Mandate

Part of Obamacare is the mandate. This says that if you choose not to purchase health care you will pay a penalty and it will be collected when you file your taxes. In 2016 eleven million people chose to pay the penalty. This figure is under reported. When you are filling out your tax return there are two questions. First is, did you have insurance and the second is did you buy it through the exchange and if you answer yes to the first and no to the second you can avoid the penalty. How many have done this is not known but they would be added to the 11 million and become part of the uninsured. Both would be part of the 27 million who did not have health insurance in 2016 and this does not count many illegals who are not insured.

Law

With the rumor that Justice Kennedy might retire comes the discussion on who might replace him and that brings up the old argument by conservatives that they want what is called an originalist. They mean a person who will interpret the Constitution as written. This rather nebulous wording has become clearer with the recent decision on the Trump travel ban. Two lower courts ruled against Trump basing their decision on things other than the wording of the law, things like what Trump said while campaigning. The Supreme Court ruled based only on the written word and overturned the lower court. It was not a political decision as the lower courts seems to have been since the judges ruled 9 to 0. Normally unanimously Supreme Court rulings are quite common and during the Obama years the court ruled 9 to 0 twenty times against Obama. He was issuing presidential executive orders based on things he thought would help people but not based on law and so the court which follows the law overturned his orders.

What's in a name

The discussion surrounding the Senate health care plan once again illustrates that party is more important than country. Rand Paul says the new plan is nothing more than Obamacare 2.0 and Chuck Schumer says "The way this bill cuts healthcare is heartless”, Schumer after saying he would not work with the Republicans said he would if they drop the word repeal. The Republicans have said for years they want to repeal and replace but that would make it a Trump thing and no democrat wants that. The democrats are ready to fix but not repeal. It appears that semantics has become more important than what is in the plan. The republicans will not agree to any plan that is not called repeal and democrats will not accept any plan that is called repeal. Shakespeare would laugh.

Recession

The news media across the country refers to the recession that occurred during the Obama administration as the worst economy since the great depression and I want to challenge that assertion with some data. The recession that occurred during the Reagan years was more severe by all economic measurements. Both reached a high of 10.8 % unemployment but other factors were quite different. Inflation reached a high of 13.9 in 1980 and a high of 2.9% in 2013. Interest rates reached 21.5% in 1981 a high of 3.5% in 2012. In the Reagan recession the administration lowered the top tax rate from 70% to 28% while easing regulations on business while the Obama administration spent 800 billion on bank bailouts, along with 1.4 trillion in fed spending called quantitative easing and raised taxes mostly to pay for Obamacare. On both occasions the country recovered but the Obama recession was the slowest recovery of any recession. This information should be reviewed when the next recession hits.

Identity

The democrats are facing decision time. Will they maintain the old ideas of identity politics championed by people like Nancy Pelosi or move into the big tent approach? Identity politics means looking at groups based on some common identity. Groups like minorities, gays, gender and low income. If a person is a member of one of these groups they often feel as if they are being persecuted by some power beyond their control. If a person feels persecuted then they think of themselves as victims. As a victim you do not feel empowered to control your future and when someone or some group offers to help you out of your hole you will gravitate toward that group. In many cases that group is government.

North Korea

While the world, led by the US, watches North Korea develop their long range nuclear missile capability everyone seems to be oblivious to the threat of a submarine launched nuclear weapon. • • The chilling thought of North Korea's fully submersible submarines firing a nuclear ballistic missile isn't as far-fetched as some might think. Reports show that they have 70 submarines with 6 or more capable of launching missiles. Instead of traveling 6,000 miles to hit LA from North Korea it could be only a 100 miles off the coast of LA. Once they have that capability there is no way to destroy their country without risking nuclear attacks on coastal cities. If the US is going to eliminate the threat posed by North Korea they best do it before they get their sub launched missiles ready. This means a first strike and it must be all out to totally eliminate their military. Afterwards the international community could ban together to feed the starving people of North Korea and ultimately reunite the North with the South.

