Archive for March, 2010

USA Marxism 100+yrs Old

Wednesday, March 31st, 2010

 Marxist is as Marxist Does     by Henry Lamb  March 27, 2010

People who believe that health care is a right instead of a privilege embrace a fundamental principle of Marxism. This philosophy is built on the idea that workers are the source of productivity and must not be exploited by kings or capitalists; that workers must control their own destiny. This is the foundation of socialism. The Democrat Socialists of America admit that:  

We are not a separate party. Like our friends and allies in the feminist, labor, civil rights, religious and community-organizing movements, many of us have been active in the Democratic Party. We work with those movements to strengthen the party’s left wing, represented by the Congressional Progressive Caucus. 

This belief system, articulated eloquently by Karl Marx and Friedrich Engels in their Communist Manifesto, envisions the perfect society to be one in which everyone shares equally in work and wealth, coordinated by a hierarchy of representatives chosen from the workers. The Democratic Party considers its leaders to be that hierarchy, empowered to do whatever it takes to redistribute society’s wealth more equitably.  

Despite the ridicule and denials that spew forth from the Democrats, the enactment of Obamacare is a victory for Marxism in the United States, recognized and publicly acknowledged by Al Sharpton. What Democrats have done is absolutely consistent with Marxism; the way it was done provides a course in this Marxist principle: The end justifies the means.  

Marxists, Socialists, Communists and Democrats have been trying for most of the century to advance a Marxist agenda. Woodrow Wilson implemented two major Marxist principles: the central bank and the income tax.  

Germany, in particular, and Europe in general, were much more successful in advancing a Marxist agenda, including universal health care. The influence of Marx and Engels, and other collectivists, was much greater in Europe than in the United States early in the 20th century.  

Franklin Roosevelt pushed the Marxist agenda quite hard and was partially successful.  Social Security, enacted in 1935, was a major step. While the goal of creating a mechanism to ensure that senior citizens had  retirement income was laudable, the Marxist notion that government could do it better than free enterprise condemned the program to constant shortfalls, ever-increasing taxes and eventual failure. How much better would it be now, if Congress in 1935 had chosen to simply allow the creation of individual retirement accounts in which untaxed principle and interest would be the property of the citizen for use afterretirement?  

Roosevelt and the Democrats believed the time was right in 1943 to introduce the first real legislation to create a universal health-care system. A bill, known as the Wagner-Murray-Dingell Bill (H.R. 2861), launched a congressional debate that continued until the 1964 election of Lyndon Johnson. He brought an overwhelming majority of Democrats to Washington: 66 to 34 in the Senate and 295 to 140 in the House.  

Medicare and Medicaid were highlights of his “Great Society” in 1965. Originally, the plan cost each beneficiary $3 per month. In 2009, Medicare Part A cost 2.9 percent of payroll, and Part B cost $96.40 per month. This program, combined with Social Security shortfalls, faces unfunded liabilities totaling $106.8 trillion – that’s TRILLION with a capital T. The Congressional Budget Office estimates that to meet this liability, the range of income-tax rates will have to increase from the current 10 to 35 percent, to 26 to 92 percent.  

Marxists, Socialists, Communists and Democrats are unfazed by this reality. They believe it is their moral duty to take whatever is necessary from the rich, to give to the poor whatever they consider to be a civil right. Like Marxists around the world, Democrats have always believed that universal health care is a right, not a privilege. Just as the cost of Social Security and Medicare and Medicaid have exploded way beyond the projections promised at the time of enactment, the real cost of Obamacare will make a mockery of the published estimates. Democrats couldn’t care less because, like all Marxists, they believe in the second principle from the Communist Manifesto: that government should impose “a heavy progressive or graduated income tax” to pay the costs of their agenda.  

The Marxist agenda being advanced by the current Washington majority will not stop with Obamacare. Another principle from the Manifesto is the “centralization of the means of communication and transportation in the hands of the state.” The new push to create a federal ID card is the means toward controlling transportation, and Obama’s choice for the FCC diversity czar, Mark Lloyd, is on the record supporting the Marxist principle of government-controlled communications.  

