The House Health Care Bill: The First 100 Pages

Everyone (including myself) is going to think that I'm a huge loser for sitting around on a Wednesday night and reading 100 pages of Congressional legislation, but it gives me bragging rights over the folks in Washington who actually vote on it but cannot make the same claim of reading it. It also serves to inform you of what is really being discussed in Washington. Unlike our Congressional representatives, I deem the task of reading transformational legislation to be of the utmost importance. What I found is startling.

Page 15: "(b) REQUIREMENTS FOR QUALIFIED HEALTH BENEFITS PLANS.—On or after the first day of Y1, a health benefits plan shall not be a qualified health benefits plan under this division unless the plan meets the applicable requirements of the following subtitles for the type of plan and plan year involved"

• This section essentially says that insurance companies cannot issue plans unless they meet certain requirements set by the government. You will not decide what you get and pay for in your plan. The government will. This is an essential step in the crowding out of private insurance. The government tells the private companies what they have to offer, but then the government is able to offer it at a lower cost; this will lead to individuals dropping private coverage.

Page 16: "(1) LIMITATION ON NEW ENROLLMENT.— (A) IN GENERAL.—Except as provided in this paragraph, the individual health insurance issuer offering such coverage does not enroll any individual in such coverage if the first effective date of coverage is on or after the first day of Y1."

• This section makes it illegal for private insurance companies to issue new private plans after the bill takes effect (read: no choice!). You can keep your current plan, but if you ever want to switch (which everyone will at some point due to changing jobs or otherwise) then you have to go on the public plan. This furthers the crowding out of private plans and will eventually eliminate private insurance entirely, leaving us with only the government "option."

Page 21: "(1) LIMITED AGE VARIATION PERMITTED.—By age (within such age categories as the Commissioner shall specify) so long as the ratio of the highest such premium to the lowest such premium does not exceed the ratio of 2 to 1."

• This essentially means that younger, healthier people are going to have to pay a much higher premium in order to pay for the care of older people who need more medical care but will be paying a much lower premium than they normally would. The Wall Street Journal, in a recent article, notes that the normal age-related premium ratio is 5 to 1. To put it simply, the 20 year old with zero health problems might be paying $50 per month when he should only be paying $20 per month. At the same time a 55 year old who requires more medical care solely because of age only pays $100/month when she should be paying $250 per month. This will only serve to force younger individuals onto the public plan, because they cannot afford private coverage, further exacerbating the crowding out factor.
  

Page 28: (starting on page 27) "(b) MINIMUM SERVICES TO BE COVERED....
(7) Mental health and substance use disorder services.
(8) Preventive services, including those services recommended with a grade of A or B by the Task Force on Clinical Preventive Services and those vaccines recommended for use by the Director of the Centers for Disease Control and Prevention.
(9) Maternity care.
(10) Well baby and well child care and oral health, vision, and hearing services, equipment, and supplies at least for children under 21 years of age."

• Any readers see anything wrong with #7? For my male readers, how about #9? Back in fourth grade I learned that a uterus and a vagina were required to birth a child. I'm pretty sure that has not changed. I have neither a uterus or a vagina, so why am I going to pay and be covered for maternity care? For those of you who don't drink (much), smoke or otherwise put harmful substances into your body, #7 requires you to pay for substance abuse coverage even though you don't abuse anything. This only increases the cost of insurance for some people.
  

Page 42: "(3) INDIVIDUAL AFFORDABILITY CREDITS.— The administration of individual affordability credits under subtitle C of title II, including determination of eligibility for such credits."

• Translation: another welfare program. "Affordability credit" is government-speak for "welfare." If you happen to be one of the politically favored, government-dependent individuals who work 51% less than the people who fend for themselves, you will receive even more government money than you were prior to the passage of this bill.
  

Page 71: "(ii) BUDGETARY IMPLICATIONS.— Amounts appropriated under clause (i), and outlays flowing from such appropriations, shall not be taken into account for purposes of any budget enforcement procedures including allocations under section 302(a) and (b) of the Balanced Budget and Emergency Deficit Control Act and budget resolutions for fiscal years during which appropriations are made from the Trust Fund."

• This might be the most deceitful thing that I read last night. It basically says that some of the costs incurred in the legislation will simply not be counted in the budget. If the legislation actually costs $1 trillion then it gives the politicians a chance to say "we just won't count $300 billion of it, and we can tell the American people that it only costs $700 billion, because we passed a law saying that we can do it." Now we have Congress actually passing laws that make it legal for them to lie to our faces and pull an Enron scheme on all of America.
  

I left out about 5 or 6 other gems that were included in the first 100 pages, like the one on Page 39 that is surely meant to protect illegal aliens by mandating that all health care plans, documentation and explanations of benefits must be able to be understood by people with "limited English proficiency." This was just the first 100 pages of a 1000+ page bill. I can't imagine what else is buried in it. Leave your comments below.

****** Revision 7/30/2009 ******

It has come to my attention, thanks to a great reader, that I read one of the provisions in the bill incorrectly. It is posted below, but I removed it from the main post, because I was incorrect in my assertion that the provision will let the government suspend someone's health plan. The provision simply states that an insurance company cannot keep issuing the same plan upon being notified by the government.

Page 44: "(1) IN GENERAL.—In the case that the Commissioner determines that a QHBP offering entity violates a requirement of this title, the Commissioner may, in coordination with State insurance regulators and the Secretary of Labor, provide, in addition to any other remedies authorized by law, for any of the remedies described in paragraph (2).....
(B) suspension of enrollment of individuals under such plan after the date the Commissioner notifies the entity of a determination under paragraph (1) and until the Commissioner is satisfied that the basis for such determination has been corrected and is not likely to recur;"

• If you purchase a private insurance plan and the government deems it inadequate then the government can simply suspend your plan without you knowing it. This would leave you without health insurance even though you have paid for it.

Clarification to Pg. 16 commentary: while this clause does not entirely outlaw private insurance, it does force people into the national health insurance exchange, the body through which all private plans will be offered and regulated. This will, however, eventually lead to crowding out of private insurance, because they will be told by the government what they must offer and how much it will cost.

I Made the Newspaper at Lewis' Town Hall!

Check it out folks! Yours truly made the Atlanta Journal Constitution at Congressman John Lewis' town hall on Monday! Now I'm not exactly prominently featured in the photo, but it's still nice to have my picture in the paper. Click on the picture to go to the web version on AJC.com and go to pic #3. I'm at the top of the photo (blue oxford shirt) just to the right of the center. I'm studying my notes in preparation to speak!

My Town Hall Experience: Part 2

As I mentioned in part one of this series I had some success at Congressman John Lewis' town hall meeting, but I also made some mistakes. I would grade myself a "C" overall. Yesterday was my first town hall meeting. It won't be my last, and I can definitely do better next time! I also want everyone to learn from my mistakes and inexperience.

Mistake #1: I could have done more prep work with my research. I came prepared, but not quite well enough. Rather than simply writing down some facts and/or memorizing them I should have printed out (multiple copies) the sources from which I gathered them (make a Fact Pack!). Then, when someone like Michaeleen Crowell attempts to tell me my facts are incorrect I can simply walk up to her and hand her the sheet on which the facts are printed. It would be pretty hard for anyone to argue with you once they have the facts in hand.

Mistake #2: Cite the correct sources! I mistakenly cited the Financial Times rather than the Investor's Business Daily as one of my sources yesterday. This is an easy fix though.

