American Politics 2012

[Guest]

An excellent analysis and getting of the proverbial grip from one of the most prestigious and influential think tanks in the nation, and no High School student in the country should be allowed to graduate without being able to demonstrate a basic working knowledge of the sound economic principles that form the basis of this analysis, and which I will italicize for emphasis.

Senate Jobs Bill: An Ineffective Means of Reducing Unemployment

By James Sherk and J.D. Foster, Ph.D.
February 23, 2010


Reduced investment and a drop in job creation--not increased job losses--have been the primary factors driving unemployment higher over the past two years. The original bi-partisan Senate jobs bill, the Hiring Incentives to Restore Employment (HIRE) Act, did little to address this underlying problem. Instead the legislation was a vehicle for extending a number of separate taxes and spending policies that would otherwise expire.

For reasons unrelated to job creation, Senate Majority Leader Harry Reid (D-NV) side-tracked the HIRE Act by introducing his own partisan "jobs" bill. The Reid bill stripped the original bill down to two main provisions:

Suspending the payroll tax for companies that hire new workers in 2010; and
Increasing federal highway construction spending.

If enacted, this bill will do little to encourage new investment and hiring. Instead it will increase the debt, placing a further drag on private-sector investment, job creation, and the economy. Ultimately, Reid's bill will fail to achieve results at a lower cost than the original proposal.

Hiring Tax Credits Marginally Effective

Although the first major provision in Senator Reid's proposal appears to encourage job creation, it will ultimately fail to do so. The bill would suspend the 6.2 percent employer payroll tax on newly hired workers in 2010. Companies that keep these workers on their payrolls for at least one year would receive another $1,000 credit against their 2011 taxes. This proposal, however, would create few new jobs.

Jobs come from the creation of valuable goods and services by entrepreneurs. Companies hire when the additional earnings that a new worker creates by producing those goods and services exceed the cost of employing that worker. The payroll tax suspension would slightly lower the cost of hiring workers. As a result, it would probably cause some companies to hire workers they otherwise would not have.

However, suspending the payroll tax for one year would not create better opportunities to produce valuable goods and services; nor would it increase the earnings a new worker would create for his or her company. Simply reducing the cost of a potential job will not cause an actual job to emerge if consumers fail to signal that such a job should exist. As a result, most companies would not expand and hire permanent new workers.

Instead, most of the tax suspension benefits would be claimed by companies that already planned to hire new workers. Even in this recession firms are hiring new workers: 49.4 million workers were hired for new jobs in 2009. Suspending the payroll tax would cost billions of dollars, most of which was spent rewarding employers that would have hired new workers anyway. Indeed, when Congress passed a similar tax credit in the 1970s, that legislation created relatively few new jobs.[1] Why? Because the employers who hired new employees would have done so with or without a credit.

Even if the payroll tax suspension created the jobs, these gains would be offset by a similar number of job losses. The tax revenue foregone due to the payroll tax suspension will require an increase in federal borrowing by the same amount; borrowing that deprives the private sector of capital to use as it sees fit, whether for business investment or personal consumption. Thus, the primary effects of this tax are to reduce Labor costs for certain employers and reduce the funds available to others.

Government Spending Depresses Job Creation

The new highway spending in the bill will also fail to create jobs for two reasons.

First, it does little to encourage private investment. The private sector creates net new jobs through the processes of entrepreneurship--investment, expansion, risk-taking, and seeking opportunity. Government spending does not encourage entrepreneurship because it only reallocates resources in the economy; it does not make potential business projects more likely to succeed. While government spending leads to directly observable construction jobs, it does not encourage additional private-sector investment.

Second, the increased federal highway construction spending will crowd out private spending, both consumption and investment. Analogous to the payroll tax suspension, the resources the government spends are taken from elsewhere in the economy: Each dollar the government borrows is one dollar entrepreneurs cannot invest and that private individuals cannot consume. Each $1.00 increase in government spending reduces private-sector investment by between $0.46 and $0.97 after two years and $0.74 and $0.95 over five years, with the balance coming out of private consumption.[2] Government spending substitutes for private spending, it does not supplement or encourage it.

Such a "crowding out" effect is why countries in which the government spends heavily to create jobs have high unemployment rates. After all, government spending eliminates more jobs than it creates.

