State Democrats Shun Democratic Process!

February 26, 2011

G’Day!

Are we living in a Third World Country? What are the Democrats thinking?

The actions by the elected Democrats in Wisconsin are now spreading to other states and are a disgrace to them, the voters in their states, the Democratic Party, and our country. This is not the way our Founding Fathers intended our nation to function and is an embarrassment for the USA in the rest of the world. At all levels of government, America should be an example of the proper functioning of the democratic process to those countries that are struggling to establish representative governments. The actions in Wisconsin are not the way to do this. Perhaps the only actions left for the Democrats to further stifle and prevent the democratic process from working is to engage in actual physical restraint against the elected Republican majority. This is not pretty and is a travesty.

On the other hand, although I do not agree with the nonelected Democrat and union demonstrators in Wisconsin, I fully support their rights do so, as long as they remain peaceful and nonviolent. I also commend Governor Scott Walker for his restraint and appeals to absentee Senators to return and perform their responsibilities.

At local, state, and national levels, our democracy is based on periodic free and fair elections by the people of representatives to meet, debate, and vote on issues important for our society, subject to the limits of our Constitution.  The Democrat Senators in Wisconsin (and now Indiana) are shunning their responsibility to the people of their state by abdicating their obligations to perform the functions for which they were elected. In doing so, they are violating the trust of the people, shutting down the government, and undermining our democracy. The people in Wisconsin and other states have already spoken with their votes and deserve better from their elected representatives. The elected Democrats are morally, and I hope legally, required to perform their proper role by returning to the state, debating the issues, and voting on them. They are not entitled to simply walk off the job and shut down the governing process because they disagree with elected majority. They should not be paid and would be fired in the private sector. This is not how our democracy works.

The democratic process is currently broken in Wisconsin and a properly functioning government needs to be immediately restored. The nonparticipating Democrats are cowards who need to be censured for their refusal to appropriately represent the people who elected them. Upholding the freedoms upon which our country was founded also means the fulfillment of responsibilities by elected representatives.

The Democrats need get with the program and support our democracy.

The Old Guy PhD


How to Solve Healthcare Part I

February 25, 2011

G’Day!

The 2,000+ page “Obamacare” legislation has good intentions but is potentially a government fiscal, debt, and administrative disaster. Like President Obama’s impressive rhetoric, it sounds good but will only increase costs, undermine individual freedom of choice, result in jobs lost in the private economy, reduce competition, increase government spending and regulations, and ultimately lead to government-only rationed health services & treatment.

Since “Obamacare” regulations are still being written and implemented, the ultimate consequences are unclear but they are certain to be, on balance, unfavorable and more costly for the majority of US citizens. More importantly, free-market improvements are available which would expand individual choices and minimize or prevent a government takeover of healthcare. The Republicans are right to oppose the bill, but the question of how we can fix it, reduce costs, and maintain our freedom of choice is still open. Perhaps the biggest question to be answered is, “Who should make healthcare decisions, the government or the patient in consultation with his or her doctor?” For me, given my belief in personal liberty and the effectiveness of free markets, individual freedom of choice is the answer.

The need for improvement in cost and coverage is obvious. In their most recent report, the UN World Health Organization ranked the USA #37 in overall world health results. The OECD 2008 report ranked the USA #1 (highest) in healthcare cost per capita. USA costs were $7,538/capita, more than twice the average for OECD countries and 50% higher than the #2 country, Norway, at $5,003/capita. Equally important is the September, 2010 report that 50.7 million of our citizens do not have healthcare insurance. While some legislation is necessary for those temporarily without healthcare insurance AND IN NEED, more government control over healthcare products and pricing will ultimately lead to higher not lower costs, fewer choices, higher taxes, more debt, and less competition.

Let’s start with the major issues upon which there is general agreement for improvement: 1) cost reduction, 2) coverage for “pre-existing conditions”, 3) patient choice in doctor selection & treatment, 4) portability of existing coverage in relocation, 5) coverage for catastrophic events, 6) tort reform, and 7) coverage for those involuntarily uninsured because of need.

Some potential solutions are relatively simple and should have immediate beneficial effects. First, allow insurance companies to compete across state lines (nationwide competition). The immediate effect would be to dramatically increase competition and put downward pressure on prices and costs. Second, remove the anti-trust exemption for insurance companies by amending/repealing the McCarren-Ferguson Act of 1945. The effect would be to reduce the potential for insurance companies to engage in unfair or collusive practices to the detriment of the consumer. When combined with nationwide competition, this should also put pressure on prices and increase transparency. Third, coverage of pre-existing conditions is in “Obamacare”, is important, and should be retained. Fourth, there is no reason for individuals to lose insurance when relocating and changing jobs. Insurance companies should be required to continue healthcare for individuals currently covered and moving under these conditions

