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Prioritizing: Charity or Investment

I consider myself a compassionate person who wants to help other people suffering economic distress. We have reached the point, however, where we are increasing charity dollars (transfer payments) at the expense of work, investment, and economic growth.

The responsible policy tradeoff that serves the long term interest is jobs over charity with an understanding that a safety net serves our best long term interest and that a safety net is not the same thing as perpetual charity. Mr. Obama’s rationalization that such charity is an economic stimulus ignores the question of where the money comes to pay for it as well as ignores the social costs of the dependency resulting from it.

The honest political question is whether we are prepared to forgo work, job creation, and economic growth in exchange for increases in perpetual charity. Mr. Obama’s response to the February 4, 2014 CBO report that notes an expected reduction in work expected from Obamacare/ACA subsidies is, “yes;” promoting the notion that being subsidized to the extent that we can choose not to work more or not to work at all is a good thing for our society.

University of Chicago economist Casey Mulligan clarifies reality near the end of this video clip (be sure to watch the balance of the clip from its starting point):

Transfer payments are not purchases. Charity is not work.

This issue focuses the essential political choice before us. More charity, dependency, and debt or more jobs, opportunity, and economic growth. We may be able to elect people who offer us a free lunch now but this is at the expense of our children’s future.

It is my personal hope that Americans, with the implications our President’s policies and priorities now clearly before us, will change direction.

Regards, Pete Weldon

Posted in Money, Responsibility.

We Already Have Government Run Healthcare

Obamacare is simply an extension of the government health care system that already controls our medical lives. It may be not technically be a single payer system but it is totally controlled (and politicized) by the government.

There is no choice.

Rough Numbers*:

  • Employer Based: 170 million people covered by employer based health care at any given time during a year. Coverage is limited to what the particular employer offers. 7 million people currently having employer based health care are expected to be forced to buy an Obamacare policy or pay tax in 2015. There is no other choice if your employer offers health insurance.
  • Medicare: 50 million people covered by Medicare. There is no other choice if you are over 64 years of age.
  • Medicaid: 66 million people covered by Medicaid at any given time during a year. There is no other choice if you are poor.
  • Private Individual Insurance: 20 million people covered by private individual health care insurance at any given time during a year. Must now buy Obamacare policy or pay a tax. There is no other choice if you work for yourself.
  • Uninsured: 45 million people not insured at any given time during a year including about 10 million illegal aliens. Must now buy Obamacare policy, pay tax, or enroll in Medicaid. There is no other choice if you are uninsured.

* numbers exceed total population primarily because people move between categories during any given year and the data sources don’t reconcile the totals.

If we had market based health care rather than government based healthcare everyone would have real choices, real competition, and we could still subsidize those in need with direct tax deductions and tax credits.

Our children deserve leadership and common sense on health care.

See the links below for source information.

Regards, Pete Weldon


Note and Sources:

Read the February 4, 2014 CBO report for information on the 7 million expected to lose employer based coverage in 2015, and other implications of Obamacare.

People who work for employers who offer health care coverage get the least expensive health care.  More than half of the U.S. population (about 170 million people) had employment-based health insurance coverage at some time during 2011. The cost of such care is a tax deductible expense to the employer resulting in a 35% subsidy all taxpayers together must pay for. Obamacare mandates certain coverages and implements an “excess coverage” tax for employer based coverage.

People with individual health coverage can only deduct health care costs for tax purposes to the extent they exceed 10% of your adjusted gross income.

At age 65 the only choice available is government run Medicare. About 50 million people were enrolled in Medicare at some time during 2010. While you are free to purchase a “private” Obamacare policy when you reach age 65 there is no reason to do so given the costs and limitations of such policies relative to Medicare. If you do elect not to enroll in Medicare you have to pay a penalty of 10% of the premium for both Part B and Part D cumulative for every month you do not enroll after reaching age 65.

If you are of modest means the only choice available is government run Medicaid. About 66 million people were enrolled in Medicaid at some time during 2010.

If you do not have employer based coverage, are not age 65, or are not eligible for Medicaid you can purchase individual health insurance. Prior to implementation of Obamacare there were about 20 million people covered by private individual health insurance.

About 45 million people did not have health insurance at some time in 2012. Many of these people could not afford insurance and did not qualify for Medicaid. Many also elected to make an economic tradeoff, allocating dollars to other uses (for example, young people not worried about their health). These totals include about 10 illegal aliens and don’t reflect a lower number of people who actually go uninsured for the full year.

Posted in Freedom, Money.

Man On Overpass With Sign

I saw something last Saturday that intrigued me; a lone middle aged man standing on an interstate overpass waving while holding a hand-drawn sign having the single word, “IMPEACH.”

How many people in cars whizzing past below did not instantly know what the man was saying and who he was referring to?

What caused this man to take his Saturday afternoon to engage in public political speech?

Why was he alone?

Is he a symbol to millions of individuals who value their personal freedoms and privacy now frustrated into action by federal overreach, or a guy with questionable judgment and too much time on his hands?

What if millions of Americans found their own overpass to express their objection?

How about this coming Saturday afternoon?

How about every Saturday afternoon?

Regards, Pete Weldon

Posted in Freedom.

Wither Work

Germany, after passing legislation in 2007 that would have increased the retirement age from 65 to 67, is now on a course to lower the retirement age from 65 to 63.

