Category Archives: economics

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.

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A Proposed Tax Law Change To Encourage Our International Corporations To Bring Home Cash Held Overseas To Invest In Transporatation Infrastructure Projects

Our transportation infrastructure is a national disgrace. We are the richest country in the world and yet we fail to upgrade, or even maintain, the vital paths of commerce. The main reason is that our states and cities, which are primarily responsible for infrastructure projects, are saddled with ever-growing welfare and employment obligations and excessive debt. We must find a way to supplement transportation infrastructure funding.

President Obama, as he has every time an important election nears, is attempting to promote a plan for HUD funding of infrastructure spending. Why should Congress approve the president’s request for funding? A large portion of previously approved infrastructure funding has not been used by the Obama administration for shovel ready projects, but to promote Democrat candidates and to reward friends. Republican Congressmen don’t trust or like President Obama who disregards Congress and abuses Republicans at every opportunity. They are unlikely to approve the funding he seeks.

This writer in his book entitled “Perpetuating American Greatness After The Fiscal Cliff”, published in March 2013, has proposed changes in the corporate income tax laws to encourage the creation of “Jump Start America Bonds”. Such bonds would be sold offshore by states and their transportation agencies to our international corporations to finance transportation infrastructure construction projects. Jump Start America Bonds would have properties to make them a win, win, win for the investing corporations, the states and the federal government. The corporations would receive a fair return and be protected against loss of principal resulting from default or interest rate risk. They would also be able to repatriate the funds over a term of years at favorable tax rates. The states would get transportation infrastructure construction funding on reasonable terms. The federal government would collect outstanding taxes on overseas profits at reduced rates and would benefit from dynamic economic growth leading to middle class job creation and increased income tax revenues. See my previous article on this blog entitled “Jump Start America Bonds Represent the Perfect Economic Stimulus”.

Annual US GDP Growth Of Ten Percent Should Be The Goal

Annual US GDP growth of ten percent should be the goal. Not the communist goal of eliminating income inequality that President Obama keeps talking about that has never succeeded.  Ironically, the failed socialistic economic policies of the Obama administration have created an immediate opportunity for much larger annual increases in the US GDP. Years of stagnant US economic growth, despite exceptional technology advances, have resulted in a highly under-utilized  and underpaid workforce. We should be seeking the preservation of American exceptionalism by encouraging competence and hard work, not laziness or poor conduct. We should be rewarding success, not encouraging failure. We can only imagine the growth that can be generated by bringing large numbers of people back into the workforce and converting part-time jobs to full-time jobs. Each time a job is lost due to improved technology or a job is lost because production moves offshore, we have an available worker for a new job which can accelerate our growth.

We have had five years of a tepid economic recovery during the period following the Great Recession, the most severe downturn since the end of World War II. President Obama has been very lucky. The recovery has taken place despite the failed fiscal stimulus programs adopted during his administration, his raising income taxes, cutting defense spending, adopting incompetently drafted banking and business regulations that are in large part counterproductive and excessively costly to comply with, and adopting Obamacare and its 18 new taxes and thousands of pages of regulations and then changing them at his whim for political purposes. The recovery has taken place because of developments that President Obama had little, if anything, to do with. TARP loans, which originated during the Bush administration, followed by the Fed’s monetary programs were instrumental in enabling the banking system and the auto and housing industries to avoid collapse, stabilize and return to profitability.

Spectacular developments have spurred the economic recovery, including: 

* Improved horizontal drilling and fracking techniques which, despite the unsubstantiated concerns of environmentalists and interference from the Obama administration, represent the single most important economic development of this century. They have (i) caused an explosion in US national gas and oil production, (ii) created an annual demand for tens of thousands of miles of stainless steel pipe for use in connection with the drilling and transportation of such oil and gas production, (iii) created a growing demand for rail transportation to move the pipe to states such as North Dakota and Texas and the oil and gas being produced to refiners and users across the nation, (iv) created  high-paying jobs leading to increased income tax revenues and a demand for cars and trucks for use by the oil and gas industry and its employees, (v) engendered the rapid growth of new communities to house and service the production employees, (vi) led to the return to the US of industries producing plastics and other natural gas by-products, and (vii) made the US energy independent and strengthened our position as the world leading military power; 

* Rapid expansion of our international businesses throughout the world and increased sales of our exports of products and services, including food, aircraft, machinery, equipment and raw materials to the BRIC and other developing countries;

* The spawning and rapid growth of sales of wireless communications devices, the Internet and social-networking businesses; 

* The wealth effect from rising stock market prices based on increased corporate profitability stimulated by the Fed’s bond purchases and promotion of low-interest rates that enabled corporations to reduce financing costs and inexpensively finance the purchase of cost saving technology. and 

*The exceptionally large sums (financed in large part by federal and state government funding and private insurance) spent for clean-up and rebuilding of roads, infrastructure, housing, and commercial real estate and vehicle replacement following  the many natural disasters that have occurred during the period. 

Even the modest recovery in the housing market (and the related housing improvement and rehabilitation market) caused in large part by investors buying up foreclosed properties for resale and rental and rising number of international millionaires seeking to own US-based assets, has contributed to the recovery. However, private home ownership that was the most important asset owned by the middle class for more than 50 years prior to the Great Recession, has been put on the back burner by the Obama administration which favors the poor at the expense of the middle class. Housing construction offers the potential to be a leading force if future US economic growth. 

President Obama claims credit for the recovery, but he had little to do with it. The manner in which he saved the auto industry was disgraceful. He favored his friends, the unions, over secured creditors. He hampered the oil and gas industry by impeding fracking, the leasing of federal lands and pipeline development. The Obama stimulus programs concentrated on increased welfare payments and ill-conceived, failed green energy programs that squandered large amounts that greatly expanded the National Debt, but generated almost no tax-paying jobs. The Fed has repeatedly stated that it has extended QE programs because of failed fiscal policies.

