Sunday, March 28, 2010

Final: Obamacare | The Macro View

The Endgame

Catch 22 -

By: Larry Walker, Jr. -

Point #1 - As I pointed out previously here, and as you can see in the top portion of the table below, Mr. Obama has outlined a budget which contains deficit spending of $-3.7 trillion more than the CBO's Baseline Budget, between the years 2011 and 2020. The CBO's Baseline Budget was already $-5.9 trillion in the red for the budget years 2011 through 2020. If you start with fiscal year 2010, the CBO's Baseline Budget deficit was already $-7.3 trillion. The CBO's estimate of the President's budget calls for total deficit spending of $-11.2 trillion beginning with fiscal year 2010 and ending in fiscal year 2020. (Note: The baseline budget total is for 2011-2020, so you have to add 2010 to get this figure.) Now if you add the President's budget deficit of $-11.2 trillion to our National Debt which was $-12.1 trillion at the end of 2009, then the national debt will reach $-23.3 trillion by the year 2020.

Table 1 - Click to Enlarge

Point #2 - You will note in the bottom half of the table above (re-posted below), that the National Debt, which was $-12.11 trillion at the end of 2009, is projected to grow to $-22.12 trillion by the year 2019. (Note: The totals on this table end with fiscal year 2019 to correspond with the scoring of Obamacare.) This represents a percentage increase of 82.6% over the 10 year period. So before Obamacare, the President was already on target to increase our National Debt by 82.6% over the present decade.

Point #3 - Also in the table below, you will note that after implementing Obamacare, if one adds in the savings projected by the CBO of $119 billion over the first decade, then the National Debt is projected to grow to just $-22.00 trillion, or a percentage increase of 81.6% over the decade. This means that Obamacare will decrease the rate of growth of the national debt by just 1.0% in the first decade (82.6% vs 81.6%). In other words, by the year 2019, the National Debt will either be $-22.00 trillion with Obamacare, or $-22.12 trillion without it. (Note: I omitted the other $19 billion of savings which the CBO projected because I do not believe it to be attributable to Obamacare, however this is diminimus.)

Table 2 - Click to Enlarge

Point #4 - You will note that the CBO projects the savings from Obamacare to be $102 billion over the first five years, and only $17 billion over the second five, for a total of $119 billion in the first decade. The greatest savings appear in the years 2013 and 2014, $50 billion and $47 billion respectively. Why would anyone believe that there would suddenly be savings of over $1 trillion in the second decade, when the rate of savings decreases so dramatically in just the second five year period? If you study the numbers closely, the rate of savings from Obamacare declines by 83% from the first five years to the second. Yet, we are expected to believe that the rate of savings will suddenly jump by 740% (to over $1 trillion) during the second decade. This is simply unrealistic. Not to mention, unreliable, because the CBO calculated the savings rate in the second decade as a percentage of GDP. What we don't have from the CBO is a projection of the Federal Budget that far out. If budget deficits continue to soar during the second decade after Obamacare, then any savings projected will be nullified.

Point # 5 - With government spending so out of control - with the national debt projected to grow to either $-22.12 trillion without, or $-22.00 trillion with Obamacare by 2019 - with the national debt projected to grow by either 82.6% without Obamacare, or 81.6% with it - it's as if Obama and his Progressive colleagues have chosen to stick their heads in the sand, and to ignore the problem. The problem being the inability to pay for current federal programs. They are giddy and claiming victory because they think they have finally come up with a deficit neutral program, but what have they really done?

What have they done? - The term 'deficit neutral' implies that a program is implemented in a way that will not add to the deficit. But what does it mean for us as relates to Obamacare? What does it mean when government spending is already out of control? It means that the government will raise around $500 billion in new taxes, fees and fines in order to pay for a new entitlement program, Obamacare. It's one thing to raise revenues in order to begin to balance the existing budget, but entirely another to ignore the debt, and to take more money out of our pockets for a new program. Meanwhile, the National Debt continues to grow at essentially the same rate. Obamacare solves nothing. By the year 2020, the national debt will be nearly twice the amount of our current GDP. If we don't take the debt crisis seriously, then by the year 2020 there will be no Obamacare, no Social Security, no Medicare, no Education, no Defense, and possibly not even a United States of America. Obamacare and its sister entitlement programs are not the solution to our problems, Obamacare and its sister entitlement programs are the problem.