Life expectancy has increased in most developed countries by more than ten years from 1960 to 2011, from slightly below 70 years to over 80 years. New developments in health care technology and knowledge are projected to further increase life expectancy in the US to as high as 86 by 2050, with those reaching age 65 in 2050 perhaps living on average to be 90. For reference, the life expectancy for someone born in the US in 1930 averaged about 60 years.

We may argue about the rate of growth in life expectancy but it would seem foolish to make public policy that seems to explicitly presume a decline in life expectancy. (Hello Germany? Are you there?)

Let’s see what happens based on an average static life expectancy of 85 years. We develop to become productive citizens the first 20 years, we work for the next 45 years to age 65, then retire and live to 85. Each of us, on average, must earn and save enough wealth to both pay for the development of our own children for 20 years and then pay for our expenses in retirement for 20 years, or we as a country will go broke. When you borrow money from future generations to pay these costs you delay the time frame within which you may go broke but you increase the probability you will in fact go broke because you have to generate the income and wealth to pay back the loans with interest as well as pay the costs of developing the young and supporting the old (not to mention the costs of supporting the poor, the unemployed, the hungry, the oppressed masses, etc., etc.). An average of 45 years of work and 40 years of assured dependency can’t work financially in perpetuity.

The preceding example analysis omits a further negative impact resulting from public employee union contracts that provide for retirement benefits including lifetime healthcare after only 20 to 30 years of service (see New Jersey as the poster child).

The point is that devaluing work by reducing the legal retirement age makes no sense given actuarial reality. Such policy destroys value. The opposite policy creates value and we in the US should be implementing policies that encourage work throughout adult life.

Both morally and financially we need policy that rewards work, especially work that defers or avoids socialized costs related to retirement health care and living expenses.Toward this end we should be raising the age to qualify for social security and medicare as a function of increasing life expectancy while providing incentives for employment for those above the qualifying age. Such incentives for continued employment may include a reduction in earned income (W-2 income) tax rates with age beginning at the age of social security qualification. The more people pay their own way through work in their older years the greater the financial incentive they should receive to work even longer.

To create a retirement system that is sustainable across generations we need to restructure virtually all government subsidy programs and priorities to value rather than devalue work while removing the expectation that some anonymous someone else will subsidize our later years of life.

Regards, Pete Weldon

Posted in Money, Responsibility.

Stereotypical Disrespect

How do we get past stereotypes in our political discourse and responsibly face the real issues? New York Governor Andrew Cuomo is now the poster child for promoting stereotypes to support the imposition of liberal/progressive priorities in law.

Here is the full context of what Andrew Cuomo said during a recent radio interview:

“I think what you’re seeing is, you have a schism within the Republican Party. The Republican Party is searching for an identity. They’re searching to define their soul. That’s what’s going on. Is the Republican Party in this state a moderate party or is it an extreme conservative party? That’s what they’re trying to figure out. And it’s very interesting because it’s a mirror of what is going on in Washington, right?

“The gridlock in Washington is less about Democrats and Republicans. It’s more about extreme Republicans versus moderate Republicans. And the moderate Republicans in Washington can’t figure out how to deal with the extreme Republicans. And the moderate Republicans are afraid of the extreme conservative Republicans in Washington, in my opinion.

“You’re seeing that play out in New York. There’s SAFE-ACT. The Republican Party candidates are running against the SAFE-ACT. It was voted for by moderate Republicans who run the Senate. Their problem is not me and the Democrats, their problem is themselves. Who are they? Are they these extreme conservatives who are “right to life,” “pro assault weapon” “anti-gay”? Is that who they are? Because if that’s who they are, and if they are the extreme conservatives, they have no place in the state of New York because that’s not who New Yorkers are. If they’re moderate Republicans, like in the Senate right now, who control the Senate — moderate Republicans have a place in this state.”

Let’s parse the nonsense. Mr. Cuomo characterizes “extreme conservatives” as those who are “right to life,” “pro assault weapon,” and “anti-gay” and further notes that such people (according to his definition) “have no place in the state of New York.” It is uncertain whether he considers people “extreme conservatives” if they satisfy one, two, or all three of his criteria.

The only one of his three stereotypes that holds water is “right to life.” Yes, Mr. Cuomo, there are millions of American’s (and possibly even New Yorkers:) who believe a fetus has a right to live, and I am sorry that you disagree. It would seem, then, only people who believe a female has a legal right to choose to end the life of her unborn fetus have a “place” in the politics of the state of New York.

Using the phrase “pro assault weapon” undermines the credibility and seeks to diminish the worth of those who believe the right to bear arms to be a core American value prioritizing and protecting the freedom of the individual from state power. Why don’t those who see insufficient evidence to conclude that banning certain weapons serves any purpose other than to unreasonably limit the right to bear arms deserve a “place” at the political table in New York, Mr. Cuomo?

Using the phrase “anti-gay” undermines the credibility and seeks to diminish the worth of those who believe that marriage between a man and a woman creates and sustains the family bonds and parenting union necessary to develop secure, independent, and strong individuals capable of assuming responsibility for their own lives and to willingly undertake perhaps the only true value of life, that being to have and raise children. According to Mr. Cuomo, then, only people who want to diminish the value of marriage between a man and a women and by implication diminish the family have a “place” at the political table in New York.

Mr. Cuomo’s comments promote divisiveness and disrespect that are the real cause of the political conflicts he helps to perpetuate as a liberal/progressive Democrat. Mr. Cuomo needs to stand in front of a full length mirror and look closely at himself, his state, and his party; as should those who gleefully embrace his stereotypes.

Regards, Pete Weldon

Posted in Freedom, Responsibility.