Low Job Creation Driving Unemployment Higher

To reduce unemployment Congress must first understand that the primary factor driving unemployment up has been a sharp drop in job creation--not increased job losses. From the start of the recession to the second quarter of 2009, job losses increased 8.7 percent while job creation fell 16.3 percent. Over that time the number of workers laid off at companies going out of business rose by 3.8 percent (48,000 jobs), and the number of workers hired at newly formed businesses fell by 10.4 percent (235,000 jobs).

This drop in hiring is unsurprising: annual private fixed investment has fallen by $313 billion since the recession started; a 20 percent drop. As long as business investment remains low and entrepreneurs hold back from starting new enterprises, job creation will remain low and unemployment will stay high. Research into past economic downturns suggests that low job creation will explain most of the net job losses throughout this recession.[3]

Recommendations to Congress

Reid's jobs bill would do little to reduce unemployment. Neither suspending the payroll tax for new hires nor increasing highway spending would notably raise the number of jobs in the economy. To lower the unemployment rate, Congress should create a better climate for entrepreneurs and businesses -- without adding to the deficit. Congress should seriously examine a no-cost stimulus.

First, Congress should recognize that its threatened actions on taxes, health care, and cap and trade are creating an uncertain climate for businesses. In the face of these heightened, Washington-based uncertainties, businesses tend to hold off on expansions until the air clears and a more favorable economic environment begins to emerge.

In addition, there are positive steps that Congress should consider, including:

Freeze taxes and costly regulations until unemployment falls below 7 percent;

Rescind the unspent stimulus funds;

Reduce unnecessary regulatory costs, such as repealing Section 404 of the Sarbanes-Oxley Act;

Reform the tort system;

Remove barriers to domestic energy production;

Suspend the job-killing Davis-Bacon Act;

Pass the pending free-trade agreements with South Korea, Colombia, and Panama; and Permit companies to bring foreign earnings to the U.S. without facing punitive taxation.

A cessation of threats from Washington combined with these positive measures would create a better business climate for entrepreneurs and encourage them to take risks, such as starting or expanding their firms. These recommendations would spur investment and meaningfully reduce the unemployment rate.

[_Brackite]

Brackite, good to see you back.

Does Rick Perry have the makings of the next great oil President and if so, would he have an adverse reaction to surfactants in the swimming pool?

Hi Moksha,

When President Barack Obama first entered office, the National average price for gasoline was about $2.00 a gallon. (1) The average price for gasoline is now at about $3.40 a gallon. The average price for gasoline in California is now at about $3.83 a gallon. (2) High gas prices hurts mostly the Low-income earning People. I would vote for Governor Rick Perry over President Barack Obama.


1. http://www.weeklystandard.com/blogs/hop ... 53930.html

2. http://www.latimes.com/business/la-fi-g ... 3736.story


Edited To Update Second Link.

[_Brackite]

But, more interestingly, you seem to think that it is the president's job to reduce California's unemployment rate and primarily should be judged accordingly. That is an incredibly unconservative thing to think for a arch-conservative like yourself.

A lot of the stimulus money from the stimulus Package went to the State of California.
The Following is From Yahoo News:

Report: Los Angeles spent $70 million in stimulus funds to create 7.76 jobs

By John Cook | The Upshot – Fri, Sep 17, 2010

A new piece of evidence has emerged in the debate over the effectiveness of President Obama's 2009 stimulus package, and it's not good for Democrats. According to two newly released audits performed by the Los Angeles controller, L.A. spent enormous portions of the $594 million in stimulus funds it received on projects that created or saved just a handful of jobs. All told, the audits — available here and here [pdf] — examined $111 million in stimulus spending by the city's Department of Transportation and Department of Public Works, and found that the money went to projects that created or retained just 54 jobs. That works out to roughly $2 million per job.

The $71 million that went to the Department of Public Works, which funded 15 road-surfacing and similar projects, was projected to save or create 238 jobs. But according to the audit, the money created just 7.76 jobs — or slightly more than $10 million per new job — and saved 37.7 (the fractions are a result of calculating the number of jobs by hours worked). The Department of Transportation's $40 million created or retained just nine jobs, the audit found.

