Showing posts with label aarp. Show all posts
Showing posts with label aarp. Show all posts

Saturday, September 2, 2023

September, 2023, Part 1, Political Class Insanity: Biden's Killer Inflation Impacts On Every American

Every month we devote posts to just general political class insanity that is running rampant through the country. The members of the American political class continue to show that they are incapable of operating any level of government in this country. 

Even their best efforts are almost always inefficient and ineffective at resolving any problem facing Americans. They spend a great amount of time not trying to improve the lives of their citizens but continually ensuring their reelection and enriching themselves, their families, and their friends in the process, all at taxpayer expense.


1)Biden’s horrific economic policies have caused widespread inflation, at some times reaching 40 year highs which, as we have  discussed, has resulted in soaring prices for food, gas, utilities, mortgages, and other life expenses. And apparently his failed economic policies are creeping into the cost of buying a care:


  • According to a Wall Street Journal article, a mere five years ago there were dozens of news cars that could be purchased for less than $20,000.

  • Now, over two and a half years into the Biden Presidency, only one car on the market, the Mitsubishi Mirage hatchback, can be purchased for under $20,000.

  • For the average American consumer, it now takes 42 weeks of income to buy a new car, up from 33 weeks a few years ago, about a 27% increase in such a short time.

  • And used cars are not doing much better, up over 30% in price since 2019.

  • And Biden’s high interest makes buying a car with a car loan very, very expensive with the interest rates for a new car loan averaging around 9.5% and the rates for a used car are a mind boggling 13.7%.


Biden’s economic policies are crippling the country’s middle class ability to have a comfortable and financially secure lifestyle, be it buying a car, buying a house, or buying groceries.


2)Biden and many others in Washington have no concept of basic economic theories and the suffering of average American households. One small example:


  • Biden’s ridiculous Inflation Reduction Act included provisions to give electric car buyers a $7,500 free cash bonus using American taxpayer money.

  • In the meantime, Americans are getting older at the same time that Medicare health coverage is hurtling towards insolvency.

  • In 2019, AARP reported that half of Medicare enrollees earned less than $30,000 a year and average $6,500 in out of pocket medical care expenses.

  • Thus, on average, half of Medicare enrollees, were paying over 20% of their income on their healthcare.

  • Conversely, those purchasing a Telsa and who were getting a cash gift of $7,500 for their purchase were half the average retiree’s age and were earning, on average, $150,000, a year.

  • Thus, rich Americans were getting more in cash than half of American retirees were spending on health care.


Do we see the insane priority problem here, thousands of rich folks get taxpayer money while millions of senior citizens cope with rising medical and Medicare costs?


3)More bad inflation news courtesy of Biden:


  • In a report last week it was reported that home mortgages rates for a fixed, 30 year mortgage had hit 7.31%.

  • Rates have not been this high since December, 2000, almost 23 years ago.

  • A year ago the average 30 year fixed mortgage was 5.65% and a mere two years ago it was around 3%.

  • Thus, in about two years, Biden’s economic policies have made a fixed 30 year mortgage almost two and half times more expensive.

  • On Biden’s  inauguration day, the average rate for a 30 year fixed rate mortgage was 2.7%.


No wonder annual house sales in the country are down almost 30%, 714,000, since August 2022 when annual sales were over 1,000,000. 


4)Alright, let’s keep rolling with Biden’s inflationary economy:


  • According to AAA, the average price of gas in the country as of September 2, 2023 was $3.81 per gallon.

  • On Biden’s inauguration day, the national  average price of gas was $2.39 a gallon.

  • Thus, in about two and a half years, the American driver has seen average gas prices go up about 60%.


Rising gas prices, rising car prices, rising health care costs, and rising mortgage rates, a lot of pressure on  lower income and middle income American families. All which may explain why total  outstanding credit card balances have breached the one trillion dollar mark, according to the latest government statistics. This is the first tim ever it has gone over a trillion dollars.


And while this debt is being ratcheted upwards, the amount of past due credit card payments is also rising rapidly, up to  almost 2.5%, the sixth consecutive quarter of increases.


However, all is not lost. Washington politicians have made sure that wealthy Americans are still  going to get that $7.500 cash rebate when they buy an expensive electric car. 


These political folks are crushing the American middle class, a reality they either do not know how to fix or couldn't care less about as long as they get their Congressional and Presidential benefits, their high quality/inexpensive health care, their electric vehicle rebates and undeserved high salaries. Insanity.



Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:


Please visit the following sites for freedom:


Friday, October 5, 2018

September, 2018, Part 2, By The Numbers: Medicare Insanity and Crime, Gun Control Causes Gun Violence and More

On a semi-regular basis we do a post under the theme, “By The Numbers.” Under this theme we analysis the crazy ways that politicians use numbers, from making them up outright, to using them inappropriately, to using them to lie to us. The problem for them when they do that is it is so easy to show how either stupid they are or how conniving they are. 

