Sunday, October 30, 2011
Volt
Here is short but sweet example of American ingenuity resulting in an unexpected consequence based around the good intentions of a government program. It seems that the government is offering a $7,500 tax credit (a credit is money you subtract directly from taxes you owe) so some dealers are buying Volts, taking the credit for themselves and then selling the Volt as a used car with Zero mileage. What a country!
Edwards
The road through life can and usually is bumpy and the case of John Edwards represents a study worth investigating. He was born into a middle class family and was the first member of his family to go to college. He was a good student and continued on through law school. He became a very successful defense attorney and amassed a fortune estimated at 70 million. Later he became a US senator and vice presidential candidate. He married and had 4 children. It was a rags to riches charmed life. He was at the apex of his life when things began to turn around. He wife was dying from cancer when he had a child with a young woman who worked in his office. He denied this but later admitted to the affair. His wife died and he recently was accused of using campaign funds to cover up his affair and is now awaiting trial. All of this is factual and I would like to move into the area of fantasy. There is a place in Matthew where it says that it is easier for a camel to pass through the eye of a needle that it is for a rich man to enter the kingdom of heaven. I believe that if we move 30 years into the future and we see Edwards as an 80 year old looking back on his life that he will say that when he lied about his affair it was the low point of his life and it was a turning point. From that point on he started to understand how life really works and what is really important. He learned after that God doesn’t come into your life through the front door of your ego but through the back door of your shame. At the point where his shame was broadcast on the public airways he felt deep within the beginnings of a new life. As the years past he came to understand that fame and fortune were just phantoms and represented barriers to happiness. It was only after meeting his shame that he began thinking of others and how he could help them and with each passing year he grew into the person he was meant to be. It is not the rich that prevents the rich man from entering a life of happiness but the ego that bloats up when riches come along.
When things are going my way I don’t need anyone. I am self-sufficient and I control my destiny and I am the captain of my ship and I know where I am going and how I will get there. Every one of those I’s in the previous sentence represents the ego. It is only when adversity strikes and misfortune rears her ugly head that I have the opportunity to open my heart to those around me. When my mistakes are made public and my shame is exposed I am on the road to happiness. I may not know it at the time but down the road it will be my salvation. The road of life is filled with strange and unexpected turns. I have faced disappointed many times but in retrospect each was a learning experience.
Back to the real world I believe that Edwards could make a decision to devote the rest of his life to doing pro bono law work for those who cannot afford a top attorney. As the years past and he used his skills to help others his children would slowly regain the respect they once had for him as will those around him.
Presented by Pastor John
When things are going my way I don’t need anyone. I am self-sufficient and I control my destiny and I am the captain of my ship and I know where I am going and how I will get there. Every one of those I’s in the previous sentence represents the ego. It is only when adversity strikes and misfortune rears her ugly head that I have the opportunity to open my heart to those around me. When my mistakes are made public and my shame is exposed I am on the road to happiness. I may not know it at the time but down the road it will be my salvation. The road of life is filled with strange and unexpected turns. I have faced disappointed many times but in retrospect each was a learning experience.
Back to the real world I believe that Edwards could make a decision to devote the rest of his life to doing pro bono law work for those who cannot afford a top attorney. As the years past and he used his skills to help others his children would slowly regain the respect they once had for him as will those around him.
Presented by Pastor John
Medicare
The problem we are encountering with Medicare is the same that we saw with the Bush attempt to fix Social Security. In both situations the cost problem has developed into one of ideology. The Republicans want to privatize the system and the Democrats want to keep these as government plans. As long as they continue to fight this battle ideologically nothing will be done.
I think the Republicans have to concede that now is not the time to privatize. Current Medicare premiums rage from $96.40 per month to $369.10 per month depending on income. The higher amount is for individuals whose income is greater than $200,000 per year. By doing the math it can be shown that there is room for adjustments here. A single person who gets $10,000 per year from social security pays 12% of their income for part B whereas a person who earns $200,000 pays 2.2%. One way to improve the cost problem is to increase the amount paid by higher income people. The second change is to increase the age when people become eligible for Medicare. It was set at age 65 when Medicare was started back in 1965 and has never been changed. This age could gradually be increased as the baby boomers retire.
