Tag Archives: economics

An Obamacare Outcome

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Dr Peter Weiss, a practicing physician, describes one.

I have now posted a notice in my office and each exam room stating exactly what Obamacare will cover for those yearly visits.  Remember Obama promised this as a free exam—no co-pay, no deductible, no charge.  That’s fine and dandy if you are healthy and have no complaints.  However, we are obligated by law to code specifically for the reason of the visit.  An annual exam is one specific code; you can not mix this with another code, say, for rectal bleeding.  This annual visit covers the exam and “discussion about the status of previously diagnosed stable conditions.” That’s the exact wording under that code—insurance will not cover any new ailment under that code.

What this means:

If you are here for that annual exam, you will not be covered if you want to discuss any new ailment or unstable condition.  I cannot bait and switch to another code—that’s illegal.  We, the physicians, are audited all the time and can lose our license for insurance fraud.

Yeah.  A separate appointment, separately scheduled for your new ailment.  Further, during your scheduled annual, note that bit above: “discussion about the status of previously diagnosed stable conditions.” That’s the exact wording under that code….  Your doctor’s discussion concerning your annual’s results are largely scripted by Uncle Sugar.  Talk about snake oil.

Oh, and good luck scheduling that separate appointment.  Keep in mind that your doctor, if you get to keep him at all, is part of a shrinking collection of doctors, and their work loads are exploding from all the new patients Obamacare is foisting off on them.  There are only so many hours in a day.

 

RTWT

Apocalypse Now

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…or is it?

Here are some interesting graphs published by Spiegel Online International that show some estimated effects of a departure from the eurozone by Greece, Greece plus Portugal, those two plus Spain, and those three plus Italy.  Frankly I think the latter two departing is unlikely; they’re not is as poor shape, yet, as they’re made out to be.

This is chump change for the seven year period, even including Portugal: it compares to Germany’s 2012 GDP of €2.5 trillion ($3.2 trillion).  Even losing all four would “only” hurt badly, not inflict debilitating damage—and only relatively briefly, at that.  See a graph below for expansion on this point.  Notice, also, that the red bars are losses in growth, not loss of growth.

Here’s that “graph below:”

Look at  that.  A burble in 2014 until we look at all four nations departing.  Then Germany gets a sharp recession.  However, notice that in the most likely scenarios—Greece only and Greece plus Portugal leave—growth goes back positive by 2015, and by 2017 if we throw Spain into the mix.

What do things look like for the rest of the EU, not just Germany, and for the US?

The UK and the US—not members of the eurozone, interestingly—hardly notice the losses.  Germany feels the sting, but as can be seen from the earlier graphs, not so much compared to its overall economy.

In short, a departure of these nations from the eurozone will hurt the remaining, and other nations, a little.  But against this must be balanced both the pain for those nations of continuing the present charade of bailouts and the benefits to Greece (and Portugal, Spain, and Italy) of stopping the bailouts, letting them go bankrupt, and letting them depart the eurozone.  And the affected nations can, with this much warning, mitigate the effects by reducing their holdings of Greek (and Portuguese, Spanish, and Italian) sovereign debt.

Unfunded Liabilities

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We’ve already seen counties and cities brought low and into bankruptcy by their blithe accumulation of future liabilities that they have no hope of honoring.  Jefferson County, AL, comes to mind, from a bond sale they had every reason to believe, a priori, that they could not honor in the future.

So does Stockton, CA’s bankruptcy, flowing from a public union pension and insurance program that they, also, must have known in advance that they could not support in future.

These are well understood, and the data that would have predicted these failures easily available to any who cared enough to look—and to face the impending problem squarely.

What of our nation’s debts, though?  Chris Cox and Bill Archer describe in a recent Wall Street Journal the hidden—and unfunded—liabilities at the Federal level that make our public national debt of $16 trillion look minor.