As an FYI, as you read my analysis of the misuse of numbers, keep in mind that I have a masters degree in statistics and for most of my life have been involved in analyzing numbers and stats. Politicians misuse of numbers and statistics is taken as a personal and professional affront to me and my profession.

1) Canada has some of the most restrictive gun control laws in the world and has had them for a while. The mayor of Toronto recently said that more gun control restrictions were needed. Byt according to the BBC: “Gun-related homicides and gun violence have increased. Firearm offences have also been on the rise in Canada in recent years. In 2016, there were 2,465 criminal violations involving firearms, an increase of 30 percent since 2013, according to figures released by the federal government.”

Much like Chicago, the more politicians put restrictions on guns the higher the violence level goes. Coincidence? I think not.

2) Many Washington politicians want to create a single payer health insurance system in this country where they and the Federal bureaucracy control EVERY aspect of EVERY American’s healthcare. Never mind that this kind of system has failed miserably in just about every country around the world where it exists.

They have coined this process of their's “Medicare For All” as if this is a good thing. But we have pointed out too many times to mention that Medicare is infested with criminal fraud and inefficiencies. Consider some sobering statistics from a recent AARP publication:
  • Medicare fraud alone is about $60 billion a year.
  • This comes out to about a $400 cost for every U.S. household every year.
  • The Medicare fraud level itself is larger than the Federal budgets for the EPA, Nuclear Security Administration, Department of the Interior, NASA, Pell College Grants, NIH Medical Research, and the Department of Homeland Security.
  • In fact, that $60 billion fraud loss is larger than the budgets of the EPA, Nuclear Security Administration, Department of the Interior, and NASA combined.
And some in Washington want to expand the Medicare program many times over. Can you imagine how large the fraud would become if that happened? 

3) AARP also recently reported on some medical people that actually got caught defrauding the Federal government within the Medicare program:
  • A Floridian doctor, Salomon Melgen, was sentenced to 17 years in jail for stealing $73 million from Medicare.
  • Houston doctor, Earnest Gibson III, was sentenced to 45 years in jail for stealing $158 million from Medicare.
  • A Fort Worth doctor, Noble Ezuknma, got 16 years in jail for being part of a $50 million Medicare scheme.
The thing that amazes me about these numbers is how much was stolen from Medicare before the crime was caught. These criminals are stealing millions and millions of dollars before getting caught. Is there no simple check point within the Medicare process that says that maybe claims for $158 million down in Houston is a little over the top? And these are the bozos that got caught, how many hundreds or thousands of other, smarter people are stealing from the Medicare system and taxpayers that are too smart to get caught

4) Hate him or love him, the numbers prove that Trump has presided over a massive economic boom time for this country and it citizens. Strong economic growth, low inflation, low unemployment, tax cuts, stable gas prices, the list of economic positives goes on and on. Compare his results to the anemic Obama economic results, as recently pointed out in a Wall Street Journal article:
  • In the previous economic 11 recoveries after a recession prior to Obama, the lost jobs during the recession were, on average, recovered in 27 months after the recession began: for Obama’s recovery, it took more than six years, 76 months.
  • Even the severe recession during the Reagan years recovered all of the lost jobs in just 35 months, half the time of the Obama recovery.
  • In those previous pre-Obama recoveries, GDP recovered on average in a little over a year: in the Obama recovery, that GDP recovery too three and a half years, twice the length of the severe Reagan recovery.
  • GDP growth averaged 2% over the Obama years, a third lower than the long term growth trend while Trump has gotten growth back over the 3% level in many quarters.
As we have pointed out so many times, Obama had no concept of how to help foster economic growth. Rather than reducing taxes and regulations, he did the opposite with the numbers above showing how terrible those policies of his were.

5) We have pointed out many times that three states, California, Illinois, and New Jersey my former home state, are in a race to see how fast they can become fiscally and economically insolvent. All three states have spent well beyond their means and tax bases, have shown no inclination to rein in spending and thus, their road to financial ruin is well underway. The only question that remain is when will that ruin become official and which state gets there first.