I will not in this writing discuss the harm to the US economy being caused by the adoption of Obamcare. I have and will continue to write about (i) the continuous stream of outrageous, lies and misinformation promoted almost daily by President Obama relating to Obamacare’s costs and benefits, (ii) President Obama’s failure to deal with Medicare spending problems,(iii) how Obamacare is gouging and damaging the lives of the middle class by requiring them to pay for free or highly subsidized healthcare for the sick and the poor and low-income folks and for a significant portion of the healthcare costs of the elderly and (iv) the inevitable economic disaster that awaits the middle class and the US economy when the employer mandate (that has been illegally delayed by President Obama for political purposes) is allowed to become effective. Suffice it to say that if and when the egregious provisions of Obamacare are repealed it will serve as an immediate stimulus to the US economy. 

Can we envision a time soon after President Obama is out of office (i)  when Congress regains control of spending and middle class income growth and not growth in welfare and ending income inequality is the goal, (ii) when Obamacare is no longer interfering with economic growth or destroying the healthcare industry, (iii) when our transportation infrastructure is being adequately repaired and improved, (iv) when employers are investing in expansion, offering raises to current employees and seeking employees for full-time, tax-paying jobs; (v) when young middle class families can pay off their college loans and buy and make improvements in homes which develop growing equity; (vi) when defense spending and homeland security spending is increased to levels needed to protect our country and our allies from aggression and terrorist acts (vii) when the National Debt is stable or declining, (viii) when Medicare costs and welfare abuses are brought under control;(ix) when the Fed permits interest rates to rise during a period with 2 to 3% inflation and (x) when savers can get a fair return on their capital? 

It can happen if we turn away from the path to socialism and focus on GDP growth and strengthening American capitalism.

 

However, the growth will not occur if Republican conservatives insist on policies of austerity or if a needed catalyst fails to occur to get the growth avalanche started. Our international corporations have more than 2 trillion dollars held overseas that can be repatriated if we change the tax laws. Previous changes led to repatriation of overseas funds, but did not result in significantly increased domestic investment. This writer published a book last year (that has not attracted attention) entitled “Perpetuating American Greatness After The Fiscal Cliff” which proposed changes in the US tax laws to finance transportation infrastructure construction projects through the sale of “Jump Start America Bonds”. The name of the bonds tells the story of their purpose. They would serve as the needed catalyst.

Beware Of The Role Of Short Selling And Stop Loss Orders In The Current Market Decline

For months we listened to investment experts on financial news programs advise investors to protect their positions against a market correction by using stop loss orders. As stock prices rose investors, who heeded the advice of these experts, placed stop loss orders at increasing price levels. As a result an inverse ladder of stop loss orders was created. When international currency issues and other factors set off a moderate market downturn some of the highest stop loss orders were automatically converted into sell orders and the market decline accelerated. Short sellers who have been on the side lines were able to accelerate the decline by selling short on downticks. They know the price on stock charts that chartists interpret as a sell point and begin to sell short on downticks in an attempt to encourage sales by chartists, the execution of stop loss orders and panic by fearful investors. The combination of stop loss orders, chart theory, short selling on downticks and ultimately panic and margin calls may set off a stampede leading to further market declines. Domestic and international economic growth are important to stock market activity, but the above described technical factors have a significant impact during a stock market market decline that may, because of the wealth effect and fear, lead to a downturn in economic activity.

The Case For Extending Unemployment Benefits Beyond 26 Weeks

Unemployment insurance was designed to provide a safety net by offering weekly benefits to employees who have lost their job  to enable them to modify their job skills and seek alternative employment. It is funded by payments by employers based on a percentage of payroll that is rated based on experience. During the emergency caused by the Great Recession the maximum period of eligibility to receive unemployment benefits was extended from 26 weeks to 99 weeks. The funding for such extended benefits is provided by the federal government and as a result of repeated extensions threatens to become another welfare benefit.

The extended benefits were sun-setted and expired as the end of 2013 as part of the sequester legislation. Naturally, President Obama and other liberals, who sense an opportunity to distract from the failures of Obamacare and an opportunity to buy votes, are loudly demanding that the extended benefits be reinstated. Most Republicans, who were blamed for the government shutdown, do not want to be hammered by President Obama and the liberal press for any failure to reinstate the extended benefits. However, most of them favor austerity and are looking for ways to cut the explosive growth in welfare benefits. They know that the American public is concerned with the size of the deficit and are insisting on an offsetting cut in government spending to fund the extended unemployment benefits. Do not be surprised in President Obama refuses to discuss any compromise and attempts to play the blame game for political reasons just as he did to encourage and maximize the harm from the government shutdown. 

Instead of allowing President Obama to treat the extension of benefits as a political football, Republicans should be talking about the pros and cons of extending unemployment benefits. They should argue that because of President Obama’s encouragement of welfare and failed stimulus plans, 75% of the jobs created during the recovery are part-time jobs and there are millions of people seeking jobs, a number that is far in excess of full-time, tax-paying job openings. They should acknowledge that unless we greatly expand our economy, the real level of unemployment (after adjusting for people who have given up looking for a job) may remain above historic levels for the indefinite future.

