Will Republicans stick to their guns?

Republicans should agree to meet the Democrats half way to freedom, not half way to tyranny,(to paraphrase Mark Levin). As Ayn Rand explained, how can you compromise with someone who wants you to take poison? Should you agree to take only half the poison? You would still be dead. Bad economic policies are like poison. For example conservatives legislators should not agree to even a watered down form of cap-and-trade,such as government regulations to reduce 'carbon' emissions. (At least until they prove their man made global warming theory, which they never will, or they would have by now.)

Conservative Republicans agree that the federal government needs to drastically reduce spending and reduce its bureaucracy. However congress keeps passing more massively intrusive and expensive legislation. Sometimes, as with the food control bill, we hardly get a peep out of Republicans. In increasingly large numbers, they vote with the Democrats. What is going on?

Currently there is discussion regarding extension of current income tax rates. We seem to have three options: keep the current rates, increase rates for all brackets (which will happen automatically if they do nothing), or increase rate only for higher brackets. There is no option to actually reduce any one's rates. The Democrats themselves want to maintain current rates for lower brackets; not for economic but for political reasons, i.e. to buy votes. The Democrats say they want Republican input and support and that they are willing to compromise. However, the only compromise that they seem to be offering is option three above, that is raise tax rates on higher income brackets (over $250,000). Again for political reasons, to advance 'class' warfare propaganda. In a compromise deal they would get the higher rates that they want but they offer nothing in return. Where is the compromise there?

If Republicans agree to any higher rates on anyone, they should insist upon cuts in spending and reduction in bureaucracy. The taxes would still be economic poison, but spending cuts would to some extent counteract the economic damage of higher taxation.

Just today, there appears to be some movement for such a deal. Next week the president and Democrats in congress may agree to a keep the current rates for all wage earners in return for Republican agreement to extend unemployment benefits from two years to three. (Initially, before other extensions, the limit was half a year.) Extending these payments is bad economic policy because unemployment benefits create unemployment.

One other factor makes this potentially a bad deal. If the higher tax rates for all go into effect because of congressional inaction, the increase can be reversed by the new Republican congress next year. The Democratic Senate and the president would be under political pressure to agree. Therefore, The Republicans should not compromise now unless it is a good deal for the economy. For example, unemployment benefits for only an additional six months and at amounts reduced by about 30% would be one possibility.

The tea party has been leading the way toward freedom and away from the 'liberal', statist progressive agenda (which is becoming more and more to resemble the national socialist agendas of days past.) To remedy economic problems now as always, we need to focus on the philosophy of free enterprise. Economist Frederich Bastiat suggested the true path nearly 200 years ago to deal with the collapsed French economy: We have tried everything else, why not try freedom.

High Prices and Recession, Thanks to BHO

When the government wants to spend more, the GCP (Government Controlled Press) comes out with stories that there is no inflation and in fact there is deflation. The Fed chief, who serves at the pleasure of BHO, may make similar statements. Therefore, say the talking heads, in this environment, government deficit spending is OK.

This blog has stated that the huge increases in government spending create money. Since there is no corresponding increase in good and services to spend the money on, this is certainly inflation. That prices don’t go up is explained by the severe economic downturn. Markets are attempting to clear, that is to sell goods and services and produce more. This is not happening because the inflation is not allowing prices to adjust downward, as is the usual way slow markets clear. The result is a more and more sluggish economy. Based upon the actions of this government, a sluggish economy seems to be what they want, except at election time.

The Root of the Health Care Crisis

Why is the health care “crisis” like the mortgage “crisis”? Both the medical industry and the mortgage industry were thrown so much money that they did not know what to do with it. This has resulted in bad loans and wasteful medical care.

In many ways, we have too much medical care, not too little. The large capacity to provide medical care has come about because of consumer demand for medical care. Why is there so much demand? Because we don’t have to pay for it. Government agencies or insurance companies pick up the bill. In actuality, we all foot the bill through higher taxes and higher insurance premiums, but we do not pay directly based on the level of services received. This large demand has resulted in growth in the medical industry to supply the care that people want. The point is that we would not want a significant portion of this care if we had to pay for it ourselves.

This is the problem that creates the so-called health care crisis. Often insurance companies are required to offer certain minimum levels of coverage. If they could offer less coverage, many people would prefer that and pay a lower premium. They would of course use less health care. A partial solution would be to let insurance companies offer and consumers have the coverage they prefer. This would limit the number of expensive procedures because consumers would have to pay for a larger portion of the bill themselves. That means less regulation, not more.

In the final analysis, there will be near unlimited demand for any free service. As the amount paid to providers by government and insurance companies shrinks, the supply of medical services will shrink. As the president says, this status quo is unsustainable. The problem with his proposal is that it makes the problem worse by offering more coverage to more people with less direct cost to consumers for the health care they receive.

The Democrats and Obama tell us that we can afford their plan. But why would we be more able to afford health care collectively when we can not afford it individually? Their plan is full of illogic and inconsistencies. For instance, why would anyone buy insurance for thousands of dollars a year if instead they can pay the government fine of a few hundred dollars instead? Since insurance companies could not refuse coverage, even for diagnosed illnesses, we could wait until we wanted an expensive procedure and then purchase insurance. I am sure a black market for basic primary care would develop. Trouble with that plan is that only the seriously ill would get insurance and the insurance companies would fold or have to be bailed out. That would eventually result in a total government take-over.