My money is on New Jersey. That state has a new governor, Patrick Murphy, and according to a summer Wall Street Journal article, he has shown no interest in all at reducing out of control state spending:
  • He wants to spend $50 million a year on “free” community college for state residents. How spending $50 million and saying it is free still eludes me.
  • He wants to increase annual school spending by over a quarter billion dollars a year.
  • He wants to bump up the top state income tax rate to 10.75% from 8.97%, an act that Obama proved is usually counter productive to economic growth and vitality.
  • Note: when Maryland did the same thing several years ago, the wealthier state residents just moved out of state, resulting in less income tax revenue despite higher tax rates.
  • But his tax insanity does not stop with the income state raise: he wants to raise the state sales tax to 7.5% from 7% and he wants to raise the state’s corporate tax rate to 13% from 9%, making it the highest corporate tax rate in the country and likely driving many businesses, and the jobs they create, out of the state.
And keep in mind that New Jersey probably has the worst funded pension and public employee retirement plans in the country, funding only 31% or so of its future pension liabilities. This is a classic numbers death spiral: politicians in the state have spent too much while not saving enough, they are raising taxes to cover their shortfall which will cause the wealthier residents and businesses to leave the state because of higher taxation which will reduce tax revenue which will mean that taxes need to be raised more which will drive more people and businesses out and boom, the death spiral is in place with no way out.

Oh, and by the way, New Jersey already has the highest property taxes in the country so it will not leave much wiggle room for those taxes either.

Whether at the state level of Federal level, it is obvious over and over that politicians have no concept of how to manage budgets, organizations, or economic growth. Their programs are ineffective and crime infested, their economic and tax policies are counterproductive to economic growth, and their ineptness results in economic distress to state and Federal income statements and balance sheets. The numbers do not lie even if politicians do.


Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:


www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:


http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org

http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w







Wednesday, April 30, 2014

May, 2014 the Unfolding Disaster That Is Obama Care, Part 3: What Should Have Been Done Vs. What Obama Did Continued

Two posts ago we laid out all of the Obama Care operations, strategies, and tenets that have already gone wrong and which are highly likely to go wrong in the coming months and years. Identity theft, higher deficits, higher national debt, higher insurance premiums, higher deductibles, loss of privacy, IRS harassment, failing government websites, millions of Americans losing access to their preferred doctors, hospitals, and insurance plans, millions of Obama Care policy holders being denied access to the top medical facilities and doctors in the country, etc. The list seems endless.

We also explained how the legislation never had a chance of successfully reducing our ever escalating health care costs in this country since those that wrote it never understood the true root causes of our increasing health care costs: Americans smoke too much, Americans eat too much of the wrong kind of food, Americans do not exercise enough, the government restricts insurance company cost reducing competition across state lines, much needed medical tort reform never happened, etc.

Since Obama, Pelosi, Reid and other Obama Care architects never understood the root causes, we ended up with 2,500 pages of legal mumbo jumbo that created a Rube Goldberg-like subsidized government insurance program that will ultimately fail. The problem is that we have a public health crisis that is causing our higher and higher health care costs, we do not have a lack of insurance problem. High insurance costs are a symptom of the root causes, they are not the cause themselves.

Starting tomorrow, we will again start reviewing the unfolding disasters still coming out of the Obama Care legislation, much like we have done on a monthly basis since last August. Today and yesterday, however, we have gone back through our blog posts over the past few years and gathered up all of the suggestions that subject matter experts and informed, logical people have put forth to identify the true root causes of our high health care costs. That information leads one to the needed public health initiatives which should be put forth to resolve those root causes. We have also added some additional information and reports that we have not previously covered which also make our point.

I maintain that if we were successful in attacking the true root causes, as proposed below, the cost of health care would drop dramatically as would the cost of health care insurance, making it affordable for all who wanted it. The Obama Care approach, raising taxes to cover everyone with health care insurance without eliminating the underlying root causes is a fallacy solution.

The following observations, government and independent reports and analysis, success stories, and realities are in no particular sequence. However, at the end of the two posts I think you will agree that the Obama Care approach to the problem has missed the mark completely by focusing on health care insurance rather than health care solutions.

8) An article on smoking that appeared in the February 7, 2014 issue of The Week magazine, reinforced the high toll in lives, health, and costs due to smoking, as researched by the Surgeon General:
  • Thirteen different types of cancer have been linked to smoking tobacco.
  • Other ailments associated with smoking include vision loss, tuberculosis, rheumatoid arthritis, impairment of the immune system, diabetes, erectile dysfunction, and ectopic pregnancy.
  • The report calculated that smoking is the nation’s leading cause of premature death, killing 480,000 people a year.
  • It also costs the nation up to $333 billion a year in medical care costs and lost productivity.
And the Washington political class annually insists on giving the tobacco industry hundreds of millions of dollars in taxpayer funded subsidies. Insane.

9) The May, 2014 issue of AARP’s Magazine discussed the widespread malady of diabetes. According to the article, almost 26 million Americans have diabetes, about 8% of the country’s citizens have it. 26 million is bad enough news but the trend is even worse, with that diabetes number having grown by 8 million people in just the past six years. 

