Healthcare — free, top-quality, available, pick any two

In response to a commenter here I wrote the following:

Healthcare — free, top-quality, available, pick any two. I have lived under multiple healthcare systems. If the price for “free” and “available” is involuntary euthanasia of the elderly, I’ll pass. If “free” and “available” means “7th-rate”, so will I. If “free” means “whoever has the best connections gets the best quality care”, it’s just “inequality” in a different way. (Except, of course, that the “deserving” New Class of bureaucrats, academia, and “helping” professions think they will get first dibs in a system run by them.)

Israel comes the closest to a workable socialized medicine system (thanks to an unusually healthy age pyramid) and even their system is increasingly becoming two-tier: gold-plated for those able to afford private care and bare-bones for everybody else.

Old Maggie had it dead to rights: “The trouble with socialism is that eventually you run out of other people’s money.” It was 0bama’s misfortune (but also his innumeracy — a common characteristic of “wordsmith intellectuals”, in my experience) to try and implement more socialist schemes just as the state ship was reaching the shoals of bankruptcy. [I couldn’t resist the Monty Python reference :-)]

American Thinker: From Cordoba to Marbella, and everything in between

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via American Thinker: Clarice’s Pieces: From Cordoba to Marbella gives an excellent summary of the insanity of the past week, from Marie-Antoinette 0bama’s Marbella trip to tge Ground Zero mosque, and everything in between. Zjust about the one thing missing is the fire-sale of Newsweek to the husband of Rep. Jane Harman.

Light blogging continues here as, in realspace,we wrap up a relocation to a new assignment.

Social Security cashflow negative

Michael Barone has the story (h/t: Killian Bundy on C2). Is this the “hope” or “change” King Nothing was promising?

One of the commenters suggests a contributing factor I overlooked: baby boomers despairing of ever finding another job in ths economic climate, and applying for Social Security as soon as they are eligible, rather than when they would normally retire.

“realwest” on C2 notes that much of the so-called “job creation” has been in the Federal government apparatus, which doesn’t exactly help Social Security…

New York State’s fiscal lunacy

A few items from Insty make you wonder if New York state politicians routinely have LSD mixed in with their bottled water:

CHANGE: Cash-poor NY state may issue IOUs like California.

Basically, New York state will now pay in virtual money. But you ain’t seen nothing yet:

A PENSION SHELL GAME: “Gov. David A. Paterson and legislative leaders have tentatively agreed to allow the state and municipalities to borrow nearly $6 billion to help them make their required annual payments to the state pension fund. And, in classic budgetary sleight-of-hand, they will borrow the money to make the payments to the pension fund — from the same pension fund.”

Is your head hurting yet? But Roger Kimball has a novel suggestion:

ROGER KIMBALL: The age of the IOU, or chickens/roost, and “anarchy literally.” “And here’s a policy suggestion that I offer free and for nothing. If New York offers its citizens IOUs instead cash, citizens should do the same come April. After wading through the pages of gibberish that our legislators have thoughtfully provided under the rubric of your tax returns, they should enter the amount owed, sign on the dotted line, and enclose an IOU instead of a check. If an irresponsible and fiscally incontinent state can hold on to your money (and you should never forget that it is your money), then you are justified in practicing a little self-defense and treating the state with a little of the contempt with which it treats you. If five or ten or a hundred people did it, it wouldn’t make much difference. What if five or ten thousand people did?”

Indeed.

The failure of the Federal con game

Wizbangblog:

The world’s largest entity in terms of gross revenue had a bad month in April. The IRScollected only $245 billion dollars in April 2010 compared with collections of $266 billion in April 2009. This was only part of the reason the U S government ran up an $82 billion dollar deficit in April of this year because the government spent $327 billion dollars in that month versus $287 billion in April of last year. For 43 of the past 56 years there has been a budget surplus in April owing to the fact that tax collections occur then.

