Category Archives: co-pays

Immediate Repeal Of Obamacare Mandates And 10% Tax On Repatriation Of Overseas Funds

February 24, 2017

Dear President Trump;

Congratulations on your election victory. I am a Harvard Law School graduate with more than 50 years experience as a practicing securities, corporate, tax and estate planning attorney. I self-published two virtually unread books and a blog at sjfeconomics.com relating to homeland security and economic prosperity which I believe have important ideas that can be extremely helpful to your team. I delivered copies of my books to you with my letter of support in March 2016.

I have reviewed your first 100 day plan and strongly approve of most of it. For your program to be successful you must also win the political game for public approval of your actions that will be played against Democrats led most likely by President Obama and the liberal press. We know that they will rely on fake news, misleading statements and lies. Many of your proposals like your cabinet appointments will get delayed in Congress.

You are off to a good start. It is important that you do not lose the momentum. This letter will deal only with immediate steps to take relating to two of the items included in your 100 day plan that will impact job growth, namely, the manner in which Obamacare should be repealed and replaced and the change in the corporation tax laws by lowering the tax rate for repatriating capital held overseas to raise revenues to finance infrastructure construction.

1. THOUGHTS ABOUT THE REPEAL AND REPLACEMENT OF OBAMACARE

I am writing as a game player to suggest a strategy to win the approval of the minds of voters in the game of repealing and replacing Obamacare. I note that my factual knowledge about Obamacare comes primarily from TV and newspaper reports, discussions with friends and doctors and internet searches and must be fact checked. I know that millions of hours have been spent by people more qualified than me to expose the evils of and to guide Congress in developing a replacement plan for Obamacare.

OBAMACARE IS NOT FIXABLE. It is disguised as a health insurance program, but is primarily a welfare platform to provide tens of billions of dollars of healthcare benefits annually for people with pre-existing conditions that are disregarded in setting premiums. It is an intricately designed hodgepodge of laws that create uniform healthcare coverages entwined with Medicaid, Medicare, prescription drug and tax provisions (that further burden the middle class) included to make it appear attractive and to make it difficult to repeal. It was fraudulently promoted as a program that would cover everyone and reduce healthcare premiums. It is very unpopular and is failing primarily because of its excessive and often unaffordable premiums to employers who are the major purchasers of healthcare coverage and the outrageously high premiums and deductibles for healthy young people whose income level does not permit them to qualify for the subsidies. The high deductibles even make it worthless for many low-income people who qualify for premium subsidies. Ignoring pre-existing conditions is like offering fire insurance for your home after a fire has occurred or auto insurance after the accident. It is like telling homeowners that their fire insurance rates are being doubled or tripled so that uninsured owners whose homes have already burned down can buy a policy and collect hundreds of thousands of dollars to rebuild their homes. Trying to trick middle class young people and their employers to pay for such excessive benefits for others is outrageously unfair. The death spiral we are witnessing was inevitable. It has been accelerated because young healthy middle class people learned they were being targeted.

From its inception President Obama acting like a snake oil salesman has time and again lied about Obamacare to prevent successful young healthy people from learning that they were intentionally being grossly overcharged to pay for the welfare benefits of others. It was the only game in town and many people bought Obamacare coverage. Now President Obama and other Democrats make misleading claims about the number of people covered under Obamacare, but fail to acknowledge the many millions of people bought Obamacare plans because they lost their former plan or thought they had to or who are without coverage because they lost their employer paid coverage when they changed jobs or their work week was reduced to under 30 hours by their employer to avoid the Obamacare coverage mandate. President Obama didn’t tell Americans that a high percentage of the people who signed up for Medicaid or for Obamacare policies are receiving a welfare benefit. Now former President Obama and his cronies who designed Obamacare want to increase the penalty. In other words, if young people continue to elect not to purchase overpriced Obamacare insurance they should be punished by paying a penalty that the Supreme Court permitted as a tax to subsidize the welfare payments for others. The very existence of the penalty is proof that President Obama and the draftsman knew when they adopted Obamacare that the premiums and deductibles of Obamacare insurance plans offered to young middle class taxpayers were grossly unfair and that many young people would refuse to buy such plans even if they were given names of precious metals, namely, Silver, Gold, Copper and Platinum, to make them appear valuable. They wanted buyers to think they were being given a choice of coverage when there is no choice. They differ only in the choice of paying higher premiums to get smaller deductibles. Obamacare is so unfair that millions of people have elected to have no coverage and be subject to the penalty.

Every American needs access to healthcare. People with chronic conditions need the most expensive treatments, procedures and drugs. Prior to Obamacare we provided subsidized healthcare benefits for the elderly, the poor and the sick under Medicare and Medicaid and at hospital ERs, but many people were unable to afford health insurance because of ratings. We sought ways to assist such people by designing high risk pools. Obamacare was designed to ignore pre-existing conditions when setting premiums. But, we cannot afford to give and no-one should expect to receive unlimited healthcare for a small fraction of its predictable cost, which is what Obamacare attempted to do. A large number of people with pre-existing conditions now have coverage under Obamacare. Many of them were covered and continue to be covered under employer plans. Some of them are receiving hundreds of thousands of dollars of welfare benefits annually for a relatively small premium or co-pay. Those receiving excessive benefits under Obamacare, the Democrats, including President Obama, some Republicans who fear being involved with reducing a welfare benefit and the liberal press will protest loudly against any attempt to reduce the welfare benefits of Obamacare. Even if a special high-risk pool is created and the US government (and not the middle class and employers) contributes a substantial welfare benefit to subsidize those with pre-existing conditions, it will still be painful to people whose benefits are reduced when Obamacare coverage is not renewed and ends. To paraphrase Shakespeare, if it must be done, better it were done quickly. No-one was dieing in the street prior to the adoption of Obamacare. Hospital ERs have long been required to treat all patients and they currently treat many people with Obamacare, Medicare or Medicaid coverage who do not have immediate access to a doctor. Hospitals provide a significant portion of all healthcare benefits and their services must be paid for. Hospitals pass on the cost of all unpaid ER care (and all Medicare and Medicaid underpayments) by increasing the charges to those who pay. As a result the middle class and their employers were, prior to Obamacare, paying a substantial portion of the healthcare benefits provided at ERs for the sick and the poor, including documented and illegal immigrants. Rising healthcare costs paid by employers (which, including employee co-pays, now exceed $20,000 per employee) are largely responsible for the lack of wage increases during the last 10 years. Many ER patients work off the books and claim they are unable to pay. We should seek ways to collect ER payments due from those who hide their income.

Even if Obamacare is repealed, increasing ER, Medicare and Medicaid underpayments to healthcare providers threaten to continue to cause an increase in healthcare premiums and deductibles and further erode the quality and availability of care. The problems of Medicare which has many trillions of dollars of unfunded liabilities have been masked by the obvious failures of Obamacare. Medicare is a needed program for the elderly, but must be reformed before it causes more serious harm to our economy.

DON’T WAIT A FEW MONTHS OR LONGER TO PRESENT A PLAN TO REPEAL AND REPLACE OBAMACARE. DEAL WITH OBAMACARE IN STEPS. I APPLAUD YOUR EXECUTIVE ORDER TO END THE OUTRAGEOUSLY UNFAIR OBAMACARE TREATMENT OF YOUNG MIDDLE CLASS TAXPAYERS. YOU ARE CLEARLY CORRECT THAT ALL OBAMACARE MANDATES AND PENALTIES ARE UNFAIR AND SHOULD NOT BE ENFORCED. BUT, DO NOT RELY SOLELY ON THE EXECUTIVE ORDER. WE ARE A COUNTRY OF LAWS THAT SHOULD BE ENACTED, MODIFIED AND REPEALED BY CONGRESS. FOLLOW UP YOUR EXECUTIVE ORDER BY HAVING CONGRESS REPEAL ALL OBAMACARE MANDATES AND PENALTIES, EFFECTIVE IMMEDIATELY AND PHASE OUT REBATES AFTER 2017. IT CAN BE DONE IN A MATTER OF WEEKS. PRESIDENT OBAMA AND THE LIBERAL PRESS WILL ATTEMPT TO SET UP ROADBLOCKS AND WILL CRY THAT PENALTIES AND SUBSIDIES WERE AN INTRICATE PART OF OBAMACARE AND THAT REMOVING THEM WILL DESTROY OBAMACARE. PRESIDENT OBAMA CLAIMS THAT OBAMACARE IS A WONDERFUL IMPROVEMENT IN OUR HEALTHCARE LAWS WHICH HAS PROBLEMS THAT CAN BE FIXED BY RAISING THE AMOUNT OF THE PENALTY AND MAKING OTHER MINOR CHANGES. THAT IS JUST ANOTHER OBAMA LIE (LIKE YOU CAN KEEP YOUR DOCTOR OR YOU CAN KEEP YOUR PLAN) THAT MUST BE STRONGLY CRITICIZED. THE HIGHER THE PENALTY THE MORE UNFAIR OBAMACARE WOULD BE. RISING HEALTHCARE COSTS HAVE DESTROYED THE MIDDLE CLASS AND LEFT MILLIONS OF PEOPLE WHO REFUSE TO PAY THE EXCESSIVE PREMIUMS AND BE SUBJECT TO THE HIGH DEDUCTIBLES OF OBAMACARE WITHOUT HEALTH INSURANCE. FACE DEMOCRATS AND THE PRESS HEAD ON IN THE BATTLE OVER THE REMOVAL OF THE MANDATES, PENALTIES AND REBATES. READ MY ARTICLE ENTITLED PRESIDENT OBAMA’S DECEITFUL AND RELENTLESS SISYPHEAN TYPE PUNISHMENT OF THE MIDDLE CLASS AT SJFECONOMICS.COM. YOU MIGHT WANT TO COMPARE THE PUNISHMENT OF SISYPHUS TO OBAMACARE’S PUNISHMENT OF THE MIDDLE CLASS. OBAMACARE IS JUST ANOTHER SOCIALIST ATTEMPT TO TAKE FROM THOSE WHO EARN AND GIVE IT TO THOSE WHO NEED.