Sources:

http://www.treasurydirect.gov/NP/NPGateway

http://www.cbo.gov/ftpdocs/113xx/doc11355/hr4872.pdf

http://www.cbo.gov/ftpdocs/112xx/doc11231/budgetprojections.xls

Obamacare: A Fiscal Point of View Updated!

Saturday, March 27, 2010

The Money That Is Sold Abroad Is You!

I found this video to be most enlightening! - Larry



It is not dollars, treasuries, bonds and debt that is being sold by your government. It is you.

Text and references:

Freedomain Radio -

Friday, March 26, 2010

2009 GDP | The Bottom Line

Click to Enlarge
2009 GDP

Real GDP decreased 2.4 percent in 2009 (that is, from the 2008 annual level to the 2009 annual level), in contrast to an increase of 0.4 percent in 2008.

The decrease in real GDP in 2009 primarily reflected negative contributions from nonresidential fixed investment, exports, private inventory investment, residential fixed investment, and personal consumption expenditures (PCE) that were partly offset by a positive contribution from federal government spending.

So now it's time for a huge tax increase, right?

Couple the worst GDP results in decades along with unemployment hovering around 10%, then add to that 4.5 million foreclosure filings expected in 2010, and mix in personal incomes falling by an average of 1.7% in 2009, and you will begin to understand Obamanomics.

Time to end this nightmare! Vote them out.

By: Larry Walker, Jr.

References:

http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

Did GDP Fall by 2.4% in 2009?

Sunday, March 21, 2010

Revised: Obamacare | The Macro View

Catch 22 -

By: Larry Walker, Jr. -

Point #1 - As I pointed out previously here, and as you can see in the top portion of the table below, Mr. Obama has outlined a budget which contains deficit spending of $-3.7 trillion more than the CBO's Baseline Budget, between the years 2011 and 2020. The CBO's Baseline Budget was already $-5.9 trillion in the red for the budget years 2011 through 2020. If you start with fiscal year 2010, the CBO's Baseline Budget deficit was already $-7.3 trillion. The CBO's estimate of the President's budget calls for total deficit spending of $-11.2 trillion beginning with fiscal year 2010 and ending in fiscal year 2020. (Note: The baseline budget total is for 2011-2020, so you have to add 2010 to get this figure.) Now if you add the President's budget deficit of $-11.2 trillion to our National Debt which was $-12.1 trillion at the end of 2009, then the national debt will reach $-23.3 trillion by the year 2020.

Table 1 - Click to Enlarge

Point #2 - You will note in the bottom half of the table above (re-posted below), that the National Debt, which was $-12.11 trillion at the end of 2009, is projected to grow to $-22.12 trillion by the year 2019. (Note: The totals on this table end with fiscal year 2019 to correspond with the scoring of Obamacare.) This represents a percentage increase of 82.6% over the 10 year period. So before Obamacare, the President was already on target to increase our National Debt by 82.6% over the present decade.

Point #3 - Also in the table below, you will note that after implementing Obamacare, if one adds in the savings projected by the CBO of $119 billion over the first decade, then the National Debt is projected to grow to just $-22.00 trillion, or a percentage increase of 81.6% over the decade. This means that Obamacare will decrease the rate of growth of the national debt by just 1.0% in the first decade (82.6% vs 81.6%). In other words, by the year 2019, the National Debt will either be $-22.00 trillion with Obamacare, or $-22.12 trillion without it. (Note: I omitted the other $19 billion of savings which the CBO projected because I do not believe it to be attributable to Obamacare, however this is diminimus.)

