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Views on the News

Views on the News*

February 15, 2014

                            

Barack Obama illustrates the perils of government run by believers in magic words and numbers, magically emancipated from reality.  Thirty months have passed since Obama said: “The time has come for President Assad to step aside.”  James Clapper, director of national intelligence, says Bashar al-Assad’s grip on power has “strengthened.”  Obama defined success down by changing the subject: “American diplomacy, backed by the threat of force, is why Syria’s chemical weapons are being eliminated.”  Meanwhile Assad has surrendered “4.1% of the roughly 1,300 tons of toxic agents.”  Syria’s civil war, after the massacres, torture, and chemical weapons, supposedly will be resolved by a negotiated regime change: with words.  Next, words will supposedly result in Iran ending the decades-old and hugely expensive nuclear weapons program that it says is nonexistent, and will proceed.  The workforce participation rate is at a 36-year low; in the second half of the fifth year of the recovery, a smaller fraction of the population is employed or looking for work than was when the recovery began.  Nevertheless, the administration is cheerful about the Congressional Budget Office’s conclusion that the Affordable Care Act will substantially slow the growth of employment and compensation over the next decade.  The decrease in growth is projected to be nearly three times larger than the CBO had previously predicted.  The ACA’s insurance subsidies, which decline with rising income and increase with falling income, will cause many people to choose to stop working, or to work less, or to stop looking for work, thereby reducing the number of hours worked by the equivalent of 2.3 million full-time jobs by 2021.  An administration spokesman did not dispute the CBO’s key finding but hailed it as evidence that the ACA is increasing Americans’ choices.  Many of the words and numbers bandied by Obama and his administration may reflect an honest belief that the world is whatever well-intentioned people like them say about it, but Obama’s critics should reconsider their assumption that he is cynical because it is his sincerity that is scary.

(“President Obama’s magic words and numbers” by George F. Will dated February 7, 2014 published by The Washington Post at http://www.washingtonpost.com/opinions/george-will-president-obamas-magic-words-and-numbers/2014/02/07/220fbc04-8f76-11e3-84e1-27626c5ef5fb_story.html )

Despite numerous impeachable offenses, America is stuck with Obama and his expansive understanding of Presidential power and prerogative for another three long years.  Looking back at the damage he has done, the result has been the weakening of our beloved nation at home and abroad.  America has lost an entire decade in service of Barack Obama's vanity, yet, America can recover.  Sure, China is provoking war in the South and East China Seas as it seeks the regional hegemony it considers its due, but so who will stop them: the only nation occupied with pajama boy and his cup of hot chocolate.  It's the same with Iran; they have taken the measure of dear leader and found him wanting... it's going to be a rough 3 years.  Obama is weak and the world knows it.  If you want to attack and damage America, you have but three years to do so.  The most dangerous part of this entire charade is that Barry actually believes he is doing a bang-up job, and his hoary claque of sycophants, do as well.  Talk about the soft bigotry of low expectations.  There aren't many things that can save the nation from the damage Barry has the potential to cause during the remainder of his Presidency.  Well, there is one thing... ObamaCare is the gift that keeps on giving.  ObamaCare relies on the many to pay much more for much less, so that the few can pay not much less for not much more, if any.  ObamaCare is going to affect, in a negative way, almost every person in America, and 2014 through 2016 is when the hammer drops, on all our heads.  We've already had 5 million people in the individual insurance market lose their coverage.  The next year should see the 120 million employer-provided insurance policies reevaluated in accordance with ObamaCare coverage mandates and either cancelled outright or restructured to come into compliance (made more expensive).  It will probably be true that by Election Day 2014, there will be fewer people with health insurance than there were when Barry and his clique sold ObamaCare as universal insurance.  The press can prop it up.  The administration will fudge the numbers.  Through executive orders, Barry will continue to tweak the program, yet each successive tweak looks more and more like a twerk.  Obama is twerking America, and we have three more years of it.