The sudden end to the program, that has previously been extended, will cause immediate hardship to many of the beneficiaries. On the other hand, every case is different. Many of the beneficiaries may have been satisfied with the benefit and were turning down less than desired employment opportunities. Others may have been cheating the system because they have left the labor market and stopped looking for work or may have accepted off-the-books employment or are earning unreported income. We should extend the term of unemployment benefits, but we should modify the unemployment laws so that extended benefits are phased out over time. We might consider gradually reducing benefits to zero over a defined period beginning after 26 weeks. This will eliminate the need for further extensions except in the event of another emergency 

There is validity to arguments that unemployment benefits provide a stimulus that supports the economic recovery. On the other hand the unemployment benefits are not the most desirable form of economic stimulus. They increase the deficit because they are spent in large part on necessities like food and clothing that increase the GDP, but do not create or sustain tax-paying jobs that generate significant tax revenues. Spending on transportation ifrastructure construction is a better way to stimulate the economy because it creates immediate tax-paying jobs and stimulates the creation of additional tax-paying jobs.

The most important reason for extending unemployment benefits is to prevent immediate hardship for those who have diligently sought employment and did not want to be forced to accept a part-time or dead-end job. However, no-one should be entitled to half-pay forever, without working. 

 

ENTITLEMENTISM

I define “entitlementism” as a political process by which voters in a democracy, motivated by greed, need, fear, or a desire to promote the comfort and well-being of others, elect presidents, governors and legislators who favor the retention or expansion of welfare benefits and other economic entitlements mainly for the poor and the elderly. Entitlementists are people who promote entitlementism. Entitlementists generally believe that wealthy and high income individuals and the entities that they control should pay higher taxes, fees and other payments to pay for the entitlements.

The grave danger that entitlementism poses to American democracy is that voters will vote for candidates who support and maximize entitlements and that political candidates who seek to control excessive entitlement spending may become un-electable in many areas of the country. If entitlementists get control of the presidency and both houses of Congress, they may, though a combination of taxes, mandates and penalties on individuals and businesses, turn American free market capitalism into an undesirable form of socialism that may over time erode into communism.

Entitlementists adopted Obamacare to offer new types of welfare benefits, including premium subsidies to many millions of individuals with incomes up to $46,000 and families of four with incomes up to $94,000 expecting them to become entitlements. It mandates the purchase, by businesses and individuals, of over-priced insurance that many of them do not want or need, to pay for new entitlements for others.

Although President Obama and his Democrat supporters refuse to acknowledge it, healthy young people with middle class tax-paying jobs are targeted victims selected to pay for the increased healthcare costs mandated by Obamacare. They are being asked to pay excessive premiums, deductibles and co-pays to (i) finance the expanded Obamacare mandated benefits, (ii) to substantially reduce the premiums payable by people with pre-existing conditions and (iii) to limit the premium increases of the elderly. They will also have to bear the brunt of tax increases that will be required to pay for the multi-billion dollar subsidies for the poor and lower middle class and for the expansion of Medicaid coverage. President Obama and other Obamacare supporters are also concealing the fact that most of the elderly, unless they qualify for premium subsidies, are subject to increased premium rates (even though their premiums are unrealistically limited under Obamacare rules (in disregard of actuarial statistics) to no more than 3 times the premium rates of young people). Most of them do not need the mandated Obamacare benefits.

Right wing conservatives, many of whom claim to be Tea Party members, are taking a political stance that enabled Democrat entitlementists to win a number of contested Congressional elections in 2012. They assess the voting record and statements of Republican candidates and, if they fail to meet pre-determined standards, they call them RINOS (Republicans in name only) and oppose their nomination. As a result Republicans often nominate a right-wing candidate who loses an election the Republicans would in all likelihood have won. Alternately, if a moderate Republican they oppose wins the nomination, they refuse financial support or to vote for him or her and he or she often loses a close election to a Democrat entitlementist. Such actions have been instrumental in enabling Democrats to retain control of the Senate. All Republicans, even moderates, opposed the passage of Obamacare. If Republicans are going to stop the march toward entitlementism, that will gain momentum if entitlements are not brought under control, they must harness their idealism and recognize the importance of winning control of both the House and the Senate in the 2014 elections.

An economic entitlement is a financial benefit that large numbers of people believe they are entitled to receive, generally from the government. Entitlements were adopted in the US over time for various commendable purposes to improve the lives of Americans. They have evolved into a broad range of benefits to provide safety net payments. They are designed to prevent hunger, provide shelter and basic needs, including medical care. Entitlements include Social Security, Medicare, Medicaid, food stamps, housing supplements and other welfare benefits, negative income taxes, unemployment and disability insurance, flood insurance, financial relief following national disasters and now Obamacare. All of these programs are financed in large part by the US government. The costs of providing each of the entitlements are growing rapidly and are out of control. Entitlement costs are increased significantly by payments to beneficiaries and others cheating the system based on fraudulent claims under entitlement programs that now exceed hundreds of billions of dollars annually. Yet, we do almost nothing to prevent or punish the wrongdoers. Entitlementists don’t seem to care.

When adopting legislation authorizing various of the entitlement programs Congress chose different ways to determine eligibility for benefits and to fund the costs. Unfortunately our Congressmen ignored or misjudged the costs of providing certain of the entitlements and we are now facing $60 to $90 trillion of estimated unfunded entitlement liabilities that we cannot afford even if we achieve an annual two or three percent rate of growth of the GDP. We might be able to manage the unfunded entitlement problem if we grow the GDP at 7 to 10% annually for the next ten years, but because our leadership is inept, that is unlikely to be achieved. Therefore, we must find a way to scale back a significant portion of the unfunded entitlement liabilities. As a result of the Great Recession and skyrocketing entitlement payments the National Debt is approaching $17 trillion. It doesn’t seem to be currently affecting anyone. Most people seem to think that the rising National Debt will present a burden for our children and grandchildren, but few people think that our wealthy country can’t handle a National Debt of $20 trillion, $25 trillion or more. Low interest rates have masked the problem. Entitlementists like President Obama have for years been stonewalling any attempts to modify entitlements to reduce rising current entitlement costs or the unfunded liabilities in the out years. To the contrary they have magnified the entitlement problem by adopting Obamacare. In all likelihood, we will not know that the National Debt is too high until interest rates rise and we discover that we are no longer the world’s most powerful country financially or militarily. We will then be faced with a choice of reducing entitlements or other government spending, raising taxes, or printing money and enduring inflation. Moreover, if entitlementists are in control of the presidency and both houses of Congress, it may ultimately lead to confiscation of property from the wealthy.