In addition to the above changes it is also necessary to formally ration benefits. The current Republican plan allows insurance companies to ration and Obama’s plan sets up a committee of 15 government employees to ration. We know that we cannot provide every medical service to every Medicare recipient so the question is how do we ration? The first step is for everyone to understand that we have been rationing health care in both private and public plans for many years and then we can formalize how we ration. Up to now we have been doing this on the sly.
I think the Republicans have to concede that now is not the time to privatize. Current Medicare premiums rage from $96.40 per month to $369.10 per month depending on income. The higher amount is for individuals whose income is greater than $200,000 per year. By doing the math it can be shown that there is room for adjustments here. A single person who gets $10,000 per year from social security pays 12% of their income for part B whereas a person who earns $200,000 pays 2.2%. One way to improve the cost problem is to increase the amount paid by higher income people. The second change is to increase the age when people become eligible for Medicare. It was set at age 65 when Medicare was started back in 1965 and has never been changed. This age could gradually be increased as the baby boomers retire.
In addition to the above changes it is also necessary to formally ration benefits. The current Republican plan allows insurance companies to ration and Obama’s plan sets up a committee of 15 government employees to ration. We know that we cannot provide every medical service to every Medicare recipient so the question is how do we ration? The first step is for everyone to understand that we have been rationing health care in both private and public plans for many years and then we can formalize how we ration. Up to now we have been doing this on the sly.
Chrysler
About a year ago it was announced that General Motors had repaid their government loan but after further investigation it was determined that they used another government loan for the payoff. The CEO of GM was on TV bragging about this loan payoff but when the truth came out he had to run for cover as they stopped the commercial.
Yesterday Vice President Biden announced that Chrysler had repaid its government loan so I was somewhat suspicious. Here is a recent news item.
No one was really surprised that Chrysler posted a quarterly profit — a modest $116 million — this year, technically its first since exiting bankruptcy in 2009, but really the first time it’s been in the black since the mid-2000s.
Now I wondered how they could pay off a 7 billion dollar loan so I looked further into the matter and discovered that Fiat had increased its ownership from 20% to 46% so I figured that Chrysler got the money from Fiat. Now there are 650 million shares of outstanding Chrysler stock and it is values at $8 per share so the book price of the entire company is about 5 billion. If Fiat bought 26% of that it would only inject about 1.2 billion so how could they pay off 7 billion.
Here is another quote:
The Obama administration’s bailout agreement with Fiat gave the Italian car company a “Incremental Call Option” that allows it to buy up to 16% of Chrysler stock at a reduced price. But in order to exercise the option, Fiat had to first pay back at least $3.5 billion of its loan to the Treasury Department. But Fiat was having trouble getting private banks to lend it the money. Enter Obama Energy Secretary Steven Chu who has signaled that he will approve a fuel-efficient vehicle loan to Chrysler for … wait for it … $3.5 billion.
But wait there is more:
So, to recap, the Obama Energy Department is loaning a foreign car company $3.5 billion so that it can pay the Treasury Department $7.6 billion even though American taxpayers spent $13 billion to save an American car company that is currently only worth $5 billion.
Oh, and Obama plans to make this “success” a centerpiece of his 2012 campaign.
More smoke and mirrors. Will the American people ever catch on?
Yesterday Vice President Biden announced that Chrysler had repaid its government loan so I was somewhat suspicious. Here is a recent news item.
No one was really surprised that Chrysler posted a quarterly profit — a modest $116 million — this year, technically its first since exiting bankruptcy in 2009, but really the first time it’s been in the black since the mid-2000s.
Now I wondered how they could pay off a 7 billion dollar loan so I looked further into the matter and discovered that Fiat had increased its ownership from 20% to 46% so I figured that Chrysler got the money from Fiat. Now there are 650 million shares of outstanding Chrysler stock and it is values at $8 per share so the book price of the entire company is about 5 billion. If Fiat bought 26% of that it would only inject about 1.2 billion so how could they pay off 7 billion.
