Economics Archives

It’s milestone time! Episode 100 of the Consider This Podcast has been released; conservative commentary in 10 minutes or less. (OK, but since this is a special occasion, that time limit has gone out the window.)

Well, I made it all the way to episode 100! If you’ve been listening, thanks so much. If you haven’t, might as well start now.

I start out the show with greetings and feedback from listeners. Yes, there are people out there actually listening to this, and I appreciate it very much.

Then we take a trip back to Camelot, as Mark Twain’s character did in “A Connecticut Yankee in King Arthur’s Court”. In that book, there is a short chapter about … economics. No, really. And it’s trying to teach a lesson that, over a hundred years later, we’re still having to relearn.

Let me know your thoughts on these or other subjects. Click on the link for the show notes and ways to send your feedback, including calling 267-CALL-CT-0 (267-225-5280) or emailing considerthis@ctpodcasting.com. Subscribe to the podcast in iTunesStitcherBlubrry, or Player.fm.

    (This is part of the script for the latest episode of my podcast, “Consider This!”. You can listen to it on the website, or subscribe to it in iTunes, Stitcher Radio, Blubrry, Player.fm, or the podcast app of your choice.)

    Sometimes people ask what the real difference is between the Republicans and Democrats, and sometimes, for certain issues, I’m inclined to agree; not much. However, when it comes to promoting economic growth, there’s certainly a trend that favors one over the other.

    It’s been said that the states are the laboratories of American democracy. Though more and more autonomy has been taken from them by the federal government, there is still enough that one can look across the country from sea to shining sea and see what works and what doesn’t. So what has the government’s Bureau of Economic Analysis told us about the year 2013?

    Here were the top 10 states in GDP growth:

    • North Dakota — 9.7 percent
    • Wyoming — 7.6 percent
    • West Virginia — 5.1 percent
    • Oklahoma — 4.2 percent
    • Idaho — 4.1 percent
    • Colorado — 3.8 percent
    • Utah — 3.8 percent
    • Texas — 3.7 percent
    • South Dakota — 3.1 percent
    • Nebraska — 3.0 percent

    This was all while the nation’s GDP growth was just 1.8 percent. Tom Blumer writing at the NewsBusters website noted that only Colorado and West Virginia could be considered something other than deep-red states — and despite having several prominent Democrats in statewide and national office, they both arguably lean red.

    And let’s not forget, as I covered back in February, that Wisconsin, under Republican Governor Scott Walker, went from running a deficit to a $1 billion surplus by cutting taxes.

    In all of this, you’d think that someone would have predicted such an economic outcome from these policies. Oh wait, they did, and those people are called “conservatives”. So if you indeed see what works and what doesn’t, and still ignore it, you might be a Democrat.

      More Money for Medicare?

      One of the alternatives to ObamaCare that the Left suggested is that Medicare should just be expanded to cover everyone. It “worked”, so they said, and thus that would be a simpler way to get health care coverage expanded.

      But an investigation by the inspector general of the Department of Health and Human Services said that the program spent $6.7 billion (with a “b”) too much for office visits and other services. And that’s just in 2010; just one year’s worth of fraud, abuse and/or incompetence.

      We keep hearing about how this politician or another wants to save the government and the taxpayer money by eliminating this kind of waste, but it never happens. Here’s one reason why. The Centers for Medicare and Medicaid Services, which runs Medicare, said it doesn’t plan to review the excess billing payments that account for this because it isn’t cost-effective to do so. Essentially what they’re saying is that it would cost more than $6.7 billion to save that $6.7 billion. Really? Is…is that job opening available? Because if it is, I think I could do it for half that cash. Or, at least I’d like to try.

      See, this is a prime example of the problems of big government. It can waste billions – billions – and then claim that it’s not cost effective to deal with the waste. And then the recipients of that fraud have nothing to worry about. Their scam is safe within the walls of a massive bureaucracy. Oh sure, it’s helping the poor and elderly, but really, is there no way at all for that to happen without flushing away billions every year? Really?

      This is also a prime example of what happens to centralized government programs. They become bigger and costlier, and, as Ronald Reagan observed, they wind up being the closest thing to eternal life we’ll see this side of heaven. They are a power unto themselves, and any attempt to rein them in has to deal with that inertia, not to mention that, as I said earlier, any attempt to curb such waste gets those attempting it the injustice of being considered hateful, racist, and whatever else the Left can come up with today.

      There’s a trend here on the issue of big government programs, both in the money they cost, and the way they’re defended in spite of their results. And yet, we just keep adding to their numbers. If one definition of insanity is doing the same thing over and over but expecting different results, it’s time to have the government committed.