MN insurance

The state Legislature on Thursday overwhelmingly approved $326 million to be distributed among Minnesotans faced with hefty health insurance premium increases this year, sending the bill to Gov. Mark Dayton, who signed it. About 125,000 Minnesotans, facing premium spikes of 50 percent or higher, should now see their monthly insurance bills drop by 25 percent for all of 2017. This is the Republican controlled MN senate and house sending $2,600 of taxpayer money to each of the MNsure and Ucare clients. This money goes to people who buy their insurance on the exchange but make too much money to get free insurance. This means people who make more than $47,500 or $97,000 for a family of four.

Economy

On Morning Joe today while discussing yesterday’s congressional elections they pointed out that most people are interested in economic issues and not in the Russian investigation and this is why they voted the way they did. They were dismayed with the results but it seems they do not realize that it is the national press that is obsessed with Russian and that they themselves are out of touch with the voters. Right now health care reform is indirectly an economic issue for many people but the Republican plan is overshadowed by the Russian affair. It is so tempting for talking heads to discuss collusion, obstruction of justice and conflict of interest that they leave no room for economic issues. Perhaps Trump has given them enough rope and they are taking the bait. We will see if the news shifts from trying to discredit Trump to talking about issues that people see as important. MSNBC and CNN will stay on Russia because their ratings are up significantly and they like going after Trump. The question then becomes will the major networks move to economic issues or will they too remain on Russian tampering? Even when democrats attempt to talk about the economy they often confuse economic growth with economic fairness. One Democratic Senator said today that people think that economic fairness means taking from Peter to pay Paul. The reason they think that way is that it is what democrats do when the conflict equal opportunity with equal results.

Secret

The Republicans learned a lesson from Obamacare and that is to pass it in secret. They screamed bloody murder when this happened but now they are doing the same thing because if the planning were made public the other party would destroy it before it got started. Remember we have to pass it to find out what’s in it. Recall the goal was to keep the cost under 1 trillion over the first ten years. This was achieved by starting the plan in 2010 but not starting benefits until 2014 so the cost was really for 6 years not ten. To add insult to injury the actual cost came in at 2 trillion. Most people don’t know this and many who do, don’t seem to care. Like I have often said we get the government we deserve. Leaders in the House and Senate have a plan to pass President Barack Obama’s sweeping health care plan by Thanksgiving without any significant participation by the American public. While it is disturbing that the public did not know what was in the plan it is even more disturbing that many in congress were for the plan before it was writing and most voted for it without having read it.

Corn

In many African countries the main food is something called pap and is made from white corn. Because of weather conditions there is a shortage of white corn and the price is so high that many are suffering from malnutrition. The US has steadily increased its production of white corn and exports are rising but exports could be much higher if some of the acreage for ethanol were decreased. 40% of US corn production is used for ethanol a product that has proven to be non-effective in controlling climate change. As the world’s biggest exporter of corn diverts more and more of its crop to make fuel, it’s sending less to the global marketplace. The corn ethanol policy is a driver of high food prices worldwide. More than 15 percent of global corn production and a total of 35 million acres are devoted to U.S. ethanol. The U.S. is the largest exporter of corn, but we use twice as much corn to produce ethanol as we use it for food export.

Administrative cost

As the health care fiasco gets more complicated the move toward single payer or Medicare for all looks more inviting. One of the big savings areas is in administrative cost but this is a bit misleading. Cost in Medicare is about 3% but that does not include other government agencies that help with Medicare. For example the IRS collects taxes that fund the program, social security collects premiums that go into Medicare, HHS helps to manage accounts and Medicare enjoys tax exempt status. However if all insurance were rolled into Medicare these total expenses would not increase proportionally so there would be considerable overall savings. Where would these savings come from? There are 16 million people working in the health care industry and 27% or 4.3 million are in administration. 90% of these 4.3 million or 4 million would be out of a job as all of this paper work would be transferred to Medicare using existing systems. Under Obamacare middle income working people are paying for the free insurance for low income people. In the single payer plan 4 million people would give up their jobs to provide free insurance for poor people. Remember there is no free lunch.