(“Obama Twerks America” by William L. Gensert dated February 11, 2014 published by American Thinker at http://www.americanthinker.com/2014/02/obama_twerks_america.html )

It is time to start watching U.S. cities go bankrupt with more than sixty of the largest cities “plagued with the same kinds of retirement legacy costs that sent Detroit in Chapter 9 bankruptcy” last year.  The ‘too big to fail’ cities, like Chicago, Philadelphia, and New York , must be warned with Compton and Oakland, CA, Harrisburg, PA, and Providence, RI. not far behind with the vast majority located in states with forced unions in non-right-to-work states.  At the time it declared bankruptcy, Detroit had 47 different public employee unions.  The legacy costs of pensions and health benefits to retired teachers and municipal retirees force city managers and mayors to lay off firefighters, police and teachers. Detroit has three retired city workers collecting a pension for every two currently working.  A nation with a $17 trillion debt who’s President has only one answer, raise the debt limit, will encounter a financial Armageddon if the spending and borrowing is not sharply curtailed.  Detroit had become a war zone of urban strife, poverty, decay and government profligacy.  Recall that President Obama claimed he had “saved” General Motors and Chrysler with bailouts that cost taxpayers at least $25 billion that will never be paid back.  At least a billion of these tax dollars went to improve GM facilities in Brazil, and at least $550 million went to GM facilities in Mexico.  Chrysler is now owned by the Italian automaker, Fiat.  Bond holders are major investors in cities and corporations, but the GM bailout denied payment to secured bondholders and redistributed their rightful share to the United Auto Workers.  As a result, today’s bonds are viewed as an investment with uncertain risk.  Most progressive cities are welfare city-states in which a large percentage of the population lives on government money, either as government dependents or government employees, and this description fits the nation as well.  The ultimate progressive, President Obama, is impoverishing millions of Americans.  Unlike Detroit, America cannot declare bankruptcy.  This nation can only collapse if voters do not replace those Senators and Representatives that voted for ObamaCare and who refuse to take the steps to reduce government spending and borrowing as long as we can survive three more years with Obama.

(“U.S. Going Bankrupt One City at a Time” by Alan Caruba dated February 9, 2014 published by Canada Free Press at http://canadafreepress.com/index.php/article/61048 )

Given that we’re now about halfway through implementation of the Affordable Care Act, it seems appropriate to assign midterm grades.  These are not intended as a forecast of the final grade.  So whether President Obama likes it or not, the public and historians are likely to base their assessment of his performance on how well his “signature piece of domestic legislation” is implemented.  This assessment will be based on a combination of promises vs. performance, peer comparisons, and outcomes.

·    Promises vs. Performance - Both as a candidate and as President, Barack Obama has made at least 80 promises related to health care.  For purposes of grading, only the eight most consequential promises were considered:

o Promise #1: Universal Coverage. Candidate Obama promised a universal health care bill that will cover every American.” The latest CBO projections show that as of the end of 2013, ObamaCare will reduce the number of nonelderly uninsured by less than 4%.  Even when ObamaCare is fully implemented in 2017, it will cover only 92% of the nonelderly population who are not unauthorized immigrants. Grade: F.

o Promise #2: No New Taxes on the Middle Class. Candidate Obama promised on that no “family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.” Obama’s promise is at best 65% true and more likely 50% or less true. Grade: F.

o Promise #3: Annual Premium Savings of $2,500. Candidate Obama promised to lower premiums by up to $2,500 for a typical family per year.  All available evidence makes this claim provably false. Medicare actuaries report shows that ObamaCare will boost health spending by “roughly $621 billion,” an average of $7,579 for a family of four, above how much Americans would have spent without this misguided law. Grade: F.

o Promise #4: Bend the Cost Curve. President Obama asserted that the Senate bill reduce the costs of health care.  By the final year of the 10-year projection, the rate of growth  would be slightly lower (6.9%) than under the status quo (7.2%). Since this was a long-term promise that may yet bear fruit, it is fairest to award the Grade: Incomplete.

o Promise #5: No Increase in the Deficit.  President Obama promised to not sign a plan that adds one dime to our deficits. The GAO has shown that ACA has put us on a path to add $6.2 trillion (2011 dollars) to the deficit over the next 75 years. Grade: F.

o Promise #6: You Can Keep Your Plan If You Like It. President Obama promised that if you like your health care plan, you’ll be able to keep your health care plan. Estimates of how many will lose their employer-based coverage because their employer drops it range from 11 million (CBO), to 14 million (Medicare actuary), to as high as 35 million (American Action Forum).  This promise was the Lie of the Year for 2013. Grade: F.

