Political Snapshot: Healthcare Proposal Faces Critical Deadline

July 27, 2009 by mattbenchener 2 Comments

In the face of eroding public support, President Obama and House Speaker Nancy Pelosi hope to have their controversial healthcare reform bill through the House before the August Congressional recess. They now have just five days to do so. Failure to pass the legislation before August would be President Obama’s first major Congressional loss.

Right: President Obama’s proposal has been widely criticized by Republicans for its high cost, tax hikes, and social welfare undertones. Republicans hope to Obama and Pelosipostpone the vote on the bill in order to rally public opposition to what they see as a sharp move left in domestic policy. The postponement would also be a major political victory for Republicans, who have thus far been steamrolled by the new president. Facing a 256-178 minority in the House, and lacking the ability to filibuster in the Senate, Republicans have been unable to dent the president’s aggressive agenda. On healthcare, it seems President Obama may have overstepped his bounds, and Republicans are hoping to use August to demonstrate that Americans oppose the radical change.

Left: While the majority of Democrats favor President Obama’s proposal, two key contingents within the party are holding up the vote. The first is that of the 52 “Blue Dog” Democrats (fiscal conservatives), who are concerned with the CBO’s projection that the bill will expand the deficit by nearly $300 billion. The second is a group of 20 freshman and sophomore Democrats from moderate districts who worry that the proposed surtax will place an undue burden on small businesses. Most analysts believe Democrats will need the support of both groups in order to pass the bill. Ms. Pelosi has said she remains confident the bill will be passed.

TruPolitics: The healthcare proposition before Congress, if passed in its current form, will be one of the largest, most dramatic reforms in U.S. history. It will change the face of healthcare, which accounts for close to 17% of GDP, creating a domestic policy more in line with European socialism than American libertarianism. In light of such monumental change, Americans deserve the time it takes to fully understand the substance of the proposal (over 1,000 pages long). They deserve legislation refined through rigorous debate, careful study, and bipartisan discourse. This will take time, and August provides that window.

President Obama and Speaker Pelosi are worried that postponement of the vote will give Republicans time to rally resistance to the bill. They see the growing tide of opposition to a socialist system that Americans will flatly reject if they understand its implications. They are afraid, and they should be.

A Washington Post/ABC poll reported last week that 33% of Americans strongly disapprove of the president’s approach on healthcare, versus just 25% who strongly approve. The poll also notes that opposition to President Obama’s healthcare proposal among independents has jumped from 30% in April to 49% in July. The Lewin Group recently issued a report stating that if the House bill becomes law, 83.4 million Americans, almost half of those with private coverage, will lose their private insurance as employers drop it to push them to the public plan. Over 170 million Americans have health insurance (80% of the population under 65), and according to the Wall Street Journal, 89% of this group like the care they are currently receiving. The president knows he is quickly losing ground as Americans understand the full implications of universal healthcare, and he knows he must act quickly.

There is no rational reason to push the vote through before August, other than the purely political desire to ram through a key Democratic agenda item. Americans should have the chance to understand what they are facing–for something this drastic, Americans simply deserve better.

-Matt Benchener from TruPolitics.net

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Why The Stimulus Failed

July 22, 2009 by mattbenchener 5 Comments

TruPolitics.net is proud to welcome writer Edward Mahee. Mr. Mahee boasts an extensive legal background, and is an emerging conservative thinker. Expect articles from Mr. Mahee every other week.

For the last two years, and especially since last Fall, the struggling economy has been the most pressing issue facing the nation.  A number of efforts have been undertaken to revive the economy, but with unemployment at 9.5% and rising, and no sign of economic recovery on the horizon, nothing seems to have worked. 

The most public and most colossal effort yet undertaken was by the federal government in the form of the American Recovery and Reinvestment Act of Government Spending2009—the so-called “Stimulus Plan”—passed in February at the insistence of President Barack Obama. The Stimulus Plan, totaling $787 billion, was sold to the American public as essential to protect the economy from further trouble.  According to the president last February, “This is not your ordinary, run-of-the-mill recession.”  It’s “the worst economic crisis since the Great Depression.” 