Most of the entitlement underfunding comes from Social Security, Medicare and Medicaid obligations. Social Security is a fabulous mandated retirement program. The amount a retiree can expect to collect is calculated by taking into account the withholding tax payments made into the system over a life-time. Social Security payments are the principal source of income for a large percentage of elderly Americans. Most people over age 65 in reasonably good health, who are entitled to Social Security and Medicare, can be financially self-reliant.

Although Social Security benefits vary based on the amount of one’s contributions, benefit levels offer a favorable return to our senior citizens. Years ago we recognized the under-funding of Social Security resulting from increased life expectancy and raised the age of eligibility to begin receiving benefits. We have known throughout the Obama presidency that we should again raise the age for commencement of Social Security benefits or change the manner in which inflation adjustments are calculated. Yet, despite the soaring National Debt, because entitlementists are in control of the presidency and the Senate, no action has been taken to make Social Security payments more affordable. Social Security cash flow needs present an additional problem as the number of workers contributing into the system per retiree declines. No trust fund was set aside out of the funds withheld from employee salaries to pay retiree benefits. Our government became obligated for future benefits, but spent the withholding taxes it received.

The other entitlements consist mostly of welfare payments. By design low-income individuals pay little or nothing for their entitlement benefits other than Social Security. Half of our population pays no income tax. They pay sales taxes and withholding taxes (often offset by negative income taxes) in amounts that are insignificant when compared to the benefits they receive. Democrat entitlementists have learned that they can buy votes by expanding entitlements.

Medicare was designed to ensure that healthcare would be available for the elderly. We have Medicare withholding taxes, annual premium payments and co-pays that can be covered in large part by the purchase of supplemental insurance, but the Medicare benefits dwarf the amounts collected. Low income people pay little into the system, yet they are eligible for full benefits. We have known for years that Medicare was an ill-conceived program which our government will not be able to afford as our population ages. Entitlementists rave about the success of Medicare but ignore its funding problem. The elderly and their children, who are relieved of a potential burden, love the benefits. It would be politically suicidal to try to reduce any Medicare benefits currently payable for the elderly. They vote in large numbers and feel entitled to Medicare benefits regardless of the cost. We have known for years that we must raise the age of eligibility for future Medicare beneficiaries (as we did for Social Security) and take other steps to control Medicare costs. President Obama knows this, but, except to state, every once in a while, that he knows we must deal with controlling future entitlements and that he will consider the way in which inflationary increases are calculated, he has not made any meaningful proposal to deal with the problem. The problem becomes greater with each passing year. Congressmen who propose ways to control Medicare payments in the out years are taking a political risk. Anyone who even brings up the subject of reducing entitlement benefits is immediately bashed by the liberal press and entitlementists seeking to gain political advantage.

Various individuals have proposed alternatives to the current form of Medicare. One way to reign in future Medicare liabilities is to modify the system for people currently under a designated age, such as 55, to a voucher system with co-pays and annual or lifetime limits. Each person would be entitled to an amount available to be spent during the remainder of their lifetime after becoming eligible for Medicare. By introducing aggregate spending limits (with higher limits for designated catastrophic injuries and illnesses) we can get the beneficiaries involved in controlling costs. We can even provide a death benefit for unused life-time benefits. Unfortunately, some people might spend their allocated benefits and be unable to afford all of their additional healthcare needs for various reasons. They might include their own negligence, and might be forced into bankruptcy. Our government will have to offer supplemental healthcare coverage, like Medicaid, and welfare assistance for such individuals. As we are learning from the harm being caused by Obamacare, that alternative is preferential to the destruction of the healthcare system and the middle class and the slowing of economic growth.

The SNAP (food-stamps) welfare program evolved to provide food for the poor in a dignified and efficient manner (though subject to abuse) through the use of a debit card. Welfare has been expanded to include housing and transportation subsidies, Medicaid, cell phones, baby sitters, home care and negative income taxes. A growing number of individuals, single mothers (often teenagers and sometimes with the unidentified father of their children moving in and out of the home to avoid the mother losing her welfare eligibility) and two parent families are relying on food stamps and other welfare benefits as their primary source of income. Some of them live comfortably by working part-time at low-paying jobs (which entitle them to negative income taxes) or off the books to supplement their welfare payments. Encouraged to apply for welfare benefits by navigators under programs initiated by entitlementists, more than 45 million people are now receiving food stamps. Most of them of working age are not attempting to further their education or job skills or looking for a job that would improve their standard of living and reduce or eliminate their welfare benefits. Instead they concentrate their efforts on maximizing welfare benefits. They lack the motivation and drive that has made American capitalism revered throughout the world. The increase in the number of welfare recipients has been fueled by an executive order issued by President Obama in violation of the 1996 welfare law, that makes it easier to satisfy the work requirement and gives states the authority to ignore such requirement.

Flood insurance is sold by the US Government at a fraction of its market cost. When flood insurance payments are added to disaster relief it encourages beneficiaries to rebuild in flood zones leading to large government payments when the next flood occurs in the same area.

It is becoming clear that Obamacare was rushed through Congress by President Obama and entitlementist Democrat Congressmen not only to give government control of all aspects of healthcare from birth to grave, but also to create a number of new entitlements for millions of individuals.

