Monthly Archives: February 2014

Random Pseudo-Thoughts on Free Speech

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Erin Ching ’16, of Swarthmore College, without a trace of irony:

What really bothered me is, the whole idea is that at a liberal arts college, we need to be hearing a diversity of opinion.  I don’t think we should be tolerating [Christian thinker Robert George’s] conservative views because that dominant culture embeds these deep inequalities in our society.

Sandra Korn, ’14, of Harvard:

[T]the liberal obsession with “academic freedom” seems a bit misplaced to me.  After all, no one ever has “full freedom” in research and publication.  Which research proposals receive funding and what papers are accepted for publication are always contingent on political priorities.

And

…why should we put up with research that counters our goals simply in the name of “academic freedom”?

This is what we’re teaching at our colleges and universities?  Maybe there’s too much “academic” freedom for the students, and not enough teaching of rigorous thinking.  Which flows from too much “academic” freedom of a different sort for the professors and their failure to teach the techniques of rigorous thinking.

h/t Robby Soave of The Daily Caller

Chained CPI, Taxes, and Spending

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In years past, Obama had offered to trim cost-of-living increases in Social Security and other benefit programs—known as chained CPI.  Not anymore.

The Obama administration also has taken to making this claim:

Social Security has not contributed one penny to the deficit.

This, of course, is mendaciously false—it’s government spending, and the government is spending more than it takes in.  The only thing is the bookkeeping fiction that it’s off-budget, and so (so the claim goes) that deficit spending doesn’t exist.  But this meme depends on a carefully distorted definition of the official “deficit”—that of being only an on-the-books deficit, and not including the off-the-books spending that is Social Security (and Medicare).

But, maybe Obama would reconsider.

“The president was willing to step forward and put on the table a concrete proposal.  Unfortunately Republicans refused to even consider the possibility of raising some revenue by closing some loopholes that benefit only the wealthy and well connected,” [White House Principal Deputy Press Secretary Josh] Earnest said.  Officials said Thursday that those potential reductions in spending, included in last year’s Obama budget, had been designed to initiate negotiations with Republicans over how to reduce future deficits and the nation’s debt.  But Republicans never accepted Obama’s calls for higher tax revenue to go along with the cuts.

Never mind that the only legitimate uses of closing loopholes are two: to reduce tax rates, and to pay down the national debt.

Beyond that, government doesn’t need more tax revenue; although it would get more, even at lower tax rates, if it got out of the way of the economy and let that grow.  Government needs to cut pending to below collected tax revenue, and it needs to use the increased revenue from loophole closing (all loopholes, including, say, tax credits for “green” energy boondoggles, not just those convenient to Democrats) to reduce tax rates even further—and then keep that tighter lid on spending.

[Obama’s latest budget proposal] says deficits as a share of the economy will be below 2% after 2025.

In other words, Obama continues to ignore our out of control national debt, since those deficits can only continue to add to the debt.

Susan Rice…Has No Regrets

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Susan Rice, currently President Barack Obama’s National Security Advisor, said this on Sunday to NBC Meet the Press‘ David Gregory:

[W]hat I said to you that morning, and what I did every day since, was to share the best information that we had at the time.  The information I provided, which I explained to you, was what we had at the moment.  It could change.  I commented that this was based on what we knew on that morning ….

Compare that with this transcript of a conference call in which a State Department official described real-time reporting of the events in Benghazi by folks present in and during the attack.

State knew the truth in real-time, as that transcript demonstrates.  And Susan Rice, then State’s Ambassador to the UN, surely knew, also, at least by the time she went on those Sunday talk shows a week after the attack and murders.  She knew at the least because she was, and is, a highly intelligent, dedicated woman who would have moved to corroborate the talking points she was given and not simply have parroted them.  She knew because, of course, State would have passed along the above transcript for her review before sending her out on the talk tour.

Welcome to the Republic

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Isn’t this part of what the 10th Amendment is about, guys?

Maybe some States finally are figuring that out.

Governors…have a blunt message for Congress and the White House: They’re moving ahead on job-creation, infrastructure and other matters in the face of federal inaction.

Democratic and Republican governors gathering for National Governors Association meetings say they’ve been forced to fill a vacuum created by the partisan battles in Washington that have blocked agreement on a long-term fiscal plan.

“We’re not waiting.  It would really be great for them to solve the mess here, but in the meantime we’re going to do what we can,” said Michigan Governor Rick Snyder, a Republican.

It’s not their mess to solve, albeit they’ve certainly been actively enthusiastic contributors to it.  Your States’ citizens are your responsibility.  The voters elected you to deal with the problems not to foist them off on relay them to the Federal government.

And this:

“There’s no long-term infrastructure plan coming out of DC—none,” said North Carolina Governor Pat McCrory, a Republican.