Why was such a stimulus necessary?  The principal underlying the Stimulus Plan is derived from the work of British economist John Maynard Keynes. Keynes asserted that in an economic downturn, when the private sector is unwilling to spend or invest, government should step in and spend in order to keep the economy afloat until private sector spending recovers.

The trouble with Keynes’s formula is that the government is not a producer of wealth or value. All the money the government has it acquires through taxes, borrowing or printing. 

Therefore, when the federal government spends $100, it takes $100 from the private economy.  When the government raises $100 in taxes, it is $100 less that a private person or entity has to save, invest, hire, build, or otherwise dispose of.  If the government chooses instead to borrow that $100, that money is not being invested in other capital markets. When the government instead chooses to print $100, it inflates the currency.  For every extra dollar the government prints, every other dollar in circulation depreciates in its purchasing power—the value of each individual dollar is diluted.  Inflating the currency is in effect a tax, as the government takes value away from the dollars held by private parties.

Because government can only spend by taking from the private economy, Keynesian stimuli focused on government spending have never worked.  In this country, we have had two runs of the Keynesian experiment, both of which predictably ended in disaster. 

During the 1930s, Presidents Hoover and Roosevelt massively increased the level of spending by the federal government. The effort was a failure. Roosevelt’s Treasury Secretary, Henry Morgenthau admitted in 1939, “We are spending more money than we have ever spent before and it does not work.  I want to see this country prosperous.  I want to see people get jobs.  We have never made good on our promises.  I say after eight years of this administration we have just as much unemployment as when we started and an enormous debt to boot.” 

The second Keynesian experiment was tried during the 1970s, during which President Nixon declared, “We are all Keynesians now.”  The result was again a

John Maynard Keynes

John Maynard Keynes

disaster, culminating in the creation of the Misery Index, the combination of the inflation and unemployment rates.

Why then are many in Congress and the Administration insistent that we walk down this path again?  The answer is not

about economic recovery, but about power.  Left to its own devices, any free market economy will recover from trouble.  We only need look to our own history.  The American economy has suffered a number of setbacks and has always recovered without resorting to massive intervention by the federal government (see the recession of the early 1890’s, 1920’s and 1980’s). 

But an economy recovering on its own is no way for a politician to increase his power or reward favored constituencies.  Under the intellectual cover provided by Mr. Keynes, politicians will tax and spend.  In the name of aiding economic recovery, politicians will take from the private, productive economy and give that money in exchange for votes.  The effect of this is to keep unemployment high and dependence on the federal government for largess higher still. 

The Stimulus Plan is not and never was about recovery, but about control by the government over individuals.  The government will happily take from you what is yours and give to another in exchange for that person’s vote.  But that largess will not effectively create jobs or produce wealth.  And maybe that is the point in the end.  When individuals have jobs and can rely on their own friends and families in times of need, they don’t need politicians—and politicians will always do everything they can to remain needed.  Mr. Keynes has given those politicians their excuse.

-Edward Mahee from TruPolitics.net

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Mr. and Mrs. Smith: A Redistribution Parable

July 20, 2009 by mattbenchener 3 Comments

John and Jane Smith were hit hard by the recession.

Recently married, John worked for a local manufacturing company, while Jane worked part-time at the local supermarket. In preparation for their new life together, Oakfieldthey bought a house in Oakfield Communities, a new development in a nice part of town. The house was a bit of a stretch for them financially, but owning a home was a dream come true for the young couple.

Last November, in the midst of the stock market’s steep decline, John worried that his company might reduce overhead.  In January, when the recession accelerated, John was laid off. As the primary earner for the couple, John’s job loss posed a serious problem for the couple–how would they afford the lifestyle they had built on his income? Their home payments were expensive, and they had received health coverage through John’s company.

After two months unsuccessfully searching for a new job, John and his wife were without health insurance, and were falling behind on their home payments.