Without mandates insurance companies who conspired with President Obama by participating in the sale of grossly unfair Obamacare plans on the exchanges will incur even more significant losses on Obamacare policies due to expensive benefits given to people who had pre-existing conditions when they bought Obamacare plans. On the other hand, with the mandates removed, insurance companies, which were prevented by the Obamacare coverage mandates will be allowed to immediately start to design new insurance products to compete with Obamacare and seek the approval of state insurance departments to sell such policies. I expect that within a year no insurance company will offer an Obamacare policy. It will confirm and you should explain loudly and clearly by tweets that Obamacare was a hoax conceived and carried out by President Obama and the socialist Democrats with the assistance of the insurance companies to provide a secret welfare program for people with pre-existing conditions and a way for hospitals and other healthcare providers to recover some of their Medicare, Medicaid and ER underpayments (discussed below) by greatly overcharging the young healthy middle class and their employers.

Millions of people will be without healthcare coverage after the self-destruction of Obamacare, but the numbers will be exaggerated by Democrats. The outrage of Democrats claiming that you will be depriving 20,000,000 to 30,000,000 people of coverage has already begun. I believe that about 12,000,000 of them are on Medicaid most of whom should be allowed to keep their coverage as a welfare benefit. Many people with pre-existing conditions are covered by employer plans and will not lose their coverage. On the other hand millions of young people are currently without coverage or they or their employers are paying excessive amounts for coverage. Demonstrate that you seek to be the savior of the young middle class and their employers. We can expect that if healthcare costs decline raises will follow. Put together a group of brilliant actuaries to expose the truth about Obamacare. Have them present examples of young middle class individuals who are paying premiums of more than $10,000 with high deductibles that make their coverage worthless. Have them demonstrate that on an actuarial basis (and assuming a fair billing rate) young healthy middle class people should have paid only a few thousand dollars for a similar plan with a low deductible and including catastrophe coverage to protect against sickness and injury during the one year term. Have the actuaries give specific examples of individuals who were previously uninsurable and received hundreds of thousands of dollars of benefits under Obamacare while paying a subsidized premium of only a few thousand dollars.

AFTER REPEALING THE MANDATES, PENALTIES AND SUBSIDIES, IT WOULD BE A NO-WIN SITUATION TO TRY TO REPLACE OBAMACARE WITH A LAW THAT WILL BE BRANDED AS TRUMPCARE. LET AMERICANS KNOW THAT YOU ARE RELYING ON A REPUBLICAN CONTROLLED CONGRESS TO FIND A WAY TO REPEAL AND REPLACE THE REST OF OBAMACARE ASAP, BUT HAVE LEARNED THAT IT WILL BE EXTREMELY DIFFICULT. OBAMACARE HAS NOT ONLY INCREASED THE COST OF BUYING HEALTHCARE COVERAGE, BUT HAS ALSO SEVERELY HARMED MEDICAL PROVIDERS, REDUCED THE AVAILABILITY AND QUALITY OF CARE, AND INTERFERED WITH THE RELATIONSHIP OF DOCTOR AND PATIENT. REPLACE OBAMACARE BY BRINGING BACK FREE MARKET COMPETITION AMONG INSURERS UNDER STATE INSURANCE DEPARTMENT SUPERVISION. MINIMIZE THE ROLE OF THE FEDERAL GOVERNMENT TO RUNNING MEDICARE AND SUBSIDIZING MEDICAID AND TO A LIMITED EXTENT SUBSIDIZING COVERAGE FOR PEOPLE WITH PRE-EXISTING CONDITIONS. MAKE EVERYONE AWARE THAT OUR HEALTHCARE SYSTEM IS FAILING BECAUSE IT IS OPERATED AS AN OUT OF CONTROL WELFARE SYSTEM WITH ENORMOUS WASTE AND INEFFICIENCY. DOCTORS INCUR EXPENSIVE LONG TERM TRAINING AND SERVE AS UNDERPAID INTERNS AND THEN FACE RECORD KEEPING REQUIREMENTS AND PAYMENT LIMITS THAT PREVENT THEM FROM EARNING DESERVED COMPENSATION. THOUGH MOST HOSPITAL BUILDINGS ARE PAID FOR BY CHARITABLE CONTRIBUTIONS FROM WEALTHY INDIVIDUALS, MEDICARE AND MEDICAID PAYMENTS TO HOSPITALS ARE ON THEIR FACE INADEQUATE TO COVER OPERATING COSTS FOR THE SERVICES PROVIDED. AS A RESULT PROVIDERS CHARGE AN EXCESSIVE AMOUNT FOR THE SAME SERVICES PROVIDED TO OTHERS .

You should encourage Congress, the insurance companies and the healthcare providers to work together to promptly deal with replacing Obamacare, but stay out of the extremely complicated mess that Obamacare has created. It will continue to haunt healthcare for many years. We do not know if most employers will return after the elimination of the mandates to 40 hour work week jobs or offer healthcare coverage to low-income employees after the mandates are abolished. No matter what reasonable approach Congress makes to create high-risk pools, the press will report incessantly about the sad stories of people with pre-existing conditions who lost their Obamacare policy and died, or can no longer afford their healthcare coverage or a needed expensive drug. Parts of Obamacare that make sense like coverage under your parent’s policy until age 26 or the doughnut hole and Medicare and Medicaid changes included as part of the Obamacare can be expected to be considered by Congress and the insurance companies when they are creating new policies. Congress by finally enacting laws limiting malpractice claims will both reduce healthcare costs and make the practice of medicine more profitable and less stressful. We should also consider including sales across state lines, which will require controls on risk taking and adequate capitalization of insurers plus guarantees against the bankruptcy of insurers.

You have only a few months to get the insurance companies to come up with new policies and present them for approval to the state insurance departments if you wish to minimize the number of uninsured people at the end of this year. Get insurance companies to offer inexpensive catastrophe policies as soon as practicable in as many states as possible to healthy young people to offer them protection (even if the are currently covered by an Obamacare plan) against the risk of becoming subject to a pre-existing condition in the interim period while Obamacare is being replaced. We must get patients and healthcare providers involved with benefit choices and place reasonable coverage limits for all plans to encourage wellness programs and avoid wasteful healthcare demands. One way is to encourage expanded use of tax-favored HSAs and tax DEDUCTIONS to supplement healthcare plans with high deductibles. We might also allow HSAs that encourage savings for use with low deductible plans.

Employer plans often cover employees with pre-existing conditions, but the employee must remain well enough to continue to work. Portable catastrophe coverage insuring against acquiring a sickness or injury that would be viewed as a pre-existing condition should be required as part of all future insurance plans. Such requirement will, over time, reduce the number of people who acquire pre-existing conditions and are thereafter unable to afford healthcare coverage. Congress should determine whether employees who lose their coverage because their employment is terminated and who have become subject to a pre-existing condition should be entitled to remain on the employers plan at their own expense (that may be paid in whole or part by their new employer) or become entitled to purchase comparable insurance from a government subsidized high risk group.

Doctors have struggled with declining incomes and quality of life as a result of Medicare, Medicaid and Obamacare under-payments and complex paper work needed to comply with federal regulations and get paid for services. Many doctors have left the practice of medicine. Others have become employees of large hospital groups or medical practice organizations. We can greatly lower healthcare costs and improve outcomes. We should make greater use of clinics staffed by nurses and clinicians to reduce cost and alleviate the overcrowding of ERs by permitting hospitals to treat patients at clinics as well as ERs. Hospitals can improve care and reduce duplicate and unnecessary procedures by assigning a clinician, a nurse or a doctor to co-ordinate the treatment of each patient. To encourage students to become doctors we should expand the program offered by the armed services by providing medical school scholarships for individuals who commit to provide a designated number of hours of service before and after graduation at ERs and clinics.