Of course, none of this is news to voters in Virginia, New Jersey, Massachusetts, and Utah and, as of last night, West Virginia. In all of these states the “surprise” losers were either irreparably tainted by an Obama/Pelosi/Reid connection or ossified incumbents that finally felt the wrath of an electorate that has had enough of giving at the office, giving at home, giving at the store ad infinitum, ad nauseum and giving everywhere else the government has extended its insatiable desire for taxes. Add to that anger a state immigration law in Arizona that a majority of Americans broadly support but is wildly unpopular in the establishment media, academia and other elitist strongholds and you get one of those rare moments in U S history when events converge to create a wave.

We are witnessing a worldwide repudiation of big government and Keynesian economics. In the Unites States the evidence of this is found in the results of the several state elections I mentioned above, most if not all of which were plebiscites on national policy issues. However, this skepticism is becoming an international issue. In Europe the response is much starker, verging on panic. Last weekend, before the big Euro Bailout, European bank stocks and sovereign credits (government issued loans and bonds) were almost falling off the cliff. Monday morning brought news of the bailout and things looked rosy….for about a day. Today brought news of abject panic buying of gold in Europe.[…]

The reason why there is such a loud repudiation of the Obama/Pelosi/Reid agenda is that many fly over country citizens know that what is known as the European contagion can happen here also. As I have mentioned before, in the midst of these financial crises of the past three years there is an enormous confidence game going on. When that confidence is lost (as appears to be happening in Europe) the result is not something that can be contained by a press conference or a new stimulus plan.

Read the whole thing. See also Bank of England: US faces similar problems as Greece.

What’s the matter with California?

Four vignettes answering that question about the state I once called home:

(1) In a long and interesting article on the insurgent D primary candidacy of blogger Mickey Kaus (son of former CA Supreme Court justice Otto Kaus) against the cartoonishly vapid Barbara Boxer, this short summary:

It’s also a sign of the Times that California, long the butt of jokes about falling into the ocean, has seriously fallen into an ocean of unmanageable debt.  Everything and everyone in the state has already been taxed; everyone who has taxable income and the means has either moved or is in the process of moving.

California is a basket case of high debt, high taxes, suffocating regulations–and that’s before the tyranny of public employee unions and their apocalyptic pensions are factored into the equation.  As the state has steadily turned from Red to Blue, it’s just as steadily turned from Golden to Tin, from Free to Nanny.

An interesting sign of the times, BTW: the LA Times, rather than offering the usual kneejerk endorsement of Boxer (whom they euphemistically refer to as “lacking intellectual firepower”, which must be the understatement of the year), endorsed neither primary candidate. Kaus — a principled, rational liberal of the old school who seeks to take the D party back to its roots — won the endorsement of fellow D gadfly Victor Davis Hanson.

(2) Speaking of whom, don’t miss his “A tour through recession America” (which is really a tour through recession California). This is another “read the whole thing”.

(3) Here are the first three parts of a series on the decline of Silicon Valley:

http://pajamasmedia.com/edgelings/whats-happened-to-silicon-valley-part-1/

http://pajamasmedia.com/edgelings/whats-happened-to-silicon-valley-part-2/

http://pajamasmedia.com/edgelings/whats-happened-to-silicon-valley-part-3/

http://pajamasmedia.com/edgelings/whats-happened-to-silicon-valley-part-4/

(4) Via the comments there, I found the following very interesting site:

http://www.doctorhousingbubble.com/

Excuse me folks, $600K for an aging 900 sq.ft. house in the LA suburbs… One can buy a house of the same size in, say, the Dallas suburbs for one-tenth of the price (and a fairly new, well-appointed, 3,200 sq.ft. mansion in a good neighborhood for half the money).

Moody’s: U.S. Debt Shock May Hit In 2018, Maybe As Soon As 2013

Read and weep:  http://www.investors.com/NewsAndAnalysis/Article.aspx?id=532490

Short version: following earlier commotion over noises that it would downgrade US debt from AAA, Moody’s now clarifies what would make it issue such a rating change:

For the U.S., debt service of 18%-20% of federal revenue is the outer limit of AAA-territory, Moody’s managing director Pierre Cailleteau confirmed in an e-mail.
Under the Obama budget, interest would top 18% of revenue in 2018 and 20% in 2020, CBO projects.

