Posts Tagged ‘cost’

Democrat’s Government Health Care Will Increase, NOT Decrease, Costs

July 19, 2009

We don’t have any idea how expensive Obama care will truly be.  You can bet your britches – and you may end up actually being forced to BET your britches – that it will cost a whopping load more than advertised.

First, some figures to show the invariable tendency of the government to dramatically underestimate the cost of its own programs:

– 2009 (January) CBO estimated that the bailout TARP plan would cost taxpayers $189 billion; instead, several weeks later the estimated cost was raised to $356 billion, and will eventually be much more by end of 2009.

– 1965 CBO estimated that Medicare Pt. A cost would be $9 billion by 1990; instead the cost was $66 billion in 1990.  They were wrong by a mere 633%.  Today the costs have exploded so incredibly that no one’s even bothering to go back now and try to figure out just how terribly wrong the forecasters truly were.

1965 CBO estimated that all (Part A plus Part B) Medicare cost would be $12 billion by 1990; instead the cost was $107 billion in 1990, and today it has a stratospheric total unfunded liability of $61.6 trillion.  Oops.

1987 CBO estimated that subsidy for Medicaid special hospitals would be $100 million by 1992; instead the cost was $11 billion in 1992There’s a nice 10,900% cost markup for you.  Better luck next time.

1988 CBO estimated that Medicaid homecare cost would be $4 billion by 1983; instead the cost was $10 billion in 1983.  But don’t worry; it’s only money.  And being off by a mere 150% is actually quite excellent by the “close enough for government work” mindset.

2003 White House estimate of Iraq War cost would be $60 billion; instead the cost so far has exceeded $600 billion.  Oh, well, if at first you don’t succeed, there’s always Afghanistan to screw up too.

Maybe you’d better sit down for this shocker: The U.S. government controls its costs the way Monty Python’s famous Mr. Creosote controlled his weight:

And like Mr. Creosote, it will be that extra tiny little bit of spending that finally causes the U.S. treasury to explode in a gory death.  Instead of the mint that blows up Mr. Creosote, it will be a dollar bill that blows up the U.S. government.

So when you hear the arguments over how much Obama’s health care “reform” will cost, realize that it isn’t a matter of whether it will cost $1 trillion, or $1.5 trillion, or $3.5 trillion; it’s a matter of whether it will cost one of those numbers times a factor of at least 10 or more.

The $1.5 trillion figure, which is currently being thrown around, is enough of a sticker shocker even without the realization that it will actually end up costing far, far more that even Democrats – fearing losing their seats – are beginning to bail out of it.

Still, the worse the plan looks, the faster Barack Obama wants it passed, before people know what a lemon they bought.  Obama has been claiming that we must immediately pass health care “reform” in order to save money in future years.  He has pounded away with that message again and again.

But that message is a complete lie.

Allow me to introduce Doug Elmendorf, the director of the Congressional Budget Office.  And allow me to cite an article by Rick Moran from Pajama’s Media to describe the truly dire situation we face, and which we are ignoring to our literal peril:

ObamaCare Gets a Red Light from Congressional Budget Office

The Democrats’ plan not only won’t save a dime, it will cost us billions over the next decade. (Also see PJTV: Nationwide Protests Target ObamaCare)

Doug Elmendorf, director of the nonpartisan Congressional Budget Office, was testifying before the Senate Budget Committee yesterday when he dropped a bombshell on the gathering that put a whole new spin on the effort by the Obama administration to reform the health care system.

The exchange with Democrat Kent Conrad was a shocker:

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 judgment, 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.

Elmendorf made additional news yesterday by scaring the hell out of everyone when he released the latest CBO report on the long-term budget outlook that, in technical terms, says that we are in very big trouble:

Under current law, the federal budget is on an unsustainable path, because federal debt will continue to grow much faster than the economy over the long run. Although great uncertainty surrounds long-term fiscal projections, rising costs for health care and the aging of the population will cause federal spending to increase rapidly under any plausible scenario for current law. Unless revenues increase just as rapidly, the rise in spending will produce growing budget deficits. Large budget deficits would reduce national saving, leading to more borrowing from abroad and less domestic investment, which in turn would depress economic growth in the United States. Over time, accumulating debt would cause substantial harm to the economy. …

Measured relative to GDP, almost all of the projected growth in federal spending other than interest payments on the debt stems from the three largest entitlement programs — Medicare, Medicaid, and Social Security. For decades, spending on Medicare and Medicaid has been growing faster than the economy. CBO projects that if current laws do not change, federal spending on Medicare and Medicaid combined will grow from roughly 5 percent of GDP today to almost 10 percent by 2035. By 2080, the government would be spending almost as much, as a share of the economy, on just its two major health care programs as it has spent on all of its programs and services in recent years.