EXPLORE A MAJOR CHANGE IN HEALTHCARE BY AUTHORIZING A 90 DAY STUDY TO CONSIDER PERMITTING HOSPITALS AND OTHER HEALTHCARE PROVIDERS TO CREATE INSURANCE SUBSIDIARIES AND OFFER INSURANCE COVERAGE OR A VARIETY OF CONCIERGE PLANS (THAT MIGHT BE TAX DEDUCTIBLE) TO COMPETE WITH THE PLANS OFFERED BY INSURANCE COMPANIES. HOSPITAL GROUPS ARE ALREADY EXPANDING TEAMS OF EMPLOYED DOCTORS THAT COULD PROVIDE THE SERVICES FOR SUCH PLANS. TO ENABLE HOSPITALS TO SPECIALIZE INSURANCE COVERAGE OR CONCIERGE PLANS COULD INCLUDE SERVICES OFFERED BY PARTNERSHIPS OF MULTIPLE HOSPITALS OR GROUPS OF PHYSICIANS.

In conclusion, I ask myself why a program so fraudulent as Obamacare can be defended by a large number of intelligent and successful people. Many of them are earning more than $250,000, are satisfied with their lives and are willing a contribute a small portion of their income to improve the lives of the sick and the poor. Many of them are clueless as the the damage to the middle class caused by such excessive premiums. Most of them have growing investment portfolios and have their healthcare paid by their employer. Unlike American capitalism which has relied on hard working individuals and endured for more than 200 years, no socialistic country has succeeded in the long run. Most people believe that we are a rich country. They ignore the surge in the National Debt to over $20 trillion coincidental with the increases in welfare and disability payments and the large number of people not working or paying income taxes. The slow conversion of our economy to socialism must be reversed and we must grow the GDP before our National Debt becomes unsustainable and our economy collapses.

2. THOUGHTS ON INFRA STRUCTURE CONSTRUCTION AND AN INTIAL CHANGE IN CORPORATE TAXATION

I urge you to ask Congress to immediately reduce the corporate income tax to 10% on repatriation of foreign earnings. It is a “no-brainer”. Make this a stand alone proposal with a sundown provision after two years unless modified in the expected comprehensive corporate tax legislation. Getting the remainder of your tax reduction plan through Congress expeditiously is important, but it may take more time than you think to do so. Hopefully the tax revenues from the repatriation of funds will immediately provide funding of about 100 billion dollars that can be applied to increase transportation infrastructure spending and propel GDP growth without increasing the federal deficit. Act quickly because the extra tax revenues are going to be offset in large part by two factors that have occurred following the presidential election, namely (i) the spike in US interest rates that will raise US government interest costs by $100 Billion for each 1/2% increase in rates as the National Debt is refinanced and (ii) the negative impact on the US trade deficit and corporate profits resulting from the increase in the value of the US Dollar. Bringing the money back to the US may further stimulate capital spending but the cash might be used for dividend increases and stock buybacks that provide lesser stimulus for the GDP. That is why I proposed corporate income tax changes in my book published a few years ago entitled “Perpetuating American Greatness After the Fiscal Cliff” (see pages 64 to 77 in the enclosed copy) to encourage corporate and private investment in partnership with government spending on transportation infrastructure through the purchase of “Jump Start America Bonds” which might now be called “Make America Great Again Bonds”. Individual and corporate balance sheets are much stronger than governmental balance sheets and are better prepared to finance transportation infrastructure.

I will in future letters comment on other parts of your 100 day plan and describe my plan for an interstate fresh-water pipeline project that could be the most important economic development of this century. Constructing a privately owned and financed fresh-water pipeline would create hundreds of thousands of jobs, add tens of billions of dollars to the GDP, reduce the federal deficit, provide water for farming and controlling wind fires, assist in flood control and lower ocean levels to mitigate any potential climate change. I will also propose a very simple proposal for a corporate income tax credit that will encourage immediate wage increases for non-executive middle class workers to stimulate economic growth, help recreate a middle class and generate increased long-term federal income tax revenues.

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President Obama’s Deceitful And Relentless Sisyphean Type Punishment Of The Middle Class

In Greek mythology Sisyphus was a deceitful king who was punished after death by being compelled to roll an immense boulder up a hill only to watch it roll back down, and to repeat this action forever. He deserved the graphic punishment. Middle class Americans are being subjected to a different type of Sisyphean punishment as a result of our government’s failed policies which prevents them, despite a lifetime of hard work and achievement, from being able to earn and save enough to pay for their children’s education, purchase a home, or build a fund for retirement. The middle class is the back bone of American capitalism. They produce our products and services and their spending is vital to GDP growth. It is no wonder that the US economy is sputtering. This article will examine how from the start of his presidency, President Obama’s fiscal, healthcare and immigration policies have exacerbated the undeserved and increasingly severe Sisyphean punishment of the middle class. It will also explore the various actions our federal government can take to improve our economy and our safety and at the same time alleviate the punishment of the middle class.

President Obama calls the socialist economic system developed by liberal Democrat entitlementists, his “Middle Class Economics”. His intent is to deceive voters into believing he cares about the middle class. He talks about creating middle class jobs, but, except for favoritism toward destructive unions that support him and other Democrats, has shown a total disregard of the middle class. We know that the compensation problems of the middle class began before the election of President Obama who inherited a deep recession, but despite a continuing series of stimulus programs from the Fed that reversed the decline, his fiscal policies, or “Obamanomics”, have failed to grow the US economy sufficiently to generate middle class wage increases. In fact, his policies have extended the decline in middle class wages during his presidency. Unemployment is down as a result of the growth of low-paying jobs and people leaving the work force. But, under Obamanomics we have too many middle class or former middle class Americans who are underpaid, unemployed, under-employed or have given up looking for work.

President Obama has raised federal income taxes on many of the middle class by eliminating their Bush tax cuts and imposing a Obamacare income tax on their capital gains income. He talks of spending on transportation infrastructure to grow the economy and create middle class jobs but he failed to do so when Democrats controlled both houses of Congress and he had the opportunity. Nor did he promote adequate spending on defense to maintain our military superiority that also would have created middle class tax-paying jobs. Instead he squandered trillions of dollars on predictably ineffective fiscal stimulus programs that included unsound loans to green energy companies and supported expansion of unproductive welfare programs, including Obamacare which is harming the economy. His claimed Keynesian stimulus programs failed because they were not aimed at creating tax-paying jobs that would have stimulated further economic growth and generated substantial tax revenues. Increased spending on food stamps increases the GDP and provides a short-term benefit to the recipients, but has a low multiplier effect because it leads to the creation of mostly part-time minimum-wage jobs. It increases the National Debt because it fails to generate increased tax revenues.

For decades members of the middle class enjoyed more financial success than their parents. With the decimation of the middle class that is no longer true. The most significant economic problem in the US today is not the growing income of the wealthy who are living the American dream, but the elimination of the gap in discretionary after-tax income after spending on food shelter, transportation, education and healthcare, between the unproductive poor and the productive middle class. The Obamacare subsidies, whether they are intended to do so or not, have narrowed or eliminated the gap. They have even made it possible for families who become skilled at maximizing welfare benefits, legally or illegally, to have higher discretionary income than the hard-working middle class achievers whose wages are declining. A family living of four in New York City can qualify for welfare benefits exceeding $70,000 per annum. Why haven’t more voters recognized that liberal Democrat entitlementists have created a welfare state that makes it financially desirable for many Americans to have children out-of-wedlock to be able to maximize benefits from the wide variety of available welfare programs than to get married, form a family unit and work hard to support it? That situation is unlikely to change as long as a Democrat occupies the White House.

Defining the middle class and the upper-middle class is difficult. Reasonable people can disagree as to what constitutes middle class and upper-middle class income. It varies greatly from city to city. In many cities pre-tax incomes of $70,000 to $100,000 before deducting healthcare, housing and transportation costs might be considered as middle class and $125,000 to $150,000 as upper-middle class. Others like New York, LA and Dallas require much higher income levels like $150,000 or $250,000 for an individual to be considered middle-class or upper middle class and an additional $30,000 to $50,000 for a family of four. Since the cost of living is higher in cities where middle class and upper-middle class incomes are higher, the Sisyphean type punishment applies to virtually all middle class and upper-middle class families. It also applies to many upper income families living in high cost areas.

Middle class and upper-middle class families generally encourage their children to work hard in school to get into the colleges of their choice. Unlike children from poor families who generally get full tuition scholarships if they get accepted at a college, middle class children generally do not qualify for need scholarships and have to bear a large part of the cost of college. Accumulating savings to pay for college has become more difficult during the past decade as the cost of tuition has soared due to government guaranteed loans and middle class incomes have declined. The problem became exacerbated because the savings of many middle class families was decimated when their home and other investments declined in value during the Great Recession. Students and their families have been relegated to taking out college loans in ever-increasing amounts at excessive rates of non-deductible interest. Upon graduation most of the students, except for those graduating college with the most desired skills or who are athletes or entertainers, even if they are hired in good tax-paying jobs that qualify them to be immediately counted in the middle class or upper-middle class, find themselves living with their parents, unable to repay their college loans or form a family unit. Many college graduates are unemployed or under-employed and unless substantially modified many of the current student loans are likely to be defaulted.