But all was not lost. The Smiths were fortunate enough to be friends with the chair of Oakfield Communities’ Homeowners Association, Barney Reid. Mr. Reid saw that the Smiths were struggling and had compassion for the newlyweds. Something had to be done to help them.

At the next monthly meeting, Mr. Reid made an impassioned plea to the association’s board: “The Smiths are great people and hard workers. John wants desperately to provide for his wife, and Jane is working long hours at the supermarket. They are victims of the recession that Wall Street gave us. John is still out there looking for a job, and if we don’t help them they might lose their home. And what if one of them gets sick? Without healthcare, it could be devastating.”

Mr. Reid’s message resonated with the members of the board. “This is a compassionate community,” they thought. “No member of Oakfield should ever be without healthcare or be at risk of losing their home. We are fortunate to have jobs, and if we all pitch in we can help out the Smiths.”

Needing to act quickly, the board drafted a letter to the community: “Effective immediately, the monthly association fee will be raised from $200 to $500. The money will go directly to the Smiths to help provide them with health coverage and allow them to keep their home.”

Members of the community were outraged. They had worked to save money and keep their jobs, and had purchased homes within their means. Yes, the Smiths’ situation was sad, but why should they be forced to pay for their healthcare and home? Didn’t they have a right to decide where their own money was spent? What incentive would John have to go back to work?

The board members were confused by the objections—they thought Oakfield residents would understand the Smiths’ plight.

But then they had an ingenious idea. There were five families in Oakfield that each earned over $250,000 per year, far more than the other families. They had more than enough money to live on and more than enough to give to the Smiths. They were, after all, rich.

So the board sent out a new letter: “Everyone in the community wants to support the Smiths, but not everyone has enough discretionary money to help out. But there is one group who does and who will gladly help. Effective immediately, the monthly association fee will be raised from $200 to $2000 for all homes with a combined income over $250,000. All other fees will remain at $200.” The idea was perfect—take from those who could afford to give and give to those in need.

But something strange happened that the board members had not expected. Over the next few weeks, they were flooded with requests for financial assistance. It turned out that the Johnsons were struggling to put their child through college, the Millers’ car had broken down, and the Richards had huge credit card debt to pay off. How would they pay for all these requests? Perhaps they could simply raise the association fees again.

——

If you lived in Oakfield, how might you have responded to the forceful redistribution of your wealth? How would you have felt if your hard work and responsibility were rewarded with payment for the indiscretion of your neighbors? The story seems unpalatable and distant, the injustice exceedingly clear.

But the troubling truth is that the story of Mr. and Mrs. Smith may soon be the story of America.  Financial, auto, and mortgage bailouts took from a few to give to the irresponsible. Historically high tax rates are close on the horizon, the price tag for increased social welfare and a universal healthcare proposal that amounts to forced charity.

We have a president and party in power that want to “spread the wealth around,” and believe that prosperity is something to be given, not pursued.  They call the poor “victims,” and wrap their policy in noble, but utopian notions of “compassion” and “fairness.” Ironically, they find justice in providing for some while taking from others.

The story of Mr. and Mrs. Smith seems remote, but government acts similarly everyday. If the country continues down the path set by the current administration, America will begin to look more and more like Oakfield Communities and less and less like the land of Liberty and Justice for All.

-Matt Benchener from TruPolitics.net

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Universal HealthCare’s Key Arguments

July 13, 2009 by mattbenchener 1 Comment

ObamaCareRunning a website and writing for multiple newspapers, I receive a tremendous amount of feedback on a weekly basis. That feedback ranges from positive to negative, rational to emotional, and from conservative to liberal. Of all the posts and articles I’ve written, however, no single topic has incited as much reader response as healthcare. It is something that Americans are clearly passionate about, and may define the next decade of reform and legislation.