Many of the benefits of Obamacare became effective immediately, while most of the funding provisions were delayed for years until January 1, 2014. This was done so that President Obama could claim credit during the 2012 election campaign for all the benefits of Obamacare while concealing the disastrous aspects of Obamacare from the voters. The public heard repeatedly that 30 million people without insurance were going to be covered, pre-existing conditions were being eliminated from consideration, children under age 26 could remain on their parents coverage and a variety of benefits would be required to be covered, including preventive care, birth control, abortion and other women’s healthcare services.

Until recently, few people understood the funding or other provisions and regulations of Obamacare (many of which had not been written) or the secondary effects they would have on jobs, the healthcare industry or previously existing insurance policies. Since the adverse consequences of Obamacare were relatively unknown President Obama was able during the 2012 re-election campaign to time and again repeat a list of deliberately untrue promises (the now infamous President Obama lies), namely, (i) insurance premiums would decline for everyone, (ii) if you liked your insurance you could keep it and (iii) if you liked your doctor or hospital you could keep them. President Obama and the Democrat entitlementists didn’t tell anyone that the Obamacare insurance policies would provide for increased premiums in most states and large deductibles and co-pays which might make the insurance worthless. Nor did they tell voters they might lose their coverage, their doctor or their full-time job. They didn’t tell college students that Obamacare might harm the economy and prevent them from finding a job. They wanted President Obama and other Democrats to be elected and anticipated that the liberal press, most of whom are entitlementists, would let them outrageously stonewall the lies when they were exposed.

The 2012 election debates over Obamacare focused on birth control, abortion and other women’s rights issues that proved harmful to the Romney campaign and would have been of lesser importance had voters known the truth about how Obamacare would affect their jobs, the loss of their existing insurance coverage, their increased premium costs and the large deductibles and co-pays that were being imposed to enable insurance companies to provide expanded Obamacare mandated benefits and to offer health insurance policies at below free market rates for the sick, the disabled and the elderly. Postponing the harm of the employer mandate until 2015 was clearly intended to and may have a similar effect of deceiving the voters in the 2014 elections except to the extent that voters learn that many employers are taking steps to protect themselves against Obamacare mandates in advance of its effectiveness. To attempt to keep control of the Senate in the 2014 elections, President Obama will do everything possible to focus on women’s rights issues and criticize the stance of the Tea Party on such issues to divert attention from the harm to the middle class being caused by Obamacare.

Few people understand the enormous amount by which eliminating pre-existing conditions will increase insurance premiums. The healthcare costs of people born with special needs, or who become ill or injured may be 10 or 20 or more times more costly than those of a person in good health. Prior to the adoption of Obamacare, individual insurance policies generally had a one year term. Coverage for catastrophic injuries and illness were covered during the term. However, insurance companies would renew the policies of people who became ill or injured during the term only at greatly increased rates. People with pre-existing conditions were generally unable to purchase health insurance at affordable rates. They became cost conscious and limited their demands for treatments and procedures or spent their personal funds. Now, individuals and families burdened with the costs of pre-existing conditions will, if they haven’t already done so, purchase Obamacare qualified policies as soon as HHS gets its Obamacare website to function. We can expect them to make substantially increased demands for healthcare services. Some are rich and getting an undeserved windfall being paid for by the increases in the premiums, deductibles and co-pays of Obamacare mandated policies. Some of them who had lost their job and their coverage have sympathetic arguments for assistance and we should have found ways to help them independently of the adoption of Obamacare using high risk pools that were available in some states.

Healthcare needs for people of all ages are in large part based on discretionary decisions made by a patient and his or her doctor. Elective treatments or procedures can be delayed or avoided. Some people are willing to endure physical difficulties or high thresholds of pain rather than face the risk or cost of surgery. The high deductibles and co-pays under Obamacare will encourage more people to avoid elective procedures.

Unlike Medicare and Medicaid, under Obamacare, federal and state governments are not paying for all of the benefits. The entitlementists, who designed it, believe that they have found a way for insurance companies to (i) provide healthcare benefits mandated by Obamacare, (ii) cover the enormous costs of disregarding pre-existing conditions when determining premiums and (iii) limiting insurance premium increases for the elderly, by overcharging businesses and healthy young and middle-class workers.

In addition, the US government is subsidizing premium costs for low-income people and some small businesses, and expanding free Medicaid coverage for the poor. Almost all part-time workers will receive substantial premium subsidies. As a result, millions of voters will benefit from the new entitlements moving our country closer to entitlementism. Despite the myriad of new taxes imposed by Obamacare, if not modified or repealed the Obamacare premium subsidies will add hundreds of billions each year to federal spending that will have to be paid for by tax increases (to be paid in large part by the same middle class workers who are being overcharged for their health insurance) or by increasing the National Debt. President Obama and the Democratic entitlementists apparently believe that the Obamacare subsidies will gain Democrats more votes than they lose.

Most of the low-income people who purchase highly subsidized insurance policies on the Obamacare exchanges will still be faced with substantial deductibles and co-pays. As a result they receive will have little or no value to them. They will continue to satisfy a significant portion of their families’ medical care needs at hospital emergency rooms. Existing laws provide that they must be treated even if they do not pay the amount due. In all likelihood doctors, hospitals and other providers will be unable to collect a substantial portion of the deductibles and co-pays from such people. Hospitals, facing revenue shortages, will whenever possible increase the rates they charge for patients not covered by Obamacare, Medicare or Medicaid. The insurance companies will pay and, in turn, raise their premium rates on policies not being offered on an exchange. In the event that a patient shows up at a hospital or other healthcare provider without any insurance coverage, the healthcare provider may, if permitted by law, offer to pay the patient’s Obamacare insurance premium in excess of the subsidy, in an attempt to limit is losses to the amount of such premium payments plus the uncollectible deductibles and co-pays.

Over time, an increasing number of doctors, hospitals and other healthcare providers are likely to refuse to treat Obamacare, Medicare and Medicaid patients unless they receive adequate fees from the Obamacare exchange insurers or the US Government. Unless we adequately compensate healthcare providers we can expect the quality and availability of healthcare to decline.