This double dose of doom has made absolutely no impact on Capitol Hill. Three House committees seem ready to report out a $1.5 trillion health care reform measure while the Senate Finance Committee appears close to a bipartisan deal on how to fund it — this, despite the fact that the CBO chief has told them there is no way to pay for it.

It is like being in a bad dream where there’s a fire in a room where a dinner party is being held and you’re the only one who notices. Everyone else is still playing cards, eating, or sitting around having witty conversations, all the while the fire laps closer and closer.

But it’s not a nightmare and lawmakers really are ignoring the fire. Elmendorf doesn’t come up with these projections to amuse himself and the wonks at CBO. He has outlined a recipe for catastrophe that will eventually make the United States a second rate economic power, not to mention impoverish the population.

The president and Democrats have been pitching this plan as a cost-saving measure. The president especially has been warning that we have to pass this reform bill quickly in order to get control of the spiraling deficits grimly outlined in Elmendorf’s long-term budget outlook.

But Elmendorf is saying that we can’t get there from here, that the numbers being used by Democrats to close the gap between what the bill will cost and how they plan to pay for it are simply not adding up.

There is another aspect to this reform measure that few are talking about: history. Every single entitlement program ever created by the federal government has cost the taxpayer more than advertised — in some cases, astronomically more.

Medicare is a perfect example. When the program was created in 1965, it cost taxpayers around $3 billion. At that time, the House Ways and Means Committee estimated that Medicare would cost $12 billion by 1990 — and that number was adjusted for a predicted rate of inflation. The actual cost of the program in 1990 was $107 billion. And today, Medicare costs the U.S. taxpayer $440 billion.

At best, Congress is guessing. The fact is, no one knows how much this monstrosity is going to cost, no one knows how it is going to be paid for, and no one knows what effect it will have on the quality of care or on the private insurance industry.

The ideas being implemented are untried. And, unlike NASA testing a new rocket or the Air Force testing a new fighter where failure is expected, there is no room for error. However this thing works itself out, we are stuck with it. History is a telling guide here as well; there has never been an entitlement once created that was later rescinded.

Elmendorf’s testimony and budget outlook should be heeded. Yes, we need to reform the health care system — badly. But the Democrats’ plan is not the only game in town. There are many proposals left unexamined by the Democrats in their haste to give their president a triumph. The partisan nature of the debate, the deliberate closing off of alternatives that would cost far less and perhaps do as much as is being proposed, and the damnable rush to get it all done before anything is digested or weighed against the long term, is frightening.

The major justification for speed in passing this legislation just went out the window with Director Elmendorf’s admission that the health care reform bill will only add many billions to the record deficits we will already be running over the next decade. Is that reason enough to slow down or even stop what the Congress is doing in order to think this thing through and try to come up with alternatives?

Not when it’s easier to ignore the fire lapping at your toes in order to grant a political victory to a president in trouble with the voters.

They say elections have consequences, and since the country voted for total Democrat control, we should let the Democrats have their shot.  That may be true.  But what we did as a nation in November was vote to slash our jugular veins, so that the blood of the entire nation (measured in the red ink of crippling debts) would gush out until we are left with less than a banana republic.

It is my sincerely held belief that those who truly understand the real picture are not telling us how truly bad things are, lest the people bring the nation down in one massively giant “bank run.”

New Study Published In ‘Nature Geoscience’ Shows Global Warming Models All Wrong

July 17, 2009

Let’s begin with the study:

Nature Geoscience
Published online: 13 July 2009 | doi:10.1038/ngeo578

Carbon dioxide forcing alone insufficient to explain Palaeocene–Eocene Thermal Maximum warming