The American Diabetes Association recommends losing weight, exercising, and a low fat diet are great ways to reduce the odds of getting diabetes. However, the article put forth some simple public health steps that everyone can take in their daily lives to reduce the spread of diabetes and thus, reduce the increasing costs of treating diabetes:
  • Stop drinking soda since according to a recent Harvard School of Public Health review, drinking just one or two sugar sweetened sodas a day increase your risk of getting diabetes by 26%. This is a result of the wide spread use of high fructose corn syrup in non-diet sodas that is encouraged by the Federal government’s misguided subsidies of corn growers.
  • Take a 15 minute walk a half hour after you eat and you will lower your post meal blood sugar levels for at least three hours, according to a recent study from George Washington University.
  • Adopt the so-called Mediterranean diet which is rich in fish and heart healthy olive oil and you can reduce your chance of getting diabetes by a whopping 83%.
  • People who sit around six to eight hours a day on their job are 19% more likely to get diabetes. Getting up and moving around for just two minutes every hour ups one’s metabolism enough to lower glucose levels and reduce the chance of diabetes.
  • Include a weight lifting component to your exercise regime beyond just aerobic exercise and you will do a better job of managing the glucose level in your body.
  • Eat your meals more slowly and you will usually end up eating less and reducing weight and the chance of getting diabetes.
Simple personal and public health initiatives that would go much further in reducing health care costs than whether of not you signed up for an Obama Care Bronze, Gold, or Silver insurance plan.

10) That same issue from AARP discussed research which found that one out of every three cancers can be prevented by exercising, maintaining a healthy weight, and eating right. The article points to six types of food to accomplish this reduction in your chances of getting cancer:
  • Garlic and onions
  • Milk
  • Broccoli
  • Dark, leafy green vegetables,
  • Red Grapes
  • Whole grains
It is that simple and you do not have to wrestle with a dysfunctional Obama Care website to get results.

11) A recent New York Times article that was summarized in the December 20, 2013 issue of The Week magazine reported that about 440,000 Americans dies each years as a result of preventable errors in U.S. hospitals. This means that one out of every size deaths in the country can be attributed to mistakes in hospitals. This makes these preventable deaths the third leading cause of death in the nation.

It does not matter whether you have a Gold, Silver, or Bronze Obama Care insurance policy since the legislation never really addresses this national problem and the associated costs caused by it. The good news is you have health insurance, the bad news is the hospital killed you anyway.

12) A mini-scandal and uproar occurred a few weeks ago when it was revealed that some doctors were receiving millions of dollars from Medicare every year for services rendered to Medicare patients. To make this number more understandable, and disgusting, a doctor getting $2 million a year from Medicare, and the American taxpayer, on average was getting about a $7,700 check EVERY business day of the year. I find it hard to believe that any doctor was providing that amount of quality and efficient medical service every day.

The situation became much clearer on why these doctors were making so much money as explained in Business Week article that appeared last week. Using the drug Lucentis as an example, you can see why doctors make millions off of the American taxpayer with very little effort.

Lucentis is used to treat is used by ophthalmologists/eye doctors to treat macular degeneration. Medicare pays doctors 106% of the average cost of a drug when a doctors administers it to a patient. Lucentis costs $2,000 for one shot making it a lucrative drug for doctors to administer since they will, on average, get 6% of $2,000 for their efforts.

However, another drug, Avastin, works just as well as Lucentis but costs only $50 a shot. Thus, a doctor would make 40 times less in Medicare payments, 6% of $2,000 vs. 6% of $50, if he or she used Avastin vs. Lucentis. 

Given that almost half of the 50 doctors being paid the most by Medicare in 2012 were ophthalmologists, what drug do we think these doctors are using the most, Lucentis or Avastin with Medicare not caring one way or the other from a treatment and payment perspective? Given that Medicare pays out about $1 billion a year just for Lucentis, it is pretty clear that at least some of these doctors are milking a stupid Medicare payment system.

I do not believe anywhere in the Obama Care legislation does it require Medicare to stop being so stupid and wasteful. Just forcing the switch from Lucentis to Avastin would save upwards of $1 billion a t year and contribute substantially to reducing health care costs.

13) An article in the march, 2014 issue of AARP’s Bulletin reported on how the nation is addicted to unnecessary medical tests, unnecessary tests that also needlessly increase the country; overall health care costs. For example, an estimated $3 billion is spent every year on PSA screening of prostate cancer which many experts now say does more harm than good. Nearly a quarter of $1,000 colonoscopies performed in older people every year are most likely inappropriate.

Nearly two thirds of women who have had hysterectomies and half of all U.S. women over 65 with not cervical cancer history report having recent Pap tests even though the American College Of Obstetricians and Gynecologists recommends against this test for these women. Excessive use of MRIs for lower back pain likely results tens of billions of dollars worth of treatments that end up not working.

How many hundreds of billions of wasted costs could be saved each year if we got the unnecessary testing syndrome under control, a syndrome not addressed by Obama Care?