As such, I’ve compiled overriding themes from reader responses, and addressed the arguments here (quotes are from actual reader voices):

1. The rich think that healthcare reform is unnecessary because they can already afford quality care.

“The rich and well to do will always have whatever care they need – what about those hardworking middle class families who need it and don’t have it. Maybe we should just keep breaking their backs.”

This is a classic class warfare argument, attempting to give the moral high ground to the poor while demonizing the rich. In essence, the reader is saying that the rich are invalidated because they do not feel the same impact as the poor. The argument, however, is grossly misdirected.

Everyone agrees that healthcare needs reform—the costs are as high for the rich as they are for the poor. The root issue is the same for both groups, but the relative impact is different. For a wealthy person, high cost means less discretionary spending. For a poor person, high cost means no healthcare at all.

While it is true that the status quo impact is different, the impact of reform most negatively affects the 80% of the country with healthcare. Should that 80% dismiss the opinions of those without healthcare because the impact of reform differs greatly? If you apply the logic of the reader’s argument, then discussions of reform should remain only with those who already have healthcare. Just because status quo impact is different, it does not mean the rights of either group are invalidated.

The truth is that both sides have a powerful stake in reform, and the rights of both groups must be respected. The real question, then, is whether or not healthcare is a fundamental Constitutional right.

2. As the richest nation in the world, we have the moral responsibility to provide healthcare for our citizens.

“I like to believe that we live in a civilized society in which all citizens are concerned for the health of the society as a whole. A civilized healthy society should include healthcare for all its members to insure that everyone has access to and is treated equally when it comes to basic needs.”

This argument again attempts to legislate morality from the seat of government. It forgets that liberty is the historical linchpin of the American experiment. When government intervenes in society, it necessarily strips liberty from its people—it decides for you. When the government spends a dollar, it spends your dollar. It is simply deciding on your behalf where your money should be spent. If President Obama wants to pay for healthcare for all Americans, Healthcarehe must take your money and pay for the healthcare of those who cannot afford it. In other words, universal healthcare is forced charity.

If you believe that healthcare is a moral issue, then you have the right to give your money to help those in need. But government should not be the legislator of that charity. This does not mean that healthcare is unimportant, or that the nation is uncompassionate. It simply means that you have a right (in liberty) to decide where your money is spent.

America may be the richest nation in the world, but that does not mean that its wealth should be forcefully redistributed. You cannot trade one value (government welfare) for the most essential value (liberty) and claim a moral high ground.

3. Those without healthcare are not responsible for their lack of coverage. They are the victims of an unfair system.

“My job was outsourced to Manilla…I’m stuck until I’m able to find a good paying job because of THE RECESSION THAT GWB AND YOU gave to all of us.”

“In all likelihood, you are lucky enough NOT to have any chronic conditions and assuredly have not had to avail yourself of the high cost of medical care, I have and know that other Americans have…it is unfair.”

Our Founders believed that the greatest sin of government was to strip its people of liberty. This belief spurred the Revolutionary War, and has defined our nation since its founding. Liberty, our Founders said, was found in the pursuit, not the guarantee of success, happiness, and wealth. That distinction is critically important, because the ability to pursue those things is present without government control. The American Dream is that anyone can become anything by the power of personal will and industry, not government provision.

The Founders’ hope was that Americans would be responsible for their own outcomes. When the government attempts to force those outcomes, it infringes on the liberty of its people. Certainly, some people face difficult uphill battles while others are privileged. But that is the reality of a free society. The beautiful reality of freedom is that anyone can succeed; the harsh reality is that many will not.

The alternative to freedom is a government controlled and regulated society, where freedom is disdained because of its unequal results (see China; Russia; North Korea). There is no utopian middle ground between liberty and tyranny.

On healthcare, each individual must earn quality care through hard work and industry. Otherwise, we face socialist policy that has failed so many nations before our own. The fact is that in America you are given the opportunity to succeed, and to succeed enough to have health coverage. There are exceptions to this rule (disabled; children etc.), and we largely provide for them. But to apply that exception to the whole is to soil the American Dream of industry with the socialist notion of casualty.