The first principle of the Communist Manifesto, the abolition of private property, has been high on the Democrats’ priority list for most of the century. They continue to use tax dollars to buy private property when necessary, take it whenever possible, or control it through regulations when all else fails.  

Passage of Obamacare is the most dramatic step forward for the Marxist agenda in more than a generation. It must be undone. The U.S. Constitution does not authorize the federal government to force people to purchase insurance – unless the people allow it. The people must not allow it. This Marxist agenda must be stopped, and the only way to stop it is to remove the Marxist advocates from Congress and the White House.

Henry Lamb is the author of “The Rise of Global Governance,” chairman of Sovereignty International and founder of the Environmental Conservation Organization (ECO) and Freedom21 Inc.

Do You Think It All Started With Obama?

Tuesday, March 30th, 2010

Stealing Capitalism: The Crime of the CenturyBy Jill S. Sprik March 28, 2010

It’s been 105 years since a clandestine plot was hatched to purloin America’s capitalist system and replace it with socialism. Most of us were unaware of what was taking place right under our naïve noses, but recent events have now made it clear. Here’s how it happened:

Autumn of 1905 was chock-full of historic people and events. Teddy Roosevelt was president. His cousins Franklin and Eleanor were settling down as newlyweds in New York. Novelist Upton Sinclair had recently published his infamous novel The Jungle in serial form. 

A young baseball player named Ty Cobb was enjoying his rookie year, and inventor Orville Wright was recovering from a recent airplane crash. The science community was atwitter with talk of new physics theories just published by a 26-year old nobody named Einstein. 

The U.S. population was around 83 million people. Fifteen million of them had a bathtub; six million had a telephone, and fifty of them were about to embark on a plan to replace American capitalism with Marxist socialism. 

On September 12, 1905, a group of community organizers assembled in the loft of Peck’s restaurant in New York City. Among those in attendance were Upton Sinclair, Jack London, John Dewey, Clarence Darrow, Mary “Mother” Jones, and Walter Lippman.

They named their group the Intercollegiate Socialist Society (I.S.S.). Governing and membership rules were established. Officers were chosen and goals were identified:

1. Promote an intelligent interest in Socialism among college men and women [1];
2. Familiarize students with the inherent evils of American economic and social system based on laissez-faire policies [2];
3. Promote the establishment of a socialist order [2]. 

The I.S.S. determined to achieve its goals in three ways: organize I.S.S. chapters on college campuses; graduate socialist adherents into society; and permeate labor unions, schools, and government with their followers. 

Initial efforts met with resistance, as socialism was despised in America at this time. But with persistence and occasional obfuscation, I.S.S. chapters were soon formed at Harvard, Columbia, and Princeton, and by 1917, there were 61 college campus chapters and twelve alumni groups. 

At about the same time the Intercollegiate Socialist Society was organized, the Rand School of Social Science opened for business in New York City. The school was funded primarily by the British Fabians. Various Intercollegiate Socialist Society officers were also on the board of the Rand School, whose purpose aligned with that of the I.S.S.:

The school had a very definite object — that of providing an auxiliary or specialized agency to serve the Socialist and Trade Union Movement of the United States in an educational capacity … to offer training along the lines calculated to make them more efficient workers for the Cause.  [3] 

As they were expanding their reach through college campuses and the Rand School, I.S.S. members were also busy building other organizations to advance their cause. The Industrial Workers of the World, the National Association for the Advancement of Colored People, the American Civil Liberties Union, the New Republic magazine, and multiple teachers’ unions were all founded by Society members. And in 1919, this tireless group launched yet another weapon against our economic system: The New School for Social Research.  