      It has been a tenet of the Left that government can be a force for good, and no one’s really denying that. It’s just that there are places for it, and places where it shouldn’t be, and if you overextend government’s reach, prepare for these very consequences. The Constitution was written to keep those kinds of folks in check. Unfortunately, there’s not been enough pushback, and now too many Americans expect this sort of overreach, but they want others to pay for it.

        More Money for the VA?

        (This is part of the transcript of my latest podcast episode, "Consider This!")

        In an opinion piece at the Huffington Post by H. A. Goodman, he argues that Republicans have been complaining about how bad the VA is, but hypocritically voted against a bill for various funding for the VA back in January.

        Here’s a problem with that, and it’s not something you’ll hear on most newscasts. For the last 5 years, the VA has not spent its full health care budget; as much as $1.163 billion extra to as “little” as $450 million in medical-care funding from this past fiscal year. And still vets have been waiting too long for care, some paying with their lives. Clearly, clearly, throwing more money at the problem has done nothing whatsoever to fix it.

        The Republicans, back in January, said that if the huge catch-all bill were split up into separate bills, there were plenty of items they would vote for. The issue was fiscal responsibility. Democrats, on the other hand, really do have the mindset that enough greenbacks will solve any problem, especially if the problem is one that makes liberalism look bad. And the single-payer VA medical system absolutely fits that particular bill. Creating a single source of a particular product or service (in this case, health care) inevitably leads to scarcity (in this case, waiting lines). If vets could choose any hospital they wanted, and if the government still picked up the tab, would we have this problem? No. But this would be an indictment of a system that Democrats want to see implemented all over, and so it cannot be seen to fail.

        Remember this when Democrats like Mr. Goodman accuse Republicans of “hating the poor” or of being “racist” because they don’t want to throw more money at programs that are similarly flawed. Since the mid 60s, when the “War on Poverty” began, the poverty rate has been bouncing around between 10 and 15% of the population. Nothing has changed. Prior to that, the poverty rate had been steadily decreasing, from 30% in 1950 to 15% when we went to war on it. We were gaining ground, but since “going to war”, it’s been nothing but a stalemate, even though the programs have been costlier every year. But just look askance at the programs, just try to reign in some of that continue rise in cost, and you get accused of all manner of hate and villainy. For nearly half a century we’ve been pouring more and more money into it, just like the VA. And, just like the VA, it is not doing what it is supposed to be doing, or doing it incredibly inefficiently.

        But if you want to change the flat tire and try to get things done better, you’re accused of hating the car. The flat’s got us this far, it can go further, right?

          Piecemeal vs. Overhaul

          Part of ObamaCare was the PCIP, the Pre-Existing Condition Insurance Plan. John Lott notes that, at its height, at the beginning of 2013, there were 115,000 enrolled in it. So one big selling point seems to be working.

          Except that dealing with something like this on its own would have been cheaper and less disruptive of the entire health insurance industry. Clayton Cramer did the math, and if you gave those people $20,000 per year to subsidize their insurance premiums, it would cost $2.3 billion. Now, that’s a lot of money anyway, but doing it that way would also allow millions of people to keep their plan if they liked their plan; just one example of the disruption that was caused instead.

          Again I note that Republicans did have their own solutions to the health care problems, but Democrats insisted that the whole industry had to be upended in order to fix it. We’re finding out just how wrong that was. We are. Seems they aren’t.

            ObamaCare “Savings”

            In spite of all its rollout issues, the glitches, the delays and the special privileges, the promise of ObamaCare was that, in getting more people, mostly the young and the poor, insured, that would spread out the risk and make insurance cheaper overall, even with those subsidies. By how much? Well, there were promises made, over and over.

            Now, in some of those cases he did say “up to” $2500 dollars. And since 0 is technically on the way up to 2500, if you didn’t save anything, he can count you as a promise kept, just like anyone else trying to sell you something on TV. However, what about these folks?

            A recent survey of 148 insurance brokers shows that ObamaCare is sending premiums rising at the fastest clip in decades.

            “For the last, about, five years they’ve been doing this survey, so this was the largest percentage increase in any quarter since they’ve been doing (it),” said Scott Gottlieb of the American Enterprise Institute.

            “But at 12 percent, 11 percent increase on average across all the states — that puts it at the upper end of any increase we’ve seen for decades.”