But under more adverse scenarios than the CBO considered, including higher interest rates, Moody’s projects that debt service could hit 22.4% of revenue by 2013.”

Jonah Goldberg: If the USA becomes like Europe, Europe is in trouble

Jonah Goldberg:

By now you may have heard: America is on its way to becoming another European country.

Now, by that I do not mean that we’re moving our tectonic plate off the coast of France or anything, but rather that a century-long dream of American progressives is finally looking like it might become a reality. The recently passed health-care legislation is the cornerstone of the Europeanization of America. And to pay for it, the White House is now floating the idea of imposing a value-added tax (VAT) like the ones they have throughout most of Europe.

In the egghead-o-sphere, there’s been an ongoing debate about whether America should become more like Europe. The battle lines are split almost perfectly along left-right lines ideologically. Liberals like Europe’s welfare states, unionized workforces (in and out of government), generous benefits, long vacations, etc. Conservatives like America’s economic growth, its dynamism and innovation.

From what I can tell, everyone agrees that you can’t have Europeanization without European-size governments. Hence, America’s government outlays (pre-Obama) have tended to hover around 20 percent of GDP (the average of the last 50 years), while Europe’s are often more than twice that. In France, government outlays are nearly 55 percent of GDP. In 2009, the bailout and the Obama budget sent America’s government outlays to 28 percent of GDP, but that should decline a bit over the next decade, unless Democrats have something else in mind.

To be fair, liberals insist conservatives are wrong to think that Europeanizing America will necessarily come at any significant cost. New York Times columnist and Princeton economist Paul Krugman says that, in exchange for only a tiny bit less growth, Europeans buy a whole lot of security and comfort. [However, ]economists such as Stanford’s Michael Boskin say Europeans have a standard of living about 30 percent lower than ours and are stagnating. Others note that the structural unemployment rate in Europe, particularly for young people (it’s over 20 percent in many countries), is socially devastating.

Obviously, I’m in the conservative camp. But I think the debate misses something. We can’t become Europe unless someone else is willing to become America.

[…]

Europe is a free-rider. It can only afford to be Europe because we can afford to be America.

The most obvious and most cited illustration of this fact is national defense. Europe’s defense budgets have been miniscule because Europeans can count on Uncle Sam to protect them. Britain, which has the most credible military in NATO after ours, has funded its butter account with its gun account. As Mark Steyn recently noted in National Review, from 1951 to 1997 the share of British government expenditure devoted to defense fell from 24 percent to 7 percent, while the share spent on health and welfare increased from 22 percent to 53 percent. And that was before New Labour started rolling back Thatcherism. If America Europeanizes, who’s going to protect Europe? Who’s going to keep the sea lanes open? Who’s going to contain Iran — China? Okay, maybe. But then who’s going to contain China?

But that’s not the only way in which Europeans are free-riders. America invents a lot of stuff. When was the last time you used a Portuguese electronic device? How often does Europe come out with a breakthrough drug? Not often, and when they do, it’s usually because companies like Novartis and GlaxoSmithKline increasingly conduct their research here. Indeed, the top five U.S. hospitals conduct more clinical trials than all the hospitals in any other single country combined. We nearly monopolize the Nobel Prize in medicine, and we create stuff at a rate Europe hasn’t seen since da Vinci was in his workshop.

If America truly Europeanized, where would the innovations come from?

Europhiles hate this sort of talk. They say there’s no reason to expect America to lose its edge just because we have a more “compassionate” government. Americans are an innovative, economically driven people. That’s true. But so were the Europeans — once. Then they adopted the policies they have today and that liberals want us to have tomorrow.

CBO chief: US debt “unsustainable”

You don’t say. (H/t: JCM)

The nation’s fiscal path is “unsustainable,” and the problem “cannot be solved through minor tinkering,” the head of the Congressional Budget Office said Thursday morning.