Mistake #3: I had not finalized my statement before I spoke. I definitely went over it prior to taking the mic, but I could have done better. Next time I will prepare and rehearse my statement well in advance. It definitely needs to be a bit fluid so that I can change it according to the speaker's points, but I will at least have a base formed prior to the meeting. Great orators practice, practice and practice more. No, I'm not giving a big speech, but I need to sound confident, convincing and convicted, nonetheless.

Here is a step by step walk through of what I will do next time and a good outline for what you can do at your next town hall meeting:

1. Do some extensive preparation the night before. Print out multiple copies of the Health Care Fact Pack (or make one for whatever issue is at hand), and review all of the facts.

2. Select the most important facts, and form a series of open ended questions (no "yes or no" questions) based on the facts. Write them down or type them and put them in the Fact Pack.

3. Bring a pen and paper to the meeting to take notes.

4. Arrive at the meeting 30 minutes early, find out where the microphone is that will be used for questions from the floor, and sit as close to it as possible (I did this, and it worked like a charm!).

5. While listening to the speakers at the meeting select the most relevant and effective question(s) to ask based on what they are saying, and do a quick final mental rehearsal of any statements/questions to make sure they are brief and to the point.

6. Be ready to jump up and head to the mic when the floor is opened (people rushed to it yesterday). Stand up at the mic with facts in hand, make your comments and ask any question(s).

7. If any facts are disputed simply take the appropriate sheet from your binder, walk to the speaker and hand him/her the facts. If anyone else wants the facts then have copies for them as well. Also have quite a few business cards handy. I was complimented by quite a few people on my comments, and they asked for cards. It is a great networking opportunity, and a great way to form new relationships.

That's about it. Again, I strongly encourage everyone to get out to meetings like this in your area. It was a great experience, and a fantastic way to get your voice heard.

Health Care Fact Pack

As promised, here is your Health Care Fact Pack, a concise summary of a conglomeration of studies and articles that I have gathered concerning health care reform. Our goal is positive and sustainable health care reform, and these points talk about what works and what doesn't. They also expose some of the misleading statements and outright lies being thrown at us from Washington. I encourage everyone to print out each of the sources (or the relevant portions) cited below each fact and compile them in a binder or a folder. Take them to your town hall meetings, share them with your friends and tweet/email/Facebook this post around the country. If someone questions your data simply pull out the corresponding source and hand it to them. It is hard to argue with the facts!

Fact #1: Politicians claim that 46 million people are uninsured. The very same Census data that Congress uses to arrive at that number also includes the following:

• 21% or 9.7 million are non-citizens
• 18% or 7.9M are between the ages of 18 and 24
• 39% or 17.6M make over $50,000 per year
• 20% or 9.1M make over $75,000 per year

Why are we counting non-citizens and people making over $50/75K per year (who most likely have chosen not to have health insurance)?

• Census source (print out page 30): http://www.census.gov/prod/2008pubs/p60-235.pdf

Fact #2: The House health care bill includes a provision that effectively ends private health insurance after the government plan is implemented. Investor's Business Daily actually called the House Ways and Means committee to confirm the language in the bill. The assertion has since been refuted a bit by various groups. The fact is that it prevents private insurers from issuing their own plans. All plans must be entered into an insurance pool and managed by the government. It will eventually lead to private companies leaving the market completely.

"(1) LIMITATION ON NEW ENROLLMENT.— (A) IN GENERAL.—Except as provided in this paragraph, the individual health insurance issuer offering such coverage does not enroll any individual in such coverage if the effective date of coverage is on or after the first day of Y1."

• House Bill (print out Page 16 and look at language starting at line 6): http://waysandmeans.house.gov/media/pdf/111/hrdraft.pdf
• Investor's Business Daily article: http://www.investors.com/NewsAndAnalysis/Article.aspx?id=482329
  

Fact #3: Congressional Budget Director, Douglas Elmendorf, testified in the House that the health care bill "would expand federal spending on health care to a significant degree." This is in direct contradiction to the claims of our President and members of Congress who claim that the health care legislation will reduce health care costs and spending.

• Print full quote and source here: http://www.reuters.com/article/politicsNews/idUSTRE56F6GT20090716

Fact #4: The CBO Director recently sent a letter to House Majority Leader, Steny Hoyer, stating that the latest House health care proposal creating the Independent Medicare Advisory Council would save just $2 billion over the period 2010-2019 (yes, that's just $2B over a ten year period!).

• See and print letter here: http://www.cbo.gov/ftpdocs/104xx/doc10480/07-25-IMAC.pdf

Fact #5: The CBO states that only 11 million uninsured individuals would be covered by the government plan. Opening health insurance markets across state lines would decrease the number of uninsured individuals by as many as 16 million, many more than the 11 million that the CBO states would be added if the government implemented its "option."

• See and print study here (page 9): http://www.aei.org/docLib/20080730_National_Marketpla.pdf

Fact #6: Medicare is projected to completely run out of money in 2017. Will our government manage an across-the-board government health care system any better?

• Source and diagram here: http://www.heritage.org/research/socialsecurity/images/wm2458_table1.gif

Fact #7: For those that claim that a government health care system will increase quality, see this: MedPac, the very agency responsible for oversight of Medicare and Medicaid, has reported on "serious shortcomings in quality as well as the absence of real progress toward restructuring health care systems to address both quality and cost concerns" within Medicare and Medicaid.

• See and print study here (quality issues start on page 2, quote on p. 3): http://www.medpac.gov/documents/20080916_Sen%20Fin_testimony%20final.pdf

Fact #8: Hear someone say that the government "option" will not crowd out and eventually eliminate private insurance? It has already happened with property insurance in Florida. The same would happen if government health insurance legislation is passed.

• See and print source here: http://online.wsj.com/article/SB124623134986666161.html

Fact #9: Study showing that the "public option" will only lead to lower quality health care:

• See study here: http://www.cato.org/pubs/pas/pa642.pdf

Fact #10: Print out this chart for an illustration of how the House health care bill would work.

• See and print chart here: http://www.rollcall.com/pdfs/healthchart072309.pdf

Fact #11: The CBO has done a study showing that almost 45% of uninsured individuals gain insurance within four months.

• See and print study here (page 21): http://www.cbo.gov/ftpdocs/42xx/doc4210/05-12-Uninsured.pdf

Fact #12: Buried in the House bill is a provision that prevents some of the costs of the bill from being counted in the annual budget (info courtesy of Jamie Dupree's hard work).

"(3) BUDGETARY IMPLICATIONS.—Amounts appropriated under this section, and outlays flowing from such appropriations, shall not be taken into account for purposes of any budget enforcement procedures including allocations under section 302(a) and (b) of the Balanced Budget and Emergency Deficit Control Act and budget resolutions for fiscal years during which appropriations are made from the Fund."

That's like saying "honey, I'm going out to buy a Ferrari," getting the response of "what?!? We can't afford that!" and responding "Oh, it's okay, we just won't count it in this month's budget."

• See and print page 731 of the bill here: http://waysandmeans.house.gov/media/pdf/111/hrdraft.pdf

My Town Hall Experience: Part 1

Many of you know that my congressman, John Lewis (GA 5th District), held an open forum on health care yesterday in Atlanta. Fortunately, I was able to attend, even though the meeting was held at 9 AM on a Monday when most people, including myself, are usually working. This is simply an account of my experience yesterday, the mistakes I made and the successes I had. I invite you to learn from my experiences and attend your own town hall meetings in the future. I used the forum not so much to speak to Rep. Lewis as much as I did to speak to the other people in the room. They needed to hear the facts, and that is exactly what I gave them when I spoke.