Richard E. Zeebe1, James C. Zachos2 & Gerald R. Dickens3

Top of pageThe Palaeocene–Eocene Thermal Maximum (about 55 Myr ago) represents a possible analogue for the future and thus may provide insight into climate system sensitivity and feedbacks1, 2. The key feature of this event is the release of a large mass of 13C-depleted carbon into the carbon reservoirs at the Earth’s surface, although the source remains an open issue3, 4. Concurrently, global surface temperatures rose by 5–9 °C within a few thousand years5, 6, 7, 8, 9. Here we use published palaeorecords of deep-sea carbonate dissolution10, 11, 12, 13, 14 and stable carbon isotope composition10, 15, 16, 17 along with a carbon cycle model to constrain the initial carbon pulse to a magnitude of 3,000 Pg C or less, with an isotopic composition lighter than -50permil. As a result, atmospheric carbon dioxide concentrations increased during the main event by less than about 70% compared with pre-event levels. At accepted values for the climate sensitivity to a doubling of the atmospheric CO2 concentration1, this rise in CO2 can explain only between 1 and 3.5 °C of the warming inferred from proxy records. We conclude that in addition to direct CO2 forcing, other processes and/or feedbacks that are hitherto unknown must have caused a substantial portion of the warming during the Palaeocene–Eocene Thermal Maximum. Once these processes have been identified, their potential effect on future climate change needs to be taken into account.

  1. School of Ocean and Earth Science and Technology, Department of Oceanography, University of Hawaii at Manoa, 1000 Pope Road, MSB 504, Honolulu, Hawaii 96822, USA
  2. Earth and Planetary Sciences Department, University of California, Santa Cruz, California 95064, USA
  3. Department of Earth Sciences, Rice University, Houston, Texas 77005, USA

This isn’t just telling us that those stupid dinosaurs didn’t send themselves into extinction by driving too many SUVs and failing to implement global warming legislation to deal with carbon dioxide.  It is saying that carbon dioxide was only a tiny, tiny little fraction of the global warming that the planet experienced 55 million years ago.

This is always one of the most amazing and incomprehensible things to me: we have HAD cycles of global warming and global cooling over and over and over again throughout the entire history of the planet.  And yet that is forgotten over and over again by people who have the educations to know better.  It is a form of willful blindness and deliberate stupidity that is simply shocking (It hearkens to Romans 1, “Professing themselves to be wise, they became fools…”).  And it is done in order to advance a political and in fact socialist agenda to redistribute wealth.

A pair of articles you should read:

What the Science REALLY Says About Global Warming

What You Never Hear About Global Warming

A Fox News Special Report story had this to say:

West Virginia, where coal is the heart of the economy.  Coal mining produces both power and revenue.  So Obama’s plan to fight climate change by taxing carbon pollution with a cap and trade system is a serious threat.  And even ardent Obama backers like Gov. Joe Manchin says, “It’s far reaching, and I think it has detrimental effects to our economy – not just West Virginia; I think the United States of America’s economy –  cannot take that shock of artificially increasing the price much higher than what we compete.”  Both senators from W. Virginia Robert Byrd and Jay Rockefeller oppose the plan.

American Electrical Power CEO Mike Morris says cap and trade will raise everyone’s power cost.  “As an electric consumer and a consumer of any product you’re going to pay more for it.  This is a societal decision to deal with the issue of global warming, and you can’t do it for free.  This is not an inexpensive move.”

Support industries like heavy industries such as Caterpillar would be seriously affected too.  Caterpillar has a $50 million payroll in W.Virginia.  And about 75% of their revenues comes from the coal industry, says Rolger Lilly of Walker Caterpillar.

Burning coal creates nearly half the nation’s electricity.  It is far cheaper than alternative energies (solar $.20 per kilowatt hour; wind $.14 per kilowatt hour; vs. coal at only $.03 per kilowatt hour).

And of course you know Obama has said his plan would cause energy prices to “necessary skyrocket.”

This is a plan that will literally result in Americans starving in the dark and cold unless they stand up for sanity.

Carbon dioxide is a naturally occurring and necessary gas.  Without it life on earth would be impossible.  Liberals like to call it “carbon” to make you think of something black and sooty and icky; but it is odorless and colorless.  It is no bogeyman; liberals are your bogeymen.

The fact of the matter is this: when we consider all global warming gasses, “anthropogenic CO2 produces less than 0.1 of one percent of the greenhouse effect.”

The evidence is abundantly clear, yet we are on the verge of crushing our economic output, and killing jobs in the process, to fight a problem which either doesn’t even exist in the first place or which we can do nothing to stop.

Meanwhile, we’ve got the Obama administration actively working to suppress the science that proves that global warming is bogusAnd we’ve got expert economists saying that the fact that China and India aren’t similarly curtailing THEIR emissions will do result in nothing more than America shooting itself in the foot.

Global Warming alarmists have called people like me “global warming deniers” to impugn me as tantamount to a Holocaust denier.  I respond by calling such people “reality deniers.”