These hidden, but too real liabilities—debts—include

the unfunded liability of Medicare, $42.8 trillion

the unfunded liability of Social Security, $20.5 trillion

the unfunded liability of federal employees’ future retirement benefits, $23.5 trillion

But these data are carefully hidden from public scrutiny.  Federal Treasury “balance sheets” don’t include things like the debt represented by those Medicare, Social Security, and retirement unfunded liabilities.  No, the data are carefully squirreled away in the individual social welfare accounts.  You have to know where to look and what to look for—knowledge that heavily trained and experienced folks like Cox and Archer have, but which our politicians know the average American constituent lacks.

This is a time bomb that demands out entitlement programs be brought to heel, our entitlement mentality as a nation to be curbed.  Else we’ll go the way of Stockton.  And for a nation, that won’t be pretty.  Think of Greece today.  Think of Weimar Germany of the last century.

Debt Forgiveness and Bankruptcy

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Christine Lagarde, Managing Director of the IMF, insists as Spiegel Online International reports, that

For Greece to recover…creditor countries would have to forgive the government in Athens a large share of its debt.  “Nothing else will work[.]”

After all,

given that Greece will be unable to reach the target [of debt to GDP, originally 120% by 2020] on its own, European creditors have little choice but to forgive a portion of the debt they hold, Lagarde insists.

Additionally,

Senior troika representatives, including ECB Executive Board member Jörg Asmussen, Thomas Wieser, the president of the Euro Working Group, and IMF representative Paul Thompson, are campaigning for a debt haircut, especially among smaller member states.  Their goal is to reduce Greece’s 2020 debt level from the 144 percent of GDP that it would likely be without any kind of debt forgiveness, to just 70 percent.  To achieve the latter number, creditor countries would have to waive half of their claims.

The proposed haircut (of which the just concluded deal is a down payment) is a default, as was the prior haircut forced onto Greece’s many private creditors.  And here we are again.

These worthies are conflating default and forgiveness with bankruptcy, and that’s why we’re here again.

Default must come through a Greek bankruptcy, not through the EU, or the IMF, condoning irresponsibility by saying, “Forget it; consider our erstwhile loans to be grants.”  Forgiveness, which approaches a bankruptcy outcome, doesn’t achieve the new beginning that a bankruptcy would; it merely condones past irresponsibility without an actual write-off and fresh start—albeit with a poorer credit rating.  But what’s the Greek credit rating, functionally, now?  “The situation in Greece is scaring away private investors.”

And all of this shows the original folly of bailing out Greece.  And the similarly original folly of the tactic in the US.

The Lies Continue

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By why would we be surprised?

President Obama returned to campaign mode on Monday – casting Republicans as against the middle class by saying their failure to accept his offer for a limited extension of tax breaks will essentially ruin Christmas for consumers and retailers.

“Stop holding the middle class and our economy hostage over a disagreement on tax cuts,” the letter [he sent to Congress Monday] states, as Congress returns…to try to reach a deal that would avert the $500 billion mix of tax increases and budget cuts set to take effect in early January.

Because, of course his way is the only way, and those Evil Republicans are blocking him, again.  And never mind that it’s Obama who’s holding not just the middle class, but our entire economy, hostage against his getting his ransom from a tiny group of Americans whom he hates so much.

Here’s the Obama compromise: he’s repeating that he won’t sign a bill that doesn’t raise tax rates on those Americans.

And this:

A growing number of Democrats say they are willing to let the country go off the fiscal cliff if a deal cannot be reached by Jan. 1 that raises taxes on the top two percent of earners while protecting costly entitlement programs.

Led by Senator Patty Murray (D, WA), Democrats have pushed the idea that the cliff is not as bad as the hype, with it being more of a “slope” than a “cliff.”

Senator Charles Schumer (D, NY) backs Murray, also saying that Democrats can’t cave in.  He and other Democrats believe that Obama won a mandate for increased taxes with the presidential election.

Also weighing in on Monday in a New York Times Op-Ed was billionaire investor Warren Buffett, who has said he think the country will be just fine going over the fiscal cliff.

The Progressive compromise, generally, remains, “Do it our way,” and Progressive bipartisanship means Republicans doing it the Progressives’ way.