I estimate that there were upwards of 150 individuals in attendance, and many voices were heard. Rep. Lewis has a panel of people with him that included his Legislative Director, Michaeleen Crowell, a regional representative from the AFL-CIO, a couple of doctors and a representative from the AARP. From Congressman Lewis and Mrs. Crowell we heard the same talking points that we've been hearing for months. Some specifics include:

• There are 46 million uninsured people in the United States.
  
• This health care bill will reduce costs
• The CBO estimates that 11 million of the uninsured would enroll in the government plan
• No one will be forced to enroll in the government plan
  

I could go on, but none of these points are new. After hearing Lewis and Crowell go through their talking points the floor was opened up to individual questions. Dozens of people rushed to the microphone. I was number 4 in line. The first person who spoke was very much in favor of a public plan. She has two diabetic children and she says her health care premiums have gone up to a staggering $3,000 per month! Is this outrageous? Absolutely! Does it need to change? Yes. I can see why she wants a public plan. She is only thinking about her children. She doesn't care how they are covered. She's just being a mom. I cannot fault her for that. Unfortunately, though, she thinks that the public plan will be better for her children. In actuality, a simple reinsurance plan would cover her needs, and her children would receive much better care. A new study from the Cato Institute outlines how "government programs cost more and deliver lower-quality care than private insurance." I wish I knew her name so I could send it to her.

Two more comments, and I had the microphone. I started by stating that my goal was for everyone to have access to health insurance. I said this so no one could accuse me of trying to prevent people from accessing health care, something that happens all too often when anyone criticizes the government plan. I then made the following points that came straight from the extensive research that I have done (some of which you can find in my previous post):

• Using the very same Census data that Rep. Lewis used for his 46 million uninsured number I stated that 17.6 million of those people make more than $50,000 per year. As a 23 year old making $25,000 per year not too long ago, I was able to provide for my own health insurance. Many of the 17.6 million likely choose to go without insurance even though they can afford it.
  
• I cited the recent Congressional testimony of Congressional Budget Office Director, Douglas Elmendorf, who stated that the legislation would increase "federal spending on health care to a significant degree." This statement is 100% contradictory to Rep. Lewis' claim that the current health care legislation would reduce spending.
  
• In response to Rep. Lewis and Michaeleen Crowell's blatant lie that we will not be forced on a public health plan I cited a recent article from Investor's Business Daily, which found that on page 16 of the current bill private insurance is effectively outlawed. You can keep your current plan for now, but if you want to change plans (read: change jobs) you must enroll in the public plan. No new private insurance plans are allowed to be created after the public plan takes effect.
  
• I followed up on Mrs. Crowell's statement that 11 million of the uninsured would enroll in the public plan by citing research (see full explanation here) that shows that the same amount of people would become insured if we could simply buy insurance across state lines. To strengthen my point I stated that millions more would be added if we de-coupled insurance from employment by ending exclusive favorable tax treatment of employer sponsored plans.
• Finally, I asked why they are favoring a plan that, according to Mrs. Crowell herself, would only add 11 million uninsured people to the public plan while research clearly shows that opening insurance markets across state lines and changing tax treatment of insurance plans would insure more individuals.
  

Congressman Lewis and Michaeleen Crowell did not have much to say in response to my question. Mrs. Crowell stated that the ideas that I mentioned had, in fact, been discussed in Washington, but she didn't give me a reason why they weren't included in the bill, something that did not impress me. She then attempted to tell me that my facts were wrong, and that the bill does not include language that states that we will be required to enroll in the government plan if we change plans. I spoke up and said that she could read it in the Financial Times (yeah, I cited the wrong source to her. It's Investor's Business Daily, but the information still exists, which is the important thing). She told me she was not aware of it. I found her last statement very interesting, because Congressman Lewis, at the beginning of the meeting, said he had read the full bill. If he is not aware of the language cited by the Investor's Business Daily then he is clearly lying. Look at page 16 of the bill (starting at line 6), and read it for yourself. It is there.

It's one thing to be lied to by the media and/or your congressperson on television. It's an entirely different experience when your congressman lies to your face. That is what happened to me today. I stated the facts, and my facts were returned with falsehoods.

Really Nice Move by My Congressman

Have you ever had to attend a PTA or neighborhood meeting at 10 AM on a Monday or Tuesday? Probably not. Are you on any church committees? Do they meet during the day on weekdays? No. Do your kids have baseball or soccer practice at 1 PM on Thursdays? No. Why? Because you have to work.

I recently received an invitation from my Congressman, John Lewis, to attend an open forum on health care (he supports government takeover of it). The date: July 27th (a Monday) at 9 AM. This begs the question: How is anyone with a job going to be able to attend this meeting? Monday morning at 9 AM, for most responsible individuals, means the first meeting of the day or arrival at your desk. For the top income earners it likely means that they've already been at work for an hour or two, as I recently demonstrated. Before I dive into the details of this politically convenient move, a little background on Georgia's 5th Congressional District is needed.

To the right is a map of Georgia's 5th Congressional District. For those of you who do not live in Georgia or the Atlanta area, the 5th district encompasses all of downtown Atlanta, almost all of the southwest portion of it and a section of the northern part of the city. The people who live downtown are more likely to vote Democrat. The people who live in the southwest portion are also highly likely to vote Democrat. The people who live in the area of the district that juts north are more likely to vote Republican. The northern area is also one of the wealthiest areas in Atlanta. I can tell you that this district is just about as perfect of an example of gerrymandering as one can find. All of this pretty much boils down to the large Democrat population canceling out the votes of the wealthier conservative population that pays most of the taxes. That's a very simplified explanation, but it's largely true.

Now, why does it matter that Rep. Lewis is holding his meeting from 9-11 AM on Monday, July 27th? Simple. John Lewis represents a very large portion of Georgians who are on welfare, Medicaid and other government programs. In other words, many of these people don't work much. If you don't work much then a 9 AM town hall meeting on a Monday doesn't really interfere with anything other than sleep. However, for those of us that do work, provide for ourselves and earn our own health care, 9 AM on a Monday means we are out doing these very same activities. I cannot imagine that John Lewis is trying to do anything other than weed out the productive members of his constituency (the ones more likely to be against government health care) and pack the room with people begging for the government to take over our health care system. This meeting should be held at 6 or 7 PM or on a weekend. Period.

10th Amendment vs. 2nd Amendment: They Both Matter

Yesterday the Senate voted down an amendment that would allow citizens with concealed carry permits to use their state-specific permit to carry firearms in all 50 states. Currently, laws regarding concealed carry permits are left up to individual states, and not all states recognize concealed carry permits from other states. For example, I have a concealed carry permit for the state of Georgia. The state of Alabama recognizes this license and will allow me to carry a weapon in that state, but the state of South Carolina does not. See here for the full reciprocity map.

The issue here is that some states have different laws than others on obtaining a firearms permit, some more and some less stringent. For example, in Georgia you have to go to your county probate court, apply for the license and a background check, get fingerprinted at the police department, and you get your license a few weeks afterward. In South Carolina you must do the same things, but you must also take a firearms course (something I agree with - if you have to take a test to get a drivers license you should sure as heck have to take one to carry a gun!). Therein lies the issue.... Georgia laws are a bit more relaxed than those of South Carolina, and in some states they are even more lenient. South Carolina doesn't want people who don't know how to use a firearm with legal concealed carry permits from other states carrying one within it's borders. This makes perfect sense.