President Obama chose Obamacare as his most important Obamanomics initiative. He knew when he proposed Obamacare that it would place a yoke on the shoulders of the middle class and make them pay excessive premiums and deductibles. Although he knew the truth about Obamacare when it was first proposed, he disgracefully lied repeatedly for political gain about the cost reduction of $2500 per year for Obamacare plans and about keeping your doctor and your plan. He also claimed Obamacare would reduce the use of ERs as doctors for the poor. However, many poor people are expanding their demand for free treatment at hospital ERs. Where else can they find a doctor who will immediately treat them or their children 24 hours a day? He lied because he knew that if he told the truth about Obamacare, it would not have passed in Congress. President Obama’s long-term objective is clear. He is an entitlementist who wants to secure votes for Democrats from the people who benefit from Obamacare’s expansion of Medicaid and who receive premium subsidies, the new entitlements. As a socialist he wants the federal government to control healthcare which represents more than 15% of the GDP. Socialists believe that government can provide healthcare better and more efficiently than the private sector. We are already seeing strong evidence to the contrary.

President Obama’s lies also succeeded in preventing most voters from learning prior to his re-election and even to this day that Obamacare requires the middle class to pay grossly excessive premiums and deductibles to help pay for the enhanced mandated benefits given to the poor, the sick and the low-income workers whose coverage is free or highly subsidized. He also failed to disclose that young taxpayers are required to pay even higher premiums to help keep down the rise in costs for the older middle class individuals whose healthcare costs are predictably higher. He deliberately concealed the future rise in premiums and deductibles for the middle class, who are not eligible for subsidies. Such a rise is inevitable as a result of the increase in Obamacare insurers’ outlays as their statutory protection is phased out over a three-year period and as the sick learn how to make greater use of their Obamacare policies that can be purchased without regard to pre-existing conditions, but offer up to $2 Million in benefits. Helping people with pre-existing conditions to obtain improved healthcare is a desirable goal that was being pursued prior to Obamacare. Offering them a Rolls Royce healthcare plan at substantially below cost and requiring the middle class to pay for it, is outrageously unfair. Prior to Obamacare many middle-income families, unless their children qualified for large scholarships, used most or all of their life savings to pay for their children’s college tuition and related costs. After Obamacare they are likely to have little or no savings to pay for education.

Employers, many of whom offer healthcare benefits, are also subjected to the horrors of Obamacare mandates and rising premiums. To avoid Obamacare burdens, many employers are converting full-time to part-time jobs and will pay penalties rather than Obamacare premiums, while encouraging their low-income employees to seek subsidies under Obamacare. Corporate executives facing a long-time stagnant economy and obsessed with increasing profits to please shareholders and to justify their excessive compensation will continue using increasing healthcare costs as an excuse for limiting wage increases.

President Obama is now claiming Obamacare is a success because an increased percentage of Americans have healthcare coverage. The increase results from people taking advantage of Obamacare’s new welfare entitlements that give coverage for free or at below cost to (i) poor people signing up for expanded free Medicaid, (ii) sick people, who couldn’t previously obtain coverage, taking advantage of the opportunity to purchase insurance at standard rates which pay for only a small fraction of their high-cost care and (iii) low-income people buying expensive Obamacare policies because they are offered discounts in the form of subsidized premiums and deductibles. President Obama ignores the evils of Obamacare, which include the hundreds of billions of dollars of costs to offer these new entitlements or the harm to doctors and other healthcare providers and the reduction in the quality of care resulting from attempts to limit cost increases for those who pay. Some healthy middle class people have been tricked by Obamacare ads into signing up for insurance to avoid paying a penalty. They are not told that the penalty is less than the over-priced premium for a Obamacare policy that may be worthless to them because of the exorbitant deductibles. He considers it a success because more people have coverage and once you give an entitlement it is difficult to take it away. He obviously doesn’t care about the spiraling cost of Obamacare premiums for the unsubsidized middle class, the damage to the healthcare system, or the size of the National Debt. That’s for the next president to worry about.

President Obama believes that even if the Supreme Court rules that a major portion of the subsidies are being paid illegally, Republicans will be afraid to enforce the law and will grant a waiver to those receiving subsidies. Republicans in Congress should go to the aid of the middle class by voting to eliminate all the Obamacare subsidies and mandates regardless of the Supreme Court’s decision and  immediately propose a replacement for Obamacare even though they know it will be vetoed by President Obama. Republicans should make the repeal of Obamacare a major 2016 campaign issue. Republican control of the White House may be required to appeal Obamacare.

Obamacare and the skyrocketing costs of other welfare entitlements are likely to prevent most of the middle class from ever again accumulating meaningful wealth despite a lifetime of hard-earned achievements. They virtually guaranty that the Sisyphean punishment of the middle class will persist from generation to generation unless we find a way to grow the GDP at more than 5% per annum and Congress (i) reins in welfare spending as a percent of the GDP, (ii) modifies welfare benefit rules to discourage bearing children out-of-wedlock and encourage family formations or at least identification of fathers, (iii) creates incentives to work, (iv) repeals Obamacare, or at least its subsidies and mandates, (v) deals with future unfunded Medicare obligations and (vi) modifies and enforces our immigration laws. The horrendous growth of the National Debt resulting from welfare costs, including Obamacare subsidies, has to date gone almost unnoticed because, due to Fed low-interest rate policies, it has not yet significantly impacted taxpayers. The people who qualify for the Obamacare subsidies pay little or no federal income tax and many receive negative income tax payments, another form of welfare for the poor paid for by tax-payers.

Most Americans are oblivious to the dangers posed by the National Debt which exceeds $18 trillion. They know that we are a rich country. They observe our amazing technology, the continuous growth in stock market indexes and the financial success of many Americans and the top 1% in particular. The number of millionaires and billionaires is skyrocketing. They do not understand that if the National Debt continues to grow much faster than the GDP (as it has during the entire term of the Obama presidency) which is likely because our government faces tens of trillions of dollars of unfunded entitlement liabilities, and if interest rates return to prior levels, a time will come when our government has to raise taxes, confiscate wealth or print large amounts of dollars to pay the annual interest charges. Since the tax burden of middle class taxpayers is already excessive, socialist entitlementists are beginning to make demands to substantially increase the tax rates on the upper class and the wealthy and eventually will demand confiscation of wealth. Such tax increases or confiscation of wealth inevitably will likely lead to an economic decline further harming the middle class and jeopardizing the survival of American capitalism. Our country’s financial condition could change suddenly if the National Debt spirals upward and the US dollar is abandoned as the world’s exchange currency and collapses in value.

President Obama argues for a higher minimum wage, which is of questionable overall benefit. It will help some workers working for the minimum wage and hurt others and does not help the middle class. Walmart and others have recently increased wages of their mostly low-income employees, but middle class wages are unlikely to rise significantly unless we have much stronger economic growth that spurs demand for labor or corporations elect to treat their non-executive employees more favorably. Henry Ford believed that raising the wages of his employees would enable them to purchase cars. President Obama has made no meaningful effort to convince corporations to share a portion of their increasing cash flow with middle class employees rather than using it to pay grossly excessive executive compensation and giving it to shareholders in the form of increased dividends and stock buy-backs. He could have tried to encourage voluntary middle class wage increases or proposed changes in the federal corporate tax laws to give tax credits to entities giving salary increases to middle class and other non-executive employees. He might also have proposed legislation to give workers a voice in management by requiring the election of an employee representative to the board of directors.

Socialism has a long history of failure. Some might argue it is beneficial in countries with an educated and motivated work force and only a limited number of people in need of welfare benefits. However, it becomes destructive as the number of families relying on welfare grows to unsustainable levels.

The middle class is not the only group to suffer from excessive welfare entitlements. Although poor families (a large number of whom are single parent families) are singled out for preferential treatment by President Obama’s socialistic policies, quality of life for welfare dependent families has declined. Children from poor families often fail to achieve in school for any number of reasons despite trillions of dollars of government funding provided for food, housing, education and other benefits. Too few of them learn about personal responsibility and self-reliance from a parent, grand-parent or from religious training. Only a limited number of them achieve in school and become eligible for available fully paid college scholarships. Some, whether or not they finish high school, achieve the American dream by working part-time (or full-time) beginning at low pay and with effort advance up the jobs ladder to achieve middle class status or higher. However, under our failing system, a large number of people in our inner cities have turned to the welfare system as their principal means of support. Young girls often become un-wed mothers and live off the wide assortment of welfare benefits which they maximize by avoiding marriage and having additional children with the same or another unidentified father. Too many young men find a way to share the welfare benefits given to women who bear their children out-of-wedlock. Others, relieved of the obligation of supporting a family, are satisfied with part-time dead-end jobs. Many turn to joining gangs and selling drugs as their main source of income.

Recent developments have reminded us of the problems faced by many of our largest cities and how unsuccessful our efforts to improve the lives of the most needy Americans have been. Socialists do not understand that a poor person is better off being given a fishing pole than a handout of a few fish. We are learning from inner city unrest that people can’t live with dignity on welfare by choice or because there are no available tax-paying jobs. Our long list of well-intended housing programs, costing more than a trillion dollars over a more than 50 year period, have often temporarily improved housing conditions for the poor, but have over time destroyed more communities than they have helped. Instead of recognizing the negative effects of our socialistic welfare system on the lives of the poor, President Obama and other Democrat liberal entitlementists are now attempting to expand welfare benefits and shift the blame for their failed leadership on alleged police racism. They have promoted hatred of, and attempted to criminalize the efforts of, the men and women in blue who risk their lives daily to attempt to prevent crime in our inner cities. Almost every incident involving a killing of an unarmed person of color by the police becomes a sensationalized national news event prompting a large protest, whether or not justified. Too often the protests are provoked and get out of control leading to looting and arson because the police are told by local politicians and police chiefs to stand down. The inner city destruction that results leads to a demand for increased welfare to clean up the damage and rebuild. Most of the cost of rebuilding will fall on middle class taxpayers. Crime and murder rates are now on the rise in the areas inhabited by the poor in many cities where the police, prevented from performing their job and facing the risk of being personally attacked or unfairly charged with wrongdoing, become less confrontational to protect their own safety.

