Those are words you will never hear in Washington because, from what I gather, they have no idea how a calculator actually works. I just started reviewing this new bill, you know, the one so popular that the phone lines to Congress were jammed all week long, and it does not add up. I shouldn’t say that it does not add up, I should say that the assumptions are ridiculous.
They decided the best way to go was to raise the Medicare tax “only” on individuals making over $200,000 a year and couples making over $250,000 a year. The income tax increase is .9% for the Medicare tax, this will be in addition to the other coming tax hikes coming at the end of this year, and there is now an unearned income Medicare tax. So, if you make a lot of money and have dividends or interest you will have to pay an additional 3.8% tax on those investments, so much for investors buying dividends stocks.
Here is the problem, the Democrats claim this tax hike will raise $210B paying for roughly 20% of this bill. Are these people for real? Why would investors hold income producing investments if they will lose 3.8% on the interest earned? They will not because they will buy a variable annuity or growth stocks that pay nothing in dividends. That blows that $210B figure right out of the water, but the Medicare income tax hike is hard to get around. Unless you can control how much you are getting paid you will have to pay that tax, but it will surely have repercussions.
For the first time ever we have an administration who is going to impose one of the largest tax increases on Americans during a recession. I take that back, this did happen twice before, the 1930’s and the 1970’s and both decades were terrible. I can hear many of you now, it is only on the rich! Well, I got news for you first, there has never been one estimate from Congress on taxation, revenue generated and cost that has ever been right. Second, there is no way that only people making over $299K a year can pay for this program, it is impossible. That $200K number will trickle down to, my guess at least, to the sweet spot of $150K for individuals and $175K for couples which is a lot of people I might add.
Insanity does not begin to describe what is happening right now. I mean, sure the President signed an $18b jobs bill today and is about to urge the passing of a trillion dollar spending bill, do you see something wrong with that? It is a bit disproportionate and, frankly, right now the country needs jobs. At this point I just hope we have a real up or down vote on this bill so we know where our Congressional member stands and we do not go through with this sneaky backdoor deemed to pass vote.
I cannot wait to read the full bill, but, unfortunately, I will not have time until well after it is passed. I do know that ultimately this is bad news for all of the country because it was not put together properly. All the people wanted was for Congress to start over and do this the right way, no one is in the “do nothing camp.” Unfortunately, that is not to be and we are on the verge of expanding upon already existing failed programs. Essentially, it is like taking Medicare, which is almost broke, and giving it to everyone, good idea! Actually, that is Alan Greyson’s idea right now, Medicare for all is what he says, but, as most lawyers are, he is illiterate to just how ugly the balance sheet of the government or Medicare really is. Good luck!
As I conduct my regular daily readings of various blogs and news sites I cannot help to get a very uneasy feeling brewing out there. The negativity is running very high in the political realm and from those who report on economic events. I keep seeing tag lines like; “expect more social unrest” when people report on things like the Berkley protests, which are disturbingly violent I might add. When I hit my favorite Libertarian blogs the feeling is more uneasy as I keep seeing words like revolution being used.
When you add in the Washington factor where our elected leaders are going to hammer unpopular legislation through, with no compromise, it makes me even more uneasy. There is no doubt that we need to make painful decisions in order to get our fiscal house in order, but that usually means less spending, not more. Unfortunately, our current political leaders do not see it that way and are hammering through more spending, in particular the health care reform bill. Look, I know we need to do something, but not this. Deducting money from Medicare and then adding it back in to other areas is not rational, this bill is not paid for and will make costs rise not fall.
Regardless, people are not happy about unpopular legislation being thrown down their thoughts. The kicker is that people like Nancy Pelosi come out and say that programs like Social Security and Medicare were unpopular when they were enacted. I guess what she means is that politicians know what is best for Americans and we should keep our mouths shut. We all know how right politicians are their track record speaks for itself just look at the stellar decisions they made over the last 10 years. Iraq was a great decision, the prescription drug coverage was fantastic (albeit unpaid for), the PATRIOT Act was a winner, free speech zones were fantastic, how many stimulus bills did we have again – they worked out well, eliminating a paper trail for voting is a sure disaster waiting to happen, and need I go on?
Politicians do not know what is good for Americans, they know what is good for them and getting reelected. Well, they did used to know how to get elected until now. If they pass this next unpopular batch of legislative nightmare on the docket they are in for a rude awakening come November because the people are coming for them. My only hope is that people come for them at the polls and not in any other way. Based on what I have read combined with the recent plane crash in Texas into the IRS building I think we might see more people going out to make a statement. Meaning, some nut job will more than likely blow something up or worse.
Who knows what will happen in the future, but we know that the average person feels left out right now. Wall Street got their massive bonuses and, for them, nothing really changed with the exception of having to play defense in the media. At the end of the day, the average person knows they got nothing over the past 2 years except for a higher future tax bill and, maybe, they got to keep their job, but we know about 20% of Americans were not so lucky as they are either unemployed or underemployed. Wall Street though, they are fine. Washington, well, they are doing OK as well as campaign contributions, from Wall Street, are still coming in and many have received raises. Clearly, there is a double standard and John Edwards was completely right when he said there are 2 Americas.