Contractors

Politics impacts the war in Afghanistan in a number of ways and one of these results from Obama's desire to hold down the number of troops. Over time he has substituted private contractors for military personnel to maintain lower troop numbers. Obama has authorized the continuation or re-emergence of two of the most contractor-dependent wars (or “overseas contingency operations” in Pentagon-speak) in U.S. history. As noted previously, there are roughly three contractors (28,626) for every U.S. troops (9,800) in Afghanistan, far above the contractor per uniformed military personnel average of America’s previous wars. In Iraq today, 7,773 contractors support U.S. government operations — and 4,087 U.S. troops. These numbers do not include contractors supporting CIA or other intelligence community activities. Under Obama, more private military contractors have died in Iraq and Afghanistan than all the U.S. troops deployed to those countries. Between Jan. 1, 2009, and March 31, 2016, 1,540 contractors were killed in Iraq and Afghanistan (176 in Iraq and 1,364 in Afghanistan). During that period, 1,301 U.S. troops were killed in Afghanistan and Iraq (289 in Iraq and 1,012 in Afghanistan). While people in congress are aware of this the public in general is not.

New jobs

I mentioned earlier that the government has 49 separate job training programs. Latest report shows the cost to be 18 billion per year. The “Workforce Investment Act (WIA) Gold Standard Evaluation,” completed six months earlier, concluded that all of the federal government’s primary job-training programs don’t really work. These programs are set up by congress to show that they are doing something but instead they became jobs for friends and are filled with scandals and just another way to distribute funds to anyone smart enough to game the system. If Trump is going to set up an on the job training program to fill the need of qualified people, he should first get rid of the current programs and then have some disinterested third party oversee the plan. It could be that the government is so big it cannot be controlled but some attempt should be made to get more qualified people ready for the new jobs.

High school grad

The emphasis on college has made non-college jobs seem inferior and recent speeches by Trump have pointed out the need for tradesmen and skilled factory workers. This is not new since there are 49 separate government job training jobs. Don’t ask why but that is subject for later. I would like to go one step further and discuss high school grads with no additional training. Joe applies at Walmart for a job stocking shelves at night. He has good personal hygiene, dresses appropriately and always gets to work on time. His goal is to make sure his area it the neatest in the store and when he finishes he goes around offering to help others. In time Joe gets the reputation of the person who is always looking for ways to help others. Soon the manager asks Joe if he would like to work in other departments and he gladly accepts. An opening for the day shift puts Joe in a department where he deals with customers and he carries the same attitude of always looking for ways to go the extra mile. In time he is moved to the various departments throughout the store and after a couple of years he is offered a job as assistant manager at a store in another city. Joe’s work ethic and his helpful attitude carry over into his personal life and his friends see him as someone you can always count on to be of help. In time he becomes a store manager as management is always on the lookout for people like Joe. Joe can have a career working in pleasant surroundings with people he enjoys. The wages and benefits will allow Joe to support a family. He will not be in the one percent but he will have a good life. This is only one possibility for Joe but with his attitude there are many such roads to travel.

Investigate

Since the beginning of the Trump candidacy, I was expecting some financial scandals since he operates in NY City the hub of all kinds of shady business deal including pay offs to unions and government officials but nothing came of it until now. Investigators have gone after collusion with Russian, then obstruction of justice and only now have they decided to follow the money. This will lead down a path to discoveries that may involve many people.

Tax the rich

When I saw the news about the man who shot the congressman and he was carrying a sign saying to tax the rich, I wanted to once again remind everyone that you cannot make the poor wealthy by making the rich poor. When Bernie Sanders started his campaign he followed the lead of Senator Warren and pitted the one percent against the 99%. Later the math showed that not to be as lucrative as first thought so they both moved away from that idea. This has been tried many times in various countries and it never works. In 2015 138.3 million taxpayers earned 9.03 trillion dollars and 19% of that or 1.7 trillion of that went to the top 1%. Of this amount they paid 465 million in taxes leaving them with 1.23 trillion. Now if take the rest of their money and give that to the 99% we will each get $8,900. When President Obama told Joe the Plumber he wanted to spread the wealth around he was on to something, the key word being wealth as opposed to income. Total wealth in the US is 88 trillion and 34.6% of that or 30 trillion is owned by the one percent. If we take that and give it to the 99% we each get $637,000 and now you talking real money. Why should Bill Gates have 85 billion? Isn’t one billion enough? We could take 84 billion from him and go down the line with the rest of the superrich. While many people feel that redistribution of income is OK they balk at going after assets. Maybe in a few years that will change!