            I don’t think that “truth in advertising” laws would allow you to claim that saving negative dollars is somewhere “up to” $2500. Now, are some people saving that much? I’ll stipulate to that, but in general, on average, this is costing the American people more, not less.

            And for some states, it’s really bad. Premiums in Pennsylvania went up 28 percent. In Florida, up 37%. In California, up 53%. And those in Delaware have had to deal with a 100% increase in premiums.

            Oh, and this isn’t considering the higher deductibles. That’s just as much a cost as the premium. And the Congressional Budget Office projects that the premiums of the ObamaCare plans are going to continue to rise.

            Of course, those paying the penalty are saving loads of cash. That defeats the purpose, but hey, savings are savings, right?

              Hollywood "Tea Partiers" (Sort of)

              “A conservative is a liberal who’s been mugged by reality”, so the cliché goes. Well, if only it were that easy. Usually, they stay liberal.

              Take Hollywood, please. This bastion of liberalism is now trying to get lower taxes to bring business back to California. Turns out that high tax rates have been pushing filmmakers out of the Golden State, into other states that don’t take as much of your gold.

              The result is job loss there, and gains in states like Louisiana and North Carolina, with more business-friendly policies. The group Film Works has started a petition to have taxes cut on the filmmaking industry to bring back those jobs and economic development.

              Now let’s see; high taxes push out business, and the solution is to cut taxes in order to jump start the economy and bring jobs back. If I didn’t know better, I’d say these folks were prime candidates for inclusion in the Tea Party. But of course, I do know better. One would hope that, seeing this economic reality mugging them, these Hollywood liberals would realize that this works for other industries, or the state as a whole. One would hope.

              But hold not thy breath.

                Since I know there are some folks who deny that ObamaCare is impacting workers’ hours, here’s a NY Times article that notes that even the public sector is feeling the pinch already.

                Cities, counties, public schools and community colleges around the country have limited or reduced the work hours of part-time employees to avoid having to provide them with health insurance under the Affordable Care Act, state and local officials say.

                The cuts to public sector employment, which has failed to rebound since the recession, could serve as a powerful political weapon for Republican critics of the health care law, who claim that it is creating a drain on the economy.

                President Obama has twice delayed enforcement of the health care law’s employer mandate, which would subject larger employers to tax penalties if they do not offer insurance coverage to employees who work at least 30 hours a week, on average. But many public employers have already adopted policies, laws or regulations to make sure workers stay under that threshold.

                Harry Reid recently claimed, ”There’s plenty of horror stories being told [about Obamacare],” Reid said. “All of them are untrue.” Tell that to the workers of this country, Harry.

                  "Doc Shock" Occurs As Predicted

                  As predicted, that is, by Megan McArdle:

                  In December, I predicted that “doc shock” was going to be a major problem for the U.S. health-care overhaul, as people found out that the narrow networks insurers use to keep premiums low often don’t cover the top-notch doctors you’d like to see if you get really sick:

                  And indeed, it’s already started, according to the Wall Street Journal:

                  Health-care wonks can insist that narrow networks aren’t news, but clearly, these networks are news to the folks in the plans — and now that they know, they aren’t happy.

                  Read the whole thing. They’re trying to fix this by passing laws, but that’s been done before with the whole HMO thing years ago. The result was costs continuing to rise.

                    How Did Wisconsin Run a $1 Billion Surplus?

                    Scott Walker, the governor of the state of Wisconsin, survived a recall effort by unions in his state. I’d hope, though I wouldn’t bet, that they are glad that effort failed.

                    Because since then, he and the Republicans in his state legislature, have been busy cutting taxes and balancing their budget. The result has been that, over 3 years, they’ve cut taxes by about a billion and a half dollars, and the economy is chugging along a good clip, such that just this year they have almost a billion dollar surplus.

                    We ought to be asking our federal government to look at this. How did they do it? Let’s listen to Governor Walker describe it.

                    http://www.youtube.com/watch?v=IuzZRgEAw1k

                    Tough decisions, predicted by his detractors to destroy the economy, instead turned the economy around, gave them a surplus, more in their rainy-day fund, and which will be returned to the people instead of turned into a slush fund.

                    Now, you might not have heard about this from your typical media sources. A Republican governor, hated by the unions, putting conservative policies into place, with the result being a booming economy, just doesn’t fit the narrative. And when it comes time to vote again in Wisconsin, I hope the people there remember who fixed their economy, and who opposed those very policies.

                    Heck, I hope the rest of the country remembers that, if they get to hear about it. A state that generated a billion dollar surplus without mortgaging their future is a model that Washington, DC should be following. If they really cared about the economy.

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