Table 2 - Click to Enlarge

Point #4 - You will note that the CBO projects the savings from Obamacare to be $102 billion over the first five years, and only $17 billion over the second five, for a total of $119 billion in the first decade. The greatest savings appear in the years 2013 and 2014, $50 billion and $47 billion respectively. Why would anyone believe that there would suddenly be savings of over $1 trillion in the second decade, when the rate of savings decreases so dramatically in just the second five year period? If you study the numbers closely, the rate of savings from Obamacare declines by 83% from the first five years to the second. Yet, we are expected to believe that the rate of savings will suddenly jump by 740% (to over $1 trillion) during the second decade. This is simply unrealistic. Not to mention, unreliable, because the CBO calculated the savings rate in the second decade as a percentage of GDP. What we don't have from the CBO is a projection of the Federal Budget that far out. If budget deficits continue to soar during the second decade after Obamacare, then any savings projected will be nullified.

Point # 5 - With government spending so out of control - with the national debt projected to grow to either $-22.12 trillion without, or $-22.00 trillion with Obamacare by 2019 - with the national debt projected to grow by either 82.6% without Obamacare, or 81.6% with it - it's as if Obama and his Progressive colleagues have chosen to stick their heads in the sand, and to ignore the problem. The problem being the inability to pay for current federal programs. They are giddy and claiming victory because they think they have finally come up with a deficit neutral program, but what have they really done?

What have they done? - The term 'deficit neutral' implies that a program is implemented in a way that will not add to the deficit. But what does it mean for us as relates to Obamacare? What does it mean when government spending is already out of control? It means that the government will raise around $500 billion in new taxes, fees and fines in order to pay for a new entitlement program, Obamacare. It's one thing to raise revenues in order to begin to balance the existing budget, but entirely another to ignore the debt, and to take more money out of our pockets for a new program. Meanwhile, the National Debt continues to grow at essentially the same rate. Obamacare solves nothing. By the year 2020, the national debt will be nearly twice the amount of our current GDP. If we don't take the debt crisis seriously, then by the year 2020 there will be no Obamacare, no Social Security, no Medicare, no Education, no Defense, and possibly not even a United States of America. Obamacare and its sister entitlement programs are not the solution to our problems, Obamacare and its sister entitlement programs are the problem.

Sources:

http://www.treasurydirect.gov/NP/NPGateway

http://www.cbo.gov/ftpdocs/113xx/doc11355/hr4872.pdf

http://www.cbo.gov/ftpdocs/112xx/doc11231/budgetprojections.xls

Obamacare: A Fiscal Point of View Updated!

Saturday, March 20, 2010

Obamacare: The 2nd Decade (Fiction)

A Fictional Account -

by: Larry Walker, Jr. -

We are now in the 2nd decade after the passage of what many Americans deemed to be comprehensive health care reform, Obamacare. The creator of Obamacare, Barack Hussein Obama, died shortly after it's passage in the year 2010 of unknown causes. Nancy Pelosi and Harry Reid have long since passed. All of the Congressional leaders from the year 2010 are now deceased.

Obamacare did not work out as promised. From the moment it was signed into law it increased the U.S. budget deficits each and every month. Medicare and Social Security became insolvent in the year 2012. All of the surpluses in these programs were borrowed and spent on Obamacare. Millions of Americans lost their health insurance as soon as the bill was passed. Nearly 50% of private practitioners closed their practices almost immediately.

Through the law of supply and demand, with the increased demand for medical services and the lower supply of practitioners, health care costs skyrocketed. Health insurance premiums increased by 100% on average each year until no one in the country could afford it. Income and excise taxes, fines and fees were imposed, but people were unable to pay these levies and their living expenses. Unemployment continued to rise as employers, being overburdened with taxes and regulations began to fail.

The national debt had actually reached the point of no return just before the passage of Obamacare, but only a handful of people knew it at the time. The only way for the government to reverse the negative effects of this erroneous legislation was to print more money. As the Federal Reserve began to print money in 2011, the rate of inflation went off the charts. Inflation reached 17% by the year 2012. The cost of gasoline soared to $10 per gallon in 2012. States began to declare bankruptcy and the most fiscally sound States began to acquire the weaker ones.