It was recently ruled unconstitutional for a state (or the District of Columbia) to deny a person their right to possess a handgun. A year ago, in the landmark case District of Columbia v. Heller, the Supreme Court ruled that Washington D.C.'s handgun ban was unconstitutional. Left up to the individual states, however, are the specific laws pertaining to how one may obtain a firearm. Yesterday's Senate vote addressed those laws. The Senate voting down the amendment is not a violation of the Second Amendment, because citizens are still allowed to carry guns in all 50 states. The real issue concerning this piece of potential legislation was the Tenth Amendment. It states that "the powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people." That a state should be required by the Federal Government to honor another state's more lenient gun permits is a violation of the Tenth Amendment, because the Constitution does not give the Federal Government the right to regulate firearms.

That's part of the beauty of living in America and the genius behind the Founding Fathers' framing of our government. The Federal Government's power is limited (or at least it should be.... in reality we could find hundreds of violations of the 10th Amendment). An individual state might be able to restrict you from doing a certain activity, but another state may not. If you don't like a particular law, and there is another state that doesn't have it then you can move. If the Federal Government had more power, however, we would all be stuck with the same laws. This is how our government was designed to work. This is true Freedom as the Founders intended.

The Incredibly Unequal Distribution of Wealth in America

Government officials love to talk about the "unequal distribution of wealth" in our country. I agree with them 100%. This may come as a surprise to many, but the data you will see later may surprise you as well (actually, it won't surprise you at all but it will explain why I agree with the politicians). First of all, only the government can define wealth as being "distributed," because only the government has the power to actually distribute it, or more correctly, redistribute. Wealth is earned, not distributed. The lawyer with two degrees working eighty hours per week making $400,000 annually certainly earns more than the high school graduate gas station attendant who works 30-40 hours per week and makes <$30K per year. The key word here is "earns." No one says "My employer distributes $45,000 per year to me." They say "I earn $45,000 per year." To get a better perspective let's look at the definitions of "distribute" and "earn":

Distribute
1: to divide among several or many

Earn
1: to receive as return for effort and especially for work done or services rendered

Which definition do you think best applies to your money? "Earn" probably looks pretty accurate. The definition of "distribute" seems to fit better with a socialist or communist society (or, as you will see later, the bottom 40% of America). Let's dive into some facts and figures to illustrate the situation. The Heritage Foundation has an excellent study on income inequality (it's a bit old, but we would see the same trends today). Notice how I did not use the phrase "distribution of wealth." That's because A. Wealth is not distributed; it is earned and B. When politicians talk about "unequal distribution of wealth" they are really talking about income. They are talking about how much people earn. You won't hear politicians use that word though, because to earn something requires "effort and.... work" (remember the definition above?). You will soon see that the government clearly does not value people who work to earn.

The graph below shows the distribution of income within the U.S. You see three columns, because The Heritage Foundation had to correct the data from the original census report so that it accurately reflects the situation. The census had some serious errors. To summarize the errors, the census data does not account for the effects of taxation, and the census data also did not divide the population equally into five quintiles. According to the census, the top "qunitile" contains 24.3% of the population (your tax dollars paid the person who came up with that, by the way). 24.3% is more like a quartile. The Heritage Foundation fixed it though.


Notice the trend of income dropping in the top quintile once it is corrected for taxation and benefits. On the flip side, notice income rising dramatically, by 55%, in the bottom quintile after taxes (in this case "taxes" means "distribution"). This can only mean that people in the bottom quintile are getting quite a bit of money distributed to them from the government while people in the top quintile are getting money taken from them by the very same government. Things get much more interesting when you look at the differences between each group in terms of hours worked.


The top quintile contains 22.2% of working age adults, but they account for 25.6% of total hours worked. When you look at the bottom quintile, however, these people make up 18.5% of the working population, but only account for 13.1% of the work in the country. Translation.... the top quintile works way more than the bottom quintile. Assuming that each group should account for a number of hours worked equal to their population (ex. top quintile makes up 22.2% of working population so they should also account for 22.2% of total hours worked), when you cross reference the data (gotta use this graph for hours worked) you can extrapolate the following facts: The people who work 17% more see their (earned) incomes drop after the government takes a share of their income and wealth. Ironically, the people who work 51% less see their incomes rise by fifty six percent, courtesy of our government's policy of seizure and distribution.

After looking at this data I have to say I agree 100% that the distribution of income is unequal in the United States. It's incredibly unequal when you consider that the people who work more get more of their income seized from them by the government while the people who work over 50% less get over 50% more distributed to them from the government. This might be one of the few cases of government officials telling the truth. Income and wealth distribution (redistribution) really is outrageously unequal in America.

Congress Wants to Grow Their Business

We love growth. America loves bigger, better and faster. CEOs strive to grow their businesses. because Wall Street worships growth. College football coaches love it when players get bigger in the weight room. We like our savings accounts and IRAs to grow. Growth, growth, growth. If you consider the modern mindset of America, it really makes sense that our elected officials love growth, too. They are essentially the CEOs of America. They run the business we call Government. What do CEOs do? They get more customers and grow their businesses. This is how companies survive and thrive. Modern day government works in the same way. However, bigger is not always better when it comes to government. Actually, for the real CEOs of America, a bigger government is often a worst case scenario. Just ask anyone currently in the health care industry. Most people do not realize it, but bigger government often times makes the average citizen worse off.

Over the past few decades there has hardly been a government official who can claim that he or she did not grow government in some way. The citizens of the United States are the customers in this scenario (called Life), and every customer is a potential vote. In the private business world people vote with dollars by buying products. Apple grows its business by making the iPod better and better every year to get more people buy it. Government largely works in the same way. The different is that the "products" that the Government comes up with (think Social Security, health care, regulations etc.) are not always needed. These "products" also cost money, but to get this money the government must first take the money away from you and me by force. We don't have the choice of whether or not to "buy" government services like we do with an iPod. Most of the time when government offers someone a "product" it takes away liberty and responsibility in some way. It's a "you won't have to worry about it anymore because we'll take care of it for you" offering, and this is how politicians keep their jobs. If they don't have enough customers/votes then they lose their jobs. How do politicians get votes? They give you tangible stuff. Usually this involves something like a tax credit, a new government agency, welfare, health care, a neighborhood park, newly paved roads etc. These are all tangible things ("products") that people notice. Politicians then turn around and say "look what I put in your hands." Unfortunately, most people don't realize that our country was founded on and grew to greatness via government giving people the intangibles, the things we cannot see or touch, mainly liberty.

Most people do not notice liberty. We have this notion in America these days that the government must fix all of our problems. This takes away an important aspect of liberty: the freedom to fail. Liberty has become equated with success. Liberty has become equated with money. Liberty has become equated with health care and security. As I said previously, America was founded on the principle of liberty. The Founding Fathers wanted everyone to have it, and this is how some people get away with touting "liberty," although their definitions of liberty are far different from that of the Founding Fathers .

These days, having liberty means everyone must succeed. Success isn't a choice anymore. It has almost become a requirement. Liberty has become synonymous with everything except failure. People write their congressional representatives and say "I cannot play because I do not have a park near my house." 200 years ago you would be told to walk to one or move. If you don't then you have failed, because you have been given the liberty to take these actions. They say "I cannot pay my mortgage. Help me!" If you took out a loan that you could not afford to pay back then you have failed, because you have been given the liberty to buy a smaller house that you could afford. These days, however, your congressperson needs your vote, so she responds by giving you more welfare or a tax credit or a mortgage bailout or a neighborhood park.

