Tag Archives: economics

Obamacare Fail

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…again.

Employers are increasingly recognizing they may be able to avoid certain penalties under the federal health law by offering very limited plans that can lack key benefits such as hospital coverage.

Benefits advisers and insurance brokers—bucking a commonly held expectation that the law would broadly enrich benefits—are pitching these low-benefit plans around the country.

This, of course, is backwards.  The coverages here should be paid out of pocket.  The better policy would cover only catastrophic events—like hospitalization.

Then there’s this:

[E]mployers and benefits experts have understood the rules to require robust insurance, covering a list of “essential” benefits such as mental-health services and a high percentage of workers’ overall costs….

But a close reading of the rules makes it clear that those mandates affect only plans sponsored by insurers that are sold to small businesses and individuals, federal officials confirm.

The money-saving bare bones policies are only available to large companies.  The jobs producers remain stuck with the expensive, overwrought mandated policies that they cannot afford.  Nor can they afford the penalties Obamacare exacts for not affording them.

And this from Kansas Insurance Department Special Counsel Linda Sheppard:

The whole idea is to get healthy people in and not-so-healthy people in.

Never mind that healthy people don’t need to be in, since they don’t need the coverage, and so they shouldn’t be being forced in.

Let’s Try That Again

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Joe Rosenberg, Loews Corp Chief Investment Strategist, has suggested that large, rich corporations should bailout a spendthrift, debt-ridden Federal government.  After all, he says, since the Federal government had bailed out some big businesses in the Panic of 2008, it’s only proper to return the favor.  As if two wrongs would make a right.

Rosenberg’s proposal is this in its essence:

Companies like Apple, J&J, Microsoft, and other US multinationals are major vendors to the federal government.  Instead of the deficit-ridden government borrowing money to buy their products, let the companies offer the government long-term, no-interest financing in lieu of cash.

In return for this no-interest loan, the companies—which would be required to source the government-purchased products in the US—would be allowed to repatriate 75 cents of every dollar they lend without incurring income tax.  The repatriated cash would pay US workers and US suppliers, increasing employment in this country.

Sadly, no.  The present problem is government spending too much, not being short of money to spend.  Moreover, the demanded vig—paying a 25% tax on the repatriated funds instead of the current 35%, and that only if the money is turned over to the government, anyway—is a money loser for the companies.  On top of which, requiring the government to buy only from American sources means denying the government the lowest prices available for the goods and services it thinks it needs—more wasteful government spending.

Here’s my proposal: companies like Apple, J&J, Microsoft, and other US multinationals should stop being major vendors to the federal government.  Since the government is so addicted to spending it can’t control itself, it’s time for an intervention: stop selling to the government and thereby force it to reduce spending.  These companies will take a hit to their bottom lines from the loss of revenue, but a) the government is paying them with soon to be depreciated—heavily—dollars (that Bernanke Inflation that’s just around the corner from all of his money printing), and b) the hit will be temporary as the companies find other buyers with which to replace the government.

Of What Are They Afraid?

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British PM David Cameron, in another step in his push to give the British people a vote on their continued membership in the EU, has

given his Conservative Party’s backing to a draft bill that would commit the UK to holding an EU referendum by the end of 2017[.]

Of course many of his governing coalition partners oppose this bill—they not only want continued membership in the EU, they want the matter closed without the people’s further input.

Opposition cronies also oppose the thought of acknowledging the people’s view—and the primacy of that view—in the matter, fearing the referendum might actually come out in favor of leaving the EU.  One such crony, John Cridland of something called the Confederation of British Industry, insists

For those of us in the business world, it feels like a diversion from what we should be doing in Europe, which is restoring growth, through trade deals, and championing the reforms that we want to see….

Europe is more important than Great Britain?  What “reforms” does Cridland seriously think he’s going to get through the EU?  Why not focus on helping Great Britain first?

The EU, in fact, is doing nothing serious for Great Britain; it does, in the larger picture, endanger British fiscal soundness with the EU’s own continued demand for bailouts of spendthrifts (which only condones that irresponsibility).