The Republic of Texas now consists of the entire southern half of the old United States, stretching from Southern California to Virginia. The old United States now consists of only a few states in the Northeast. The others declared themselves to be sovereign republics in the year 2013. The Republic of Texas seceded from the Union in the year 2013. This time there was no civil war, and the issue was not slavery.

The city of Washington, DC was destroyed in the year 2013 by a nuclear missile attack launched by Iran. No one came to the rescue. No one cared. The blight had been removed. The culprits were dead. The problem had been solved.

Now I tell the story from the year 2030. I am one of the survivors. I saw it coming. I tried to warn others. Most wouldn't listen. They believed that big government was the solution. They relied upon government entitlements for their health and well being. Now they are simply wards of the old country, for all practical purposes, slaves. The United States of America is no more. And it all came to a crashing halt, in the year 2010.

See the Factual Account at: Final: Obamacare | The Macro View

Wednesday, March 17, 2010

Obamacare: A Fiscal Point of View | Updated!

Obamacare: A Fiscal Conservative's Point of View

- By: Larry Walker Jr. -

Paying for Obamacare, which we can not afford, sounds like the same strategy used to grant people their other Government given right, the right to buy a home, even if they couldn't afford one. With housing, the Government made lenders come up with scams like interest only loans, variable interest rate loans, and other devices to make a home affordable 'today', with hopes that things would work themselves out in the future. That plan caused millions of people to lose their homes and nearly bankrupted the entire global financial industry. That's the danger. Now the facts.

Click to Enlarge

The table above reveals the Congressional Budget Office's March 2009 Baseline Projections which were used around the time the Senate's health care bill was scored. Nothing new here. The United States Federal Government has a problem with out of control spending. The National debt is out of control and at that time was projected to reach $18.7 trillion by the year 2019.

Click to Enlarge

The above table attempts to show you the effect of Obamacare on the National Debt. Since Obamacare is projected to save $82 billion through 2019, I have simply applied the CBO's initial scoring of the Senate Bill on a straight-line basis (an equal amount for each year). I used straight-line because no one really knows how they come up with this stuff. So after Obamacare, we would save $82 billion over 10 years, right. Well, actually, since the Government was already projected to overspend by $8,824 billion ($8.8 trillion for the math weary) over the rest of the decade, this only represents a savings of 0.93%. And remember, that's a savings of the amount of deficit spending, not a reduction to the National Debt. Deficit spending is deficit spending in my view.

Click to Enlarge

The final table (above) reveals the revised debt projections as published by the White House. As you can see, just through the year 2013, the Government is already projected to spend $1 trillion more than what was projected in March of 2009. So Obama will already spend $1 trillion more than he projected, and now he's proposing to knock that down by a whopping $82 billion over 10 years, by destroying the health care industry. And we're supposed to be happy?

Conclusion: The President is very sincere in his efforts to justify Obamacare as a means of fiscal responsibility. However, he fails to address the main problem - Out of Control Government Spending. Obama himself is projected to spend over $1 trillion more than he projected a year ago. The Federal Government will have a National Debt of $16.2 trillion by the year 2013. Although Obamacare may save 0.93% of Obama's own, out of control, deficit spending (a percentage which is declining every second) over the next decade, it fails in that:

  1. It will not stop the deficit spending.
  2. It will not pay down the National Debt.
  3. It will not provide health coverage for all Americans.
  4. It will not reduce the cost of health insurance.

And then there's the question of what's going to happen after the first decade. Not even the CBO can legally answer that question. In my opinion, Obamacare is nothing but a token bill designed to stroke Obama's ego. It will have virtually no effect from a fiscal standpoint, and could trigger many negative side effects. So I ask, what's the point?

__________________________________________________________

Update 3/18/10

The top section of the following table is from the CBO's March 2010 Baseline and CBO's Estimate of the President's Budget here. For the fiscal years 2011 through 2020, the President's budget came out $3.777 trillion more in the red than CBO's baseline, resulting in total deficit spending by Obama of $9.761 trillion between 2011 and 2020, or $11.2 trillion from 2010 through 2020.