In a press release accompanying the audits [pdf], L.A. Controller Wendy Greuel said the job numbers were underwhelming. "I'm disappointed that we've only created or retained 55 jobs after receiving $111 million in [stimulus] funds," Greuel said. "With our local unemployment rate over 12 percent, we need to do a better job cutting the red tape and putting Angelenos back to work."

The audit didn't find any misspent funds or waste. But the breakdown of how some of the money was spent seems to indicate efficiency was not exactly the order of the day for project managers. The Department of Transportation, for instance, spent $9 million to install new LED lightbulbs in traffic lights at 1,800 intersections. Less the $228,000 in labor costs associated with the project, that's nearly $5,000 per location to change lightbulbs. Another project spent $4 million to install 65 new left-turn arrows, averaging more than $61,500 per arrow.

Link: http://news.yahoo.com/blogs/upshot/repo ... funds.html



Solyndra, a company based within California, was supposed to create several thousands of ‘Green Jobs' within California.
However, After having received over a half-billion dollars in stimulus money, Solyndra ended up going bankrupt.
The Following is From Bloomberg Businessweek:

Solyndra files for bankruptcy, looks for buyer

NEW YORK


A California solar panel manufacturer that received more than a half-billion dollars in government loan guarantees filed for Chapter 11 bankruptcy Tuesday and plans to seek a buyer for the company.

Solyndra LLC, based in Fremont, Calif., becomes the latest in a series of failures in the U.S. solar business, which has been beset by oversupply and competition from abroad.

The company, which makes unique solar tubes that can soak up sunlight from many different angles, has struggled recently to raise capital as the economy soured. Investors turned away from solar companies as profit margins were squeezed by declining prices for solar wafers and rising supplies. Experts also expressed doubt about the future of government incentive programs.

Solyndra owes $783.8 million, including loans of $527.8 million to the federal government, according to documents filed with the U.S. Bankruptcy Court in Delaware.

Solyndra said in its filing that it would look for a suitor to buy the entire company out of bankruptcy, and if it couldn't, it would liquidate its assets piecemeal to pay creditors.

The company announced last week that it would seek bankruptcy protection and lay off 1,100 workers, virtually its entire workforce. Lawmakers used the announcement to criticize President Barack Obama's support for green technologies.

Solyndra, once considered a rising star in the solar industry, received $535 million in loan guarantees and $1 billion in private investment. Obama visited the company last year, as did other officials, including former California Gov. Arnold Schwarzenegger and Energy Secretary Steven Chu.

Two other prominent solar companies, Evergreen Solar Inc. and Spectrawatt Inc., both sought bankruptcy protection in August. Spectrawatt's CEO said the company could not compete with solar manufacturers in China, which receive "considerable government and financial support."

Former Solyndra employees filed a class-action lawsuit against the company in response to the bankruptcy, saying that Solyndra failed to properly notify them. They're seeking extra wages and benefits, according to a separate complaint filed with the bankruptcy court.

Link: http://www.businessweek.com/ap/financia ... J89JG0.htm




Here is what Kevin Graham wrote right after the 2010 midterm elections:

And because we're a country of racists and idiots who demand instantaneous change only when the President is Democrat, black, or both, you refuse to understand the problem on its own terms and choose to use the darky as the scape goat and regurgitate the idiotic talking points, like the script Paul Rand just ripped off from some Right Wing think tank. And yes, I've seen the signs at the tea parties, up close and personal. Never seen so many pissed off white racists in all my life. The Tea Party is at least 97% white. And that is a fair representation of "we the people"?? The Tea Party was formed and funded by a few Right Wing billionaires just weeks after Obama took office. Coincidence? It took off before Obama had the chance to do anything wrong, but they already knew what they were going to blame him for long before he stepped foot in office. The beauty of the deception is that it worked. They actually have millions of ignorant Americans thinking Obama is to blame for our current plight. That his failed attempt to offer government health insurance was the reason Banks decided to keep the bail out money and not give it back to the taxpayers in the form of loans. If Obama tried to force the banks to do what they said they'd do, the Right was trying to use this as an example of a socialistic dictator trying to use government to coerce private enterprise. What a bunch of idiots.

Link: viewtopic.php?p=377516#p377516




President Barack Obama’s name was not even on the ballot for the 2010 midterm election. However, within the State of California, Not any of the Democratic Members of Congress lost their U.S. House seat. The People of California voted the way People like Kevin Graham wanted them to vote. When the 2010 midterm elections occurred last November, California's Unemployment rate was 2.8% higher than the National Unemployment rate. Now California has an Unemployment rate, which is 3% higher than the National Unemployment rate.