Doug Elmendorf, best known for arbitrating the costs of various health care proposals, added his voice to a growing chorus of economic experts who predict dire consequences if political leaders don’t scale back spending, increase taxes or both — and soon.

Elmendorf noted a recent CBO report that pegged an increase in the public debt from $7.5 trillion at the end of 2009 to $20.3 trillion at the end of 2020 if President Barack Obama’s fiscal 2011 budget were to be implemented as written. As a percentage of gross domestic product, the debt would rise from 53 percent to 90 percent, CBO forecasted. The last time the percentage was that high was right after World War II.

Elmendorf’s remarks to reporters at a breakfast sponsored by the Christian Science Monitor echo the recent sentiments of a pair of Federal Reserve chiefs — the current head, Ben Bernanke, and former Chairman Paul Volcker.

Volcker said earlier this week that the U.S. should consider adopting a value-added tax, an idea he described as being less toxic than it has been in the past.

“If at the end of the day we need to raise taxes, we should raise taxes,” Volcker said.

On Wednesday, Bernanke said in a speech in Dallas that the government must cut entitlements or raise taxes.

“These choices are difficult, and it always seems easier to put them off — until the day they cannot be put off anymore,” Bernanke said.

There’s little apparent political appetite to do either.

Krauthammer: VAT is coming

Charles Krauthammer: The VAT is coming  [Read the whole thing]

OBAMA KNOWS that the debt bomb is looming, that Moody’s is warning that the Treasury’s AAA rating is in jeopardy, that we are headed for a run on the dollar and/or hyperinflation if nothing is done.

Hence his deficit reduction commission. It will report (surprise!) after the November elections.

What will it recommend? What can it recommend?

Sure, Social Security can be trimmed by raising the retirement age, introducing means testing and changing the indexing formula from wage growth to price inflation.

But this won’t be nearly enough. As Obama has repeatedly insisted, the real money is in health care costs – which are now locked in place by the new Obamacare mandates.

That’s where the value-added tax comes in. For the politician, it has the virtue of expediency: People are used to sales taxes, and this one produces a river of revenue. Every 1 percent of VAT would yield up to $1 trillion a decade (depending on what you exclude – if you exempt food, for example, the yield would be more like $900b.).

It’s the ultimate cash cow. Obama will need it. By introducing universal health care, he has pulled off the largest expansion of the welfare state in four decades. And the most expensive. Which is why all of the European Union has the VAT. Huge VATs. Germany: 19 percent. France and Italy: 20%. Most of Scandinavia: 25%. [Israel’s is somewhat lower, at 16% — Ed.]

American liberals have long complained that ours is the only advanced industrial country without universal health care. Well, now we shall have it. And as we approach European levels of entitlements, we will need European levels of taxation.

Obama set out to be a consequential president, on the order of Ronald Reagan. With the VAT, Obama’s triumph will be complete. He will have succeeded in reversing Reaganism. Liberals have long complained that Reagan’s strategy was to starve the (governmental) beast to shrink it: First, cut taxes – then ultimately you have to reduce government spending.

Obama’s strategy is exactly the opposite: Expand the beast, and then feed it. Spend first – which then forces taxation. Now that, with the institution of universal health care, we are becoming the full entitlement state, the beast will have to be fed.

And the VAT is the only trough in creation large enough.

As a substitute for the income tax, the VAT would be a splendid idea.

Taxing consumption makes infinitely more sense than taxing work. But to feed the liberal social-democratic project, the VAT must be added on top of the income tax.

Ultimately, even that won’t be enough. As the population ages and health care becomes increasingly expensive, the only way to avoid fiscal ruin (as Britain, for example, has discovered) is health care rationing.

It will take a while to break the American populace to that idea. In the meantime, get ready for the VAT. Or start fighting it.

People of a classical-liberal bent in Western countries who see things going pear-shaped look to the USA as an alternative to immigrate to. At this rate, why should they bother?

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