Education

States across the country are facing a budget dilemma. Spending on higher education is now lower that it was in 2008 even though income from taxes is higher. State pensions including teacher pensions are rising rapidly and must be paid as many state constitutions along with union contracts demand. The states can take money from higher education without facing court challenges and they are doing just that. Another competitor for state funds is Medicaid where federal government matching deters any cuts from the state. There is no matching for higher education spending so cuts here will likely continue leaving tuition as the major source of new income. This combined with the availability of government student loans will cause tuition and student debt to continue to rise faster than the inflation rate. Many articles are published concerning the rapid rise in student loans, which now exceed credit card loans but few mention the reasons. It is uncomfortable for many to say that money to pay for health care for poor people is coming from cuts to higher education.

Deductible

Suddenly everyone has become aware of the high deductibles in Obamacare. All of the emphasis has been on premiums (monthly cost) and the out of pocket cost per year has been ignored, that is, until a person wants to use the insurance and suddenly discovers they can’t afford it. Here is something I wrote in 2013. Current speculation says that those signing up for Obamacare may pay more or less. The estimated 15 million currently uninsured, mostly young people, will pay more. Those who are on Medicaid, families earning less than $32,000 will pay nothing. Other low income families earning less than $94,000 will receive help on a sliding scale. Families with income above $94,000 and individuals earning more than $46,000 will pay more. All the plans have higher deductibles. Obamacare has four plans, the least expensive is Bronze , next Silver, next Gold and last Platinum. The average Bronze Plan has a deductible of over $5,000 which is four times higher than a typical company sponsored plan. This will cause some problems. I spent many years explaining insurance to people and many who buy on line will look to premiums and be caught off guard by the high deductible which they will likely discover when they have their first claim. I can hear them now! How can you call this insurance if I have to pay the first $5,000? This will be especially true for people who have not had insurance in the past. This will also come as a shock to the 50 million people who are on Medicaid. To add insult to injury many companies who now sponsor plans will begin to dump their employees onto Obamacare and most of the time the plan will not be as good. I predict a lot of unhappy people down the road. By the time they fight their way through the online sign up they will be as the old song says, mad as hell.

Wage

Fifty-one percent of working Americans make less than $30,000 a year, new data from the Social Security Administration (SSA) shows. Most of these people either work and/or shop at places like McDonalds and Walmart. They comprise about 70 million working Americans and thus raising the minimum wage to $15 or higher is a way to redistribute the wealth from one low income group to another low income group. Will McDonalds raise prices to pay the higher wage or will they use some of their profits. The average franchise costs $1 million dollars and the average annual sales are $2.7 million with a profit of $154,000. The average owner works 60 hours per week and makes $50 per hour before taxes. The average payroll is $540,000 and the average pay is $10 per hour so if they raised the wages to $15 that would increase payroll to $810,000 which would put them out of business. Thus they are likely to raise the cost of products.

Paris accord

Since the start of the last presidential election the talk of climate change has disappeared from the scene. There was not one question about climate change in any of the debates but now once again it is in the news and once again it is seen as a political issue. Solar provides one percent of our energy and if you take away all of the government subsidies it would no longer be a business. The loudest voices would come from those who receive government grants to study and write about the issue along with those who get subsidies for their business. Rising levels of CO2 continues to be a problem and the obvious way to stop this rise is to switch to natural gas. The US is the leader in this area and we are now convincing China to move in that direction. We don’t need the government to get involved because the economics dictates this is the way to go. Right now the movement is toward using natural gas in power plants but transportation will be next. The problem is that there is no kick back to politicians with natural gas so this change will be slow. Trump pulling out of the Paris agreement was a good thing because that agreement was all about talk and no walk. Maybe now the emphasis will be on moving toward natural gas instead of electric cars. Look for the US to begin negotiating deals with China and India to promote natural gas. They need it and the US has it. This is called a win-win.