Here is another quote:
The Obama administration’s bailout agreement with Fiat gave the Italian car company a “Incremental Call Option” that allows it to buy up to 16% of Chrysler stock at a reduced price. But in order to exercise the option, Fiat had to first pay back at least $3.5 billion of its loan to the Treasury Department. But Fiat was having trouble getting private banks to lend it the money. Enter Obama Energy Secretary Steven Chu who has signaled that he will approve a fuel-efficient vehicle loan to Chrysler for … wait for it … $3.5 billion.
But wait there is more:
So, to recap, the Obama Energy Department is loaning a foreign car company $3.5 billion so that it can pay the Treasury Department $7.6 billion even though American taxpayers spent $13 billion to save an American car company that is currently only worth $5 billion.
Oh, and Obama plans to make this “success” a centerpiece of his 2012 campaign.
More smoke and mirrors. Will the American people ever catch on?
Tax and spend
As the elected officials in Washington debate how they will solve the budget problems we are faced with two arguments. The Democrats say we must cut spending and raise the tax rates but the Republicans say cut spending and reform the tax laws. Obama wants to raise taxes on those making more than $200,000 and use that money to invest (spend) on education and infrastructure. This is what we used to call tax and spend. His theory is that by spending this money we will cause the economy to grow. We know that the so called shovel ready projects are not ready. It takes years to get environmental approval and planning can only start after these approvals. As far as spending on education this may keep some teachers from getting laid off but there are good reasons to doubt that spending more will improve education.
On the other side there is evidence that shows when you increase taxes on those who provide jobs you slow down the economy. I believe both sides concur that reforming the existing tax law can help. When large corporations pay zero tax it is not because the tax rate is too low it is because there are too many loopholes in the tax code. We could easily lower the corporation tax rate from the current 35% to 25% and eliminate the loopholes and end up with more revenue.
The question remains, is it better for the economy if the government spends our money or is it better if we spend our money. Remember that taxation is merely the transfer of money from one group of people to another group with the government deciding who gets what and from whom. If you are a cynic you see it as taking money from those who earn it and giving it to those who don’t. Most people realize that there are times in the lives of people that they need help and most are ready to give help but when it gets to the point of more people in the wagon than pulling the wagon then no one is helped. Currently there are 310 million people in the US and 40 million receive food stamps, 10 million get unemployment benefits, 58 million on Medicaid and 52 million on social security and if you do the math you see there are more in the wagon than pulling the wagon.
Wake up people!
On the other side there is evidence that shows when you increase taxes on those who provide jobs you slow down the economy. I believe both sides concur that reforming the existing tax law can help. When large corporations pay zero tax it is not because the tax rate is too low it is because there are too many loopholes in the tax code. We could easily lower the corporation tax rate from the current 35% to 25% and eliminate the loopholes and end up with more revenue.
The question remains, is it better for the economy if the government spends our money or is it better if we spend our money. Remember that taxation is merely the transfer of money from one group of people to another group with the government deciding who gets what and from whom. If you are a cynic you see it as taking money from those who earn it and giving it to those who don’t. Most people realize that there are times in the lives of people that they need help and most are ready to give help but when it gets to the point of more people in the wagon than pulling the wagon then no one is helped. Currently there are 310 million people in the US and 40 million receive food stamps, 10 million get unemployment benefits, 58 million on Medicaid and 52 million on social security and if you do the math you see there are more in the wagon than pulling the wagon.
Wake up people!
Medicare Medicaid
The two sides have staked out their claims on how to solve the problem with Medicare and they are both right so regardless of which way we go we will begin to make some headway. The Obama plan is to set up a government committee of 12 members who will decide what treatments are available. The Ryan plan offers vouchers to people who can then purchase a plan through a group of private insurers. Both of these approaches use rationing to reduce cost and that is the only logical way to go. Whenever any benefit is reduced or eliminated there will be good arguments as to why this particular procedure should be allowed but as time passes people will realize that this is the only way to save the program. It comes down to the simple fact that everyone cannot have every procedure that is medically available and someone or some insurance company will have to make these tough choices. Unbeknownst to most people this process of rationing has been going on for many years in both Medicare and private insurance. Last year when the phrase “Death Panels” was coined everyone panicked but upon further evaluation it was revealed that by the way that doctors present options the idea of dying with dignity was often chosen over life extending treatments. It is time for people to grow up and face the fact that there is not enough money to do everything for everyone. Once both political parties have the courage to explain this quandary to their constituents we will begin to take the necessary steps to save Medicare. Let’s hope this happens before the whole program goes down the drain, which by the way is currently scheduled for 2018.
