Archive

Posts Tagged ‘Free Enterprise Nation’
December 16th, 2010 at 10:52 pm
Recent Obamacare Ruling a Pyrrhic Victory?

Christine Erickson at Free Enterprise Nation has a chilling analysis of Judge Henry Hudson’s ruling that Obamacare’s individual mandate is unconstitutional:

The idea behind the individual mandate is that it is a way to achieve universal coverage through the private market, rather than through a government-sponsored plan. When considering the regulations placed on insurance companies by the reform law, the individual mandate is necessary because it brings healthy individuals into the insurance pool. Under a major provision within the law, insurers can no longer deny policies to people with preexisting conditions. If this regulation is put in place without the individual mandate, a healthy individual can go without insurance, knowing that he or she can purchase coverage after having been diagnosed with a serious medical problem. For insurance companies that sell to the individual market, this would shift the makeup of their policy holders to the point where they would spend much more on claims than they make in premiums, leaving them with the decision to drastically raise premiums (15% to 20% by CBO estimations) or exit the individual market altogether. Once private insurers are forced out of the individual market, it is almost guaranteed that the government would step in and create a government-run plan.

With Judge Hudson’s ruling, as well as two other recent rulings that the mandate falls within Congressional limits, healthcare reform supporters now see two likely outcomes to a Supreme Court challenge: the law will be upheld in its entirety, or the individual mandate alone will be overturned. If the Supreme Court decides the latter, the country could be immediately set on a path towards a government-run, single payer system.

Oh, dear…

November 24th, 2010 at 4:55 pm
Giving Thanks for Clarity

So maybe the era of big government really wasn’t over when former President Bill Clinton declared it so.  Jim MacDougald of the Free Enterprise Nation explains that the balanced budget Clinton delivered was the product of a shell game with the Social Security Trust Fund, not a profile in political courage.  From a blog entry discussing the history of Social Security and Medicare:

The federal government recognized that beginning in about 2011 the transfer payment system wouldn’t work. There would be too many recipients of benefits and not enough workers to take money from to pay for it. To avoid the financial catastrophe that loomed ahead, in 1983 the government substantially increased employer and employee contribution requirements to (at least partially) pre-fund for 2011 and thereafter.

Planning ahead for an event that would occur 28 years in the future was a commendable and far-sighted act by our elected officials. “Baby-boomers,” who made up the majority of our workforce, were subsequently “taxed twice,” with matching contributions from employers. One portion of their tax was to pay for those on Social Security who had already retired, the second portion was to pre-fund a part of their own retirement benefits.

Congress took this excess tax revenue and put it in a “trust fund” to pay future benefits. But the trust fund they established was an enormous shell game because the money was treated as general revenues…a huge windfall to the federal government. It enabled President Clinton to announce at a State of the Union address, that the deficit was “exactly zero.” Even today, people are still congratulating Presidents Clinton and H.W. Bush for having balanced budgets and reducing national debt. But Congress had accomplished that feat by taking and spending all of the “excess revenue” that was coming in from payroll taxes for Social Security, and there was a lot of it to spend! From 1983 to 2008, the federal government took $2.5 trillion more than required to pay current Medicare and Social Security recipients, and they “bought Treasuries” with it. In other words, they spent it all.

Now, it makes a lot more sense how the federal government could “balance” the budget so quickly with nary a squeal heard from entrenched interests.  As MacDougald makes clear in the rest of his article, starting next year there are no more games to play.  The 2011 budget for Social Security and Medicare is $1.22 TRILLION – more than all of the federal income taxes paid by all of the workers in America last year.  In order to pay for the payments owed to Baby Boomers (who, as a cohort, begin reaching 65 in 2011), every American worker will have to pay at least $10,000 in new federal taxes every year.

Add this to the cost of ObamaCare and….pass the tryptophan and bring on the food coma.