This is how government grows. When you have 535 members of Congress sending money to their constituents in one way or another the growth simply compounds. America rewards growth. Like I said, it's only natural that government wants to grow their "business." The more things they have to manage, the more things for which they can take credit. The more things in your life they can take credit for, the more they get noticed and the more votes they get. We no longer reward the liberty of 200+ years ago, because the definition of liberty has changed. Popular liberty now equals having to take care of less and less within your own life. Liberty currently means "I don't have to take care of it, because the government will do it for me. I can do whatever I want to do." The Declaration of Independence says we all have the right to Liberty, so Congress gives the people what they want: "liberty," albeit the newly defined popular liberty.

If we are going to redefine liberty in this way then we need to throw out the Declaration of Independence and the Constitution and replace them. We currently reward our government for doing the exact opposite of what our country was founded upon while simultaneously allowing our elected officials to trample on the intent of the Founders using their own words. It's the ultimate historical kick in the face. As long as we keep voting for candidates who will grow their business we will continue to lose true liberty. I would gladly vote for a congressional candidate who puts nothing tangible in my hands other than liberty as defined by the Founders.

A Little Vacation...

I've been on vacation for the past week, so that's why things have been quiet. I had some posts that were supposed to auto-post, but it looks like none of them actually went up. Sorry for the lull, but I'll be back in full swing shortly.

Minimum Wage

In a little over a week the Federal minimum wage requirement will rise to $7.25 per hour. This is the result of the Fair Labor Standards Act, passed in 2007, that put the minimum wage requirement on an upward path from it's then level of $5.15 an hour. This wage hike will have serious consequences, including delaying economic recovery. It also brings to mind a number of questions. Will it have a greater impact on small businesses than larger ones? Too great of an impact (i.e. - forcing many to close)? What demographic group will it impact the most? And is a minimum wage even constitutional?

A wage or salary is a measure of how much an employee is worth to a business. There is a reason that the guy cooking burgers at McDonald's is not making $100,000 per year like the pharmacist does. Anyone can cook a burger. Not everyone can tell you that it's potentially dangerous to take both simvastatin and amiodarone at the same time. To really get a grasp of the issue it is important to understand that $1 per year (for a full time employee) equates to about $2,000 in wages. That number is calculated as follows: 40 hours per week x 52 weeks per year x $1 = $2,080 (keep it at 2K to keep the numbers easy). The previous minimum wage, $5.15 per hour translated to about $11,000 per year. $7.25 per hour is around $15,000 per year, an increase of $4,000.

Let's say a small business has ten employees, four of which are at minimum wage. The employer will now have to pay an extra $16,000 per year in wages. The employees didn't earn it. The government is requiring it. If they did earn it the mandate completely undermines their merit based achievement. The business owner might have been getting ready to say "great job, I'm giving you a raise, because you are a fantastic employee." Instead the employee simply watches CNN, sees that he's getting a government-mandated raise and gets none of the verbal and psychological reward that he worked so hard for. He then thinks that the only way he will get a raise is if the government requires it. He sees his hard work as inconsequential, and may start to slack off a bit. The Wall Street Journal notes that "two of every three full-time minimum-wage workers get a pay raise anyway within a year on the job." That's 66% of the full time minimum-wage workforce that will not get the positive feedback and subsequent merit-based raise that is so vitally important to an employee's development.

What if the employer wanted to hire someone else? At $5.15 per hour he or she could have added an employee and given the other four employees a raise. With millions of people currently out of work that extra job could really mean something for someone trying to feed her family. Multiply that by the tens of thousands of small businesses throughout the U.S., and it really starts to make an impact.

What I really want to know is how someone cannot manage to make more than minimum wage after high school. Government officials talk about the "right" to a "living wage" all the time. If you cannot make yourself worth more than $5.15 an hour to an employer without a government mandate then it's time for some serious self-examination. I was making more than minimum wage while I was still in high school. My job didn't require much education, so crediting my parents with sending me to private schools is a non-factor. It was simple work ethic and attitude. Anyone could have started where I did and worked their way up to store manager without ever having set foot in a college classroom. I have seen many people do it. Most people with a high school education could start flipping burgers at McDonald's at age 16 and eventually learn how to manage the entire restaurant.

After college I worked in a restaurant for a while. One of the guys that worked in the kitchen started as a dish washer. He has since received three or four promotions. He didn't go to college. You can get education at work. In fact, many people would argue that you learn more outside of a college classroom than you do in one. Yes, college is beneficial, but it's not the only way to success. Telling an employee that he is automatically worth $7.25 per hour simply by applying for a job does nothing to advance America. It is actually a step backwards. The true American dream is one of starting at the bottom, with nothing, and working your way up to the top. A minimum wage of $0.00 per hour would allow more people to truly live it.

Health Care Reform Part 3: The Government "Option" is Not an Option at All

We have heard it over and over again...... "If you want to keep your current health insurance you will be able to do that," and the public "option" will "make the health care market more competitive, and keep the insurance companies honest." You hear these statements in the media, you hear them from Congress and you hear them from our President. No matter how many times they get repeated, however, none of them are or will ever become true.

It really does not take much to demonstrate that these statements are very misleading. Let's start with the first statement about keeping your current plan. In the first installment in this series I outlined a few of the major problems with our current health care structure and solutions to fix them. One of the problems is health insurance being tied to employment for the vast majority of Americans. One consequence of this relationship is that you don't actually choose your health insurance provider. Your employer chooses for you. The insurer may be great or it may be terrible. Regardless of quality, you are stuck. So let's revise things a bit: "If you want to keep your current health insurance you will be able to do that if and only if your employer chooses to keep your current provider." The choice is not yours.

Employers, faced with the decision to stay competitive and keep their businesses alive vs. provide private health insurance for their employees, will eventually start dropping their private health insurance coverage in favor of the cheaper public plan. Once this happens you don't really have the "option" of keeping your current plan, because your employer made the choice, not you. You only option becomes the public plan. If you don't believe companies will drop health insurance then check out this study that illustrates the effects of a public "option" on private health insurance markets. In the scenario where the government models their plan after Medicare the study shows that 119 million people would drop or lose their private plans and be enrolled in the public plan.

It's simple economics. Company A sees that Company B is dropping their private health insurance plan in order to save costs. If they cut costs then they can also cut prices. Cutting prices causes more people to buy Company B's products. Company A sees their sales drop as a result. To fix this Company A drops their private health insurance plan and cuts prices to stay competitive. It's not that Company A necessarily wanted to drop their private health insurance, because they know it's better than the public plan. However, the choice eventually becomes "do I want to stay in business by cutting costs or close as a result of sales dropping too far?" To put it another way "I can either keep all of these people employed and receiving paychecks and offer them a public plan, or I can give them private health insurance until I have to close the business and everyone loses their jobs." This is the beginning of the "crowding out" process.