o Promise #7: If You Like Your Doctor, You Can Keep Your Doctor. President Obama promised that if you like your doctor, you will be able to keep your doctor. Since one third of doctors are currently unwilling to see new Medicaid patients, at least some unknown fraction of newly Medicaid-eligible people will lose their doctors. Grade: F.

o Promise #8: I’m Not Going to Touch Medicare. The President asserted that Medicare is a government program, and it wouldn’t be touched. The Medicare chief actuary found that it would cut Medicare by $575 billion in its first 10 years. ObamaCare eventually would drive Medicare payment rates to physicians to less than half the levels paid by Medicaid. The Medicare actuary projects these cutbacks will result in a 50% reduction in Medicare Advantage plan membership by 2017. Grade: F.

o Midterm Grade, Promises vs. Performance: F - Not one of these promises was inherently implausible when uttered, but the prospect of achieving even one of them by the final grading period seems vanishingly remote.  It may be best to consider abandoning this project in favor of starting over with a new approach.

·    Peer Comparisons - In this section Presidential performance is compared against that of the peers who preceded him in office.

o Peer Comparison #1: Transparency. Candidate Obama promised that all negotiations would be open, bringing all parties together, so that the American people can see what the choice are. Obama continues to make implementation decisions behind closed doors causing the poor rollout of the Obamacare exchanges. Grade: D.

o Peer Comparison #2: Legitimacy of the Statutory Process. Candidate Obama promised to bring the nation together by forming huge congressional majorities to support his policies. Meanwhile ObamaCare faced years of steadfast public opposition so it was rammed through Congress on a party-line vote. It remains to be seen the impact of the party-line vote will be. Grade: D. 

o Peer Comparison #3: Legitimacy of the Implementation Process. The administration adopted a lax approach to implementation. In some cases, this took the form of using regulations or not-so-subtle coercion to implement provisions never written into the law, while in others, it meant selectively enforcing the law as written, issuing waivers or delays without statutory authorization. Leaving aside the roughly 100 lawsuits that have challenged provisions of the law itself, these actions have triggered a steady stream of legal challenges that may yet cripple the law’s operation. Grade: D-.

o Peer comparison #4: Quality of Rule-Writing. A Mercatus study of the first eight major rules issued under Obamacare revealed the ACA rules were of lower quality and produced poorly substantiated claims about the law’s benefits and costs. The analysis was even worse than is typical for rules of this scope. Grade: C-.

o Midterm Grade, Peer Comparisons: D - This administration has been far less transparent than it should have been, especially for the President’s signature domestic initiative. It used a process of questionable legitimacy to enact the law and followed up with an implementation process that too often skirted legal and constitutional constraints. Even if the implementation had remained within legal bounds, the administration’s rule-writing was below-par.

·    Outcomes – The entire ObamaCare justification for change was based on improvements to health care insurance and health care costs and premiums.

o Outcome #1: Uninsured Risk. It remains to be seen how many people ultimately gain coverage under ObamaCare. Even if we generously assume that 1 million of those dropped were able to keep their plan after all because of the President’s plea to allow canceled policies to remain in force for another year, the chances appear far better than even that ObamaCare has not reduced the total number of uninsured. Grade: F.

o Outcome #2: Health Spending. The Society of Actuaries calculated that premiums in the individual market nationwide would increase from 8 to 37% in 2014. The National Journal estimates that 66% of workers with single coverage and 57% of workers with family coverage will face higher premiums on the exchanges than they would pay for employer-sponsored coverage.  When averaged across the entire population with private coverage, the annual premium increase attributable to ObamaCare to date would be less than 1.5%, which is certainly worse than the premium savings predicted by the President, but likely much better than many feared. Grade: B-.

o Outcome #3: Quality. While ObamaCare has launched a series of changes designed to improve quality, actual data on quality improvements are not yet available. Moreover, any such improvements may be counterbalanced by the deep cuts in Medicare payments to hospitals. In addition, taxes on medical device manufacturers and pharmaceutical companies may well lower the sums spent on R&D in these industries, resulting in avoidable deaths due to the suppression of innovations that might otherwise been produced by this research. Grade: Incomplete.

o Outcome #4: Employment. When both direct and indirect effects are taken into account, ObamaCare eventually is expected to reduce the number of full-time-equivalent workers by 2.5 million, according to the CBO report. Once the employer mandate takes effect, it is expected that the law will result in an additional 10 million workers transitioning from full-time to part-time. Thus, the biggest measureable adverse employment impact that has resulted from ObamaCare comes from a synthesis of Obama-care regulations showing that to date they impose an annual burden of 127 million hours (equivalent to 63,000 full-time workers). Grade: C.