14) Okay, last example of how we could dramatically reduce health care costs in this country without needing a useless 2,500 page piece of legislation from Washington:
  • In 1975, California passed the Medical Injury Compensation Reform Act (MICRA) which, among other things, capped the amount of medical malpractice awards. Since then, the California cost for medical malpractice insurance has gone up 168% on average while nationally the cost has gone up 420%. 
  • In the 1990s and again in 2003, Texas passed major medical malpractice tort reform. Since then, the number of malpractice awards have gone down 25% and the cost for malpractice insurance from the state's largest insurers is down over 50%. 
  • In 2005, Georgia also capped malpractice awards and has seen the number of malpractice lawsuits go down 39% and medical insurance rates go down 18%. 
  • The Congressional Budget Office estimates that medical malpractice tort reform would reduce the cost of medical insurance anywhere from 10-30%. And if you reduce the costs of malpractice insurance, you eventually would see those savings translate into lower overall health care costs.
Want to bet that the reason that national and rational medical industry tort reform was NOT included in Obama Care, despite the success at the state level, is that the American Bar Association and the legal cartel did not want to see their lucrative practices in suing doctors to dry up? Just a hunch.

There you have it. Fourteen easy ways to reduce health care costs in this country that truly address the root causes of that problem. No fancy Washington legislation, no corrupt and inoperable new Federal bureaucracy, no loss of freedom, no wasting of taxpayer wealth, no increased taxes, no disruption in millions of Americans lives. 

Just a straightforward approach to resolving a public health crises with public health strategies as oppose to using a massive and inefficient government insurance operation to resolve a public health crises. Eat healthier, exercise, stop smoking, clean up the existing inefficiencies and criminal fraud that exists to day and the country would easily save hundreds of billons of dollars every year. That is what root causes analysis does for you, something that Obama and the rest of the Obama Care advocates never did.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

Term Limits Now: http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.robertringer.com/
http://www.youtube.com/watch?v=08j0sYUOb5w





Tuesday, April 29, 2014

May, 2014 The Unfolding Disaster That is Obama Care, Part 2: What Should Have Been Done Vs. What Obama Did

Yesterday we laid out all of the Obama Care operations, strategies, and tenets that have already gone wrong and which are highly likely to go wrong in the coming months and years. Identity theft, higher deficits, higher national debt, higher insurance premiums, higher deductibles, loss of privacy, IRS harassment, failing government websites, millions of Americans losing access to their preferred doctors, hospitals, and insurance plans, millions of Obama Care policy holders being denied access to the top medical facilities and doctors in the country, etc. The list seems endless.

We also explained how the legislation never had a chance of successfully reducing our ever escalating health care costs in this country since those that wrote it never understood the true root causes of our increasing health care costs: Americans smoke too much, Americans eat too much of the wrong kind of food, Americans do not exercise enough, the government restricts insurance company cost reducing competition across state lines, much needed medical tort reform never happened, etc.

Since Obama, Pelosi, Reid and other Obama Care architects never understood the root causes, we ended up with 2,500 pages of legal mumbo jumbo that created a Rube Goldberg-like subsidized government insurance program that will ultimately fail. The problem is that we have a public health crisis that is causing our higher and higher health care costs, we do not have a lack of insurance problem. High insurance costs are a symptom of the root causes, they are not the cause themselves.

Starting in two days, we will again start reviewing the unfolding disasters still coming out of the Obama Care legislation, much like we have done on a monthly basis since last August. Today and tomorrow, however, we have gone back through our blog posts over the past few years and gathered up all of the suggestions that subject matter experts and informed, logical people have put forth to identify the true root causes of our high health care costs. That information leads one to the needed public health initiatives which should be put forth to resolve those root causes. We have also added some additional information and reports that we have not previously covered which also make our point.

I maintain that if we were successful in attacking the true root causes, as proposed below, the cost of health care would drop dramatically as would the cost of health care insurance, making it affordable for all who wanted it. The Obama Care approach, raising taxes to cover everyone with health care insurance without eliminating the underlying root causes is a fallacy solution.

The following observations, government and independent reports and analysis, success stories, and realities are in no particular sequence. However, at the end of the two posts I think you will agree that the Obama Care approach to the problem has missed the mark completely by focusing on health care insurance rather than health care solutions.

1) Several years ago, a report from the National Research Council had some very interesting findings, findings that continue to prove that Obama Care got the whole approach to solving the nation's escalating health care costs. The National Research Council is part of the National Academy Of Sciences, an independent organization of the Federal government. It is chartered by Congress to advise the government on scientific matters. Thus, the government did not even listen to itself when it cobbled together the unfolding disaster know as Obama Care.