Although their membership numbers were increasing, in 1921, the I.S.S. encountered a publicity problem. The recent Bolshevik Revolution had moved Russia from aristocracy to socialism, where it teetered briefly before falling into communism. Consequently, American sentiment toward socialism was increasingly hostile. It was time for the Intercollegiate Socialist Society to heed the advice that their comrade, ACLU founder Roger Baldwin, had once given:

Do steer away from making it look like a Socialist enterprise. …We want also to look [like] patriots in everything we do. We want to get a good lot of flags, talk a good deal about the Constitution and what our forefathers wanted to make of this country, and to show that we are really the folks that really stand for the spirit of our institutions.  

Consequently, they changed their name to the League for Industrial Democracy (L.I.D.) and articulated a new goal: “education for a new social order based on production for use and not for profit.” The work of the L.I.D. moved forward, now with an emphasis on reaching the general public with their message. 

Sixteen years of effort had by this time produced socialist sympathizers employed in all facets of society — government in particular. Ironically, the more socialist thinking wormed its way into the economic policy, the more the economy was dragged down, making capitalism look like a flawed system. And the more capitalism looked like a flawed system, the more appealing the utopian vision of socialism became. With these factors in play and without organized resistance, rapid expansion of the socialist movement from 1921 to the present was almost inevitable; its tentacles were and are everywhere.

The drumbeat of capitalist criticism has now been going for over a century. This economic structure of opportunity has been repeatedly portrayed as a system which is oppressive, when in reality it is socialism that results in true oppression. This oppression appears to have been an ulterior motive of the movement all along, as evidenced by this revealing quote from an address given in 1903 by General Education Board President Frederick T. Gates:

In our dream, we have limitless resources, and the people yield themselves with perfect docility to our molding hand. The present educational conventions fade from our minds; and, unhampered by tradition, we work our own good will upon a grateful and responsive rural folk [4]. 

Do Americans really want a system where the powers that be can “work their good will” on us? Do those who have unknowingly bought into to this century-old power-play comprehend the hoax being played on them? Unless we who see through this scheme can passionately persuade our fellow citizens about the merits of our maligned capitalist system and the underlying motives for eliminating it, our fight to sustain the Republic might be a losing effort. 

Let me take you back to 1905 again and tell you the story of someone who did practice that kind of passionate persuasion. On February 5 of that year, Alisa Rosenbaum was born in Saint Petersburg, Russia. At the innocent age of 12, she witnessed the horrors of the Bolshevik Revolution, and her family experienced difficult communist persecution. In 1926, she left her homeland for the freedom of America. 

After a brief stay in New York City, Ms. Rosenbaum moved to Hollywood, where she became a screenwriter, playwright, and novelist. This Russian woman went on to become one of America’s staunchest opponents of socialism and outspoken advocates of capitalism, and her influence continues through her books and through a website dedicated to her work.  

This is the kind of passionate persuasion for which we need to strive before it’s too late. By the way, perhaps you know Ms. Rosenbaum better by her American name — Atlas Shrugged author Ayn Rand.

Notes:[1] p. 1, The Turning of the Tides, 1962, Long House Publishing, Paul W. Shafer, John
Howland Snow
[2] The Life and Mind of John Dewey. Dykhuizen, George (1973). Carbondale: Southern Illinois
[3] The American Labor Year Book, 1916. New York: Rand School of Social Science,[1916]; pg. 151.
[4] The Country School of Tomorrow. The Board. Occasional Papers, No. 127 Comments on “Stealing Capitalism: The Crime of the Century

Vladimir Lenin: “Socialized Medicine”

Wednesday, March 24th, 2010

Vladimir Lenin:   “Socialized Medicine is the Keystone to the Arch of the Socialist State.” 

….In 1927 American socialist Norman Thomas, six times candidate for president on the Socialist Party ticket, said the American people would never vote for socialism. But he said under the name of liberalism, the American people would adopt every fragment of the socialist program…  ….One of the traditional methods of imposing statism or socialism on a people has been by way of medicine. It’s very easy to disguise a medical program as a humanitarian project 

….Now, the American people, if you put it to them about socialized medicine and gave them a chance to choose, would unhesitatingly vote against it.