Right before the 2010 midterm elections, President Barack Obama went to campaign for then Democratic Candidate for Governor Jerry Brown, and he went to campaign for Senator Barbara Boxer for her re-election Candidacy last year in the fall within the State of California. During that last election within California in November of 2010, all of the Democrats running for State offices in California won. Liberal Democratic U.S. Senator Barbara Boxer won her re-election to the U.S. California Senate seat.
The Following is from the Associate Press:

Obama to campaign with Jerry Brown in Los Angeles
Oct. 13, 2010 | AP

Add California's Democratic candidate for governor, Jerry Brown, to the list of politicians who hope to get a boost from a campaign visit by President Barack Obama this month.

During Tuesday night's gubernatorial debate, Brown announced he will campaign with Obama, who will join Brown and Sen. Barbara Boxer in Los Angeles on Oct. 22.

This will be the president's third trip to California, but his first public appearance with Brown, the state's current attorney general and former governor from 1975-83.

Democrats have a 13-point registration edge in California, but many are thought to be disillusioned this year, and turnout will be key on Nov. 2.

© 2010 The Associated Press.

Link: http://www.scpr.org/news/2010/10/13/201 ... s-angeles/




Democratic Governor Jerry Brown has now been Governor over the State of California for about nine months now. Now California has an Unemployment rate as high as 12.1%, which is 3% higher than the National Unemployment rate.



Edited To Add in more information.

[_moksha]

Hi Moksha,

When President Barack Obama first entered office, the National average price for gasoline was about $2.00 a gallon. (1) The average price for gasoline is now at about $3.40 a gallon. The average price for gasoline in California is now at about $3.83 a gallon. (2) High gas prices hurts mostly the Low-income earning People. I would vote for Governor Rick Perry over President Barack Obama.

Besides that, President Obama was very naughty making those nice English gents at British Petroleum pay for that oil spill.

by the way, Governor Perry is no friend to low income people if the rhetoric at those Tea debates was any sort of indication.

[_richardMdBorn]

by the way, Governor Perry is no friend to low income people if the rhetoric at those Tea debates was any sort of indication.

What's your reference for this assertion.

[_moksha]

by the way, Governor Perry is no friend to low income people if the rhetoric at those Tea debates was any sort of indication.

What's your reference for this assertion.

Cheers and yee-haws when it came time to equivocate on whether he would do away with Social Security, Medicare and Medicaid.

[_Brackite]

Besides that, President Obama was very naughty making those nice English gents at British Petroleum pay for that oil spill.

by the way, Governor Perry is no friend to low income people if the rhetoric at those Tea debates was any sort of indication.

Cheers and yee-haws when it came time to equivocate on whether he would do away with Social Security, Medicare and Medicaid.

Hi Moksha,

Governor Rick Perry is not for doing away with Social Security, Medicare and Medicaid. As I Pointed out in my previous Post here, President Obama went to campaign for then Democratic Candidate for Governor Jerry Brown in California. Governor Jerry Brown ended up becoming Governor of California again. One of the first things that Governor Jerry Brown did as Governor again was to cut services for the poor, the sick and the elderly.
Here is the Evidence for this:


In major cuts, Gov. Jerry Brown slashes services for poor, sick and elderly:
http://articles.latimes.com/2011/mar/25 ... t-20110325

SSI/SSP Cut Means Life’s About To Get Tougher for Seniors and People With Disabilities:
http://californiabudgetbites.org/2011/0 ... abilities/




The Democratic Party does not really care more for the poor, the sick and the elderly, than the Republican Party does. (At least the California Democratic Party does not care more for the poor, the sick and the elderly, than the California Republican Party does.)

Moksha, when I asked the Question on my first Post on this Thread here that stated, "Does President Barack Obama really deserve to be re-elected as President???", it was before California's Unemployment rate got even higher, and before the Solyndra scandal broke.
The Following is from the Washington Post:

...