Fifth, enact “tort reform” by capping “punitive damages” at a reasonable level and forcing the “loser” in a lawsuit to pay the legal costs of the “winner”. This should dramatically reduce the number of frivolous or speculative lawsuits by reducing the benefits for lawyers and increasing the costs of losing in a lawsuit. There can be little doubt that the high costs of defending medical malpractice lawsuits by insurance companies adds to medical expenses by increasing insurance premiums and stimulating “defensive” medical practices (unnecessary or marginal medical testing and consultations). There can also be no doubt that the victims of legitimate cases of medical malpractice deserve and should receive appropriate compensation for actual damages. What is at fault with the current system is that it is a patient cost-free, one-sided lottery, funded, not by legitimate actual damages, but by “punitive” damages. Anyone with common sense knows the magnitude of these “punitive” claims is ridiculously excessive and largely serve the lawyers, (just watch your TV to see how many ads there are claiming “you may be entitled to compensation”). Capping “punitive” damages at a reasonable level reduces the financial incentive for lawyers (and patients) to initiate unwarranted or marginal lawsuits. Combining this with “loser pays” the legal costs of the “winner” in a lawsuit creates a potential penalty, which further discourages initiating lawsuits with little or no merit in the hope getting a large settlement from the insurance company, a substantial portion of which goes to the lawyers. Without a “loser pays” penalty, the lawyer can rightly claim to any patient that there is no downside cost for the patient in filing a lawsuit. It is truly a one-sided, no-cost “lottery” for the patient and the maximum loss for the lawyer is only his or her time. This is absurd and without correction adds to medical costs by increasing insurance company costs and premiums and stimulating  “defensive” medical practices by doctors.

Sixth, regarding healthcare for those not currently covered and temporarily in poverty, Medicaid already provides a means-tested method of coverage, including children. If Medicaid is not working properly, it should be changed. But, it should be a transitional bridge, not be a permanent provider, and should be modified to keep routine treatment out of Hospital Emergency Rooms. Improving Medicaid to better and more efficiently provide the intended services should not require a new bill with 2000+ pages of unclear legislation AND “Obamacare” seeks to expand Medicaid coverage (& CHIP for children) far beyond poverty levels.

These six items should be “doable” with some political will and a little common sense. Other potential solutions including better “catastrophic” coverage are more complicated and would require major structural change in the industry but potentially could have even larger positive effects on costs, individual doctor choices, and decisions on treatment in the long term. Perhaps the biggest of these is to remove the employer from the insurance business. This will be the subject of a future post on this site.

Healthcare should be a choice and responsibility of individual citizens in a nationwide free-market economy. Let’s keep our government’s role at the minimum necessary to provide a competitive level playing field and a safety net for only those in temporary need.

Individual choice in a free-market economy with competition is the best way forward.

The Old Guy PhD


Big Government IS Our Problem!

February 11, 2011

G’Day!

President Reagan was right! Big government IS our problem. Many of you are justified in your frustration with government for its increasing size, spending, regulation, and control over our lives. Left unchecked (pun intended), our individual freedoms, ability as a nation to innovate, and competitiveness in the global economy will continue to be eroded. If government would get out of the way, business would improve, jobs would be created, and the country would prosper. Reforming both personal and business income taxes is also required and would further stimulate growth and job creation. Taxes will be the subject of future posts on this site.

The magnitude of our nation’s financial problem is enormous and growing! We anticipate a fiscal deficit of $1.6 trillion in 2011 and President Obama’s budget proposal for 2012 projects a further deficit of $1.1 trillion. Over the next 10 years the new Obama budget proposal projects a cumulative deficit of $7.2 trillion. Additionally, we currently have an overall national debt in excess of $14 trillion, nearly the size of our annual GDP, and according to the National Debt Clock, have unfunded “entitlement” liabilities for Social Security of $14.8 trillion, Prescription Drugs of $19.6 trillion, & Medicare of $78.1 trillion. This is a current total obligation for future generations of $112.5 trillion, nearly 8 times our total annual output and just over $1.0 MILLION per current taxpayer. This is madness and is unsustainable for our economy.

President Obama has impressive rhetoric, but his new “centrist” oratory is unconvincing and inconsistent with the actions of his administration. He has a very different view for the future of our government than I. Obama’s actions indicate the socialist belief that BIG government is the answer to most, if not all, issues. He is converting our personal freedoms and free market economy into a European-style collectivist society with strong central governmental control over our lives and appears to believe that central government can make better decisions for individuals than individuals can make for themselves in a free society. This is a dangerous trend toward expanded central planning and is not the constitutional basis for liberty upon which the Founding Fathers established our great nation. Oddly enough, Obama’s action is taking place at a time when the major European nations are moving in the opposite direction toward American ideals. I believe it was Abraham Lincoln who said, “Government should only do for the people what the people cannot do for themselves.” I fully agree.

If the current administration is not stopped, America’s freedoms, spirit of entrepreneurship, & economic strength could be set back for years and probably permanently diminished. Much has already been initiated with the new legislation for healthcare and financial reform. Both of these new acts add too much central governmental control over crucial industries and need to be repealed or modified to conform to the principles of our free market economy. Future posts will also explore these two subjects in more detail.

America is on an unfavorable and unsustainable course, which must be changed or we face extremely serious consequences for our economy and our freedoms. Ronald Reagan was right (additional pun intended) when he said the 9 scariest words are, “I’m from the government and I’m here to help.” It is time for us to take back our country.

Big government IS the problem; freedom is the answer.

The Old Guy PhD