The middle class and the poor have also suffered from President Obama’s wanton failure to enforce US immigration laws which has enabled illegal immigrants to work at millions of jobs at below the minimum wage. Many of such jobs had previously been tax-paying middle class jobs available for legal residents. Liberals argue that these are jobs that Americans do no want. That is true in some cases, but is clearly not true for many desirable jobs involving manual labor where language and mechanical kills can be learned on the job. The long list of jobs includes building, improving, repairing and maintaining homes, apartments, sidewalks, driveways, landscaping and pools. Although employers benefit from the cheap source of labor, these are the types of potentially tax-paying jobs we need to rehabitate the middle class and lift the inner-city poor out of poverty and reduce the number of people needing welfare.

The illegal immigrants entering into the US across our borders or overstaying their visas are using their children born in the US and eligible for food stamps and other welfare benefits as their anchor to remain in the US and as their personal ATM to fund their family’s basic financial needs. Illegal immigrants are able to further improve their way of life by working at or even below the minimum wage without paying withholding taxes or receiving healthcare benefits. They get free healthcare for their families at the hospital ERs which causes crowding and adds tens of billions of dollars to the annual cost of operating the ERs. The costs, borne by tax-payers are a further burden on the middle class. We do not know the aggregate cost of providing welfare benefits to illegal immigrants and their US born children. We do know that there has been an enormous rise in the number of people receiving food stamps during the Obama presidency to approximately 50,000,000 at an aggregate cost of about $80 billion per year. A significant portion of that amount is paid to illegal immigrants families.

Unless President Obama’s current blatantly unconstitutional effort to change the immigration laws is stopped by the Supreme Court, it will result in the elimination of even more middle class jobs to the tens of millions of illegal immigrants who are already in our country. Why aren’t voters and the press demanding to know why President Obama is enabling illegal immigrants to take jobs from Americans workers? Although we are a land of immigrants and welcome more than a million people into the US as legal residents annually, as long as we recognize children born in the US to illegal immigrants as citizens eligible for welfare benefits, we will not be able to stem the flood of illegal immigrants. Nor will we prevent people overstaying their visas and going into hiding until we issue everyone an US identification card (“USID”) of a type as described in my book entitled Homeland Security and Economic Prosperity published in 2003. A USID would enable us to track illegal immigrants and serve the even more important purpose of identifying, preventing entry and limiting the movement of Islamist terrorists within our country.

Upper-income individuals and the wealthy are generally able to bear the costs of our welfare entitlements including Obamacare. However, we are already hearing almost daily from socialist entitlementists about the excessive income and assets of the top 1%. It is not the growth in the income of the top 1% that is the problem. The industrial revolution, that created wealthy industrialists, generated the middle class and made it possible for almost all Americans to have the opportunity to achieve a comfortable way of life. We should appreciate the important role now played by our most financially successful individuals who have amassed multi-billion dollar fortunes that are beyond the amounts their descendants will ever need. They currently pay a significant portion of all federal income taxes. Their capital investments are spawning new entities and their personal spending on homes, yachts, jets, cars and other luxury items propel economic growth. They and the entities they own are responsible for the creation of many millions of tax-paying jobs. Their charitable foundations are feeding the hungry, caring for the sick and finding cures for diseases worldwide. We should note that much of the income growth of the 1% results from the asset bubble caused in large part by the Fed stimulus programs that have lasted for over five years because of the failed Obama fiscal policies.

Socialists demands for confiscatory tax policies are not the answer, but changes in the tax laws to make them fair should always be under consideration. Without making income tax rates excessive, unfair and counterproductive we might consider higher, but not confiscatory, marginal rates for people earning in excess of $5,000,000, $10,000,000 or $20,000,000 per year averaged over a 3-5 year period. Investment bankers should pay ordinary income tax not capital gains taxes on disposing of their carried interest. We might also change our estate tax laws to take into account that many of the great fortunes accumulated in recent years came in the form of capital appreciation of assets that has for good reasons never been subject to income taxation until it is sold. That is why Warren Buffett pays a lower-income tax rate than his secretary. The Federal Estate Tax is designed to collect a death tax on such appreciated property. However, permitting the wealthy to donate all of their assets to charitable foundations prevents the US government from ever collecting taxes on such capital appreciation. Federal estate and gift tax laws can be changed to enable the US Treasury to recover such previously untaxed income with the remainder of the estate available to be given to a charity.

Economic growth in the US has been feeble. We need more than a trillion dollars to be spent on transportation infrastructure and increases in defense and homeland security expenditures to generate economic growth and create millions of tax-paying jobs. Many conservatives argue that only the private sector and not government creates jobs. How wrong they are. Adequate spending on infrastructure and defense by governments can lead to the creation of millions of tax-paying jobs and substantially increased tax revenues to enable the GDP to grow at a higher percentage rate than the National Debt. However, many Republican Congressman, who have for six years been unfairly abused by President Obama at every opportunity, are obsessed with the size of the National Debt and have good reasons to dislike the president. They have made no attempt to impeach him for his outrageous conduct, but we should not expect them to cooperate with him during the remainder of his term. However, the Sequester and other forms of austerity pushed by conservative Republicans are not the answer. Our goal should be to grow the GDP at 7 to 10 percent yearly while reducing welfare as a percent of the GDP. A decaying infrastructure coupled with defense and homeland security needs, available raw materials and technology and an underemployed work-force give us the opportunity to do so.

Many Republicans favor tax cuts for corporations which might help to stimulate investment. But, corporations have strong balance sheets and are not investing because they do not see a need to increase their productive capacity. They might just use the tax savings to increase dividends, stock buybacks and executive compensation. They have strong balance sheets and will begin to spend when they see the increased government spending. We should look to the wealthy and our cash rich multi-national corporations to partner with our federal and state governments and invest in and help jump-start our economy by financing transportation infrastructure construction. It can be accomplished by changes in the federal tax laws which permit corporations to bring home the trillions of dollars of cash deposited overseas if they invest it in expanding production capacity or to partner with states to finance transportation infrastructure. We could give a fair return, financial guarantees and naming rights to entities investing in America.

Republicans should take the lead in immediately promoting increased defense and homeland security spending. They should pass legislation to do so even if it is vetoed by President Obama. Although the US remains as the world’s leading military superpower, China is closing the gap and will soon equal the US militarily. China like Russia will continue to seize territory unless we take deterrent actions to prevent it or are prepared to confront them. However, they are unlikely to attack our homeland because of fear we will retaliate. A majority of Americans are war-weary and don’t want to fight to protect the citizens or territory of other nations. But, that is no excuse for decreasing and not materially increasing our military strength and preparedness. President Obama’s inept foreign policy has created a new urgent need to be prepared to defend our homeland from immediate and rapidly expanding security threats.

Throughout his presidency he has failed to recognize the threat of Shiite Islamic terrorism supported by Iran. He falsely claimed that Al Qaeda’s Sunni Islamic terrorists were on the run and diddled when they re-appeared on the scene as ISIS, savagely killed tens of thousands of people and in record time established a rapidly expanding caliphate in Syria, Iraq and elsewhere. Although Iran and ISIS have each made it clear that their goal is to rule the world, our president has downplayed the danger to our allies and our homeland and failed to develop a military strategy to deal with the threat of either Iran or ISIS. He stubbornly refuses to use US troops on the ground, even special forces to stem the rise of ISIS. It is no longer a question of trying to build democracies in Iraq and Afghanistan. We must prevent ISIS from using its caliphate to train Islamic terrorists to attack our allies and our homeland. We must also prevent Iran from developing a nuclear bomb and from gaining control of most of the Middle East. Fortunately President Obama appears to be listening to Congress and public opinion relating to verification of Iran’s current capability and delay in removing sanctions prior to such verification in negotiating his Iran nuclear deal. Our president is placing unjustifiable reliance on ill-equipped countries to retake the territory seized by ISIS and paying lip service to the Iranian risk. Apparently he is prepared to allow Iran to assume control of defeating ISIS and, if it succeeds, become the major political force in the Middle East to the chagrin of Saudi Arabia and other Sunni dominated countries who are taking actions to prevent it and to confront the danger a nuclear Iran will cause.

Meanwhile ISIS is using social media to encourage a significant number of US residents to join its cause. There are potential domestic terrorists who might commit horrendous and financially devastating damage within our country. Our constitution guarantees freedom of speech, but that does not include the right to participate in an Islamic terrorist conspiracy of the type currently being orchestrated by ISIS. The necessary evidence to prosecute the conspirators is available from their Internet communications.

