Saturday, August 15, 2009

The CBO and Our Common Welfare

This blog was inspired today by comments made during Obama’s town hall event in Colorado. Here are the tweets that inspired this research:

Obama said, "despite all the scare tactics out there, what is truly scary is if we do nothing." I said, “Isn't this a scare tactic?”

Obama said, "spread the word, knock on doors, to help enact his health coverage plan.” I said, “It might help if he actually had a plan, no?”

Obama said, "health care costs are the biggest part of federal deficit and debt?" I said, “Defense and interest on the debt are right behind.”

Obama again states: "nobody is talking about a government takeover of health care." I said, “Nobody as in Congress via H.R. 3200?”

My summary of Obama’s town hall meeting: “Let's all get behind this idea of spending money that we don't have, on a reform plan that hasn't been written.”

Afterwards I watched the following CBO webcast, The Long-Term Budget Outlook, and studied the cost projections for Medicare, Medicaid, Social Security, and Interest on the Debt. After all of this, I am convinced that our government is on the wrong track.

Link to CBO Video

The issue should not be how to include more people in entitlements while cutting costs (an impossible feat). But rather how to create incentives to make people more self-sufficient so that they will not need to depend on the government? In other words, the focus needs to be on reducing the number of people covered by government entitlements, reducing government size and spending, and increasing government revenue to extinguish the debt.

In
Mortimer Zuckerman’s USA Today column entitled, “The Coming Government Debt Bomb” [Spending must be cut, or surging deficit could leave U.S. deep in the red for years], he states the following:

The nonpartisan Congressional Budget Office reckons that the deficit will run for a decade and will still exceed $1.2 trillion in 2019. By that time, the United States will have virtually doubled its national debt, to over $17 trillion. Then, after 2019, we get another turn of the screw as the peak waves of baby boomers move into their retirement years and costs soar for the major entitlements, Social Security and Medicare.

At 41 percent of GDP in 2008, the accumulated federal debt will rise to 82 percent by 2019. One out of every 6 dollars spent then by the feds will go to interest, compared with 1 in 12 dollars last year. These out-year budgets will require an increase in everyone's income taxes, raising federal income taxes an average of $11,000 for families, a hike of 55 percent per household—a political impossibility. The Government Accountability Office estimates that by 2040, interest payments will absorb 30 percent of all revenues and entitlements will consume the rest, leaving nothing for defense, education, or veterans' pensions.

I know you don’t want to hear about private savings accounts versus Social Security. And you probably don’t want to hear about high deductible health insurance plans and health savings accounts. But the alternative being peddled by the Obama Administration and Congress is to increase government debt until it actually exceeds what our economy can produce in a year.

In other words they would rather bankrupt the United States, than face the fact that government cannot provide for the health and retirement needs of the people. And that's the bottom line - the government cannot provide for the health and retirement needs of any but the most needy. Come to think of it, seems to me that was the original plan.

I realize that this is counter to the Biden-Obamanomics view that, “we need to spend more to keep from going bankrupt,” but I live on planet earth. The track being followed by this government will create a new problem, i.e. what do we pay or not pay this month. A bankrupt government would create a more serious crisis than any we have ever faced. Listen to the hearing, read the legislation, study the numbers, and see what you think.
“Give a man a fish and he will eat for a day. Teach a man to fish and he will eat for life.”
We can do this on our own if our government would get out of the way, and simply provide us with the incentives to provide for ourselves.

The bottom line on Obama's non-existent health care/insurance reform 'plan' - show us the 'plan' you are talking about, or stop talking.