1) This scandal is no big deal. To the contrary, evidence is mounting that there was something irregular about the way the Solyndra deal got greenlighted. My colleagues Joe Stephens and Carol D. Leonnig have obtained e-mails showing that the White House pressed the Office of Management and Budget to hurry up in reviewing the deal (note, however, that this only came after the Energy Department had approved the loan), even as OMB officials voiced concern about being rushed.

Does that prove the White House engaged in cronyism, shoveling cash toward a political ally? Not necessarily. Democrats have pointed out that Solyndra’s loan process was initiated by the Bush administration and that many key investors were Republicans. Still, there could have been other reasons the deal was hastened. As a former Clinton energy aide stressed to me, it was arguably a mistake to sell the loan guarantees as job-creating stimulus (the program was expanded as part of the 2009 stimulus bill). “It means you try to force huge amounts of money quickly through processes that aren’t quite ready yet,” the aide said. “It’d be better to have a calmer, steadier source of funding.”

...

Link: http://www.washingtonpost.com/blogs/ezr ... _blog.html



The Bush Administration Never gave Solyndra a loan.

Solyndra pressured Bush for loan approval in January 2009 and didn't get it:
http://forums.hannity.com/showthread.php?t=2321581





The Following is from the Los Angeles Times:

Obama advisors raised warning flags before Solyndra bankruptcy

Treasury chief Timothy F. Geithner and others were worried that the selection process for federal loan guarantees fell short and raised the risk that funds could be going to the wrong firms.

...

By Tom Hamburger, Kim Geiger and Matea Gold,
Washington Bureau

September 26, 2011, 6:35 p.m.


Reporting from Washington— Long before the politically connected California solar firm Solyndra went bankrupt, President Obama was warned by his top economic advisors about the financial and political risks of the Energy Department loan guarantee program that boosted the company's rapid ascent.

At a White House meeting in late October, Lawrence H. Summers, then director of the National Economic Council, and Timothy F. Geithner, the Treasury secretary, expressed concerns that the selection process for federal loan guarantees wasn't rigorous enough and raised the risk that funds could be going to the wrong companies, including ones that didn't need the help.

Energy Secretary Steven Chu, also at the meeting, had a different view. Under pressure from Congress to speed up the loans, he wanted less scrutiny from the Treasury Department and the Office of Management and Budget, or OMB.

The divisions foreshadowed a question that has emerged since Solyndra's bankruptcy: Was the program's vetting process thorough enough? The disagreements also spotlighted an issue that has confronted Obama since he took office: What is the appropriate role of the government in stimulating the private marketplace?

Skeptics, noting that taxpayers could now be on the hook for $527 million the federal government loaned Solyndra, said the administration would have been better off making greater use of market incentives, not individual company loan guarantees.

"It was completely predictable that there would be a colossal failure among the bets," said one person familiar with the internal debate.

Defending the program as an overall success, administration officials say that the $17 billion in loan guarantees now on track to go to 30 companies will help double renewable energy generation in Obama's first term.

The program that funded Solyndra is set to expire at the end of the month, and the White House is pushing to provide more green-energy loan guarantees through other initiatives and keep the U.S. competitive globally. The Chinese government, the Energy Department says, last year committed $30 billion to solar-panel manufacturers.

Almost immediately after the 2008 election, Obama advisors began debating how to create jobs while reducing the nation's reliance on fossil fuels. Some advisors pushed to expand a George W. Bush administration loan-guarantee initiative to help green-energy companies launch commercially. Others were philosophically opposed to providing help to individual companies and warned against betting taxpayer money on inherently risky ventures.

Nevertheless, the administration went forward with the loan guarantee program as part of the 2009 stimulus law. High-level disagreements on the program continued.

In late October 2010, administration officials took their opposing views directly to Obama. In preparation, a memo was drafted by Summers, who remained wary of the program, and two others who were more supportive: then-energy advisor Carol Browner and Ron Klain, then chief of staff to Vice President Joseph Biden. The memo laid out their different concerns and options to fix a "broken process" for getting loans approved.

Warning that the program could "fail to advance your clean-energy agenda" by investing in companies that didn't need help, the memo proposed alternatives, including diverting the funds into grants available to the entire industry. By contrast, Energy Department officials wanted to end the "deal by deal" reviews by the Treasury and OMB, the memo said.

After the meeting, officials worked to streamline the process but didn't make significant changes.