According to the report:
  • The United States spends more on health care than any other nation in the world but has worse life expectancy than many other nations who spend less.
  • The U.S. average life expectancy at birth for women is 80.8 years and 75.6 years for men.
  • In France, women's life expectancy is 84.4 years and for men it is 77.4 years.
  • In Japan, women's life expectancy is almost 86 years and for men it is 79.2.
  • The report concludes that smoking and obesity are the primary drivers of the U.S.'s poor performance since, according to the findings, over the years, the U.S. led those unhealthy trends of eating too much of the wrong kinds of food and smoking too much.
  • The report found in countries where women's life expectancy was high, there was a strong correlation with low smoking levels and in those countries where women's smoking levels were comparable to U.S. smoking levels, life expectancy was about the same as in the U.S.
Smoking and obesity are the primary drivers of the U.S.’s poor performance. Interesting, a possible set of root causes of bad BEHAVIOR for our high health care costs in this country? Note that the report did not find that lack of health insurance was the primary driver of poor health or high healthcare costs.

2) According to a March 25, 2010 Associated Press article, recent studies have shown that the incidence of breast cancer (190,000 new cases and 40,000 deaths every year in the U.S.) can be reduced by 25-30% through the modification of BEHAVIOR as it relates to smoking, diet, and exercise. “Modification of behavior” sounds like a need for a public health initiative, not a massive government health insurance initiative.

3) A March 28, 2010 article in Parade magazine reported that the New England Journal of Medicine found that reducing the daily intake of salt by just three grams by every American would "reduce the annual number of new cases of heart disease by 60,000-120,000, stroke by 32,00 to 66,000, heart attack by 54,000 to 99,000" cases. This would reduce annual health care costs by up to $24 billion a year. 

Another vote for the changing of BEHAVIOR, not the implementation of a government insurance bureaucracy. 

4) In a Fortune article in the March 1, 2010 issue, an interview of the head of the Cleveland Clinic asserted that smoking, poor diet, and exercise BEHAVIOR was the cause of 40% of the premature deaths in this country every year. Obviously, reducing the amount of premature deaths would significantly reduce health care costs.

The same article reported that these same bad habits and BEHAVIORS are responsible for 70% of the chronic diseases in this country such as heart disease and diabetes. Imagine how much health care costs and health care insurance costs would come down if you could eliminate 70% of the chronic diseases. 

Consider the other assertions made by the head of the world renowned Cleveland Clinic, Dr. Delose Cosgrove:
  • In our current health care industry there is no incentive for staying well. 
  • Obesity in America accounts for 10% of all health care costs. 
  • At the Cleveland Clinic facility, all deep fryers were removed from the cafeterias, the menus were made healthier, the candy and soda machines were removed, free exercise programs were initiated for Clinic employers, free Weight Watcher memberships were made available.
  • In the first year of this transformation, Cleveland Clinic employees lost amazing 120,000 pounds of weight, 60 tons. 
  • From a smoking perspective, smoking was banned on the entire grounds of the Clinic, free smoking cessation classes were offered to both employees and the entire county where the Clinic is located, a lobbying push was made to ban public smoking everywhere in Ohio, and the Clinic stopped hiring smokers. In four years the smoking rate in the county went from 28% to 18%, a little less than the national average of 20%.
Smoking reduction and better eating habits, imagine that as a way to reduce disease and health care costs vs. getting everyone an expensive insurance policy.

5) Consider an article in a past issue of AARP's magazine. The article focused on the residents of Albert Lea, Minnesota which was a participant in the AARP/Blue Zones Vitality Project. This program started in May, 2009 and focused on lessons learned in so-called "blue zones" - regions in the world where people have a long life span. 

The lessons learned in these zones focus on exercise, good eating habits, connecting with others, and finding purpose in life. Outputs and activities from this towns efforts included fifteen healthy initiatives, among which were the following:
  • Cooking classes to help people learn to eat healthier. 
  • Formation of walking groups to get people more active and connected to others. 
  • Construction of pedestrian-friendly paths. 
  • Creation of community gardens. 
  • Two thirds of the city's restaurants began serving health food options.
Within just five months, town residents participating in the program had lost three pounds on average which had added about three years to their estimated life spans. One resident, used her participation in dance classes to lose thirty pounds. Another resident has lost 55 pounds and has increased his life expectancy from 52 years to 78 years by eating smaller portions at meal time, walking daily, and doing community theater work.

A year later, according to the article, more and more people were walking, dancing, and bicycling. Residents had accumulated over 42,000 miles in distance traveled via exercise. Twenty two town employers now offer work-site wellness programs to their employees, which has resulted in over 1,000 free health assessments. 

These Americans are living healthier, living longer, and not contributing to our rising health care problems since they took personal responsibility for their health, not nameless and numerous government agencies

6) A December 24, 2010 article from The Week magazine reported on how Americans take in too much salt in their diet. The article reported that just a small reduction in that amount could save upwards of 100,000 lives a year that occur as a result of excess salt (a 13% decline), and the incidence of new heart disease and stroke cases would decrease by 11% and 8% respectively.