President Obama has made it clear that despite its faults he will veto any attempt to repeal Obamacare. He will continue to use his executive powers to grant exemptions principally for groups that favor Democrats. It is difficult to predict what other steps President Obama may take to try to prevent Obamacare from failing regardless of the cost to the middle class or the US government. Since deductibles and co-pays are already causing serious problems for both insurance policy purchasers and healthcare providers, we can expect that President Obama will propose further additional government subsidies, regardless of cost, to cover the deductibles and co-pays payable by the poor and lower-income people. If Republicans refuse to approve his proposed changes because of costs, he will brand them as unfair obstructionists.

One of the favorable features of Obamacare is that it will create significant healthcare cost savings by creating clinics and expanding nursing care, but that could have been accomplished independently of Obamacare. Hospitals should be given the choice of treating patients unable or unwilling to pay either at emergency rooms or at clinics created at or near the hospital.

Employer provided health insurance has been a major source of funding for employee healthcare and has represented a significant portion of employee compensation for years. Many businesses have been offsetting healthcare cost increases by increasing deductibles and co-pays and reducing middle-class cash compensation. Some are reacting to Obamacare by reducing full-time head count and hiring part-time employees to limit healthcare costs. Some businesses have delayed expansion plans. Other businesses are going to use Obamacare mandated requirements as an excuse to cease providing healthcare benefits to employees in order to reduce costs. Instead many of them will pay the applicable penalty and offer a taxable salary increase and advise employees how to purchase insurance on Obamacare exchanges. Many of the employees will be unable to purchase an exchange offered policy with the after-tax dollars received or will decline to purchase insurance when they realize that it is of little value because of the high premiums (even if reduced by a subsidy), deductibles and co-pays. They will pay the penalty and take the risk of living without insurance. If they later need catastrophic coverage they will acquire it during the following eligibility period. The result will be that the poor and those with pre-existing conditions will have insurance or Medicaid and millions of people who had jobs and insurance coverage will lose their job or their coverage. We are learning that Obamacare is not promoting the common good as claimed by the entitlementists. Instead it is destroying the American way of life. We can nevertheless expect that President Obama and the Democrats will ignore the detrimental affects of the dropped employer coverage and claim credit for pre-tax amount of the cash compensation increases. They will also claim that Obamacare enrollment is improving as anticipated by including individuals who lose their employer coverage and purchase insurance on the exchanges. A portion of the cost of providing health insurance for low-income workers will pass from the employer to the US Government which will subsidize the premiums for such workers’ policies purchased on the Obamacare exchanges.

Congress should take immediate steps to modify Obamacare to encourage employers to continue to provide health insurance for their employees. This might entail elimination of the employer mandate or limiting the required benefits to be offered under employer plans. President Obama may, in an attempt to help Democrat candidates in the 2014 elections, again postpone the employer mandate by fiat, even if he does not have authority to do so.

Giving free Medicaid or health insurance with greatly expanded mandated coverage to 30 million additional people and eliminating pre-existing conditions had to substantially increase the cost of healthcare insurance for everyone except for those who were going to receive underpriced or highly subsidized policies. The designers of Obamacare didn’t tell voters that their plan was to reduce healthcare costs for the sick, the poor and low-income workers by sticking a large part of the new entitlement costs on businesses, the rich, the healthy middle-class and young people. They also relied on unjustifiable expectations that fees to providers for treatments and procedures could be reduced, without harming the quality and availability of healthcare, because providers would be treating large numbers of additional patients.

They also created the fiction, that if enough healthy people were forced to over-pay for health insurance, it would pay for the enhanced benefits of a Obamacare policy and the extra costs for reducing the premium costs for those with pre-existing conditions and the elderly. They knew or should have known that they significantly underestimated the costs to be incurred by the exchange qualified insurance companies in paying for the mandated Obamacare benefits and the requirement that they provide coverage for people with pre-existing conditions and the elderly at below actuarially calculated rates and that not enough young or healthy people existed even if all of them bought the overpriced Obamacare qualified policies. Although the facts relating to the percentage of healthy young people buying Obamacare exchange policies are being concealed for political reasons and ignored by the liberal press, the truth will eventually be learned. President Obama and the Democrats also deliberately underestimated the government costs of providing the premium subsidies by underestimating the number of employees who would lose their full-time jobs or their employer coverage.

Obamacare was adopted at the depth of the Great Recession. President Obama and the Democrats ignored the risk of further damaging the economy or slowing the hoped for recovery. It’s adoption coincided with the adoption of what turned out to be a failed stimulus plan that led to an unprecedented expansion of welfare benefits and squandered funds on other liberal causes (that included excessive payments to Obama supporters) and pork spending while creating few tax-paying jobs. However, they anticipated that Obamacare would be disruptive to business and the healthcare industry and therefore postponed the effectiveness of many of the provisions of Obamacare until after the 2012 presidential elections. They wrote the law and regulations so that almost all individual insurance policies would be cancelled and the individuals would have to purchase replacement policies on the exchanges. They also knew that, despite the employer mandate and the penalties they imposed, millions of employees would ultimately lose their existing employer paid coverage because businesses would do everything possible to increase short-term profits and would attempt to avoid increases in or reduce healthcare costs. They were relying on the better health status of the individuals who were losing their employer paid coverage to improve the quality of the pool of exchange policy purchasers to help pay for the extra costs the insurance companies would have to pay to meet Obamacare requirements.