Discontent is here and that discontent could become a powder keg if not rectified. The unfortunate thing is I do not see how the public can be pacified, especially as this thing we are in deepens as we are now seeing. Things could get ugly and politicians need to figure out that they are representing the people and start acting that way. It is beyond me how they cannot see that Americans view them as being on the wrong path, but, again, that is politics and they will be surprised if they get voted out in November.
There is good news and bad news to this mess. The good news is it is almost over and the bad news is that is it is almost over. No matter what side of the fence you are on the one thing I can assure you of is that it is going to pass tomorrow morning. Even though I can also assure you that it is a budget buster, see the Republican CBO inquiry today for proof, and you should all know by now that the CBO is garbage in, garbage out group. What I mean is that if you feed it the sequence of data you want results for you are certain to get the desired results you want.
The real unbiased results were from the actuary that submitted his results a couple weeks ago, sorry, but actuaries know insurance and are key to determining costs, risks and results. His report shows that the costs for premiums will go sky high, I guarantee that to be the case as well, I know a thing or two about insurance as well. Basically, we have lawyers writing a bill that is math intensive and that is a major mistake, for proof look at Medicare deficits, Social Security, National Flood Insurance or any other government run program. For those who think this bill will reduce health insurance premiums ask yourself this one question, how can it is they did not take out the federal anti-trust exemption for insurance companies?
Seriously, without taking out that one exemption it is next to impossible to lower insurance premiums because it restricts citizens from buying policies across state lines. That means that insurers who have a lock on some states will still have a lock on those states, give me a break. Not only that, but now these same insurers must add millions of sick people to the roles and cannot charge them higher premiums, specifically, so that means all of our premiums will go up. This bill is the greatest gift to the insurance industry ever created. The only government gift to the private industry that was better, and it was not even close, was the no bid contracts to Halliburton under Bush. If this thing passes, buy insurance companies because for the first time in history the Federal government will mandate that citizens will be forced to buy a product from private companies to the tune of a trillion dollars over the next 10 years, give or take a few billion.
Because premiums will go sky high and our brilliant elected officials are incapable of doing simple math the subsidized premiums we will have to pay will blow those sweet deficit reducing estimates right out of the water within 3 to 4 years. If the administration and Congress decided to work with the industry, people like me who are truly impartial, they could have built a real reform bill, but since they think they know everything they have just put the final nail in the coffin of the US, from a fiscal point of view. Medicare will be insolvent or eliminated much faster than currently projected and the budget deficits will be through the roof by 2016 as the new taxes make people rethink how much money they want to earn. Oh, I am also assuming that we are actually in a recovery I might add, but if we are not in a real recovery, which the housing numbers today shows that without government help we are still in trouble, then the trouble comes much earlier.
What is that you say, AARP and the AMA support this bill so it must be OK? Let me tell you something about those organizations, in my opinion, they would sell their grand kids for an extra dollar and I am not kidding. AARP had a Medicare Advantage plan that they endorsed pulled from the market because it was so bad. They endorsed the product, it got pulled from the market and I can assure you that Medicare Advantage contract was a lot shorter than 2,100 pages long so it is highly unlikely they even know what is in the health care reform bill, but they know they can profit from it somehow. They hate variable annuity contracts, but love immediate annuity contracts because they have a GA contract with NY Life. Basically, if they can profit from it they will endorse it, period.
The AMA, who knows what they see in it except that they probably think they will get a permanent Doc Fix Bill passed or they like the idea of mandatory private insurance much better than a public option. Let’s face it, $26 per office visit from Medicare must stink versus the $50 or $90 per visit from private insurance. If you combine that an additional 30M new patients, or 40M depending who you listen to or where you get your uninsured number from, that equals some major money for the AMA and its members.
Clearly, this whole bill revolves around money for everyone. Everyone who loves it is getting paid big time to endorse it or vote for it. However, you, the person who pays for everything, is not in favor of this bill according to every poll conducted. I wonder why you are not in favor of it? Maybe because you know your Congress person is receiving tons of money from special interest groups to push things through, check opensecrets.org to see, or that Bernie Sanders, a socialist, sold out for $10B, way to be a socialist, Ben Nelson sold out for less, and of course we have the Louisiana Purchase take II. However, you have to pay your taxes plus the health insurance premiums and Congress wonders why you don’t want this thing, incredible.
What I find interesting is that New York, who is on the verge of bankruptcy, should have held out against this thing. Where was Schumer and Gillibrand on this? Why didn’t they say no way on this bill and get out Medicaid paid for? It work for Ben Nelson and Bernie I am sure it would have worked for NY. Oh yeah, Chuck was busy making the media rounds and calling flight attendants “bitch” instead of doing is fiduciary responsibility to his home state. I dislike the Republicans, I mean abortion that is the best defense against this thing you can come up with, however I agree with them that this bill is the train wreck of the century. Why is China moving towards capitalism, but the US appears to be moving towards socialism?
Clearly socialism did not and does not work, but here we are. For those who want the socialist lifestyle I urge you to seek out the countries that live under those types of regimes. I admit the US has problems, nothing is perfect, but here is the thing most countries want what we have, not the other way around. We could fix health care the right way if we took our time and did things in the open, as Obama promised he would do, but that never happened. Instead we decided to use a sledge hammer to itch our nose and it is not going to end well. Unfortunately it will take 4 years for me to be proven correct.
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