By Monty Pelerin, on March 10th, 2010 Anyone who has looked at the financial condition of this country knows insolvency cannot be remedied without severe cutbacks in entitlements such as Social Security, Medicare and Medicaid. Similarly, major cutbacks in the welfare and warfare state will be required. These latter cutbacks are not sufficient. The bulk of the cuts must come from entitlements.
For those depending upon these benefits, the bad news is just starting. Bloomberg reports:
Erskine Bowles, co-chairman of the commission on U.S. deficit reduction, said entitlement programs such as Social Security will turn the nation into a “second- rate power” if their costs aren’t reduced.
“We’re going to mess with Medicare, Medicaid and Social Security because if you take those off the table, you can’t get there,” Bowles said today in a speech to North Carolina bankers in Greensboro. “If we don’t make those choices, America is going to be a second-rate power and I don’t mean in 50 years. I mean in my lifetime.”
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By Monty Pelerin, on March 6th, 2010 The title puts the sound of Obamacare into perspective. Orally, it is possible that the speaker means it either way. “Obama care” is the issue that Simon Johnson, MIT economist, explores. More specifically, “Does Obama care?”
Johnson appears to answer the question with a No. He believes Obama is not trying to remedy the economic mess:
But ever so quietly, you get the impression the Obama team itself is not so very unhappy — they know the jobs will come back by 2012, they feel that Republican control of the House will just energize the Democratic base, and no one will be able to blame the White House for getting nothing done from 2010 on.
If Johnson is correct in his impression, how competent can this Administration be? How does someone who accomplished nothing in his first two years possibly think that pitching another two year shutout can help in 2012?
According to Johnson, the Administration thinking is that unemployment will not be a crippling issue in 2012:
The inner team apparently thinks that 2012 will go just fine — as long as unemployment is down around 6 percent.
It would have been interesting to hear Johnson’s opinion on the unemployment target. In my opinion, unemployment dropping to 6 percent by 2012 seems extremely slim. Massive tax increases are just around the corner. Higher interest rates probably are as well. A weakening dollar may force Bernanke’s to tighten monetary policy. Unemployment does not improve under any of these conditions.
If, in fact, the beliefs communicated by Johnson
Continue reading ObamaCare or Obama Care?
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By Monty Pelerin, on March 4th, 2010 J. R.Nyquist has written an excellent article on Healthcare.
He summarizes quite nicely the economic aspects of healthcare and why soft-headed thinking, regardless of good intentions, produces bad results.
He uses basic economics to describe why healthcare, as proposed, must fail. It cannot work in theory. And it cannot work in practice. Nothing the government has ever done has worked. They have no record of improving anything. Generally, their results are just the opposite from what the intended. Here is Nyquists assessment:
But many agree that the health care system is broken. So government is to fix the problem? Just like they won the war on drugs, crime and poverty. Just like they fixed education, and the family court system. Anyone who understands today’s social problems can see that government has solved nothing. In fact, there is no way government can fix our health care problem, especially when government has lost sight of its basic function (i.e., national security). Every solution offered by government leads to further problems: dependency, corruption, economic inefficiency, clogged courts and crowded prisons, schools that graduate illiterates, broken homes and neglected children.
Finally, Nyquist believes the entire effort of taking over healthcare is merely an early step in a “road to serfdom:”
After the government has taken over the management of health care, the socialists will find yet another industry to target. As each sector of the economy is colonized by government, as each citizen is guaranteed free health care, free bread or lodging, the power of the state will
Continue reading The Basics of Healthcare and Economics
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By Monty Pelerin, on February 26th, 2010 The unpopularity of Obamacare continues. The image to the right, obtained from the American Thinker site, provides visual evidence of what most Americans sense. Rube Goldberg would be proud of this contraption. Of course his health did not depend upon it.
A Rube Goldberg Contraption
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By Monty Pelerin, on February 21st, 2010
Image via Wikipedia
There apparently is no limit to President Obama’s hubris and arrogance. He has gotten message after message on health care reform, yet insists on pushing forward with it. Polling data is overwhelming. Recent elections were likely referendums on his health care plan.
From a political standpoint, there can be no more toxic issue for Democrats. Rasmussen’s latest poll (2/21) reports: “Forty-one percent (41%) Strongly Disapprove giving Obama a Presidential Approval Index rating of -19. The Approval Index has been lower only on one day during Barack Obama’s thirteen months in office (see trends). The previous low came on December 22 as the Senate was preparing to approve its version of the proposed health care legislation. The current lows come as the President is once again focusing attention on the health care legislation.”
Just as discouraging must be the drop in the President’s Strongly Approve rating to only 22%, the lowest yet recorded. The population of messianic followers appears to be dwindling.
Below the surface, Congressional tectonic plates are likely shifting. The old bulls in Congress have always had inflated impressions of their value to the world. To them, a President of either party is merely a means to accomplish their agendas. If the President is of the opposing party, destroy him. If of your party, ride him.
When Obama was seen as a magical asset, they were willing to go along and treat him with respect. As the public increasingly views “The One”
Continue reading Democrats seek distance from Obama as health care reform is revived
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Friedrich von Hayek
Friedrich von Hayek founded the Mont Pelerin Society.
“Monty Pelerin” is a pseudonym chosen by this blogger to convey general agreement with the philosophy, goals and spirit of the Mont Pelerin Society. No other connection exists between the blogger and the Society.
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