Obamacare mandates are leading to the loss of full-time jobs, the increase in part-time jobs, the loss of existing healthcare coverages and the continuance of an upward spiral of insurance costs in most states. These factors have caused a slowdown in the economic recovery that was predictable when Obamacare was passed. President Obama was fortunate that events he had nothing to do with, like actions taken by the Fed, amazing oil and gas fracking successes, the rapidly expanding use of social media and new internet devices and software and business and growth in the developing world, helped the US economy make a modest recovery from the Great Recession.

President Obama and the Democrats are changing their tune. They ignore the lies about being able to keep your insurance and claim that Obamacare requires better benefits. They now argue that requiring young and healthy people and businesses to purchase insurance policies, subject to high deductibles and co-pays, they don’t want or need, or pay a penalty, to pay to help the poor and those people with pre-existing conditions, serves the common good. They are claiming that more people will be helped that hurt by Obamacare. Even if it turns out to be true because of the enormous government subsidies, that claim does not justify the great harm it is causing. The outrageous taking of property and damage being inflicted by entitlementists on the quality and availability of healthcare, businesses, millions of individuals and the US economy, is unjustifiable. They are trying to trick young and healthy people into purchasing insurance policies on the exchanges using government paid advertising and navigators to convince them it is their patriotic duty to do so while misleading them as to the aggregate costs.

Obamacare is furthering the destruction of the middle class. An individual or family whose income slightly exceeds the maximum amount that qualifies for a Obamacare subsidy will find that the portion of their income remaining after paying taxes and excessive healthcare costs may be negligibly higher (or in some case lower) than the disposable funds available to those who work part-time, collect negative income taxes and maximize their welfare benefits including healthcare subsidies. What incentive will young people have to incur college loans in a country that is more interested in expanding entitlements for the poor and low-income workers than in creating full-time high-quality job opportunities?

Like all entitlements, once people are getting the benefits of Obamacare, it will be difficult or impossible to take them away. We will never know the extent of middle-class job or wage losses or the negative impact on the US GDP caused by Obamacare. President Obama and other Democrats will try to shift the blame for Obamacare failures to the Republicans. They will resurrect outrageous claims for political purposes that Republicans who have criticized Obamacare and President Obama’s lies about it are extortionists and obstructionists. It is all but forgotten that President Obama refused to negotiate with Republicans relating to their concerns about Obamacare or unfunded entitlement obligations. Ted Cruz, Mike Lee and other conservative Republicans may have made tactical mistakes by failing to anticipate that they would be fiercely attacked by President Obama and the liberal press and that the American public would blame them for the government shutdown. They were not trying to harm the US economy. They were trying to prevent the upcoming Obamacare disaster that they anticipated. Although President Obama acts like he has dictatorial powers, the US Constitution gives Congress control over government spending.

The actions and statements of President Obama and his appointees during the partial government shutdown, like causing barricades to be placed at monuments and parks, were obviously intended to inflict as much pain as possible on the American people that he could blame on the Republicans. They are indicative of the fact that President Obama wanted a much publicized short, but painful, government shutdown for his own political gain. His obvious goal was to shift the blame for his economic failures to the Republicans to enable entitlementists to retain a majority in the Senate and gain control of the House in the 2014 elections. Although it was ignored by the liberal press, President Obama and his cabinet appointees, seeking to maximize the criticism against Tea Party conservatives, shamefully played politics by exaggerating the risk of default and failing to assure financial markets around the world that President Obama would use his Presidential powers to ensure that the US would not default on its debts. They knew that more than adequate monthly incoming tax receipts would be available to be used to meet the interest and principal payments on US debt as they became due. President Obama’s political gamesmanship, and not the short-term partial government shutdown, is responsible for any long-term damage to our credit in world financial markets.

Entitlements do not care if the entitlements they propose promote the common-good as long as they result in additional voters becoming dependent upon them. Obamacare is reducing the quality and availability of healthcare. Encouraging insurance companies to limit their extra costs by reducing payments to doctors, hospitals and other healthcare providers is going to backfire. Healthcare providers are going to suffer great financial harm with the result that they will refuse to participate in Obamacare exchange insurance provider networks. Doctors are leaving private practice in large part because of reduced Medicare, Medicaid and Obamacare fees, excessive record keeping requirements, difficulties in getting paid and excessive malpractice insurance costs. Low-income people with newly issued insurance policies can be expected to greatly increase the number of malpractice claims that will speed the doctor exodus.

Some doctors will perform services only for individuals and families willing to pay them directly. Concierge healthcare plans with limited benefit are being offered by groups of doctors, outside of Medicare, Medicaid and Obamacare. They will become more popular as the quality and availability of healthcare provided under government programs further declines.

The initial failure of the federal government’s Obamacare website is a “red-herring”. It is merely a sign of the HHS’ incompetence in running a business. They will eventually get it to work. The website failure is merely delaying the distress which is going to be suffered by millions of Americans when they discover they are facing job and insurance coverage losses, large premium cost increases and large deductibles and co-pays. We can expect that the government will investigate and fail to disclose how the contractor to build the website was selected, how the website requirements were determined and who failed in monitoring the installation.

Look for President Obama to use the website failure as an excuse to postpone the penalties for failing to comply with the individual mandate so that people will not have to pay or leave themselves subject to the penalty if they decide not to purchase insurance. He will claim that registration is growing each month and that it will take a few years to get the kinks out and reach satisfactory enrollment levels. We know that if they do not get a large percentage of healthy people to pay for coverage (and even 100% may be insufficient), the insurance companies will lose money and will raise the premiums as soon as they can unless they are subsidized by the government. Obamacare anticipated the problem and provides for declining subsidies for the insurance companies over the next few years. We can anticipate that if premiums go up or the quality and availability of healthcare decline the entitlementists will then blame the insurance companies for operating inefficiently and demand single payer healthcare.