Nationalization: Today Your HealthCare, Tomorrow Your Retirement

Tuesday, March 23rd, 2010

Whiskey & Gunpowder March 23, 2010 by Ron Holland 

“There are more instances of the abridgement of the freedom of the people by the gradual and silent encroachment of those in power, than by violent and sudden usurpation.”    

— President James Madison  

As the United States travels down the long road from the first limited government republic model of our Patriot Founding Fathers to a Washington style form of fascist national socialism, both health insurance and our private retirement system will eventually be nationalized and much of our retirement wealth confiscated all in the name of protecting us. But in a democracy, unlike total fascist and communist systems, great pillage and wealth attacks by government does not happen overnight like Kristallnacht in Nazi Germany against Jewish wealth and property. The same can be said for Stalin’s starvation of the Ukraine and forced collectivization and confiscation of all private property and farms. By necessity in a democracy, it is a slow, incremental step-by-step process and this provides the means for American investors to protect and defend their retirement assets.
There is little chance to stop the coming health and retirement plan nationalization because both systems certainly don’t work for the benefit of most Americans. The needs of the American people have been circumvented by the politicians of both parties.  The legal system and the greed of Wall Street and the American insurance industry due to their special interest control of Congress. Only a fool would say either the health or retirement system works well or that they represent the best of free-market capitalism. Both industries are simply regulated monopoly interests and the GOP propaganda to the contrary is self-serving rather than a real attempt to fix the problems.
Because of public opinion and the risk of voter outrage like we see today with the Tea Party movement and Ron Paul’s Campaign For Liberty, the ultimate wealth confiscation goal is the same in our special interest controlled debt democracy as in a totalitarian system but the confiscation time frame is far longer. The population must first be prepared and a number of real or contrived crises must follow to give the excuse for incremental government actions over a number of years.
But Will Americans Never Learn?  
Fool me once, shame on you. Fool me twice, shame on you.
For example, the income tax began in 1913 with taxes starting at around 1% of income on an equivalent income of around $65,000 in today’s dollars. The graduated tax rate went up to 6% on annual incomes over $10 million.
 Social Security started in 1935 with a 1% tax on the employee and employer and only half the workers were covered at inception. Roosevelt promised the funds would go into an independent trust fund rather than the General Operating Funds of the government. Oh and yes, your Social Security benefits were originally not considered taxable income to recipients.
The Federal Reserve was created in 1913 and promised to promote economic stability and stable prices. The Great Depression followed in 1929 as did Franklin Roosevelt’s confiscation of the entire private supply of gold in the United States. The stated goal was stable prices and low inflation. But check out the graph below and see the actual results of the Federal Reserve System and don’t forget we are now in the middle of the greatest financial crisis since the Great Depression.  More Incremental Theft  The coming retirement trap I write about in “Get Ready For the Obama Retirement Trap” and the new mandatory retirement system proposed by the Obama Administration known as the “automatic IRA” is just more Washington theft. It is the same for the eventual nationalization and confiscation of the majority of retirement benefits from successful Americans as their funds are forced into breach of a flood tide of forced liquidations of treasury debt. Their retirement funds will benefit many lower middle class, unemployed and government employees at the expense of the productive Americans who saved for retirement in the first place.
The coming nationalization of private retirement plans and IRAs will be the greatest government theft and wealth transfer scheme in the history of the world but it will be opposed only by a small minority of productive Americans who have worked in the private sector and who have saved for their retirement years. These Americans who have saved a substantial amount for retirement will lose wealth and retirement security while the groups who have spent their entire lives feeding at the public trough will continue to come out ahead as usual in the largest theft in history.
Remember, everything out of Wall Street, Congress and Washington on retirement planning is all about generating money in the form of dramatic government tax revenues for Washington and not about building real retirement security for Americans.
For other groups listed below, the retirement trap will be a winning proposition for them as funds from successful Americans will be used to fund their retirement benefits.
The Usual Tax Feeders Will Continue to Pig Out
at the Expense of Productive Working Americans
The Winners