Mr McCrory last year pushed through legislation changing the way North Carolina spends scarce transportation dollars.  Under the plan, projects that boost the economy, such as highways that link urban centers and relieve congestion, get priority.

In an interview Friday, Mr McCrory said the measure was partially a response to the failure of federal lawmakers to rework transportation funding.

You guys shouldn’t need one Federal action first; you should be acting on your own initiative.  When that happens, you get McCrory’s outcome: you finally stop feeding your addiction to Federal dollars, you start getting more efficiency and better prioritization, and you stop spending OPM willy nilly.

And this:

Colorado Governor John Hickenlooper, a Democrat, said the “cycle of partisanship and dysfunction” in Washington could ultimately benefit state and local governments by forcing them to rethink how they relate to the federal government.

Well, NSS.  Welcome to the world of independence and responsibility.

States’ rights come with States’ responsibilities.  Where you guys been?

Health Plans vs Emergency Cash Savings

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In light of the rapidly rising cost of health “coverage,” courtesy of Obamacare, I thought I’d offer a few thoughts comparing health plans with emergency cash savings.  To concretize things, let’s say a medical emergency costs $50,000.  A three-person household consisting of 43- and 41-year old parents and a 16-year-old child, a family with an $85,000 annual income in Collin County, Texas might select a Silver Plan from the ObamaMart that has a $681 monthly premium and that pays 70% of covered medical expenses after deductible and copays (this Plan has a $12,700 annual deductible with copays of $500 for ER and $250 for a hospital stay of any length, but let’s ignore these for this comparison.  On the other hand, let’s say the $50k medical event is a comprised of items that are covered under the Plan.  Also, it should be clear that, even though I’m positing a three-member family, the principles illustrated would apply to a family of any size, from a single person on up).

Health Plan Pros:

  • provides all the coverage it ever will with the first premium

Health Plan Cons:

  • only useable for the covered items
  • premiums paid are lost forever from the perspective of the family—they can’t be recalled and redirected
  • covers low probability, high cost events (under Obamacare, routine, minor expenses, like annual checkups, contraceptives, and so on also are covered; I’ll come back to that below)
  • guaranteed to cover only a fraction of the covered item(s)’ actual expenses—70% of them under this family’s Plan; under Obamacare generally, the per centage can go as low as 60%

Emergency Cash Savings Pros:

  • accumulates money to cover those same low probability, high cost events
  • usable for any expense, and there are no arguments over whether the item is a covered item
  • have chance of paying for 100% of the emergency expense
  • entirely under control of family doing the saving, including how the money is held or invested.  Also, the person doing the saving gets the proceeds of any investing plan, not a Plan provider

Emergency Cash Savings Cons:

  • must be accumulated before there’s enough money to cover the emergency/medical event

Now consider how Health Plan providers (and the insurers in the remaining insurance industry—life, property, etc—generally) make their money.  First they estimate the likelihood of a payout for a covered event (and their actuarial statisticians are very good), then they aggregate that over the number of customers they have for that event coverage, and they arrive at a premium that exactly covers the expected payouts.  That is, if their numbers are right, the collected premiums will exactly pay for the most likely total payouts in, say, a year’s time.  Then the insurers plus up the premium actually charged so as to cover additional costs like R&D, marketing, and so on, and a profit.  The result of this is that the Health Plan buyer (for instance) pays a bit higher premium than he’s expected to collect on the actual occurrence of the medical event(s) for which he bought the Plan.

It seems to me that, at least for a family that’s fundamentally healthy and doesn’t take too many risks with that health (e.g., they eat moderately well and they exercise moderately regularly), they’re better off funding their own Emergency Cash Savings fund.  The pros and cons above favor the ECS, if the family is willing to run the risk of having such an event before their fund is fully loaded.

But look at what’s expected of the family, if it buys the Plan described at the outset: it’s expected to pay to the provider $681 per month, month in and month out, year in and year out, even if the covered medical event(s) never happen.

It occurs to me that if the family can afford to make those payments, it can afford instead to sock them away in its own ECS, ultimately fully funding it.  Doing that, at essentially 0% return (e.g., sticking the money into a bank savings account or a money market fund), means the family will accumulate the $50,000 of the posited medical event in six years.  Oh, and in those six years, the 30% not paid by their Plan also is covered.  Just getting to the $35,000 paid by the Plan will take a skosh over four years.

Now, invest that at a nominal rate, seed it with some startup money, and the family’s ECS is accumulated much more quickly.  And will continue to grow.

Notice, too, that that fund, under the sole control of the family, is not limited to a medical event, or to any particular purpose.  It’s available, also, to repair/replace the roof that got nailed in one of those Texas hail storms.  Or it can be drawn on to replace the car that failed catastrophically.  Or….  You don’t have that flexibility with a Health Plan.  And the Plan costs the same.