-Matt Benchener from TruPolitics.net

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The Hidden Cost of ObamaCare

July 8, 2009 by mattbenchener 1 Comment

TruPolitics.net is proud to welcome Edward Mahee as a new contributor to the site. Mr. Mahee boasts an extensive legal background, and is an emerging conservative thinker. Expect articles from Mr. Mahee every other week.

“What I am trying to do – and what a public option will help do – is put affordable health care within reach for millions of Americans. And to help ensure that everyone can afford the cost of a health care option … we need to provide assistance to families who need it. That way, there will be no reason at all for anyone to remain uninsured.”

-President Barack Obama, Speech to the American Medical Association, June 15, 2009 

The President of the United States, as he promised during last year’s campaign, has embarked on a radical transformation of the American health care system.  This transformation however, is not only about changing the American health care system, but the American way of life. 

Mr. Obama claims that his intent is to ensure that affordable health care is available to all Americans.  At first glance, this seems an admirable goal.  Who, after all, is against granting people access to health care?  But giving people “access” to affordable health care is not in fact the goal.  People already have access to healthcare, whether or not they are insured.  The issue remains cost. Obamacare

Admittedly, health care is costly in terms of money, and for many people that cost can be difficult.  But the solution, as proposed by Mr. Obama, will be costly, not only in terms of money, but in liberty lost by the average American. 

First, the financial costs of Mr. Obama’s plan are staggering, up to $1 trillion over the next decade according to some estimates.  Given the debt this administration has run up this year, one is left to wonder how such sums are to be raised.  One way Mr. Obama can pay for his health care reforms is by raising taxes.  But experience suggests that taxes themselves will not pay for health care costs to be borne by the government.  And like any enterprise, if enough money cannot be found to pay for something by raising revenue, the money will have to be found by cutting costs. 

Cutting costs means paying doctors and nurses less (which will result in fewer people choosing to enter these professions), paying less for hospitals (which will result in hospitals becoming less safe while the resources necessary for maintaining them dwindle), paying less for therapy (meaning fewer options and far fewer new or better options for therapy) and restricting access to health care.

Mr. Obama wants us to view government intervention into the health care space as simply a compassionate move designed to assist those without.  Doubtless, an admirable intention.  But we all know what the road to hell is paved with.  Nobody seriously doubts that the American health care system is in need of improvement.  But the solution proposed by the president is counterproductive.  If the government is trying to reduce the cost of health care, the solution is not to have the government assume those costs and then ration care. 

Sure, every American will theoretically have access to health care (although I suspect the access of those like Mr. Obama and Messrs. Dodd and Kennedy, who have proposed legislation along the same lines as Mr. Obama, will be more equal than access for the average American), but what good is access if it means is a spot on a list to wait to see one of the ever shrinking number of nurses or doctors, or for a bed in the shrinking number of hospitals (which are increasing falling into decrepitude) to be treated, but not with state of the art treatment that a bureaucrat has decided is not cost effective.

Which brings us to another cost of Mr. Obama’s plan to change health care, one which cannot be measured on a balance sheet.  Once the government is in charge of health care, every American will be beholden to the tender mercies of a bureaucrat who will determine when and where we can receive treatment.  The suffering endured by one who waits for hip surgery, heart surgery, or cancer treatment is a cost.  The suffering endured by those with chronic conditions who have to continually await treatment will be a cost.  The suffering endured by those who may have benefitted from a new drug, but cannot because a bureaucrat has determined that a drug is not cost effective, will be cost.  But the greatest cost of all will be how, in the name of compassion and equality, each and every American will lose his or her ability to freely choose whether and when to get health care.

That in the end will be the greatest cost paid under Mr. Obama’s plan, the loss of individual liberty.  We will no longer be free individuals, but merely serfs with the federal government as our noble lord who in return for protection demands from us our toil and our freedom.  And all because people in power think they know better.  They don’t believe in the dignity and inherent value of the individual.  We each must be controlled, and those in power will do the controlling.