  • State government employees
  • County and municipal employees
  • Federal employees may be bailed out along with state and local government employees who have dramatically under-funded retirement programs.
  • The unemployed
  • The underemployed
  • Those who simply don’t work
  • Participants in most under-funded union plans 

And the Losers in the Retirement Trap: All productive, working American in the private sector who have trusted the government and politicians to keep their world and saved a substantial amount of funds in qualified plans and IRA accounts. The Timing The timing of the steps to retirement plan nationalization and confiscation are a very difficult proposition first because of an uncertain political situation. While I fear both political parties will move in the direction I’ve outlined below to retain political power, historically the Democrats have moved faster in this direction than the Republicans. But now with the revenue needs of Washington totally out of control, which side of the two-party monopoly in control of Congress and the White House may not matter in the future. Second, most of the probable causes of the next financial or foreign policy crisis depend more on what China, Japan, Iran or Israel may do than on Washington. I believe the ultimate confiscation conclusion of the Retirement Trap will take place within ten years and I have a suggested time limit for each step to help you in your retirement planning.
Regards, Ron Holland 

America Trots Down The Same Doomed Path as Bankrupt Illinois

Tuesday, March 23rd, 2010

Rich Trzupek Mar 22nd 2010 Featured Story, Healthcare, Politics | Comments (68) 

The irony would be amusing, were the stakes not so serious. The very day that the United States Congress pass sweeping legislation that will undermine the economy, increase debt and send tax rates soaring, a leading liberal Chicago Tribune criticized the elected officials who have been in charge of the president’s home state for repeatedly passing legislation that has: undermined Illinois’ economy, increased Illinois’ debt and sent Illinois tax rates soaring, thus poisoning the business environment and employment prospects in the state. Chicago Tribune says that government’s mission isn’t to tax and spend. Who knew? 

It will be hard to believe, but when Illinois Democrats passed all of the legislation that got Illinois into this cesspool of a fiscal crisis, they assured voters that the there was nothing to worry about. These great new programs, they said, will actually make the state more prosperous and, if you disagreed with that proposition, then you were obviously a crabby conservative trying make political hay at the expense of what was obviously the best thing for the people of the state of Illinois. Sound familiar? 

Having seen the light, the Chicago Tribune urged readers to clean house in Springfield in a May 21 editorial, because the current bunch of Illinois legislators have created an untenable financial crisis and refuse to fix it.  

Still, it’s nice for the Trib to finally notice: 

State government’s free-fall into insolvency was designed intentionally and executed methodically. Over the years, legislators devoted more to hoarding power and ensuring their re-election than to smart governance. They repeatedly created employee benefits, entitlement coverage and spending obligations that the people of Illinois cannot pay as costs come due. 

Substitute “federal government” for “state government” and “the United States” for “Illinois” and you have a paragraph that the Trib can trot out again around 2020. That’s about when the Trib’s editors will figure out that the reason the United States is $100 trillion in debt and unemployment rates are competing with inflation rates to see which can soar the highest is because Congress created – starting on May 21, 2010, “employee benefits, entitlement coverage and spending obligations” that are simply unsustainable. 

How to solve Illinois’ problems? The Trib hit upon a novel solution: 

You can re-elect lawmakers who, for two decades, have grown state obligations at twice the rate of inflation. Or you can mobilize en masse and elect a responsive new legislature. 

Gosh, thanks for the advice Tribune editorial-writers. Anyone reading your paper for the last decade would be forgiven for assuming that there’s some sort of state law that requires Illinois residents to vote Democrat. Illinois Democrats have had control of both chambers of the legislature and the Governor’s office for eight years and have spent most of their time spending tax dollars, most of which don’t yet exist, like a drunken sailor on shore leave. It would have been something of a public service for the old media to notice what was happening before now – before Illinois’ economic situation could be described in the following terms: 

… (Illinois ranks) a pathetic 48th in job creation…suffers an unemployment rate of 12.2 percent, the highest in 27 years. Here’s a damning metric: The …January jobless rate in all 12 Illinois metro areas exceeded the previous year’s rate — for the 32nd consecutive month. 