7) On October 17, 2013, the health.com website ran an article based on the latest obesity results and research from the Centers For Disease Control (CDC). The CDC reported that about one in three U.S. adults are obese from a body weight perspective. 

This obesity epidemic costs the nation’s economy an estimated $270 billion a year due to health care costs and loss of productivity associated with obesity and overweight, according to a 2011 report produced by the Society of Actuaries. This cost burdens every U.S. household with an average cost of almost $2,400 a year.

That will do it for the first half of our theory, what should have been done vs. what Obama did, in the crisis of high health care costs in this country. Rather than making Americans healthier via a public health strategy of diet, exercise, and reducing smoking, his administration and supporters created a massive insurance apparatus that is expensive, inefficient, and ineffective. Why? Insurance plans and strategies do not resolve the undelrying public health care issues of obesity, smoking, and the government programs that encourage both. 

Tomorrow, we will conclude our analysis and theory that other, different steps should have been taken, based on a root cause analysis, vs. the wrong path that the Obama administration took, making a bad siutation worse.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

Term Limits Now: http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.robertringer.com/
http://www.youtube.com/watch?v=08j0sYUOb5w




Friday, June 10, 2011

The Stupidity Of Social Security Myths - The Five Legged Dog Riddle

It never ceases to amaze me how well the American political class has bamboozled the American public on many different issues. However, their best piece of work was to be the stupidity and myths they have sold us all when it comes to Social Security.

The latest proof of Social Security myth is summarized in an article written by James Roosevelt , Jr., the grandson of Franklin Delano Roosevelt, the President who created the Social Security system. The article, "Social Security's Enduring Truths,"  which appeared in the current issue of the AARP magazine, is rife with stupid Social Security myths. However, to fully understand the myths, one must understand how the system works:
  • A citizen pays money into the system from their current wages.
  • This money, better defined as wealth, is taken into the system and paid out to current Social Security recipients, with the excess wealth beyond current payouts being given to the Treasury Department.
  • In turn, the Treasury Department gives the Social Security Administration the equivalent of a paper government IOU for the money/wealth that the Treasury Department took in excess of what benefits were paid out.
  • The political class then uses this excess Social Security wealth/money to run the government, for better or worst, as if the money from Social Security was collected as general taxes/revenues.
Now, let's review the stupid myths that Mr. Roosevelt tries to push as "enduring truths:"

- Mr. Roosevelt says: "But this is also a generation [baby boomers] that has been paying into the [Social Security] system since they started working in the early 1960s. Much of the money that boomers are and will be drawing from Social Security is and will be their own."

This is totally incorrect. The money that baby boomers have paid into the system via their pay check deductions over the past years has been spent long ago. As the money from younger Americans is paid into the Social Security system, that money and wealth is immediately sent right back out as payments to retired, older Americans.

The money that each baby boomer paid in did not get placed into some mythical type of individual bank account. Thus, Mr. Roosevelt's assertion that baby boomers will be drawing down "their own" money is a fallacy, their money was spent long ago either as benefits or it was spent, or likely wasted, by politicians.

- Mr. Roosevelt tries to paint Social Security as a great retirement option, stating that "The administrative cost is .09%. It returns more than 99 cents to beneficiaries on every dollar collected. I dare you to find a private retirement plan that can claim that."

I do not disagree with his numbers, just his somewhat shallow conclusions that these are great numbers. First of all, this is a lousy retirement and investment plan in that for every $1.00 that goes in, less than a dollar comes out. While the difference is not great, it is still a negative return. I could place my Social Security payments in a low yielding bank savings account and still get a better return than the negative return Mr. Roosevelt claims is a good thing.

Second, in previous posts I have already discussed a more extensive analysis that explodes Mr. Roosevelt's conclusions that this is a good plan. I assumed that the money that was actually paid into the Social Security system on my behalf, beginning with my first high school job, was instead placed into a tax deferred retirement fund, like an IRA account. That money was then invested solely in an S&P 500 index investment fund. That account was allowed to grow, or shrink over the next forty years or so, based on the changes in the S&P 500 index fund.

The results show that if I had maintained control of my Social Security wealth and deductions, I could retire with about twice as much in monthly payments than I will get via Social Security. If I had been more conservative in my investing and invested only in long term Treasury bills, then I could have retired with about 33% more than what I will get from Social Security.

Thus, Mr. Roosevelt is wrong, I can easily show him a retirement plan that blows Social Security returns out of the water since I would have generated substantial positive returns. The government operation of Social Security generates a negative return.