Once people start moving off of private insurance it will cause private insurance premiums to rise. As they start rising, more and more people will be unable to afford private health insurance (even though they could previously afford it). These individuals and families will start moving to the public plan as well, because it will be the only "option" that they can afford. It happened in Florida with property insurance when the state started offering a public insurance "option." The Wall Street Journal notes (article linked above) that private insurers "have either curtailed operations or withdrawn from the Sunshine State." Now the state of Florida is one hurricane away from financial disaster, because they do not have the funds behind their public property insurance "option" to cover a disaster. Looks pretty similar to the current failing state of Medicare and Medicaid doesn't it? Oh, and speaking of Medicare, if the "crowding out" factor does not exist as our government is currently trying to tell us then why are the elderly all covered by Medicare? Answer: because private plans have been crowded out by the government plan.

Regarding the "competition" aspect of the debate, there are already hundreds and hundreds of insurance companies in the marketplace today. How much more competition do they need? Furthermore, if the insurance market needs government competition to keep it "honest" then why not other industries as well? We all use computers so how about a government computer "option"? Or a government grocery store chain? Government airline? I would also include "government automobile option," but we already have that. The truth is that there is no solid economic basis for the government "option" providing competition for the private sector. Many people in Washington would like you to think so, but it's simply not true.

We have every reason to be skeptical of Congress and the President. Our government, to my knowledge, has never given a correct estimate of the costs of any government program. The costs are always higher than projected. So with a government that runs two failing medical insurance programs that have crowded out private insurance, what reason do any of us have to believe that the same thing won't happen this time? It's important to decide now, because if we wait then we won't have an option.

The True Story of Race

I get it. I really do. Slavery, Jim Crow laws, separate water fountains etc. I can see why people get really upset at the slightest hint of racial discrimination against blacks these days. It certainly still exists, and it's wrong. Permeating our country, however, are a major double standard and a complete misunderstanding of racial issues. If something race-related or discriminatory happens to a black person it becomes national front page news. If something similar happens to a white person it goes largely unnoticed and gets buried by the media. Don't believe me? Read this story and this story. Both articles ran yesterday. The former, a case of whites discriminating against blacks reported by CNN, was the front page lead headline on CNN.com for part of the day yesterday. The latter, a case of as many as fifty black teens attacking a white family reported by Ohio.com (only reason I found it was through Drudge), is completely ignored by the national media. Both stories deal with the exact same topic, so why don't they put them side by side? There's no doubt CNN knew about it. If it's on Drudge then surely someone in the newsroom noticed it but chose to ignore it.

I often struggle with the issue of race. It was a horrible thing that blacks were systematically discriminated against by the government and the general population for so long. I can see how people might think the mentality of "okay, we discriminated against one group for so long that now we have to switch and help them at all costs" might help, but the truth is that it does not. The reason is that the issue does not have anything to do with race. It's culture that we need to be focused on.

Regardless of your skin color, if you're lazy, messy, not well spoken, poorly dressed and you have an "I don't care" attitude then you're going to be making minimum wage for the rest of your life. The only reason skin color enters the arena is because you cannot hide it. The defining characteristics of most cultures that get negatively stereotyped can be covered up with clothing or masked by other means. If you're a white tattooed drug dealer you can still walk into the office on a Monday with a suit on, and no one knows the difference, because you work your butt off during the week, and you're well respected among your peers who have no idea you peddle crack. On the other hand, if you're a hard working, motivated, well spoken, impeccably dressed black person you can't hide the fact that you're black. If people see a tattooed black guy getting arrested on the morning news, and they see you in the office later then you might get grouped with the criminal since you share one visible consistent trait in common. The white tattooed drug dealer can hide his tattoos, but a black man cannot hide his skin color.

When a certain group only makes up around 13% of the population but accounts for 50% of the homicides in the United States, that group gets labeled. The one common visual factor that everyone sees is skin color. Stereotypes exist for a reason. To a certain extent all of them are true. Nonetheless, that does not mean they apply to everyone. The reality is that the common factor linking the homicides isn't skin color at all. It's behavior. Those folks on the news are all behaving in a certain way. Culture is defined as "the integrated pattern of...... behavior." Behavior is not always visible. The tattooed white drug dealer might behave one way outside of the office and an entirely different way at the office. His co-workers cannot see a link at all. When black violence and crime dominate the news as they so often do, the behavior certainly doesn't carry itself into the office of other blacks, but their skin color does. Most people look through the lens of skin color, however, and not through one of behavior. On the same token, if a hard working, well spoken black person with good grades applies to a college then they might receive favorable treatment in the admissions process for the purpose of maintaining "diversity" on campus. In effect they are told "Your behavior does not matter. You are going to gain admission simply because you're black." Many blacks are justifiably upset about this. Just ask Clarence Thomas. He keeps his Yale law degree in his basement with a $.15 sticker attached to it, because the school's affirmative action program completely undermined his achievements.

If we really want to fix this whole race issue then people need to realize that more often than not the issue doesn't even concern race. It's a culture thing. By focusing on race the achievements (behavior) of successful people are completely undermined while simultaneously giving negative incentives to those who achieve less. Telling a black kid "If you want to get into X college you only have to have a B average, because you're black. If you were white then you would have to have A's" makes the black kid strive for less. His goal is to get into college, not to make A's, and to achieve this goal he knows he only has to make B's. Upon arrival at the university, however, he's surrounded by white students that have made A's. It breeds inferiority not on the basis of race or ability but by assigning lower standards to one group.

If people want equal treatment then we need to treat everyone equally based on actions and culture rather than skin color. If skin color becomes an asset for getting into college (which it has for that and many other things as well) then you're telling minorities that their skin color is a tangible advantage while simultaneously they are being told that everyone is equal regardless of race. You can't have it both ways. If your actions and your actions alone produce a college degree and a well paying job then you should be respected, not as a black person who achieved it but simply as a person. Stereotypes are earned, and they can ruin opportunities and undermine respect for those who are mistakenly included in the stereotyped group. A group of black teenagers assaulting a white family while yelling "this is a black world" deservedly earns a negative stereotype based on their actions. For the hard working successful people in college whose skin happens to be black, those same teenagers destroy everything that the college students have earned through their behavior.

We need to start running the CNN and Ohio.com stories side by side. The white people are not to be condemned for being white. Their behavior is the focus. The same goes for the black teens in Ohio. It is not until we throw aside our lens of race and start using one of behavior and culture will we ever begin to progress towards true equality.

Fannie and Freddie Go to Cancun

Consider this: A parent has a teenage kid asking to go to Cancun for spring break. The parent says no, and the teenager doesn't go on the trip, so the kid doesn't concern himself with certain decisions and the freedom he would have if he were able to go to Mexico.

On the contrary, if the kid is allowed to go to Mexico then he has a whole new set of possibilities to consider such as whether or not to get blackout drunk in the midst of a bunch of complete strangers and/or engage in risky sexual behavior with girls he doesn't know. Let's say the kid goes to Cancun, gets blackout drunk and along the way he meets other people and they all get drunk together and start having sex with each other. Meanwhile, mommy and daddy are home telling everyone that their kid is an angel and is sitting on the beach drinking Coca Cola. However, all of the parents' friends have seen the kid's scandalous pictures from Cancun on Facebook.