Since Medicaid is financed with ongoing funds from the federal and state governments there is no date when it will go broke but it faces the same cost problems that Medicare does and the same cure will be needed. We must ration. This is a very difficult problem since about one in four Medicaid recipients are in eldercare facilities. There is new technology available that can keep many of these people in their homes. For about $10,000 most houses can have the bath modified to accept people in wheel chairs. Instead of paying out $7,000 per month to stay in a care facility many people can stay in their homes where they would rather be. This is only one example. In the future it may be necessary that families take on more responsibility as they did not that many years ago. People who use Medicaid for their health insurance will have to face rationing just as others in private insurance will face.
Since Medicaid is financed with ongoing funds from the federal and state governments there is no date when it will go broke but it faces the same cost problems that Medicare does and the same cure will be needed. We must ration. This is a very difficult problem since about one in four Medicaid recipients are in eldercare facilities. There is new technology available that can keep many of these people in their homes. For about $10,000 most houses can have the bath modified to accept people in wheel chairs. Instead of paying out $7,000 per month to stay in a care facility many people can stay in their homes where they would rather be. This is only one example. In the future it may be necessary that families take on more responsibility as they did not that many years ago. People who use Medicaid for their health insurance will have to face rationing just as others in private insurance will face.
Mortgage crisis
One of the main reasons that the mortgage fiasco was so big is that it was allowed to develop even though many people warned that there were serious problems. Every time someone or some agency challenged the easy access to a home mortgage they were shot down by accusing them of not wanting poor people to participate in the American Dream of home ownership. The biggest advocates for the loose requirements for home loans were liberals who wanted to help the poor. One of these was Barney Frank, who chairs the House Financial Services Committee, the congressional committee whose job is to oversee the mortgage business. For more than ten years Frank defended mortgage giant Fanny Mae against attacks by promising to make it easier for low income people to get loans.
One group that regularly investigated Fanny Mae was the Office of Federal Housing Enterprise Oversight (OFHEO). Now I would be willing to cut Barney some slack during the early years as this problem developed but at some point he had to know that things were not right. Yet in late 2010, two years after the whole thing blew up, he was asked why he always defended Fanny Mae and he said that he thought the problem was just an adversarial relationship between the regulators at OFHEO and Fanny. This is a very revealing statement as most people would expect there to be or would demand that there be tension between the regulators and the regulated. Frank had been in bed with Fanny for so many years he could not break away even after they were proven to be corrupted.
Lest we just want to blame our elected officials be advised that Frank easily won re-election after the scandal was made public and he is now serving his 31st year in congress.
The people who have been most hurt by the collapse of the housing market were the very poor people that Frank set out to help. This same result has happened over and over since the start of the Great Society which was supposed to help the poor but has time after time hurt more than it helped. This has not deterred liberals from continuing to propose government programs that will help (?) the poor. One more example of the unintended consequence of good intentions.
One group that regularly investigated Fanny Mae was the Office of Federal Housing Enterprise Oversight (OFHEO). Now I would be willing to cut Barney some slack during the early years as this problem developed but at some point he had to know that things were not right. Yet in late 2010, two years after the whole thing blew up, he was asked why he always defended Fanny Mae and he said that he thought the problem was just an adversarial relationship between the regulators at OFHEO and Fanny. This is a very revealing statement as most people would expect there to be or would demand that there be tension between the regulators and the regulated. Frank had been in bed with Fanny for so many years he could not break away even after they were proven to be corrupted.
Lest we just want to blame our elected officials be advised that Frank easily won re-election after the scandal was made public and he is now serving his 31st year in congress.
The people who have been most hurt by the collapse of the housing market were the very poor people that Frank set out to help. This same result has happened over and over since the start of the Great Society which was supposed to help the poor but has time after time hurt more than it helped. This has not deterred liberals from continuing to propose government programs that will help (?) the poor. One more example of the unintended consequence of good intentions.
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