We greatly improved homeland security after the World Trade Center attack on 9/11 and occasionally prevent a terrorist act. But when we examine the terrorist attacks around the globe and listen to daily news reports, it is clear that our anti-terrorist preparedness is woefully inadequate. Incompetence is rife and ignored at most government agencies. Our borders have not been sealed because our President doesn’t want to stop the flow of illegal immigrants to gain votes for Democrats. We must not wait for events that disrupt our economy or cause the death of large numbers of Americans. We must immediately recognize the danger and greatly expand the effort needed to prevent any type of domestic terrorism anywhere in the US and to respond in the event of a catastrophic event caused by a weapon of mass destruction or an attack on the Internet, our power grid or our banks. That will include hiring, training and equipping a large number of additional anti-terrorist specialists to work with current anti-terrorism forces and within local police units. We should increase the number of our military personnel so that we are prepared to fight on three fronts if necessary. Hopefully it will serve as a deterrent so that we will never have to call upon them to do so. We should address our doctor shortage and strengthen homeland security by offering free medical school to military enlistees who agree to serve as military doctors for five years after graduation. Just as the extraordinary World War II military build-up strengthened our economy and enabled us to escape the Great Depression, the effort to upgrade our military strength and to protect our homeland against terrorism, if undertaken, will enable us to jump-start the American economy and re-establish a strong middle class and permit others to escape poverty.

Obamacare Is A Giant Step Along The Path To American Communism

Preliminary Note- I expect that a majority of the readers of this article do not believe there is any danger that our economic system will ever be converted to communism. I hope for the sake of our great country that they are right. However, I fear that the conversion to American communism is already well on its way. Obamacare is a giant step along the path to American communism. Conversion to communism need not be effected by an uprising. It can and is being legislated as the law of the land by our elected Democrat representatives. Even though Russian and Chinese communism, are incorporating aspects of capitalism, American communism is different. Our federal government hasn’t seized outright control of production. Instead it has passed laws, rules and regulations to give itself indirect control in selected areas. It has been taking property, in ever-increasing amounts, from the middle class and the wealthy and giving it or applying it for the benefit of sick, low-income and poor people.

The development of American communism began before Obamacare. Providing free healthcare for the poor at hospital emergency rooms and recovering the cost by increasing the charges to those individuals and employers who paid hospitals for healthcare was a precursor of Obamacare. Charging a fee to cell phone users to fund free cell phones for the poor and increasing transit fares to gives free rides to the poor are other examples of American communism. Requiring the construction of wheelchair accessible bathrooms and ramps, though generally commendable, is requiring spending by those who have, for the benefits of people with disabilities.

What other moves toward American communism will Democrat liberals propose for the benefit of poor and low-income people when they next get the opportunity? Will they (i) require electric utilities to give free electricity or air conditioners, (ii) require landlords to allocate a portion of their properties to offer free housing, (iii) require bicycle renters to pay a higher payment to pay for free bike usage, (iv) require restaurants to give free meals, (v) require theatre owners to provide free access to movies or shows, (vi) require hotels to give free rooms, (vii) require airlines to give free travel, or (viii) require car rental companies to provide free rentals. They may not require such welfare benefits to be given for free. Instead, they might require discounts or provide poor and low-income folks with Obamacare type US government subsidies to be paid for by taxpayers. The Obama administration has found a way to confiscate and transfer wealth by extorting unfair or excessive settlements from banks growing out of misconduct by bankers relating to the collateralizing of mortgages, and redistributing a portion of the penalties collected for the benefit of the poor and organizations that support Democrats.

President Obama and other Democrats seeking political gains constantly complain about growing income inequality. It may be true with respect to the gap between the middle class, whose incomes have stagnated due in large part to the inept federal fiscal policies of the Obama administration, and those of us who have capital to invest and are benefitting from a rising stock market. Stock prices have been increasing in large part because of short-term interest rates that the Fed has kept near zero for years because of the failure of our fiscal policies. However, the gap is overstated because most employers have been paying increasing healthcare costs for their employees. While such payments do not increase cash compensation or take home pay, they have materially increased aggregate employee compensation. The income inequality gap between the middle class and low-income people and the poor is not growing, but is narrowing because of ever-increasing welfare benefits, including Obamacare subsidies, being given to the later groups. President Obama and liberal Democrats also complain that many of our highest income individuals or corporations pay little or no income tax because of tax loopholes. They could eliminate the problem, but because the beneficiaries of the income tax loopholes are major campaign contributors to both parties, our politicians do not eliminate tax loopholes every year as was done routinely in past Congresses.

President Obama believes that our rich Americans, even though they earned it, have much more wealth than they need. He ignores the fact that the industrialists who created great wealth for themselves during the 19th and 20th centuries, reinvested it in a burgeoning US economy and created millions of blue-collar jobs that led to the formation of the middle class. A faster growing US economy sparked by capital investment would create millions of jobs and strengthen the middle class.

Instead of concentrating on growing the economy and improving employment opportunities for the middle class and the poor to give them an opportunity to narrow the income gap, the Obama administration adopted (i) an inept fiscal stimulus plan that exploded the size of the National Debt, (ii) rules and regulations that stagnated our economy and (iii) adopted Obamacare, a communistic type law, to take property from those who are succeeding to provide underpriced healthcare for sick and low-income people.

Obamacare Is A Cancer.

Obamacare was adopted by Democrat Congressmen at the urging of President Obama for political gain. President Obama promoted Obamacare based on deliberate lies to mislead the voters about its affect on the middle class. He did so to conceal the fact that the Obamacare mandates require the healthy middle class or their employers and the wealthy, to purchase overpriced insurance or be charged a penalty to pay for a significant portion of the healthcare offered on a highly subsidized basis to sick and low-income people. He obviously expected that once the sick and the poor received Obamacare’s subsidized benefits it would be politically impossible to eliminate them. He believes that the ends justify the means. Now that his repeated lies have been exposed he ignores them and lies about the success of Obamacare.

Obamacare is proving to be a malignant cancer that was inserted into and is causing great harm to our healthcare system, the US economy and the middle class. President Obama and the Democrats who created it knew or should have known of the terrible damage it would cause. Its thousands of pages of regulations are adding excessive costs to healthcare providers. They don’t care. Their goal was to seize governmental control of our healthcare system, expand Medicaid for the poor and create a giant new welfare entitlement to provide greatly expanded benefits for sick and low-income people. They thought they could trick the young and middle class to purchase overpriced Obamacare policies to pay for it.

Obamacare does not create a single payer system making the US government the sole payer. Instead it uses the insurance companies as the middlemen, leaving them to take the blame for the inevitable premium increases and declining quality and availability of healthcare. Obamacare mandates straight jacket insurers. It requires insurance companies to disregard pre-existing conditions and offer greatly expanded benefits, including preventive care that is exempt from deductibles. As a result, they must offer outrageously below cost coverage to sick people that requires insurers to raise premiums, deductibles and co-pays for everyone else or reduce payments to providers or some combination of both. Since low-income people receive federal government subsidies of up to 80% of their premiums, the extra costs incurred by insurers resulting from the Obamacare mandates are in large part borne by the middle class and their employers. To limit the premium increases for the older (but not yet Medicare eligible) middle class they targeted the unsubsidized young middle class for maximum increases by mandating that older people could not be required to pay more than three times the amount paid by young people. They knew, based on actuarial tables, that the rate should be five times higher. Furthermore, since most of the subsidies will be paid for by the taxpayers, the middle class (who pay the bulk of our income taxes) will ultimately be paying for most of the subsidies as well.

Prior to Obamacare, healthcare policies were designed to offer a broad range of benefits subject to cost constraints. Health insurance policies were offered for a one year term. They generally did not include catastrophe coverage that would have entitled you to coverage in later years, but would have greatly increased the premium. Various forms of insurance were available prior to Obamacare to protect against acquiring a pre-existing condition. However, few people bought such coverage. Disability insurance was available to help by providing partial income continuation, but also was purchased by only a small percentage of our population. Some people lived a healthy lifestyle that helped avoid pre-existing conditions, but for various reasons, often beyond their control, or because they made a mistake, developed pre-existing conditions. Others were born with a genetic defect, abused their bodies or took undue risks that increased their chances of becoming subject to pre-existing conditions. If you acquired a serious medical problem prior to the time of renewal of your healthcare insurance policy it was treated as a pre-existing condition. As a result your renewal premium, as determined by insurance company actuaries, may have greatly increased or become unaffordable. Irregardless of the cause, healthcare policy costs for a person or family with a serious pre-existing condition were often $100,000 or more per year.

One’s ability to purchase the best and most expensive healthcare to treat one’s medical problems, like the purchase of an expensive home, car or vacation, was available only to those who could pay. Steps were being taken at the state level to assist people with pre-existing conditions in obtaining limited coverage. Insurers in various states were offering special types of coverages to give limited relief to people with pre-existing conditions. Business group insurance with large pools of healthy workers were often able to include coverage without ratings or with limited ratings for people with pre-existing conditions. However, most people (unless they had acquired adequate catastrophe or disability insurance or had received a large damage award following an accident case) had to limit their care or spend all or a portion of their savings to pay for their healthcare costs. People were responsible for taking care of their own bodies.