Now let's look at a real life example that actually happened. Over the last decade or two Fannie Mae and Freddie Mac (the teenagers) were forced by Congress (the parents) to lower their lending standards (go to Cancun). A key point to take note of is that in this case Fannie and Freddie did not ask to go to Cancun..... they were forced to go by mommy and daddy. So they went. The rum and tequila (money and mortgages) were flowing freely, and Fannie and Freddie had a great time meeting other crazy drunkards along the way (Lehman Brothers, Wachovia, Bear Stearns etc.). The other drunkards that they met actually had coolers that were full, so Fannie and Freddie offered to take some and store it for them. This allowed the other drunkards to drink way more than they could handle, but they didn't care, because they were having fun. Fannie and Freddie were also storing way more liquor than they actually had room for, but they didn't care either, because they were having fun too. Oh, and everyone is having drunken sex with each other. Meanwhile at home, Congress (remember: the parents) is telling everyone "Fannie and Freddie are perfectly good kids," while everyone else sees the scandalous pictures that Fannie Mae and Freddie Mac are posting on Facebook. All of the sudden one of Fannie Mae and Freddie Mac's friends, Bear Stearns, in Cancun notices a bad rash, um, south of the border. He panics, and everyone else does too. They all go home and realize that they all have STDs. Lehman Brothers actually dies from the STD. Fannie Mae, Freddie Mac, Bank of America and other friends have to be put on life support by their parents, and they barely survive. The life support provided by the parents, however, is extremely expensive and the parents max out all of their credit cards.

This story is not meant to talk about Fannie and Freddie specifically. It's infinitely more important than that. There is one glaring difference between the parents and the teenager. If the parents act responsibly then the teenager's potential for harm is limited. However, irresponsible parents allow the teenager to influence and harm many many others from all parts of the country. When a private corporation makes a decision it affects a few thousand people, maybe a few million people at most. When the government makes a decision it affects everyone, hundreds of millions of people, because we are all governed by the same people in Washington.

Why is this important? In one word: isolation. Unlike private sector decisions, the effects of government decisions are not isolated. In the case of Fannie Mae and Freddie Mac, if they had never been forced/allowed to make risky loans then this whole financial crisis and meltdown would not have happened. Maybe a bank here or there would have made some bad loans and gone under, but it would have been isolated, and we would not have had the widespread financial meltdown that occurred. However, these decisions originated in Congress or at the desk of the President, and the entire private banking sector was systematically empowered to make the risky decisions that they otherwise wouldn't have had to make.

The government absolutely should not be our parent. However, they do have certain authorities that are rightfully granted to them. If the people in charge, parents, government or whomever, act responsibly then everyone benefits.

You Would Never Do These Things

Read the following and ask yourself if you would ever do any of the following:

1. Accept a job without reading the job description and without knowing the salary or the benefits package.
2. Hire a babysitter without ever interviewing or meeting him/her.
3. Let your accountant file your tax return knowing he had not read or even seen any of your financial statements.

I am going to assume that you would not do any of these things. Most rational and sane people would think these ideas are outrageous. Accept a job without knowing the salary and whether or not it is enough to feed your family? No way! Then why are we letting Congress do it? Our government, specifically Congress, is passing legislation every week that they have never read. It's not just any legislation. Unlike the harmless naming of a post office, it is legislation that will change our lives.

In reference to the health care reform bill currently being drafted in Congress, our current House Majority Leader recently said "if every member pledged to not vote for it if they hadn’t read it in its entirety, I think we would have very few votes.” He then goes on to laugh at a question about requiring legislators to read all legislation before voting on it: "I’m laughing because a) I don’t know how long this bill is going to be, but it’s going to be a very long bill." That pretty much lays out a solid strategy for anyone in Congress wanting to get anything passed. Just make it really long so no one will read it, and it'll get whisked right through no matter what it is or how important.

If they're not actually reading all of their own legislation then what did we elect these people to do? We hired them (voted). We pay them (from our taxes). How is this situation any different than the accountant or the babysitter or the job that you knew nothing about? If your boss walked up to you right now and asked you for an analysis of a report and you said "Okay, I'll give you an analysis, but I'm not going to read the report because it's really long," you would get fired. Why do we allow Congress to operate on a completely different set of standards?

Regardless of your political preferences or affiliations, don't you think it's imperative that the people who make all of the laws for our country, the people who have the power to affect the lives of 300 million people, read everything that they vote on? When a business owner makes a decision for his company, it affects only those people who work for that company, usually a few dozen to a few hundred people. When the government makes a decision it affects the lives of everyone. Our elected officials are currently making decisions for hundreds of millions of people and they are not even reading the things that they are deciding upon.

The solution is simple. We hold all of our elected officials accountable by calling them (it takes a minute at most) and telling them to read everything. I bet if they got a couple hundred million calls in the next week telling them that they're out of a job unless they start reading then they might get the message.

Government Health Care Limiting Job Growth and Economic Recovery

Some obvious things that everyone knows..... we are in a recession, and the economy has shed millions upon millions of jobs over the past year and a half. Stemming from these problems is one glaringly obvious solution: give employers and entrepreneurs incentives to create more jobs. More jobs equals more paychecks for people. More paychecks for people equals spending and economic growth. In the end it means an end to this recession.

The concept of job growth is painfully simple, but our government does not seem to get it. In fact, Congress is considering legislation right now that will decrease job growth. How, you ask? One idea (among many job killing bills) that is currently being floated in Congress is to require employers to provide health insurance to their employees. Not only will they mandate health insurance, they will mandate a specific type of health insurance, one that covers waaaaaaay more medical issues than most people need or want. If they choose not to provide this specific type of health insurance then they will be forced to pay a penalty to support the public health "option." One extremely large group of people in this country is very upset about this potential mandate, because it would crush their businesses. This group of people is comprised entirely of small business owners. Small business owners are the largest group of employers in the country. Congress knows their concerns, and they are talking about exempting small businesses from the mandate. Problem solved, right?

Absolutely not and here's why. How will the government define "small business"? Simple. They will use employee head count. Let's just say it's 20 employees. So, if a business has 20 or more employees it will be required to provide health insurance to all employees. Those with 19 or less will be exempt. According to the latest U.S. Census data available, 89% of the businesses in the United States have less than 20 employees and employ almost one fifth of the workforce. Now let's say this health care thing passes and you're a business owner with 18 or 19 employees. You already provide health insurance to your employees, and they're happy with it. You want to grow your business, but growth means hiring more people. If you hire more people then you'll incur the added expense of providing the government mandated health insurance to your employees. This added expense would actually make your business less profitable, maybe even unprofitable, even though you are trying to "grow" it by adding more employees. So instead of adding more employees, which would help our economic recovery, you decide to keep your business the same size.

If job growth is so essential to our economic recovery (which it is) then why is the government working against it? In addition to stymieing recovery, exempting small businesses won't do much to reduce the number of uninsured. A recent Wall Street Journal article points out that most large employers already provide health insurance to their employees. Regardless of this fact, though, this is our government's solution to the health care problem. Their "solution" makes zero sense, and it simply won't work. Stay tuned over the next week or two for some Real Honest Solutions on health care issues.

New Design!

No worries folks! It's still the same Real Honest Thinking you've been reading for the past few months. It's just got a new look. Hope you like it!

This is How They Count "Jobs Saved or Created"

I was listening to the radio on my way home from work one day last week, and I heard a firsthand account of how the current Administration is counting "jobs saved or created" by the so-called "stimulus package." If you need a refresher on "saved or created" see here. The guy who called in to the station owns a manufacturing company, and one of his clients is a firm that received money from the stimulus package. This client recently placed an order with the man's company, and shortly thereafter the owner received a questionnaire from the federal agency in charge of tracking the impact of the stimulus package. The questionnaire asked how many jobs the owner was able to save or create as a result of his customer receiving stimulus money. The owner thought about it and put zero as his answer, because the customer's order had no impact on his company's head count.