Of what are the opponents of the British voice so afraid?  Or is it simply that the people shouldn’t be allowed waste government resources on making a choice that their Betters already have made for them?

ObamaTaxes

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Compiled by the good folks at Americans for Tax Reform.  Se the link below for details.

President Barack Obama, in a cynical Mothers’ Day “defense” of Obamacare, actually called these taxes the

largest health care tax cut for working families and small businesses in our history.

Here’s an excerpt of the list.

  • $123 Billion: 3.8% Surtax on Investment Income (Took effect Jan. 2013).  This tax hits capital gains and dividends (think about the impact on your 401(k)s; this doesn’t only hit the evil rich).  It also taxes “other” income—things like interest, annuities, and royalties.  Think this only hits the rich?  Your 401(k) mutual funds also invest in interest-paying instruments—bonds, for instance.  Many of our seniors live on annuities.  Our farmers are making beneficial use of the royalties oil and gas producers pay them for access to these energy sources that lie below their land.
  • $86 Billion: Hike in Medicare Payroll Tax (Took effect Jan. 2013).  This isn’t the end of the payroll tax holiday, this is an Obamacare tax increase: a bump from the present employer tax of 1.45% per paycheck (2.9% for the self-employed) to 2.35% for the employer to pay (3.8% for the self employed).
  • $65 Billion: Individual Mandate Excise Tax and Employer Mandate Tax (Both take effect Jan. 2014).  Employers with 50 or more employees must offer government-approved health insurance if a single employee qualifies for a tax subsidy to buy insurance.  If they do not, they must pay a tax of $2000 for all full-time employees [emphasis added].  It gets higher under certain circumstances.
  • $60.1 Billion: Tax on Health Insurers (Takes effect Jan. 2014).  No particular reason for this one; it’s just an excuse to squeeze the insurance companies for more money.
  • $32 Billion: Excise Tax on Comprehensive Health Insurance Plans (Takes effect Jan. 2018).  These are the Cadillac plans that unions and evil rich get, and they’re pretty good policies.  But since the government doesn’t offer them, you have to pay even more extra to keep them.  Pay up, sucker.
  • $23.6 Billion: “Black liquor” tax hike (Took effect in 2010) This is a tax increase on a type of biofuel.  Because biofuels are unhealthy, so if you’re going to use them, you must pay the resulting health costs.  Never mind that the government requires you to use them.
  • $22.2 Billion: Tax on Innovator Drug Companies (Took effect in 2010): Because the innovators innovate too successfully.  Pay up, sucker.
  • $20 Billion: Tax on Medical Device Manufacturers (Takes effect Jan. 2013): A 2.3% excise tax.  Because these producers produce too successfully.  Pay up, sucker.
  • $15.2 Billion: High Medical Bills Tax (Took effect Jan 1. 2013).  Because if you can afford to get that sick, you can afford to give Uncle Sugar an extra taste.

And so on.  We’re seeing what’s in this…Act…now that it’s been passed, and it’s still incomprehensible.  Except the enormous tax increase—that’s clear to everyone but Obama.

Another Obama Sequester Fail

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Recall that California’s gas and oil industry has been shrinking for years.  It’s a slow shrinkage, but in the present political clime—the green political clime—it’s been inexorable.  This graph tells the tale (ignore, for this post the loud contrast with Texas).

Now this administration’s Bureau of Land Management, the agency responsible for leasing and permitting of Federal lands to oil and gas producers, is claiming that it’s helpless to reverse this trend—the sequester, you see.  The BLM has announced that it

will stop scheduled oil and gas leasing on public lands for the rest of the fiscal year. At least two auctions of more than 3,000 acres with promising oil deposits have already been canceled.

As the WSJ put it,

The state and feds forfeit the money from the leases. The industry can’t move ahead with its planned drilling, which wastes money. And Californians—in a state where nearly one of 10 workers is jobless—lose the chance at hundreds and perhaps thousands of high-paying jobs.

Never mind that lease income, and future royalties from the extractions, are both money makers for the government.  The sequester won’t let them make the money.

Nothing circular or political here.  Mm, mm.