We have seen that government can not keep the costs of Medicare down. There are fundamental economic reasons why the government can not do what the free market does: it balances supply and demand and provides just the level of care that people want. This blog attempts to explain and references others who attempt to explain why socialism does not work.

Tell your representative that you do not want the government take over of health care. Along with the government take overs of banking, automobiles, etc., with hhealth care, it would control about 50% of the economy. Mark Levin and others list the representatives who have not announced the way they will vote.

Apparently the number to call the House of Representatives is: 1-877-SOB-U-SOB. That says it all.

Obama Health Care Looters

Socialism has been described as killing the goose that laid the golden egg, with capitalism being the goose. Tonight, Mark Levin referred to Bastiat's description of the fruits of socialism as plunder. What happens when there is nothing left to plunder? Mr. Levin also used the metaphor of locust stripping a field of grain. When there is no more grain, what do the locust socialists propose to do?

I think of socialism as legalised looting. What happens when the looters have broken all the windows and taken all the merchandise? Will the store restock the shelves so that the looters can come back for more? I don't think so, nor will factories continue to produce just so their production can be taken from them. The socialists think nothing of attacking corporations who produce most of the world's goods. They do not know how they will continue to produce without corporations but they seem to think they can do it. Actually, they do not seem to have even thought ahead that far. We have said it before: capitalism is the most efficient way to provide for the most urgent needs of mankind.

Senator Murry again treated us to the story of Marcelas Owens whose mother died because she lost her health insurance. I have not heard the press explain this story in any more detail. It seems to me that the mother could have obtained emergency life saving care if she had sought it out. Both the states and charities provide ample free care for the needy. What is instructive to me in this story is this: Hypothetically, the mother required some advanced procedure that was available in this country. The reason that the procedure was available is because our health care system with its corporations and insurance companies provided that procedure. They did the research and development, which was financed by investors who believed that through insurance and other means, consumers would be able to pay for their service. If our health care had been socialised years ago, the procedure would not even exist. Even if she had state supplied coverage, the procedure would never have been produced so she, and the rest of us, would be out of luck.

It is hard for the victims of socialist propaganda to see the error in their ways. It would require the ability to envision what might and could have been.

Free Free Market vs. The Party

The recent health care summit tells the whole story of what this administration is all about: a quest for authoritarian, dictatorial power. The president pressured Republican congressional leaders to attend a meeting with him and Democrats. The Republicans were reminded that they must address BHO as President Obama or Mr. President. Yet he addressed them by first name. What ever happened the the co-equal branches of government? After months of stating that the Republicans had proposed no health care ideas of their own, he summarily dismissed their proposals as unacceptable. He then lectured the Republicans for using "talking points" and for "campaigning." In point of fact, his and the Democrat's only arguments against the Republican proposals were that they could not be passed by Congress. In other words, they would vote against them. That is precisely why the republicans don't have bills being considered in congress. Since they are a minority and the Democrats are not in a bipartisan mood, any Republican bill is dead on arrival. BHO and the Democrats have constantly claimed that the Republicans have no ideas. One Democrat, who was quoted for a week in the press, stated that Republicans' only health care plan was that if you are sick, you should die. These types of statements by BHO and the Democrats are in fact only propaganda, campaigning talking points. Just because the press didn't point it out, does not mean it isn't so.

The Republican ideas include removing state regulations so individuals can shop for any type of health insurance policy that they want. Income tax deductible of individual health care and insurance should remove the bias in favor of employer provided coverage and promote portability. Insures would be required to participate in high risk pools to take pre-existing conditions and other high risks at a predetermined rate. For those who cannot afford available coverage, the state would subsidise care on a sliding scale. Private charities could also play a roll. Private insurance companies and all types of providers would be in constant competition to provide the best and lowest cost care. Some providers would of course contract with insurance companies to provide specialised care for certain expensive cases. The roll of the state could be minimal. Consumer protection agencies could closely police any violations of the contractual responsibilities of the parties involved. This would augment normal legal remedies. Tort lawyers would play the roll that they currently do of obtaining compensation for those who are seriously injured by negligently shoddy care or by breaches of contract. As far as tort reform, some sort of limits on judgements could be set. Judges and juries do a fair job of doing this already. The benefit of this type of tort reform would be to keep down the number of expensive tests. This would happen by reducing defensive medicine and by reducing expensive procedures preformed under the pretense of defensive medicine.

There are many market refinements possible that would need only minimal and probably no new types of government involvement. What is needed is less regulation to let the efficiencies of the market do the job, not the bureaucrats. This is what Republicans, at least the conservatives, want. This is what Democrats, at least the Progressives, Communists, and Socialists do not want. With little or no government involvement, we would not need them.

Republican Conservatives: The Time is Now

The demos, the president, and politico.com say that the Republicans have a “responsibility to govern.” So be it. That does not mean that they should rubber stamp every BHO, Harry Ried, and Nancy Pelosi proposal. Why don’t they introduce stand-alone bills to address healthcare issues, such as state-to-state portability? There are a myriad of other issues that can be addressed by legislation. They can introduce bills to give the unspent and repaid stimulus and TARP funds back to the treasury to reduce the deficit. They can introduce a real spending freeze bill to take affect this year. They can reopen oil drilling, coal power production, and nuclear power licensing. That could be for starters, then tomorrow they can work on eliminating any spending motivated by global warming. Bank regulation? Why not common sense requirements such as loan documents that can actually be read and understood by borrowers. The list of real reforms is endless and can be proposed in bills of five to ten pages. Get to it Mr. McCain et al.