-Guest author Edward Mahee from TruPolitics.net

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President Obama’s Bridge to Nowhere

July 2, 2009 by mattbenchener Leave a Comment

“This is President Obama’s economy now”

-Congressman Eric Cantor

At the beginning of his term in January, President Obama warned the nation that it faced an economic crises not seen since the Great Depression. Without swift action, he said, the downward spiral would continue and the American economy would suffer the consequences. His solution was a $787 billion stimulus plan, which the administration claimed would rescue the economy by injecting it with new, job creating spending. The Obama Administration admitted that the legislation was full of earmarks, but said it was a price the nation simply had to pay for immediate action. Bridge to Nowhere

That immediate action, the administration promised, would keep unemployment below 9%, and would spur a broad recovery in the stock market. Thursday, the unemployment rate hit 9.5%, its highest level in 26 years. The stock market closed at 8,280.74, down nearly 6% for the year. It appears the $787 billion “stimulus” was anything but.

The ineffectiveness of the stimulus is not surprising. Only a little over one third of the money was allocated toward growth producing spending (tax cuts plus infrastructure investment), while the remainder was simply earmarked for political agenda items. Among the waste were the following:  1. Nearly $4 billion to ACORN (the far-left group that helped President Obama get elected); 2. $400 million for global-warming research; 3. $20 billion for food stamps and $36 billion for expanded unemployment welfare (welfare expansion policies long hoped for by Democrats); 4. $50 million for the National Endowment for the Arts; 5. $150 million to the Smithsonian museum. Did anyone actually expect items such as these to stimulate the economy?

And for all of the rhetoric surrounding the need for swift action—a favorite of the Obama Administration (see healthcare; the mortgage, financial, and auto bailouts; cap-and-trade environmentalism)—only 23% of the total spending is slated to be spent this fiscal year. The rest will be spent through 2011, long after most economists expect the natural market rebound to occur.

Democrats have been understandably silent on economic issues in the past month, and the administration has been hesitant to offer a defense of its now failed policy. Its only argument to date: 150,000 have been “saved” because of stimulus spending. When asked how that number was determined, the Obama Administration said it was based on theoretical statistical modeling that predicted job savings through spending initiatives. Since the President took office, the economy has shed over 2 million jobs. Unemployment now stands well beyond the levels the administration promised the stimulus would help maintain. Unfortunately for the administration, fact has inconveniently trumped theory.

President Obama needs to be held accountable for the failure of his policy and lack of economic leadership. At a time when the country desperately needed serious, thoughtful action, his administration forwarded a highly partisan pork-filled bill. The portion of the bill that legitimately sought stimulus spending was based on unproven and controversial Keynesian economic theory. No country has ever used government funds to spend its way out of a recession–ever. Not to mention that the stimulus greatly expanded an already dangerous deficit which will only prolong the obama's changedownturn.

And all of this waste for what? Democrats saw an opening (“never let a serious crisis go to waste”) and were able to push forward a political wish list they had been holding for decades.  The Obama Administration decided that it could allocate resources and use consumer money better than consumers themselves could. They failed to realize a powerful economic axiom: Every dollar the government spends will be spent for political purposes; every dollar the economy (businesses and consumers) spend will be spent for economic purposes. Now the economy, and American citizens, are suffering the consequences.

With the country now focused on healthcare, Justice Sotomayor, and cap-and-trade, the egregious error of the stimulus may be left behind. But perhaps not. According to a Rasmussen Reports poll, 45% of Americans believe the remainder of the stimulus spending should be canceled, and close to 40% now hold President Obama responsible for the nation’s economic struggles. Those numbers have accelerated greatly in the past two months alone.

Perhaps the nation is beginning to realize that not all “change” is good change. Many Americans were frustrated with the Bush Administration and the Republican Party. But I doubt that aggressive partisan politics, radical government expansion, and socialist policy were the change they had “hoped” for.

-Matt Benchener from TruPolitics.net

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