I overlaid the lower section with the CBO's stated effect of Obamacare on the deficit, from Table 1 (page 6) of their scoring report, which was released on 03/18/10 here.

Click to Enlarge

So it's even worse than I stated yesterday. Obama will overshoot the baseline budget by $3.777 trillion, and will add $11.2 trillion to the National Debt between 2010 and 2020. And he thinks that by passing Obamacare and destroying the US Health Care Industry in the process, that it is worth it, in order to save $119 billion (or $138 or whatever) over the first 10 years. If you ask me $119 billion (or $138 or whatever) in savings looks pretty pathetic when Obama and Congress are already on course to increase the national debt by $11.2 trillion in reckless spending.

This makes Democrats giddy? The whole borrow and spend fest makes me mad as hell. And as far as the second decade goes, I don't see any compelling evidence in the CBO report that would guarantee that the deficit would continue to fall. And even if the deficit would fall by $1 trillion in the second decade, this would only partially offset an additional $10 trillion (or more) of reckless deficit spending if Washington continues on it's present disastrous path.

And by the way, the report doesn't say that the deficit will fall by $1 trillion in the second decade. It does, however, mention that the savings generated by the education provisions would outweigh the costs related to the health care provisions. In otherwords, by fundamentally 'destroying' the education system, they can justify destroying the health care system, but this only works for 'giddy', power grabbing, debt laden, incumbent Democrats.

Sources:

http://www.cbo.gov/ftpdocs/112xx/doc11231/budgetprojections.xls

http://www.cbo.gov/ftpdocs/113xx/doc11355/hr4872.pdf

Cost Analysis Health Care Bill

http://www.whitehouse.gov/omb/budget/fy2011/assets/hist01z2.xls

National Debt Crisis - 2010

The Raw Truth: GDP vs National Debt

Monday, March 15, 2010

Obama's Big Lie at Today's Rally: "Your Employer Would See Premiums Fall By As Much As 3000 Percent"

Obamacare Rally in Strongsville, Ohio


March 15, 2010



"How many people are getting insurance through their jobs right now, raise your hands, a lot of those folk, your employer, it's estimated would see premiums fall by as much as 3000 percent so they could give you a raise."

More lies and desperation from Obama. He fools these poor suckers in Strongsville, Ohio into believing that under his health care plan, employer's health insurance premiums will fall by as much as 3,000%. And they just soaked it up, until one of them fainted. Poor suckers.

I guess by the time Obama get's done, we'll all be getting paid to have health insurance. What a moron.

Just vote no today and we'll settle it in November.

Kudos to: Hot Air Pundit, and Town Hall

Thursday, March 11, 2010

Obama's Illogical Health Care Act

Random Thoughts from an Independent Fiscal Conservative

  1. If the insurance industry does away with preexisting conditions, then health insurance costs will go down. Yeah, unless those people really get sick, and then health insurance costs will skyrocket.
  2. If younger workers who don't want health insurance are forced to buy it, then health insurance costs will go down. Except, of course, for those who don't pay for health insurance now.
  3. If everyone had health insurance then the quality of care would improve? Unless, of course, we don't address the quality of health care.
  4. If we had passed Obamacare the Federal government's monthly budget deficit would have only been $210 billion instead of $220 billion, in February. What a noble achievement. And what about the other $210 billion? Do we perhaps have bigger fish to fry?
  5. If 30 million people who can't afford to pay one extra dime for health insurance are forced to buy it, then health insurance costs will go down. Except for those individuals who were not paying and now have to pay, and the rest of the population who will have to make up the difference.
  6. We got the Stimulus wrong, but we will get health care right. Fool me once, shame on you. Fool me twice, shame on me.
  7. The reason health insurance costs are rising is because of publicly traded, and (mostly) non-profit health insurance companies greed. Of course it couldn't be related to the fact that Medicare and Medicaid undercut payments to doctors and hospitals, which makes insurance costs rise for the privately insured.
  8. Nobody complains about Medicare. And why would they? I mean it's practically free, it's completely insolvent, and it's the cause of most of our national debt.
  9. We must pass Obamacare by March 18th. A more noble goal would be to draft a final bill first, then get public feedback, discuss it, debate it, and then vote. Is this deja vu?
  10. The American people want Obamacare to pass. No. The American people want Congress to start over and to calmly and rationally pinpoint the more pressing problems of the day, and to address those with logical and coherent solutions. Solutions that everyone would agree upon. In reality, there are only a few purple shirts out there who are being paid $15 per hour to act like they want it passed. The rest of us (unpaid and under appreciated) are willing to wait for the next Congress and the next president. Hopefully, a president who's not all tanked up on Nicorette gum. And preferably a Congress who is less concerned with bribes and racketeering, and more concerned with facing facts with logical, non-political solutions.