Make no mistake, the principal purposes of Obamacare is to give a new welfare entitlement to the poor and low-income individuals and to give the government control of healthcare. It promotes entitlementism and enlarges the Democrat base, by offering a new complex welfare entitlement benefit to a very large group of low-income people. It furthers the plan of liberal Democrats to take from those who have and give to those who have not. It also enables Democrats to demonize Republicans who want to control the costs of entitlements and preserve American capitalism. Entitlementists will seek to make Obamacare a pillar of entitlementism.

Even if Republicans gain control of both the Senate and the House in the 2014 elections it will be extremely difficult to reverse the damage already caused by Obamacare. However, it will give them the opportunity to seek changes in Obamacare, to limit future damage and reduce unfunded entitlement obligations.

They are talking about the unfair increase in insurance premiums, deductibles and co-pays to finance the costs of eliminating pre-existing conditions from consideration and reinstating high risk pools to help alleviate the healthcare costs for those with pre-existing conditions. They also propose the sale of health insurance beyond state lines to create competition among providers.

OBAMACARE IS A WELFARE PROGRAM THAT IS REDUCING THE QUALITY AND AVAILABILIITY OF HEALTHCARE AND HARMING BUSINESS AND THE MIDDLE-CLASS

Obamacare is a multi-trillion dollar welfare program that makes health insurance available to 30 million previously uninsured Americans. It requires insurance companies to disregard pre-existing conditions. The inevitable affect is to raise the rates of required Obamacare policies. Most importantly, it makes Medicaid available for free to the poor and offers large premium subsidies to lower income individuals. It also offers other benefits to selected individuals, such as, allowing students to stay on their parents healthcare plan until age 26 and elimination of the doughnut hole in Medicare drug plans.

Why do Americans not like Obamacare if it helps so many people? Americans are discovering what the draftsmen of Obamacare knew, or should have known, that businesses, middle-class and healthy individuals are going to have to pay, directly or indirectly, for a substantial portion of the increased costs mandated by Obamacare. They will not be paying for improved insurance coverage for themselves, but to provide free coverage for the poor and reduced or subsidized premium costs for people with pre-existing conditions and low income individuals. Obamacare is designed to advance liberal Democrats acknowledged goal of improving the lot of the poor by taking money from the rich individuals and businesses who they think have more income than they need. To make matters worse it is destroying the availability and quality of healthcare and is giving too much responsibility to bureaucrats at the IRS.

Liberal Democrats do not seem to care that it will cost hundreds of billions of dollars a year to make such insurance benefits available. They fraudulently claimed, that when Obamacare was adopted and became effective it would enable everyone with insurance to keep their policy and receive the same benefits from the same doctors and healthcare providers, at reduced costs. We are only beginning to recognize how fraudulent those claims were. The draftsmen hid the true cost of purchasing healthcare under Obamacare by including large deductibles and co-pays that significantly raise aggregate healthcare costs. The availability and quality of care are declining. Doctors are leaving the profession and hospitals are reducing staffs. Medicare benefits are being reduced. President Obama repeated the false claims about Obamacare during the re-election campaign and now unashamedly claims that voters supported his views on Obamacare. The Obamacare discussion during the 2012 campaign focused on women’s rights issues, not the disastrous financial consequences of Obamacare.

Democrats, who rammed through the passage of Obamacare withhout a single Republican vote, knew that because our country was in the midst of the Great Recession, the federal and state governments couldn’t afford to pay for a new gigantic welfare program. They therefore devised an extremely complicated plan relying on a hodge-podge of new taxes and rules and regulations applicable to Medicare, Medicaid and health insurance to provide for funding the costs of Obamacare and to limit benefits and payments to providers. They gave it the misleading name of “The Affordable Care Act”. They didn’t care, or negligently failed to realize, the secondary affects of the new taxes including the negative impact they would have on young people looking for jobs and the middle-class who are losing good full-time, tax-paying jobs and existing insurance coverage.

Businesses seek to maximize profits. They have for years been seeking ways to limit increases in employee healthcare expenses. Outrageous Obamacare requirements encourage businesses to rethink their providing of healthcare benefits for employees. They are modifying business plans in ways to minimize or eliminate their health insurance costs. Some employers will save money by requiring their employees to purchase their own insurance from the state exchanges. Some will pay penalties to avoid paying for expensive Obamacare policies. Aggregate payrolls are being controlled by not hiring or laying off full-time employees and hiring additional part-time employees. Retired employees and spouses are losing healthcare coverage.

Obamacare is based on tens of thousands of pages of laws and regulations which are extremely difficult to understand and interpret. It requires the filling out of forms that make the practice of medicine and the delivery of healthcare more stressful and less profitable. Liberal Democrats who proposed Obamacare deliberately ignored pleas of doctors about the outrageous cost of purchasing malpractice insurance because of out of control claims and excessive jury awards. Why would we expect them to do otherwise? Tort lawyers are major contributors to Democrats. Obamacare was promoted to gain votes for Democrats. It is turning into a train wreck which may cost them votes.

The draftsmen of Obamacare tried to hide the cost of giving the new benefits by adopting a variety of new taxes on the middle-class and the rich and requiring businesses and individuals to purchase insurance. They knew that taxes on medical products and drugs, not only drive business off-shore and reduce research and development efforts to produce new products, but also, are inevitably passed on to the consumer. They knew that, if they told the truth about Obamacare, young people, middle-class workers and their employers would object to paying larger insurance premiums or penalties to pay for the new welfare benefit for the poor and those with pre-existing conditions. That is the reason they adopted penalties for businesses and individuals if they failed to buy insurance. They did not anticipate many of the adverse consequences that have surfaced as businesses and individuals have learned about the requirements of Obamacare. Now they are trying to get people to purchase Obamacare policies by claiming it is the patriotic thing to do to help your fellow Americans. Why should young people, strapped with student loans or working in part-time jobs as a result of Obamacare, do so?