o Outcome #5: Federal Budget Deficit. The adverse impact of ObamaCare on the federal budget deficit is in the future, because revenues were front-loaded and spending back-loaded. Although its financing is far more convoluted and less transparent than it should be, the law in its early years at least was honestly financed. Grade: A.

o Midterm Grade, Outcomes: C+ - Even though expanded coverage was its central purpose, ObamaCare has failed to achieve it so far, a performance that may improve in the future. Conversely, ObamaCare gets much better midterm marks for its modest impact on health spending and employment and high marks for its short-term effects on the federal budget deficit. Unfortunately, all signs point to worsening performance on each of these dimensions over the next five years. 

Net Assessment and Outlook - Here’s the bottom line: ObamaCare has failed miserably on nearly every major promise made about it (Grade: F).  The processes used to enact and implement the law have been tarnished by actions of questionable legality and a pervasive lack of transparency (Grade: D).  On actual outcomes, ObamaCare has fared better in the short term (Grade: C+), but there are worrisome signs that by most measures, the law’s performance will get significantly worse by the time final grades are handed out.  We’re only at midterm, but I’d have to say the long-term outlook for ObamaCare is very poor indeed. 

(“An ObamaCare Report Card” by Christopher J. Conover dated February 17, 2014 published by The Weekly Standard at http://www.weeklystandard.com/articles/obamacare-report-card_778827.html )

It's no exaggeration to say that President Obama, by slashing defense spending, is encouraging other nations to step up their arms programs to fill the growing void left by a shrinking U.S. military.  U.S. defense outlays hit a post-World War II high in 2010, but since then, after inflation, they've fallen 21%.  The drop can't be blamed on the winding down of wars in Afghanistan and Iraq.  Even without those, real spending is down 12%, with 2013's drop being the biggest since the Korean War.  America's defense decay is being noticed.  Recently Germany announced it was considering rearming, given stark new global realities surrounding it and the need to be able to respond to threats.  Meanwhile, Japan, alarmed at China's muscle-flexing near the Senkaku Islands and the growing threat from North Korea, wants to reverse his nation's postwar pacifist constitution to let its military help allies who are attacked.  Japan has already "concluded defense agreements with half a dozen new nations like Australia and England, and agreed to deals for Japanese military equipment with the Philippines and India and others."  Rearmament is happening because it's unclear today what, if anything, the U.S. might use its defense assets for, apart from repelling an attack on U.S. soil.  Shows of weakness in the face of recent challenges from Russia, China, Iran and even Syria have made our allies think twice about counting on us for protection.  China, which until quite recently was increasing its defense spending at a double-digit clip, is expected to boost outlays this year at a still-respectable 6% or so.  Russia is using its oil boom to rebuild a Soviet-era military into a modern force.  World Affairs ranks Russia as the world's No. 2 military and, as with No. 3 China, its military is growing.  Both world wars of the last century began this way: with weakness, growing pledges of mutual defense and reckless military moves taken because belligerent nations didn't feel any country would stop them.  The main reason the world was so peaceful for over a half-century after World War II was that American military might, both conventional and nuclear, guaranteed the security of allies such as Japan and Germany against all comers.  The world was prosperous and safe.  Weakness is not a virtue and sadly, that seems to be a lesson that each new generation must learn for itself, one that will someday again cost us dearly.

(“As U.S. Weakness Leads to Global Rearmament, Can War be Far Behind?” dated February 10, 2014 published by Investor’s Business Daily at http://news.investors.com/ibd-editorials/021014-689574-us-decline-creates-vacuum-for-china-russia-to-fill.htm )

 

* There is so much published each week that unless you search for it, you will miss important breaking news.  I try to package the best of this information into my “Views on the News” each Saturday morning.  Updates have been made this week to the following issue sections:

· Civil Rights at http://www.returntocommonsensesite.com/Culture/civilrights.php

· Welfare at http://www.returntocommonsensesite.com/Culture/welfare.php

· Budget at http://www.returntocommonsensesite.com/dp/budget.php

                                      

David Coughlin

Hawthorne, NY

www.ReturnToCommonSensesite.com