Might the Tribune have seen this crisis coming before it reached these epic proportions? It might have, had the paper been listening to conservative Illinois Republicans who predicted this was going to happen as far back as 2002. That was when then Illinois state senator Steve Rauschenberger, a strong fiscal conservative and a Republican, outlined in horrifying detail exactly how the state’s economy was going to crash and burn if Blagojevich and the Democrats went forward with their plans. And, at that point, all Blago and the Dems were doing was robbing state pension funds to pay for other government goodies. 

It got worse, much worse, after they implemented the Illinois version of universal healthcare. Today, the situation is so bad that health-care providers have had to wait nine months to a year or more for Medicaid reimbursements from the state, with the predictable reductions in access to care. Thus, “improving” health care in Illinois has only made it worse. 

Sounds like the model that Barack Obama, who helped create this mess as a state senator by the way, is going to emulate on a national scale, doesn’t it? 

The Trib was all but blind to what was going on as the crisis was building in Illinois. They gleefully joined in the “Great Bush Bash of 2006,” which saw Democrats swept into office in overwhelming numbers. When Republican state level candidates in Illinois tried to make state finances the focus of their campaigns in 2006, the newspaper’s editorial board was much more interested in a candidate’s views on immigration reform (which isn’t in the purview of state government), abortion (ditto), and – I’m not making this up – whether foie gras should be illegal or not. The economy was going to hell in a hand basket and the Trib wanted to talk about goose liver. Now that it’s clear to everyone this side of Richie Daley that Illinois Democrats have screwed up Illinois so badly that it’s going to take a Herculean effort to fix this state. 

They are “shocked, shocked!” to find that the lawmakers in Springfield have been so irresponsible. And, if Barack Obama’s grand plan to socialize medicine in the United States is not somehow derailed, we can expect to have much the same conversation in about ten years, on a much larger scale.

Health Savings Accounts

Tuesday, March 16th, 2010

An Indiana experiment that is reducing costs for the state and its employees.

By MITCH DANIELS March 1, 2010 Wall Street Journal 

When I was elected governor of Indiana five years ago, I asked that a consumer-directed health insurance option, or Health Savings Account (HSA), be added to the conventional plans then available to state employees. I thought this additional choice might work well for at least a few of my co-workers, and in the first year some 4% of us signed up for it.  

In Indiana’s HSA, the state deposits $2,750 per year into an account controlled by the employee, out of which he pays all his health bills. Indiana covers the premium for the plan. The intent is that participants will become more cost-conscious and careful about overpayment or overutilization.  

Unused funds in the account—to date some $30 million or about $2,000 per employee and growing fast—are the worker’s permanent property. For the very small number of employees (about 6% last year) who use their entire account balance, the state shares further health costs up to an out-of-pocket maximum of $8,000, after which the employee is completely protected. 

The HSA option has proven highly popular. This year, over 70% of our 30,000 Indiana state workers chose it, by far the highest in public-sector America. Due to the rejection of these plans by government unions, the average use of HSAs in the public sector across the country is just 2%. 

Individually owned and directed health-care coverage has a startlingly positive effect on costs for both employees and the state. What follows is a summary of our experience: 

State employees enrolled in the consumer-driven plan will save more than $8 million in 2010 compared to their coworkers in the old-fashioned preferred provider organization (PPO) alternative. In the second straight year in which we’ve been forced to skip salary increases, workers switching to the HSA are adding thousands of dollars to their take-home pay. (Even if an employee had health issues and incurred the maximum out-of-pocket expenses, he would still be hundreds of dollars ahead.) HSA customers seem highly satisfied; only 3% have opted to switch back to the PPO. 

