are kind of curious about how President Barack Obama’s healthcare reform plans would impact America’s huge fiscal deficit. Government officials are using his Asian trip as an opportunity to ask the White House questions. Detailed questions.

Boilerplate assurances that America won’t default on its debt or inflate the shortfall away are apparently not cutting it. Nor should they, when one owns nearly $2 trillion in assets denominated in the currency of a country about to double its national debt over the next decade.

Nothing happening in Washington today should give Beijing any comfort or confidence about what may happen tomorrow.  Healthcare reform was originally promoted as a way to “bend the curve” on escalating entitlement costs, the major part of which is financing Medicare and Medicaid. That is looking more and more like an overpromised deliverable.

For instance, a new study from the U.S. government’s Centers for Medicare and Medicaid Services finds that the healthcare reform bill recently passed in the House of Representatives would increase healthcare spending to 21.3 percent of GDP by 2019 compared with 20.8 percent under current law. That’s bending the curve the wrong way. The study also questions the “long-term viability” of the $500 billion in Medicare cuts meant to help pay for expanded insurance coverage.

In addition, the CMS study gives a clearer cost estimate than the one provided by the Congressional Budget Office. According to the CBO, the 10-year cost of PelosiCare is $894 billion. But that analysis includes early years with little government spending, According to the CMS, the House approach would cost $1 trillion from 2013-2019, or some $140 billion a year when fully put into effect.

Few realists in Washington think any of the current reform plans make a significant dent in the long-term healthcare cost to government. Indeed, the Senate Budget Committee recently held hearing about creating a bipartisan commission to find solutions to America’s entitlements problems.

If healthcare reform really bent the curve, there would be a no need for such a commission to do Healthcare Reform 2.0.

The Chinese might want to keep up the questioning
.

Think about the $894 billion estimate, versus the new $1.4 trillion estimate ($140 billion times 10 years) which has based on more accurate information (The CBO estimate was based on the Democrats’ warped claims and figures).  The difference is $506 billion – stacked right on top of that $894 billion.  We’re talking about an increase of 56.6%.  That’s a rather huge difference.

I’m glad that the Chinese are smart enough to realize that playing games with numbers isn’t going to get the job done.  I wish the American people would be that smart.

It is frankly amazing that Obama is literally to the left – and WELL to the left at that – of a communist country when it comes to attempting to forge a big government monopoly over yet another 1/6th of the economy of a once-great capitalist nation.

China is worried about the United States imploding under the weight of its own indebtedness, and therefore being unable to pay them back or buy their products in the future.  If we have any wisdom left, we would be worried about the same thing.

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Democrat Position: We Have To Spend To Keep From Going Bankrupt

July 21, 2009

There’s stupid, really stupid, truly stupid, and Democrat stupid.

Try to follow Joe Biden’s argument (if you dare!):

(CNSNews.com) – Vice President Joe Biden told people attending an AARP town hall meeting that unless the Democrat-supported health care plan becomes law the nation will go bankrupt and that the only way to avoid that fate is for the government to spend more money.

“And folks look, AARP knows and the people with me here today know, the president knows, and I know, that the status quo is simply not acceptable,” Biden said at the event on Thursday in Alexandria, Va. “It’s totally unacceptable. And it’s completely unsustainable. Even if we wanted to keep it the way we have it now. It can’t do it financially.”

“We’re going to go bankrupt as a nation,” Biden said.

“Now, people when I say that look at me and say, ‘What are you talking about, Joe? You’re telling me we have to go spend money to keep from going bankrupt?’” Biden said. “The answer is yes, that’s what I’m telling you.”

Spend your way out of bankruptcy.  There you go.

It sounds really good.  But I’ve got a couple neighbors on my street who tried it – and it turns out that it doesn’t work out all that good.

You see things walking your dog every evening.  Like what kind of cars people own, and what kind of expensive “toys” they have in their garage, and whether or not they’ve had pools installed or not.

There are two homes that are now standing vacant on my street.  And both of them had two expensive luxury cars in the driveway, and a number of toys such as jet skis (in one) and quads (in the other) in the garage.  And one had put in a below-ground swimming pool.  Both couples were young enough that I wondered, “Where did they get the money to buy all this stuff?” up until the very day I saw the moving trucks and then the foreclosure signs.

