Show me the Numbers!

Either universal health care is an entitlement, or it isn't.  And, if its both, then we can divide the argument into two parts and solve from there.  Now, I do not want to hear a bunch of "blah blah blah" from the folks who are trying to push their own political agendas.  Let's keep this simple. 

If health care is not an entitlement, then how do you think this is going to work?  Is this some kind of trust fund that we will all pay into and get some benefit?  Is this going to be an equal benefit for all participants?  Or, is this another "progressive" program where those who make more have to pay more?  If this is another "progressive" program, where some people will pay more than others for the same service, then, in my opinion, this is just another "share the wealth" policy; yet another entitlement disguised as progressive legislation.  And, I certainly hope that Americans will be able to find out; so, when it comes time for elections they can vote accordingly. 

If health care is an entitlement, then how do you think you are going to pay for this?  I do not want to hear talking points.  I want to see numbers.  And, I want them presented without all the obfuscation that is usually used to hide the real agenda.  Its simple.  Where is the money to pay for this entitlement program coming from?  I have heard that this will not have any new taxes.  Forgive me, but I find this hard to believe.  So, the government is going to have to cut spending some where else, if this program is going to be funded.  Since I sincerely doubt that congress is going to reduce their sizable compensations, I suspect things like Defense and NASA are going to pay the price.

Again, let's keep this simple.  Show me the numbers.  Where is the money coming from to pay for the health care program?

We are in a very serious economic situation, that was caused by consumers spending more money than they actually had.  I know - I know - it's not their fault.  But, that is another blog.  Back to this blog.  Why in the world is the government doing the same thing?  Did we not learn anything from this economic mess?

I've heard that this health care program will "pay for itself through a
reduction is costs".  Oh really.  I thought the only way to control
costs was competition.  That's what that high-priced college economics class taught me.  How is there going to be real competition if the government is involved?  Today, pharmaceutical companies have to compete for market share; just like any business.  It's this competition that will control costs. 

I've heard that the government wants to cap the amount of profit a pharmaceutical company can make.  Okay.  So, how do you think pharmaceutical companies pay for research?  Imagine what would have happened if we had started controlling pharmaceutical companies 30+ years ago?  We might still have some of those really nasty diseases.  There is no way the government can "govern" the pharmaceutical business, in order to control costs.  Regulation always increases costs - look at the empirical evidence.  And, for anyone to think they can regulate this industry without damaging the research and development efforts; they are delusional. 

Some of my best friends have died of cancer.  I donate money every year to cancer research.  And, I still do not think enough money goes into medical research.  If the government gets a hold of this industry, I predict lifespans will start shortening because of the inability to get new medical treatments. 

Yet Another Tax

For those of you who have not heard, the Republicans have proposed to start taxing your health care benefits.  Yes - I said the Republicans.  The Republicans are supposed to be the party that wants to reduce taxes; except for our health care.  For some reason, that completely eludes me, the Republicans have decided that taxing our health care will make health care more fair.  From where I sit, this is the most idiotic thing I have ever heard.  It's bad enough the Democrats are planning to raise taxes on just about everything else.  Why in the world are the Republicans advocating taxing our health care benefits?  Can someone explain this to me please?

I think this is one of the key reasons why the Republicans lost the presidential election.  If you recall, talk of taxing our health benefits surfaced a couple of months before the election.  And, this is right around the time that the Republican candidate began losing ground against the Democratic candidate.  Republicans are supposed to be the party of fiscal responsibility; at least they were before the Bush-Delay days.  I believe it is policies like taxing health care benefits that drove all the moderates and independents away from the Republican party.  And, if they do not wake up soon, those folks are going to stay away from the Republican party. 

The bottom line is that unless the public starts to let their government representatives know how they feel about having their health care taxed, your health care benefits are going to be taxed.  And, we will have the Republicans to thank! 

Call your Senators and Representatives today!  We are Taxed Enough Already!

What Growth?

I was watching CNBC this morning.  And, I heard someone (don't remember who) talking about how good the earnings for companies were going to be.  This individual was clearly excited about the prospect of the market going up as a result of earnings going up.  At first thought, it sounded like good news.  Then, I thought about it ...

Unemployment numbers came out today, and they were not good.  Yeah, I admit the number is getting smaller every month.  And, if we continue on this trend, the new unemployment claims should reach a pre-recession level some time at the end of 2010.  But, we also need to consider that these numbers are not realistic.  You see, the government, by virtue of owning the automobile companies, has effectively kept the unemployment numbers from growing by continuing to pump money into the two now bankrupt car makers (GM and Chrysler).  Think about it ... the government is still paying these folks (and huge salaries by the way).  Yet, the unemployment numbers are not getting worse.  The government is in a win-win situation.  They are keeping a large number of the folks who put them in power employed.  And, they are keeping the unemployment numbers from increasing.  This is great, right?  After all, its all tax payers money.

The reason I took the scenic route on this "rant" was because I wanted to talk about unemployment in context of earnings.  Have you noticed that a number of companies are reporting record earnings?  Haven't you wondered how this is possible?  Well, if that company cut a bunch of its employees in order to cut costs; that would be one explanation.  There are two parts to the earnings calculations: Revenue and Cost.  Growth is typically an increase in Revenue (either by real growth or price inflation).  In an earlier post ("Maximum Wage"), I already talked about what companies are doing to increase revenues, so, I will not go into a lot of details here.  The key point to be made here is that companies are still laying off employees.  Further, companies are not increasing revenue as a result of growth in the market.  If there is any revenue growth, it is because companies are increasing prices in response to increases in the prices of the raw materials they consume. 

So, why do we care?

Before you start buying stocks, you might make sure the company who's stock you are buying is not just increasing their earnings by reducing their workforce.  Eventually, they are going to run out of people to cut.  And, as more and more folks lose their jobs, the demand for products and services is going to drop as well.  So, the company's revenue will have to decrease because demand for products and services will have to decrease.  Its a vicious cycle.  Nevertheless, think very carefully before you invest your cash.  People want to hope that things are going to turn around quickly.  We know this from experience.  Hope will not pay your grocery bill.