Not long after mailing the questionnaire into the agency he received a call from the federal agency who received it. They asked why he put "zero" for jobs saved or created as a result of his client receiving stimulus funds and subsequently placing an order with his company. The idea here is that the man's client may have been able to place an order that it wouldn't have been able to place had it not received stimulus money. Subsequently, the revenue from the order for the manufacturing company may have been able to "save or create" a job. However, the manufacturing company's owner was not able to save or create any jobs as a result, because he was not reliant on that customer's order to avoid layoffs, so he correctly put zero. The federal employee then responded "Didn't someone have to take the initial order? Didn't someone pack it up and ship it?" The agent that called him informed the owner that the actual methods that the agency has set out for measuring "saved or created" were actually different than the method that the owner used. The owner then responded "What? You mean that you are counting everyone who touched the process in some way?" The federal employee said yes. The owner then said "So you mean I'm supposed to count the person who answered the phone, the person that took the order, the person who boxed up the order, the person who shipped the order etc. etc., even though they would have been employed without the order coming in? All of this regardless of whether or not their jobs were contingent upon receipt of that order?" The federal employee said yes.

This is the method that our government is using to measure the effectiveness of the stimulus package. We have a firsthand account from a business owner here, and he clearly demonstrates that the government's measurement system is a complete fraud. This is how we are being deceived by the government into believing that the stimulus package is actually doing something when in actuality it is nothing but a government vote-buying package. This is a blatant example of the government's attempts at deception. There is no doubt that both Republicans and Democrats, conservatives and liberals alike, engage in this type of activity. Politicians make up numbers all of the time, because they know that most people won't check them for accuracy.

I don't care who is in Congress or the White House. This stuff happens all the time. It has been said that "eternal vigilance is the price of freedom." We are slowly seeing our liberties taken away by politicians in Washington, because we have been asleep or apathetic. When it comes to politicians do not pay attention to anything they say. Only pay attention to what they do. I'm just as disgusted with the Republicans as I am with the Democrats. The last Administration started the whole bailout mess with TARP. The last Administration is gone, however, so it's no use complaining about them. The current one has the power and the opportunity to undo all of it. Our government isn't doing it though. Not only that, they are making it worse. We are being lied to, and this country is headed down a path that will be burdensome to individuals, businesses, the economy and freedom for years to come. Vigilance was needed years ago. A lack thereof brought the current mess upon us. Action is needed now.

A Well Deserved Grilling

Many of you may have heard about or seen President Obama's town hall meeting on health care yesterday. It seems a few people in the media have become a little upset about the fact that the "open" town hall meeting wasn't really open at all. Every question was carefully pre-screened and every attendee was as well. Check out this video of Press Secretary Robert Gibbs getting a well-deserved grilling by the press on this:



There is no doubt that this has happened with every recent president, Bush, Obama, everyone. However, we haven't ever seen it to this extent. At the end of the video you saw Helen Thomas, who has been around the White House for years, comment that she has never seen anything like this before. What lends even more credibility to it is that this is the Obama press corps, the very same people who have followed him around and repeated his every word without question. The hypocrisy of it all is that Obama has consistently touted transparency and openness throughout his campaign and Presidency. It's fine if Obama wants to monopolize some time to talk about his health care initiatives, but don't do it under the guise of a "town hall meeting". A true town hall meeting would inevitable make him answer the tough stuff. We got absolutely zero new information out of yesterday's meeting. If it's a true town hall then we should at least get something valuable. Yesterday was the same old rhetoric that we've been hearing for weeks. Just call it what it is: a commercial.

Health Care Reform Part 2: Government is Not the Answer

It doesn't take long to figure out why government-sponsored health care is not the answer to our health care problems in the United States. Government health care simply doesn't work. It's not financially sustainable, and it does not improve the health care system. It has been tried before in both the U.K. and Canada, and it is failing in both countries. It's even been tried in the United States with Medicare and Medicaid and they are failing as well. The U.K. and Canada are currently expanding their private health care sectors in response to widespread problems with their public systems. If the government systems are failing everywhere then why are we moving in the opposite direction in the United States?

The fundamental problem with "free" government health care is that it isn't free. As I outlined in part 1 of this series, someone pays for it. When the patient is not held accountable for his or her own health care costs then the overall costs for the entire system go up. When something is free the supply of products or services dries up very quickly. It's very basic economics. In the case of "free" health care it leads to people requesting and receiving services and/or procedures that they do not need. If they had to pay for it (or at least a portion of it) themselves then they surely wouldn't buy something they don't need. "Free" health care inevitably leads to rationing. Rationing means lines and long waits for health care. Rationing means less access to health care for everyone. But don't people say that government-sponsored health care increases access? They're wrong. It does the exact opposite. Keep reading for plenty of examples of the failures of the U.K. and Canadian health care systems and how government health care actually restricts access to health care rather than increasing it.

Canada
You will see here that years ago Canada had already begun its march towards privatization of the health care industry. The turn towards privatization is a direct response to the failures of their single-payer government health care system, the exact road that we're headed down. Look here and you'll find data from 2005 that outlines wait times for various specialties (due to rationing). Any of this look alarming to you? How about 11 weeks just to see a neurosurgery specialist? Oh, and don't forget to add in the waiting period just to see a primary care specialist. Many regions in Canada have lotteries to decide who gets to go to the primary care doctor. If you subsequently need to see a neurosurgeon and get referred then it's another 8 weeks after seeing the specialist until you actually receive treatment. That's over five months from referral to treatment for brain related medical issues! I'm pretty sure many neurological issues are a lot more urgent than a five month wait. But hey, it's free right?

U.K.
The U.K. is also increasingly reliant upon the private sector for their health care. Additionally, in the United Kingdom they have developed a standard that they use to measure success regarding wait times from referral to treatment. If the wait time is less than the standard then it's considered a "success." Care to take a guess at how many weeks they consider successful? Their standard for "success" is eighteen weeks from referral to treatment! Can you imagine a wait time of eighteen weeks being considered "successful" here in the United States?!? What if you went to the doctor tomorrow with a broken leg or some sort of trauma and they said "okay, we'll try to get you treated within 18 weeks." You would go nuts! Check out this data from August of 2008 (the "adjusted admitted pathways" link). Just browse through the different regions and specialties and see the percentages of people who were actually treated within 18 weeks. Look at line 35 and you'll find that three out of ten "trauma and orthopaedic" patients at this particular hospital had to wait over five months to get treated for trauma and orthopaedic related medical problems. That means people with broken legs and ACLs had to wait five months to get them fully treated. Are you kidding me? You'll also see some percentages for cardiothoracic surgery around 50%. That means half of the people who needed HEART SURGERY didn't get it within eighteen weeks! Imagine your doctor saying "You have a serious heart condition and need emergency surgery. Our goal is to get you this emergency surgery within the next five months." But it's free, so that's better, right?

You have already seen the failures of the current government run health care systems in the United States. Medicare is projected to go bankrupt by 2017. Even if it doesn't go bankrupt, Medicare has quality and accountability problems. If we can't figure out how to make our current government systems work then why are we going to try to expand government health care?

ALL of these government run health care systems are failing, even our own. What makes people think that the government will suddenly be able to make it work this time around? Do you need more proof? The fact is that it doesn't work. It cannot work. You cannot ignore the fundamental, natural laws of economics. They exist regardless of whether or not people want them to exist. The good news is that we can improve the system while taking advantage of the basic laws of economics and increase access to health care. That is everyone's goal. Let's get it done.