Nope.  You don’t spend to keep from going bankrupt.  You spend to go bankrupt even FASTER.  And, for the record, it is invariably excessive spending that puts people on the racetrack to bankruptcy in the first place.

Now, in business, or even in homes, one might make a relatively expensive purchase that will so reduce costs during the lifetime of the “gadget” that it justifies the initial outlay.  A new computer system that will streamline and optimize the accounting system; a new refrigerator that replaces a worn-out, energy-wasting unit.

Now, no rational business owner or homeowner would make such major purchases if they are already deeply in debt: the best move for either would be to pay down their highest-interest debts, which would save FAR more money in the long run.  Buying more stuff would just add to your already-too-high payments.  Even a sound purchase is unsound if you don’t have the cash on hand to pay for it.  I think budget experts such as Suze Orman (who offers such rare pearls of wisdom as “Saving is good; going into massive debt is bad”) would agree with me on this one.

But is Joe Biden talking about a big purchase that will save money down the road?

No.

Congressional Budget Office chief Douglas Elmendorf just got through telling Congress that the health care legislation at issue does not achieve “the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount.”  And then he went on to say that, “And on the contrary, the legislation significantly expands the federal responsibility for health care costs.”

ABC News’ Z. Byron Wolf reports:

Answering questions from Democrat Kent Conrad of North Dakota at a hearing of the Senate Budget Committee today, Elmendorf said CBO does not see health care cost savings in either of the partisan Democratic bills currently in Congress.

Conrad:  Dr. Elmendorf, I am going to really put you on the spot because we are in the middle of this health care debate, but it is critically important that we get this right.  Everyone has said, virtually everyone, that bending the cost curve over time is critically important and one of the key goals of this entire effort.  From what you have seen from the products of the committees that have reported, do you see a successful effort being mounted to bend the long-term cost curve?

Elmendorf:  No, Mr. Chairman.  In the legislation that has been reported we do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount.  And on the contrary, the legislation significantly expands the federal responsibility for health care costs.

Conrad:  So the cost curve in your judgment is being bent, but it is being bent the wrong way.  Is that correct?

Elmendorf:  The way I would put it is that the curve is being raised, so there is a justifiable focus on growth rates because of course it is the compounding of growth rates faster than the economy that leads to these unsustainable paths.  But it is very hard to look out over a very long term and say very accurate things about growth rates.  So most health experts that we talk with focus particularly on what is happening over the next 10 or 20 years, still a pretty long time period for projections, but focus on the next 10 or 20 years and look at whether efforts are being made that are bringing costs down or pushing costs up over that period.

As we wrote in our letter to you and Senator Gregg, the creation of a new subsidy for health insurance, which is a critical part of expanding health insurance coverage in our judgement, would by itself increase the federal responsibility for health care that raises federal spending on health care.  It raises the amount of activity that is growing at this unsustainable rate and to offset that there has to be very substantial reductions in other parts of the federal commitment to health care, either on the tax revenue side through changes in the tax exclusion or on the spending side through reforms in Medicare and Medicaid.  Certainly reforms of that sort are included in some of the packages, and we are still analyzing the reforms in the House package.  Legislation was only released as you know two days ago.  But changes we have looked at so far do not represent the fundamental change on the order of magnitude that would be necessary to offset the direct increase in federal health costs from the insurance coverage proposals.

In other words, the Obama administration is going to spend a ton of money in order to buy something that will cost even more money than the thing it replaces.

Not exactly a Consumer Reports “Best Buy” recommendation.

So we’re back to the young homeowners on my block who splurged and splurged and splurged on toys and luxery items and fancy cars until long after they were already broke.  And then they went “bye-bye.”

Don’t listen to Barack Obama and Joe Biden.  They are genuinely clueless idiots who will quickly spend this country into bankruptcy all the while assuring us that they are somehow spending us out of bankruptcy.  It doesn’t make any sense in your small business, it doesn’t make any sense in your home, and even though the federal government has a giant printing press to “make money,” it doesn’t make any sense in the White House.