Another piece in the health care puzzle

This article describes the response by major health insurers to the new “no preexisting conditions” provision for children:

http://articles.latimes.com/2010/sep/21/business/la-fi-kids-health-insurance-20100921

The socialized medicine supports will use this as a spear to demonize the insurance companies.  You will see commercials and ads depicting the helpless children abandoned by the money grubbing insurance companies.  The next step will be to enact legislation that creates a Federal solution to this great social crisis.  This will be one more piece in place of the socialized medicine puzzle.

Just cut it

The Cato Institute is running the following full page advertisement in these publications, Wall Street Journal, Washington Post, New York Times, Los Angeles Times, Washington Examiner and Politico:

http://www.cato.org/files/DownsizingAd.pdf

If my math is correct the federal spending cuts suggested in this ad would total $650 billion per year.  That’s a lot of money, even in Washington D.C.

Zero Tolerance

Your federal government is here to help you once again. Recently the United States Department of Health and Human Services has begun a campaign to stamp out a threat to our society, free speech. The following letter was mailed by Health and Human Services Secretary Kathleen Sebelius to the executive director of America’s Health Insurance Plans (AHIP), (the national association of health insurers):

http://www.hhs.gov/news/press/2010pres/09/20100909a.html

Some of these statements are hard to believe but here is what her letter says:

It has come to my attention that several health insurer carriers are sending letters to their enrollees falsely blaming premium increases for 2011 on the patient protections in the Affordable Care Act. I urge you to inform your members that there will be zero tolerance for this type of misinformation and unjustified rate increases.

This is nothing more than a threat by a government agency to suppress criticism of the Obama administration’s programs.

According to our analysis and those of some industry and academic experts, any potential premium impact from the new consumer protections and increased quality provisions under the Affordable Care Act will be minimal.

What about the analysis of other experts? Are we now only allowed to view favorable studies?

Moreover, I want AHIP’s members to be put on notice: the Administration, in partnership with states, will not tolerate unjustified rate hikes in the name of consumer protections…… Later this fall, we will issue a regulation that will require state or federal review of all potentially unreasonable rate increases filed by health insurers, with the justification for increases posted publicly for consumers and employers. We will also keep track of insurers with a record of unjustified rate increases: those plans may be excluded from health insurance Exchanges in 2014.

I knew that this day would come but I am surprised at how quickly it arrived. The Federal Government is in the process of drafting a regulation that will effectively control the rate increases of private insurers. Over time the Government will force the private insurers out of business by preventing adequate rate increases and presto the United States Government will be the “insurer of last resort”. You will then be in a single payer government controlled health care system.

If you doubt the effectiveness of this process I suggest you study the history of public transportation. Street cars and buses were once owned and operated by private enterprise. Over time government regulation dictated what the private operators could charge their customers. By keeping the rate increases below the cost inflation of the service provided the government put the private operators out of business. Government then placed itself in charge of public transportation.

The following quotation is from Friedrich Hayek in his book The Road to Serfdom:

When the state has the final say on the economy, the political opposition needs the permission of the state to act, speak, and write. Economic control becomes political control.

The most expensive school ever constructed

A friend of ours sent me the following article:

http://online.wsj.com/article/SB10001424052748703959704575454013855538920.html?mod=WSJ_Opinion_LEADTop

The following paragraphs highlight the orgy of spending involved in this Los Angeles public school project:

At $578 million—or about $140,000 per student—the 24-acre Robert F. Kennedy Community Schools complex in mid-Wilshire is the most expensive school ever constructed in U.S. history. To put the price in context, this city's Staples sports and entertainment center cost $375 million. To put it in a more important context, the school district is currently running a $640 million deficit and has had to lay off 3,000 teachers in the last two years. It also has one of the lowest graduation rates in the country and some of the worst test scores.

"It wasn't cheap, but it was saved," says Thomas Rubin, a consultant for the district's bond oversight committee, which oversees the $20 billion of bonds that taxpayers approved for school construction in recent years.  I asked Mr. Rubin whether some of the school's grandiose features—like florid murals of Robert F. Kennedy—were worth the cost. "Did we have to do that? Hell no. But there's no accounting for taste," he responded.

The Kennedy complex is Exhibit A in the district's profligate 131-school building binge. Exhibit B is the district's Visual and Performing Arts High School, which was originally budgeted at $70 million but was later upgraded into a sci-fi architectural masterpiece that cost $232 million.


Even more striking is Exhibit C, the Edward Roybal Learning Center in the Westlake area, which was budgeted at $110 million until costs skyrocketed midway through construction when contractors discovered underground methane gas and a fault line. Eventual cost: $377 million.

If you find this unaccountable spending outrageous you may ask yourself how this can occur. The answer is in this paragraph from the above article:

Expect more such over-the-top and inefficient building projects in the future. Los Angeles voters have approved over $20 billion of bonds since 1997 and state voters have chipped in another $4.4 billion of matching funds. Roughly a third of the cost of the Kennedy complex will be shouldered by state taxpayers.

This is the recipe that government has found so effective. Place a referendum on a ballot that asks voters to approve more government spending.

Giving money and power to government is like giving whiskey and car keys to teenage boys.

Just say no to government spending.

Increased tax revenue leads to increased spending

Recently there has been much discussion about enacting a Value Added Tax in the USA. Experience in the real world shows us that this new tax will solve nothing. The following article from Investor’s Business Daily examines this subject:

http://www.investors.com/NewsAndAnalysis/Article/545596/201008311833/If-VAT-Is-Rx-For-Deficits-And-Debt-Why-Are-VAT-Users-On-The-Brink-.htm

The moral of this story is summed up in this paragraph:

The Organization for Economic Co-Operation and Development reported that since the 1960s, when the VAT began to be widely adopted, government spending by OECD member countries with a VAT soared from 30% of their GDP to 50%. Governments tend to spend all available revenue, and then some.

Just say no to raising taxes.