We must recognize that the patient must have some skin in the game to encourage wellness, prevent the cost of healthcare from becoming prohibitive and avoid long waiting periods for treatment. We should require significant co-pays. Healthcare needs are often discretionary. If a person has to pay for a portion of a treatment or procedure he may choose to forgo it. Similar consideration should be given to modifying Medicare to make it viable in the long run, instead of the multi-trillion dollar burden it will soon become.

President Obama and the Democrat leadership saw an opportunity for political gain by offering greatly expanded benefits for everyone, including people who had pre-existing conditions. They knew that low-income individuals would be unable to afford to pay the required increases in premiums needed to pay for the trillions of dollars of additional costs to take care of the sick and to cover the Obamacare mandated benefits over a 10 year period. They therefore included very high subsidies for the people they affectionately refer to as low-income folks. The subsidies are so large that they cover not only the increased costs resulting from the Obamacare mandates, but also cover a large portion of the remainder of their premiums, thereby creating a gigantic new welfare program for low-income people. They expected such generous subsidies to be available within a few years, after the employer mandate kicked in and many, if not most, employers dropped coverage, for a majority of all Americans. They knew that if they told the American people the truth about the enormously increased healthcare costs which would have to be paid by everyone who did not receive a large subsidy, namely the middle class, the employers and the rich, Obamacare would never have passed.

President Obama with the assistance of the Obamacare draftsmen  and paid advisers like Gruber carefully concocted a plan of deception to prevent the American people from learning the truth about the cost of Obamacare and who was going to pay for it. They started by creating new types of insurance plans and named them after valuable metals to fraudulently give them the appearance that purchasers were getting a meaningful choice between good healthcare plans. In fact, the exchange offered plans available to most people require them to buy very expensive mandated coverage they may not want or need. Choices between plans deal with choices between higher premiums and lower deductibles and vice-versa. The differences between the plans are meaningful only to people who will be receiving large subsidies or who can reliably predict their healthcare needs.

President Obama and the draftsmen knew that the aggregate of the premium charges, deductibles and co-pays for all of the plans, to be determined by the insurance companies, would have to be substantially higher than prior plans that did not have to meet the very expensive Obamacare mandates. They took money from Medicare and adopted 18 new taxes to pay for a portion of the governments’ administrative costs and the cost of providing the subsidies for low-income people and expanded Medicaid benefits for the poor. Some of the Obamacare taxes will be passed on to consumers and further increase healthcare costs. The revenues from the new capital gains tax are treated as Obamacare revenues, but have nothing to do with Obamacare. They are merely a supplemental income tax on upper income taxpayers allocated to Obamacare to make it appear to be costing the US government less. Few people realize that the Obamacare capital gains tax, coupled with the expiration of the Bush tax cuts, increased marginal income tax rates on upper income taxpayers by almost 10% in one year. Yet, many economists wonder why the recovery in the American economy is so tepid.

Obamacare was passed by left-wing Democrats who didn’t understand and didn’t care how it would work. At the urging of President Obama, who withheld the truth from them, they rushed to adopt Obamacare while they had the minimum votes for passage. President Obama is still lying to prevent the middle class from learning the truth about Obamacare. The middle class is only beginning to understand that it is required to pay for (i) the very expensive benefits Obamacare gives at way below fair market rates to people with pre-existing conditions, (ii) the greatly expanded and costly to provide benefits mandated (mainly for political reasons) for all Obamacare exchange offered policies and (iii) the subsidies for low-income workers.

Prior to the passage of Obamacare we were making progress in solving our healthcare problems. It had been determined years ago that the poor needed medical care, and a compassionate America was giving it to them. Everyone who lived within a radius that enabled them to reach a hospital emergency room had access to quality healthcare. Emergency rooms were required by law to treat everyone. You didn’t need to have insurance coverage or be able to pay. The use of emergency rooms became a healthcare safety-net entitlement. Although emergency rooms were not the most efficient way to provide run-of-the-mill healthcare in most cases, over time people who lived near hospitals, including illegal immigrants, used emergency rooms for their routine healthcare needs. However, the federal and state governments didn’t offer to pay for the new welfare benefit. To recover their emergency room costs, hospitals charged higher fees for patients who had insurance or could afford to pay. Such charges and the cost of newly developed treatments, procedures and drugs were rapidly increasing aggregate healthcare costs that were driving up the cost of healthcare insurance. When we look back we can see that providing free healthcare for the poor at emergency rooms resulted in the middle class and the employers indirectly paying for the cost of providing healthcare for the poor.

A large portion of employee healthcare insurance costs was (and is currently) paid for by employers. As a consequence, employers were not increasing cash compensation and in many cases were passing along an increasing portion of the costs to employees in the form of policy limits, premium contributions, deductibles and co-pays. Healthcare insurance for individuals was seeing similar cost increases. As a result of Obamacare, businesses are increasing employee deductibles and co-pays, eliminating full-time jobs and creating part-time jobs, outsourcing or delaying hiring as they grapple with Obamacare regulations and costs as a result of or in some cases in preparation for the delayed employer mandate.

Hospitals were permitted to require proof of insurance or payment before providing treatments and procedures requiring patient admission to the hospital. Expensive surgery and treatments were often not sought or were unaffordable because of cost constraints in cases where there was no insurance or high deductibles or co-pays. Nevertheless, using capitalist principles and relying on American exceptionalism, we were able to develop the world’s best healthcare system and provide ever-improving healthcare to increasing numbers of people.

President Obama and the Democrats fraudulently claim that when everyone has insurance it will lower the cost of providing healthcare by reducing emergency room visits. It is true that clinics that can be staffed with nurses and other trained medical personnel are being established at or near hospitals to perform routine procedures at lower cost. The use of clinics is an important step in lowering the cost of providing good healthcare for the poor. However, that was being accomplished independently of Obamacare, financed, in large part, by charitable contributions to hospitals from rich donors. But, where is a parent going to take their ill child if a doctor or a clinic is not readily available after office hours or because of increased waiting time to see a doctor? Moreover, the savings (particularly if clinics remain open 24 hours) will barely dent the outrageous costs of the Obamacare mandates.

Instead of honestly acknowledging the outrageous burden on the middle class, President Obama took to the airwaves as the chief salesman for Obamacare and deliberately lied (beginning before its passage) about the effects of Obamacare by stating repeatedly that your premiums would decline, and if you liked your doctor, or if you like your plan, you could keep them. He apparently believed that low-income people would accept having to use another plan, doctor or hospital when they learned they were paying reduced premiums as a result of their subsidies. He obviously felt that a significant number of young middle class liberals, who were attracted by his promises of hope and change and blindly supported him, would be confused and prevented by the Obamacare lies from understanding that Obamacare provides for a transfer of wealth from the middle class, their employers and the rich to sick, poor and low-income people and that they were deliberately targeted to pay for President Obama’s new welfare program. The repeated failures of the Obamacare websites and the lack of criticism from the liberal press served as a further barrier that prevented the middle class from learning the truth about Obamacare. However, the VA, IRS and numerous other scandals that even the pro-Obama press are finding impossible to ignore, have caused them to question the truth of statements from and the competency of the Obama administration.

The draftsmen made all preventive care exempt from the deductibles. Therefore, many people will not discover that they their coverage is subject to a deductible or co-pay until after they have a medical need which is subject to them. We do not yet know how many low-income people chose lower premium plans because they did not know they were subject to higher deductibles. Nor do we yet know how many people are being denied treatment for failure to pay a deductible in advance or what will happen if hospitals, doctors and other healthcare providers provide services and the deductible is not paid. Many people, whether or not their premium is subsidized, will elect not to have a treatment or procedure if they have to pay out-of-pocket for all or a significant portion of its cost. Hospitals may elect to perform expensive surgery, even if the deductible or co-pay prove to be uncollectible, because the insurance companies will be obligated to pay all charges in excess of such amounts.

For political reasons, the effectiveness of many of the Obamacare provisions (including the required purchase of a Obamacare policy) were delayed until after the 2012 presidential election so that the Obamacare lies would not be exposed until after the election. Since the Democrats didn’t have the votes in the House of Representatives to modify Obamacare, President effected such delays by issuing executive orders, that are likely to be found to be unconstitutional. President Obama knew that the unfair treatment of the middle class would be discovered over time, after the presidential election. However, he expected that so many low-income people would sign up for the new welfare benefit that it would be political suicide for Republicans to try to take away the subsidies. Being an entitlementist, he believed that the new welfare program would gain more votes for Democrats than it would lose. Now, President Obama stresses the millions of people who have gained coverage because of Obamacare. Many of them have signed up for expanded Medicaid programs which are free and paid for by the federal and state governments and should not have been linked to Obamacare. They were included in Obamacare to coerce the states into creating Obamacare exchanges and give the federal government control of healthcare. Large numbers of low-income people will flock to Obamacare after the employer mandate kicks in and they lose their full-time jobs and their employer paid coverage. However, they may not do so, and will be left with no coverage, if they are unable to receive a subsidy because their state in one of the majority of states that has not established a state Obamacare exchange. In an attempt to coerce the states to create Obamacare exchanges, Obamacare specifically limits subsidies to people who sign up on a state established exchange. However the Obama administration that wants to grant subsidies to as many people as possible to encourage Obamacare sign-ups, has chosen to ignore the very precise wording of the Obamacare law and is granting subsidies to people signing up on the federal exchange. Such subsidies are being challenged in a case to be heard next year by the US Supreme Court. Unless the Supreme Court finds the Obama administration’s payment of subsidies to low-income people signing up on the federal Obamacare exchange to be unconstitutional, we can expect Obamacare premiums for the middle class to rise substantially. If the US Supreme Court rules that no subsidies can be paid to purchasers on the federal exchange, then the number of uninsured individuals will skyrocket.

