The Fallacy of Health Care “Uncertainty”

January 5, 2012

I was talking to a friend of mine for the first time in a couple of years yesterday. We used to work together and engage in lively discussions on the topics of the day.

My friend now finds himself involved in a small business. We talked of the differences between our old existence at a major corporation and how we thought about employee benefits versus his current thinking as a buyer of those services (and not simply as a consumer of whatever the HR department already purchased) and someone charged with watching every corporate penny.

The subject turned to health care.

My friend talked of an “almost universal hatred of Obama and the health care law” within the small business community that he knows. “The cost to hire new employees has gone through the roof and on top of that is all the uncertainty associated with health care.”

“Uncertainty?” I asked. “There’s no uncertainty.  The health care law has been enacted and is in effect. The only ‘uncertainty’ about the law is from Republicans talking about undoing it and repealing it,” I told him.

“Oh,” he said.  “I guess you’re right. I hadn’t thought of it that way.”

Well maybe you should from now on and stop complaining about problems that don’t exist, I did not add.

“It was good talking to you,” I said.  “I’ve missed our little chats.” And my chance to set you straight on what’s really happening.


The looming tax increase

March 1, 2010

The closer you look, the smaller it gets

This has nothing to do with Democrats or Republicans or who is president.

Today’s Wall Street Journal shows that the effect of the financial crisis on states and municipalities (and taxpayers) is only starting to be felt. As state pension funds cut investment return forecasts (to reduce the need to take excess portfolio risks), the difference must be made up by taxpayers.

At Calpers, about 75% of payouts come from the pension fund’s investments, with the remaining 25% tied to contributions from California governments and employees. According to Pew, a hypothetical $100 billion pension fund that achieved a 7.75% return rate for 10 years would have about $211 billion. With a 6% rate, the same fund would grow to $179 billion—a difference of $32 billion.

That $32 billion will come on the backs of California taxpayers.

Note to IL residents: If Calpers is cutting from 7.75% to as low as 6%, consider that IL is still at 8.6% on an $8.7 billion asset pool.  If IL cut to 6%, that’s about a $4bn addition to an existing $45bn unfunded pension liability gap.

We’ve made promises to workers that we can’t afford to keep.  The Pew Center on the States reports that the total gap is about $1 trillion ($1,000,000,000,000).  Those promises were made to people that are critical to our survival,both literally and figuratively (e.g., firemen, policemen, teachers), who are relatively low on the pay scale and who aren’t eligible for social security.  It’s not as simple as cutting the payouts to the recipients.  The whole social contract needs to be rethought.

As being known as something of a cynic, I was disappointed in myself that I was continue to be surprised and disappointed by the lack of vision and the unwillingness of our elected officials to tackle the tough problems we face, preferring instead to focus on those less difficult issues that will offend no one and help keep them in office.  In the meantime, the problems created from when we were seemingly awash in money and nothing bad would ever happen to us, continue to get worse and the hole gets deeper.

The first rule of being in a hole is “stop digging”.  As a nation, our elected officials always seem to have shovels in their hands. (And that’s not a crack at the very necessary stimulus plan.)

Droopy Lieberman

October 30, 2009

Separated at birth?I don’t know who first planted the idea in my head of “Joe Lieberman as Droopy Dog”, but now that it’s there, I can’t shake it.  Maybe it was Jon Stewart.

The fact that the Wikipedia description of Mr. Dog includes the following only adds the similarities:

Droopy moved slowly and lethargically, spoke in a jowly monotone, and, though he didn’t look like much, was shrewd enough to outwit his enemies and, when finally roused to anger, capable of beating adversaries twice his size with a comical thrashing.

Truer words might never have been spoken about both of them.

Given what’s going on, the fact that when you see Senator Lieberman on television the caption reads “Sen. Joe Lieberman (I-CT)” is pretty rich.  The “I” might actually stand for “insurance”.

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