The state is saving, too. In a time of severe budgetary stress, Indiana will save at least $20 million in 2010 because of our high HSA enrollment. Mercer calculates the state’s total costs are being reduced by 11% solely due to the HSA option. 

Most important, we are seeing significant changes in behavior, and consequently lower total costs. In 2009, for example, state workers with the HSA visited emergency rooms and physicians 67% less frequently than co-workers with traditional health care. They were much more likely to use generic drugs than those enrolled in the conventional plan, resulting in an average lower cost per prescription of $18. They were admitted to hospitals less than half as frequently as their colleagues. Differences in health status between the groups account for part of this disparity, but consumer decision-making is, we’ve found, also a major factor.  

Overall, participants in our new plan ran up only $65 in cost for every $100 incurred by their associates under the old coverage. Are HSA participants denying themselves needed care in order to save money? The answer, as far as the state of Indiana and Mercer Consulting can find, is no. There is no evidence HSA members are more likely to defer needed care or common-sense preventive measures such as routine physicals or mammograms.  

It turns out that, when someone is spending his own money alone for routine expenses, he is far more likely to ask the questions he would ask if purchasing any other good or service: “Is there a generic version of that drug?” “Didn’t I take that same test just recently?” “Where can I get the colonoscopy at the best price?”  

By contrast, the prevalent model of health plans in this country in effect signals individuals they can buy health care on someone else’s credit card. A fast-food meal costs most Americans more out of pocket than a visit to the doctor. What seems free will always be overconsumed, compared to the choices a normal consumer would make. Hence our plan’s immense savings.  

The Indiana experience confirms what common sense already tells us: A system built on “cost-plus” reimbursement (i.e., the more a physician does, the more he or she gets paid) coupled with “free” to the purchaser consumption, is a machine perfectly designed to overconsume and overspend. It will never be controlled by top-down balloon-squeezing by insurance companies or the government. There will be no meaningful cost control until we are all cost controllers in our own right. 

Americans can make sound, thrifty decisions about their own health. If national policy trusted and encouraged them to do so, our skyrocketing health-care costs would decelerate.  

Mr. Daniels, Governor of Indiana.  

Economic Collapse is Coming and Obamacare Will Finish it Off

Tuesday, March 16th, 2010

“Masked youths…attacked the head of Greece’s largest trade union while addressing the crowd, and hurled stones at the police. It suggested that Greece sell Corfu…and that Greeks get up earlier and work harder.

Iceland:  93% of voters cast his ballot against a bailout plan.  Why shackle common voters to the banks’ losses? The plan was so outrageous and so unpopular that Iceland’s normally compliant Prime Minister called for a referendum.

Insurrection is in the air. In England, government employees are preparing the biggest strike since the ‘80s. In America, dissatisfaction with Congress is at record highs; four out of five of those polled say, “Nothing can be accomplished in Washington.”

There are more clowns in economics than in the circus. Economists enjoyed the illusion of competence and pretend to know what they were talking about.  The new theory gives everyone what they most wanted. Politicians could spend even more money that didn’t belong to them. Consumers could enjoy a standard of living they couldn’t afford.  Financial industry earns huge fees by selling debt to people who couldn’t pay it back.

Never before had so many people been so happily engaged in acts of reckless larceny and legerdemain. But as the system aged, its promises increased. Beginning in the ‘30s, the government took it upon itself to guarantee the essentials in life – retirement, employment, and to some extent, health care. These were expanded over the years to include minimum salary levels, unemployment compensation, disability payments, free drugs, food stamps and so forth. Households no longer needed to save.

As time wore on, more and more people lived at someone else’s expense. Lobbying and lawyering became lucrative professions. Every imperfection was a call for legislation. Every traffic accident was an opportunity for wealth redistribution. And every trend was paid for by government.