End of Random Thoughts.........

Friday, March 5, 2010

Obama's Tax Fallacy II: Updated



By: Larry Walker, Jr.

[Updated]

Tax Fallacy II, 95% B.S.

According to the Tax Policy Center, there were 151 million tax units in 2009 (excluding dependents of other tax units). Out of those 151 million tax units, 65.6 million, or 43.4% had zero or negative tax liabilities here. This confirms that only 56.6% of those who file income tax returns actually pay income taxes. But that's not the end of the story.

According to the IRS Statistics of Income Report here, at the end of 2008, there were 9.2 million tax units who filed tax returns with additional taxes due. At the end of 2008, although $28.4 billion had been collected, the balance still owed by these 9.2 million tax units was $94.4 billion.

Also according to the same IRS Statistics of Income Report here, at the end of 2008, there were 3.4 million tax units who had open delinquency investigation cases. The net amount of taxes owed by these taxpayers was $24.9 billion. Although $3.8 billion was collected when such returns were filed, the difference of $21.1 billion was still outstanding.

So far we have one report which reveals that there are a total of 151 million tax units within the United States. We also have proof that only 85.4 million (56.6%) of these pay income taxes, while 65.6 million (43.4%) pay none. Next we have statistics from the IRS which tell us that out of the 85.4 million who pay income taxes, 12.6 million (9.2 + 3.4) actually haven't paid, and in fact, they still owe $115.5 billion ($94.4 + $21.1). Are you with me so far?

So out of the 85.4 million who pay income taxes, 12.6 million actually haven't paid what they owe. This means that only 72.8 million out of a total of 151 million tax units actually file their tax returns on time, and pay their share of income taxes. Thus, in real terms, only 72.8 million out of 151 million tax units, or 48.2% pay income taxes, while 51.8% do not.

This makes moot the following quote: "I gave 95% of working families a tax cut."

Although I admit the rhetoric sounds good, when one considers the national debt which is heading towards $19 trillion, one has to wonder whether this is even such a good idea. When one considers an unemployment rate of 10% to 19%, depending on who you believe, one has to wonder what that segment of society thinks about the "95% Fallacy". Shall we subtract the unemployed from those who pay taxes and add them to those who don't, or just leave well enough alone?

However you want to look at it, there is no way on earth that 95% of working families received a tax cut. In reality, roughly 51.8% don't pay any taxes to cut. And between 10% to 19% received a cut alright, but it wasn't a tax cut. What it works out to, in reality, is more akin to an additional tax burden on the ever shrinking 48.2% who actually do pay income taxes. I'm still waiting for the proof behind those grandiose words. Prove it!

Update:

And now we have news that 100,000 federal civilian employees owe just about $1 billion in unpaid federal income taxes. When you tack on retirees and military personnel, the number jumps to 276,000 who owe more than $3 billion. Oh for crying out loud, fire them all starting at the top. Where was it that the buck stops again?

See: Fire Fed Workers Who Don't Pay Taxes

__________________

References:

IRS Statistics of Income

Tax Policy Center

TaxFoundation.org

Natural Born Conservative: Obama's Tax Fallacy