It is unclear whether an overhaul would have helped anticipate the problems at Solyndra. In February, the Energy Department agreed to restructure the company's loan. A little more than six months later, Solyndra declared bankruptcy, laying off 1,100 people and triggering FBI and congressional investigations.

The administration originally touted the green energy program as a tool that would create or save tens of thousands of jobs. So far, 30 projects are on track to create about 16,750 construction jobs and 2,577 permanent jobs. The Energy Department notes that a related loan guarantee program helped save 33,000 jobs at Ford by helping the company modernize its factories.

But some critics argue that other government loan guarantee programs do a better job of protecting taxpayers.

For example, a Transportation Department program to spur infrastructure improvements limits loan guarantees to 33% of the cost of a project, said Autumn Hanna of the nonpartisan Taxpayers for Common Sense. Energy Department guarantees can amount to 80%.

Critics also question whether the Energy Department has the expertise to select which companies to help.

"Questions have to be raised about the quality of their analysis," said analyst Shyam Mehta of GTM Research in Cambridge, Mass.

Jim Nelson, chief executive of Solar 3D, a Santa Barbara company that is developing three-dimensional solar cell technology aimed at making more efficient solar cells, said the government should stay out of the business.

"If private investment cannot find a reason to invest in emerging technology to make it commercial," he said, "what is government doing it for?"

Energy Department officials counter that only projects that have met the test of the marketplace are considered.

"We don't pick winners and losers," spokesman Damien LaVera said. "The private sector does." Companies selected for loan guarantees, he added, have been "deeply, deeply, deeply capitalized by the private capital markets."

Many clean-energy investors say the loan guarantees have been essential to getting capital flowing, particularly during the credit crunch. It's important for the government "to bridge this difficult gap between where venture capital is able to fund these companies and where traditional project finance kicks in," said Sunil Paul, a San Francisco-based clean-energy investor.

Rhone Resch, president and chief executive officer at the Solar Energy Industries Assn., credited the program with creating "more than $40 billion of private investment in both energy generation and manufacturing projects," and said the solar projects selected would not have gone forward without government backing.

But government audits in recent years have found problems in the implementation of the program.

A July 2010 report by the Government Accountability Office found that the department committed to back the loans without completing required studies of market, legal and technical issues.

"Without this information, it is not clear that the program could have fully evaluated the risk of the loans it committed to," said Frank Rusco, an analyst for the GAO.

Link: http://www.latimes.com/news/nationworld ... 8311.story



So I ask that Question again, “Does President Barack Obama really deserve to be re-elected as President???".

[_richardMdBorn]

]

Cheers and yee-haws when it came time to equivocate on whether he would do away with Social Security, Medicare and Medicaid.

He doesn't need to do anything. ObamaCare already guts Medicare.

Medicare’s chief actuary Richard Foster has been a thorn in the side of both Republican and Democratic Presidents.

Back in 2003 he got on the Bush administration’s bad side by turning in an estimate of Bush’s Medicare prescription-drug program — then the largest new entitlement in a generation — that was significantly higher than the White House’s estimate. For that he was threatened by Medicare administrator Thomas A. Scully with termination for insubordination. The administration withheld Foster’s estimate until Congress had passed the bill.

During the recent debate over ObamaCare in Congress, Foster issued a report stating that national healthcare spending would rise by $222 billion over the next 10 years if ObamaCare became law, noting also that if coverage were to begin immediately instead of in 2014, the spending increase would be much higher. He also pointed out that the new long-term care program, used to make the balance sheet look better in ObamaCare’s early years because it will collect premiums for five years before paying any benefits, would likely be bankrupt by 2025.

Foster’s latest salvo against expanded healthcare entitlements, described by the Wall Street Journal as “the most damning fiscal indictment to date of the Affordable Care Act,” comes in the form of an appendix to the annual Medicare trustees report — the report that Democrats are hailing as a vindication of ObamaCare because it seems to indicate that passage of that legislation has improved the outlook for Medicare.

However, as Foster explains in his appendix, the body of the report is unrealistic because it is premised on the law as written as opposed to what will actually happen in the real world. In other words, the main body of the report is bunk designed to make the law’s supporters look responsible. Foster recommends instead an “alternative scenario” drawn up by his office using more realistic assumptions.