Banks invented subprime loans. By 2005 even jobless people could get mortgages. Then, the bankers found ways to hide debt…and ways to allow the public sector to borrow more heavily. Goldman Sachs did for Greece essentially what it had done for the subprime borrowers in the private sector — it helped them to go broke.

All thought they were getting something for nothing, this economic model enjoyed wide support. But now that they are getting less than promised, the masses are unhappy. Half the US states are insolvent. Nearly all of them are preparing to increase taxes. In Europe taxes are going up. Services are going down. Taxpayers are being asked to pay for the banks’ losses…and pay interest on money spent years ago. Until now, they were borrowing money that would have to be repaid sometime in the future. But today is the tomorrow they didn’t worry about yesterday. So, the patsies are in revolt.

Several countries are already past the point of no return. Even if America taxed 100% of all household wealth, it would not be enough to put its balance sheet in the black. And Professors Rogoff and Reinhart show that when external debt passes 73% of GDP or 239% of exports, the result is default, hyperinflation, or both. IMF data show the US already too far gone on both scores, with external debt at 96% of GDP and 748% of exports.

The rioters can go home, in other words. The system will collapse on its own.

Bill Bonner
The Daily Reckoning

So you want Canadian Medicine?

Monday, March 1st, 2010

Can Canada afford to be healthy? Karen Howlett Globe and Mail Friday, Feb. 26, 2010

Dr. Paul Dobrovolskis had just come back from vacation to his job in the emergency room when an official at the Greater Niagara General Hospital called with an ultimatum: Either go along with a new work schedule or leave. “That was the final straw,” Dr. Dobrovolskis recalls. He decided he would go, he declared that, because of constant cuts to its budget, the hospital where he had spent 14 years was “dying a slow death.” Three of his colleagues followed suit, leaving just two-full-time doctors on the emergency ward’s staff. Doctors voted non-confidence in its leadership, residents protested in front of the Ontario Legislature.

…Hospitals are cutting services and undermining their role as providers. “Our population here is older and sicker, and we have a national shortage of doctors and nurses.”

…Overall spending last year amounts to $5,452 for every Canadian, and roughly 12 per cent of the gross domestic product – an all-time high and almost twice the 7 per cent seen in the 1970s.

….governments at all levels seem determined to avoid a public debate on how to sustain a system many Canadians appear to take for granted.

…Parliamentary Budget Officer Kevin Page warns that the country must cut spending or raise taxes.

…Alberta retreated on plans to close acute-care and rehabilitation beds at an Edmonton hospital.

…British Columbia is trying to cut $160-million from budgets for its 12 hospitals, close a six-bed psychiatry unit, 10 beds for addiction-treatment.

…In Ontario, the government has quietly topped up funding for several cash-strapped hospitals.

…Niagara Health received another $14-million, all but erasing its deficit. With a shortfall expected to reach $24.7-billion this year, Ontario has launched the biggest restructuring of hospitals since the mid-1990s cuts.

…The gap between “what the public wants and what governments feel they’re in a position to give” is widening.

…Bureaucrats insist that changes they are making are all about improving the care the public receives as medicine becomes more sophisticated and highly specialized. But that’s a tough sell when cutting costs is the real goal.

…Niagara Health’s experience shows how trying to save by streamlining services can have unexpected consequences, leading to a disgruntled work force and, in some cases, even greater expense.

….In late 2008, converting emergency rooms into around-the-clock urgent-care centres, closing beds for patients with chronic illnesses saved $28milion.

…In the 1990s, Harris government’s Health Services Restructuring Commission oversaw the biggest shutdown of hospitals in Canadian history. It closed or merged 35 facilities.

…Converting the emergency rooms has failed. Niagara Health will save more than $1-million, but area municipalities and the province will spend an additional $3.1-million on ambulance service.

…Niagara Health announced that the medical staff faced a risk of “burnout” because they were seeing too many patients.

…“It is impossible for physicians to deliver appropriate care with time constraints.”

…Ontario Medical Association’s emergency medicine section said a shortage of beds was the real issue.