The draftsmen of Obamacare knew that when the middle class discovered the extent that they were being overcharged for a Obamacare policy many of them would refuse to purchase or refuse to renew a Obamacare policy and go without coverage. Why should anyone pay for insurance coverage they were unlikely to need knowing that if the became ill or injured and needed coverage, they would be able to obtain coverage at the next enrollment period? They therefore included a penalty (that the Supreme Court called a tax) that increases over each of the first three years, rising to 2.5% of income, to trap the middle class into paying an unfair amount whether or not they purchased a Obamacare exchange policy. Whether you call it a penalty or a tax, it is designed to force the middle class to pay to help subsidize the greatly underpriced benefits offered to the ill and to low-income folks. The president (who claims repeatedly that he is a champion of the middle class) continues to deliberately deceive the young middle class people he needs to sign up for Obamacare exchange policies to keep premium increases from going through the roof. He told them it will cost no more than a monthly phone or cable bill. That is just another Obamacare lie unless you are a low-income person or family eligible for up to an 80% subsidy.

We do not yet know what percentage of the Obamacare exchange policy purchasers are healthy or young middle class people who get no subsidy or whose policies will prove to be worthless because of high deductibles and co-pays. We do not know how many people lied about income to be eligible for subsidies or were illegal immigrants who lied about being US citizens. President Obama and the HHS won’t tell us. Nor are they telling us whether people who signed up for Obamacare policies have paid their premiums or are paying their required deductibles to the healthcare providers. Since they make selective disclosures to make it appear that Obamacare is succeeding, it is obvious that President Obama and the Democrats are trying to withhold certain relevant information until after the mid-term elections. They are being aided in their efforts by the failure of the liberal press to talk about the Obamacare faults.

President Obama and the Democrats attempted to get insurance companies to participate in the Obamacare exchanges and to minimize premium increases during the first three years by including a provision in Obamacare (that the president, HHS and the liberal press do not talk about) that provides for subsidies for insurance companies to cover their losses during the first three years. Many insurance companies have nevertheless excluded the services of many of the best available doctors and hospitals from their groups of providers, to limit their costs of providing Obamacare policy services. They are also talking about raising premiums next year. Because, as was predictable, the insurance company losses are now expected to exceed the amount available, the administration has announced that the subsidies shall be reduced proportionately as necessary. We can expect that when the quality and availability of healthcare has declined significantly, the Democrats will blame it on the “greedy” insurance companies and demand a single payer system. We should not forget that Medicaid ad Medicare are basically single payer systems and that an increasing number of doctors are refusing to treat Medicaid or Medicare patients.

Obamacare Is Destroying The Quality And Availability Of American Healthcare.

Because Obamacare mandates will increase insurance company payments by hundreds of billions of dollars annually, insurers are squeezing healthcare providers by reducing payments for treatments and procedures. Many doctors and some of our greatest hospitals are being excluded from or are refusing to participate in Obamacare provider networks because insurance companies selling Obamacare exchange policies are seeking to contain costs to limit premium increases. The added costs of complying with Obamacare regulations and the failure of Obamacare to deal with outrageous malpractice claims are driving additional doctors from private practice. Many of them, who have or will become hospital employees, will find their compensation reduced because hospitals are paid inadequately by Obamacare exchange qualified insurers. Because of Obamacare, the number of malpractice claims and the cost of malpractice insurance are going to grow due to the increased number of patients that doctors are going to have to treat (at lower fees per patient).

We have not yet seen the expected surge in demand for healthcare services from the sick, the poor (who receive Medicaid) and low-income individuals who are eligible to receive free or highly subsidized insurance coverage under Obamacare. Healthcare expenditures during the first three months of 2014 were less than expected. This is probably due to the confusion caused by the inept Obamacare rollout. The covered benefits, that include preventive care, not subject to deductibles or co-pays, will, within a short time frame, overburden the healthcare system. It will in most cases, because of reduced payments and increased costs, make it less profitable to practice medicine unless you work longer hours. Obamacare’s adoption comes at a time when the aging of our population is also going to add demands for healthcare services from Medicare beneficiaries that will put further pressure on healthcare providers. We only have to look at the treatment of our veterans, whose service earned them premium healthcare, but have for decades received inadequate coverage despite annual funding increases, to know it is inevitable that patients will in a few years incur long waiting periods for appointments and treatment under both Obamacare and Medicare. Obamacare will make it difficult to make a doctor’s appointment or arrange for a timely hospital procedure, thereby effectively rationing healthcare (even for those who are not entitled to a subsidy and pay excessively for coverage) and subject its availability to political considerations. As in Europe and Canada, the rich will not subject themselves to the inadequate healthcare offered under Obamacare (or Medicare which is following the same path) and will pay independently for high quality healthcare. Medical groups are already offering concierge plans to provide improved quality healthcare covering a broad range of healthcare needs at an affordable price for those who decline to purchase an Obamacare policy.

We Should Repeal Or Phase Out The Obamacare Mandates And Subsidies ASAP.

The Democrats claim that Obamacare can be fixed. Like most laws, Obamacare has some provisions and regulations that can be improved, but it is impossible to fix the main flaws of Obamacare. We must start by recognizing that we simply cannot afford (i) the elimination from consideration of pre-existing conditions which may enable an individual or family to receive a million dollars or more of treatments and procedures annually and (ii) the mandate that all insurance policies provide very broad politically motivated benefits for everyone. If we taxed the rich at close to 100% of income, which even Democrats most left leaning members would not dare to propose, the remainder of the cost of the Obamacare welfare will have to be borne by the middle class.

Republicans are faced with a dilemma. They opposed the adoption of Obamacare and have from time to time demanded its repeal. However, the Obamacare cancer has already caused major changes in the healthcare system which are irreversible. We cannot repeal all of Obamacare, but we can repeal its most harmful provisions. We must, as soon as possible, repeal the Obamacare provision that prohibits taking pre-existing conditions into consideration and repeal or phase out many of the other Obamacare mandates.

Irreparable harm is occurring daily as people with pre-existing conditions take advantage of the Obamacare windfall to obtain virtually free benefits that are not paid for the the US government, but instead are paid for in large part by the middle class through increased premiums. Democrats will immediately bash Republicans for any attempt to reinstate the consideration of pre-existing conditions as a callous attack on the sick who will be deprived of needed healthcare. Since most Americans sympathize with the needs of those Americans who are suffering from untreated medical problems, it is critical that Republicans carefully explain why Obamacare is a communistic law whose benefits are being paid for by the middle class and destroying the medical profession. To do so they must remind Americans of all of the misleading and fraudulent statements and outright lies made by President Obama relating to Obamacare.

Democrats argue that Republicans have no alternative proposal to replace Obamacare. Merely eliminating the mandates would represent a major corrective step. We can then reconsider pre-existing conditions and the other mandated benefits, ab initio, using healthcare experts who understand the importance of free-market capitalism, not political entitlementists who lean toward communism. We can encourage insurance companies to offer new types of coverage that will offer various forms of limited catastrophe coverage. We can also expand former efforts to give help to people with pre-existing conditions. To reduce administrative costs and make the providing of healthcare more efficient, we should eliminate federal government involvement in healthcare administration and encourage the mergers of insurance companies with hospital and other healthcare provider networks. The Obamacare rules, that encourage healthcare providers to focus on outcomes, can be retained to improve outcomes and by so doing, reduce costs.

President Obama is now arguing that Republicans are trying to take health insurance away from millions of Americans who have signed up for Obamcare. He ignores the equal or greater number of people who have already lost or are paying excessively for their coverage, or will lose their employer paid coverage after the employer mandate becomes effective. He also ignores the tax benefits from receiving employer paid coverage that will be lost when employees receive a small wage increase (that Democrats will claim credit for) and have to pay for their own coverage on the exchanges.

If left unchanged Obamacare may destroy American capitalism. Eliminating the Obamacare mandates will greatly reduce premium costs and materially increase the disposable income of the middle class and increase business investment and hiring. Instead of working 20 to 30 days a year to pay for the healthcare of non-family members and people they do not know, young middle class people will be able to pay off their college loans, buy a car or home, or put the money in an IRA that will be worth a million dollars or more when they reach retirement age. If we can grow the economy, as is likely to happen if the burden of Obamacare is removed, the percentage of disposable income spent on healthcare will likely decrease over time.

This article is one of a number of Obamacare related articles that have been published on this blog.