In his alternative scenario Foster demolishes the notion that there are any real Medicare cuts in ObamaCare (aside from those in Medicare Advantage, hated by Democrats because it involves the private sector). The alleged cuts, writes the Journal, “exist only on paper and were written so they could pretend to reduce the deficit and perform the miracles the trustees dutifully outlined.”

The paper continues:

One of the fictions Mr. Foster highlights is the 30% cut in physician payments over the next three years that Democrats have already promised to disallow. Republicans would do the same, we hasten to add.

Another chunk of ObamaCare “savings” are [sic] due to cranking down Medicare’s price controls for hospitals and other providers that Mr. Foster says are also “extremely unlikely to occur.” In the absence of “substantial and transformational changes in health-care practices” — in other words, a productivity revolution in medicine that has never happened — costs will simply rise for private patients, or hospitals will refuse to treat seniors insured by Medicare. Congress will never allow that to happen either.

In other words, under ObamaCare the “cost curve” will not be bent as the White House has advertised.

http://www.thenewamerican.com/index.php ... re-savings

In his analysis accompanying the recently released Annual Report of the Medicare Board of Trustees, Richard Foster, Medicare's chief actuary, noted that Medicare payment rates for doctors and hospitals serving seniors will be cut by 30% over the next three years. Under the policies of the Patient Protection and Affordable Care Act, by 2019 Medicare payment rates will be lower than under Medicaid. Mr. Foster notes that by the end of the 75-year projection period in the Annual Medicare Trustees Report, Medicare payment rates will be one-third of what will be paid by private insurance, and only half of what is paid by Medicaid.

Altogether, ObamaCare cuts $818 billion from Medicare Part A (hospital insurance) from 2014-2023, the first 10 years of its full implementation, and $3.2 trillion over the first 20 years, 2014-2033. Adding in ObamaCare cuts for Medicare Part B (physicians fees and other services) brings the total cut to $1.05 trillion over the first 10 years and $4.95 trillion over the first 20 years.

These draconian cuts in Medicare payments to doctors, hospitals and other health-care providers that serve America's seniors were the basis for the Congressional Budget Office's official "score"—repeatedly cited by the president—that the health-reform legislation would actually reduce the federal deficit. But Mr. Obama never disclosed how that deficit reduction would actually be achieved.

There will be additional cuts under ObamaCare to Medicare Advantage, the private option to Medicare that close to one-fourth of all seniors have chosen for their coverage under the program because it gives them a better deal. Mr. Foster estimates that 50% of all seniors with Medicare Advantage will lose their plan because of these cuts. Mr. Obama's pledge that "If you like your health plan, you will be able to keep it" clearly does not apply to America's seniors.

Moreover, there will be additional cuts to Medicare adopted by bureaucrats at the Medicare Independent Payment Advisory Board. ObamaCare empowers this board to close Medicare financing gaps by adopting further Medicare cuts that would become effective without any congressional action. Mr. Foster reports that "The Secretary of HHS is required to implement the Board's recommendations unless the statutory process is overridden by new legislation."

The drastic reductions in Medicare reimbursements under ObamaCare will create havoc and chaos in health care for seniors. Many doctors, surgeons and specialists providing critical care to the elderly—such as surgery for hip and knee replacements, sophisticated diagnostics through MRIs and CT scans, and even treatment for cancer and heart disease—will cease serving Medicare patients. If the government is not going to pay, then seniors are not going to get the health services, treatment and care they expect.

Mr. Foster reports that two-thirds of hospitals already lose money on Medicare patients. Under ObamaCare it will get much worse. Hospitals also will shut down or stop serving Medicare patients.

The president's concept of spreading the wealth includes sacking the Medicare system, on which America's seniors have come to rely for medical care, in favor of others the president's progressive vision deems more worthy.

Everyone should know by now that Medicare suffers dramatic long-term deficits and unfunded liabilities, and is in need of fundamental, structural reforms. But effectively refusing to pay the doctors and hospitals that provide the medical care the program promises to seniors is no way to solve that problem.

http://online.wsj.com/article/SB1000142 ... 54940.html

[_Nomomo]

The fact that not a single damn Wall Street criminal is going to jail makes Obama a worthless POS Jackass! The only thing to be said for him is that a Rethuglican in office would be somewhat worse.

[_Droopy]

Great! More scintillating intellectual substance at the Trailerpark. Welcome home, Nomomo.