- The article claims that at the end of 2010, the Social Security trust fund had a positive balance of $2.6 TRILLION. However, what he calls a trust fund is nothing more than $2.6 TRILLION worth of Treasury Department IOUs. Remember, from the above discussion, the political class stripped Social Security of excess funds/wealth and left behind basically worthless IOU paper over time.

In fact, in 2011, due to the bad economic times, the Social Security Administration had a negative cash flow. In other words, the Social Security Administration paid out more money, cash, and wealth than it collected in Social Security wage deductions. How did it manage this? It went to the Treasury Department, who floated bonds to start paying back Social Security IOUs.

There is no pile of money laying around in the Social Security vaults. Trust funds , IOUs, etc. do not matter, the only thing that matters is cash. Thus, the Social Security now needs Americans to pay more in taxes to pay out current Social Security benefits. There is no trust fund pot of money that will last until 2036 and be able to pay out full benefits until then, as Mr. Roosevelt asserts.

His conclusions shows a basic ignorance when it comes to cash flow and real wealth. An IOU is not wealth, it is a promise to pay. That promise has to be fulfilled by the government going out and confiscating more money form the American public today in order to pay out benefits to the levels promised by short sighted politicians from the past.

_
- The final point of discussion is briefly mentioned by Mr. Roosevelt and is then ignored: "The purveyors of fear want you to believe that boomers are retiring on the backs of their children and grandchildren. If you buy that, they have statistics showing fewer contributors supporting more beneficiaries' proof that the program is unsustainable."

He then goes onto other topics without addressing the very real problem of the growing number of Social Security recipients and the relative dwindling number of those paying into the system. Ignoring this reality does not make the problem go away.

According to the Social Security website, way back in 1940, there were 159 payers into the system for every retired worker receiving a Social Security check. Back then, this seemed like a good deal. Small sacrifices by 159 workers to support one older American in retirement. 

However, this ratio started to quickly shrink so that just ten years later, the number of payers per retiree was down to 16. Today, that ratio is only three payers to one beneficiary and within twenty years that ratio will be down to about two to one. How Mr. Roosevelt can ignore this reality is unconscionable. Consider what this reality really means:
  • According to the Social Security website, the overall average annual Social Security payout is about $12,924 a year.
  • If the number of workers supporting the system is down to only three to one, then each of those three Americans is basically paying the one retired American $4,308 a year for their retirement.
  • Since the average American household has about $60,000 a year in income, then the average working family pays more than 7% of its gross income each year to support one retired American.
  • In twenty years, all other things being equal, that average American family will be paying $6,462 to support one retiree which will be more than 10% of the family's gross income and much more than the family's net income after income taxes, sales taxes, gas taxes, etc. are considered.
  • In 1940, all other things being kept relative, the average American family, along with 158 other Americans, would only be paying about .1% of their family income. 
What more proof does Mr. Roosevelt need? More and more baby boomers retiring, relatively fewer and fewer working people paying into the system has to put a burden on future generations, our kids and our grandkids.

I believe Abe Lincoln is responsible for the following riddle: if you called a tail a leg, how many legs would a dog have? Answer: four, calling a tail a leg does not make a leg:

  • Calling Social Security a great retirement plan does not make it so. We proved that above, Social Security pays out less than it takes in and far less than if that money had been privately invested.
  • Calling Social Security a non-burden on our kids and grandkids does not make it so, there are too many baby boomers entering retirement.
  • Saying that the money people paid into the Social Security system is waiting for them is a lie, their contributions were spent long ago.
  • Pretending that Social Security has trillions of dollars in its trust funds does not mean that real wealth and real money is there.
Pretending a tail is a leg does not fix the problem. However, the following steps from "Love My Country, Loathe My Government" could fix the system:
  1. The retirement age needs to be raised to 70 since people are living much longer today than when the Social Security was implemented, invalidating one of the original premises and assumptions supporting the system. A hardship exception would be available for those that cannot afford to wait until they are 70 years old.
  2. Wealthy older Americans would not receive a Social Security check at retirement age in order to have enough funds for those that really need the money for life and death purposes. People like Warren Buffet, Bill Gates, Donald Trump, etc. have more than enough money to make this sacrifice, freeing up money for much needier Americans.
  3. The tax rate for Social Security needs to be lowered significantly but the maximum amount taxed uncapped and to include all forms of income, not just wages. This would level the percentage of each American's contribution to Social Security which is currently negatively skewed towards lower earning Americans.
Details on these three steps can be found in the book.

The only enduring truth about Social Security is that it is in serious financial trouble and needs bold actions to fix it. Unfortunately, our political class keeps trying to make this tail into a leg, something that Abe Lincoln knew could not be done.





Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at http://www.loathemygovernment.com/. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.



Please visit the following sites for freedom:

http://www.loathemygovernment.com/
http://www.cato.org/
http://www.robertringer.com
http://realpolichick.blogspot.com
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment.com