Jul 23 2010
Archive for the 'Think About It' Category
Aug 28 2009
Why government can NOT run Health Care
Three Reasons Why Government Can’t Run Health Care
by Newt Gingrich
by Newt Gingrich
08/26/2009Facta, non verba.
For those of you who have forgotten your Latin, it means “deeds, not words.”
There’s been a lot of overheated rhetoric about health care reform, but this saying is one that all Americans should return to when considering plans for a government-dominated health system.In other words, we should judge government, not by its words, but by its deeds.
With this simple principle in mind, what follows are three examples why government can’t – and shouldn’t – run our health care system (at least not any health care system you or I would want to be dependent on).
Reason No. 1: Government Can’t Be Trusted With a Credit Card
Every family knows about making a budget and living within its means. Government, to put it bluntly, does not.
What if your husband had come home last Friday night and announced that he had racked up almost 30 percent more debt on the family credit card – including the mortgage and car loans – than he had told you about just a month ago?
Would you trust him to go out and start spending money to remodel the kitchen? And do you think he could get a loan to do it?
But that’s exactly what the Obama Administration did with their weekend news dump. They announced late Friday that the amount of money they don’t have but are nonetheless planning on spending over the next ten years isn’t the astonishing $7 trillion they estimated in May but is instead an astounding $9 trillion.
Add this to the fact that, after the administration sold its health care reform proposal on the grounds that it will reduce costs to the Treasury, the independent Congressional Budget Office determined that the House plan will actually cost an astounding $1 trillion-$1.5 trillion in the next ten years, which will be added directly to the federal debt. The director of the CBO testified before Congress last month that “[i]n the legislation that has been reported we do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount. And on the contrary, the legislation significantly expands the federal responsibility for health care costs.”
Which do you have more faith in, the government’s happy talk of “bending the cost curve” or its record of out-of-control spending?
Deeds, not words.
Reason No. 2: Government Can’t Even Give Away Money Effectively
As the inimitable Andy McCarthy of National Review put it, “Compared to the infinite complexity of healthcare and health-insurance, cash-for-clunkers is kindergarten stuff. You trade in your old car for a new one that gets (slightly) better mileage and the government gives you money – between $3,500 and $4,500. How hard is that?”
Too hard for government bureaucrats, it turns out.
Transportation Secretary Ray LaHood has boasted that the cash-for-clunkers program provided “a lifeline to the automobile industry, jump starting a major sector of the economy and putting people back to work..”
But look at the deeds, not the words.
Last week, cash-for-clunkers ended in a bureaucratic morass of red tape, failed promises and unanticipated costs.
Air Traffic Controllers Manning the Cash-for-Clunkers Hotline
Only a government bureaucracy could mess up a program designed to give away free money.
The government wizards who set up cash-for-clunkers initially budgeted to sell 250,000 cars in three months.
The program sold that many in four days.
And because the central planners who think they can provide government “competition” to the private health insurance market failed to accurately estimate how many government workers it would take to administer cash-for-clunkers, they had to take employees from the FAA – air traffic controllers, no less – to help manage the demand.
And what about the car dealerships the program was supposed to help in the first place? Even though the rebates were supposed to be paid within 10 days, only 7 percent of federal promises under cash-for-clunkers have been paid so far, leaving dealers with millions of dollars in unfunded government promises.
More Than Bureaucratic Incompetence, Political Business as Usual
But there’s more to the cautionary tale of cash-for-clunkers than just bureaucratic incompetence.
This is a case study in what happens when politicians get involved in the marketplace.
Despite all the rhetoric of jump starting the auto industry, politicians’ priorities are to give free goodies to their constituents. So as far as they’re concerned, cash-for-clunkers has been a resounding success.
Forget the fact that they’re spending money they don’t have, or that car dealerships are left holding millions of dollars in empty government promises. They’re not concerned with the long-term, just the next election.
So tell us again why should we think bureaucrats and politicians will perform any better with our health care?Reason No. 3: Government Would Rather Pay Crooks Than Manage Efficiently
There’s been a lot of worrying about the inevitability of government rationing health care under the Democratic reform bills in Congress.
Economists have known about this inevitability for a long time. Well, Americans can stop worrying. Government is rationing care already – and doing it in a particularly stupid way.
Studies have shown that early use of home health care after hospitalization – allowing patients to go home and be visited by a nurse to manage their care – saves Medicare billions of dollars.
So here is a case where an innovative government program actually saves the government money. Home health care is both more compassionate and more efficient. It reduces the likelihood a patient will be readmitted to a hospital by allowing her to heal in a more familiar setting.
Home Health Care Works, So Naturally Medicare Bureaucrats Cut Its Funding
So naturally bureaucrats at the Centers for Medicare and Medicaid Services cut $34 billion from this compassionate, efficient program last week.
And if the House health care reform bill becomes law, an additional $56.8 billion will be cut from the program – an amount equal to almost the entire federal budget for home health care services in 2007.
What makes rationing care to the homebound all the more immoral is the fact that there is a much bigger pot of savings available to Washington if it only had the political will to look.
Instead of Seeking Savings from the Homebound, Why Not the Crooks?
As a new book by the Center for Health Transformation’s Jim Frogue details, criminals rip off the taxpayers to the tune of $80 billion to $120 billion each year in the current Medicare and Medicaid programs.
We’re not talking about inadvertent bill errors but outright fraud. Government health programs are currently paying men maternity benefits, giving taxpayer dollars to pizza parlors that are supposed to be HIV transfusion centers, and even paying dead patients federal health care benefits.
If ever there was a reason not to turn our entire health care system over to government it is this: Government can’t run the health care programs it already has. It would rather ration compassionate, effective programs than do the hard work of rooting out and punishing the crooks who are stealing our taxpayer dollars.
Facts are Stubborn Things
Americans have already heard a lot of rhetoric about health care reform, and we can expect to hear a lot more.
But as Ronald Reagan used to say, facts are stubborn things. And the facts of government’s track record in managing our money and delivering on its promises speak louder than any televised presidential speech or stage-managed town hall ever could.
So as the summer winds down and the debate rages on, let this be our mantra:
Facta, non verba.
Make a bumper sticker out of it.
Put it on a tee-shirt and wear it to a town hall.
And when someone asked you what it means, tell them that before we hand over more of our lives to government, we should consider how they’ve treated us so far.
Your friend,
Newt Gingrich
Mar 27 2009
What does 1 TRILLION dollars look like
All this talk about “stimulus packages” and “bailouts”….
A billion dollars…
A hundred billion dollars….
Eight hundred billion dollars…
One TRILLION dollars…We’ll start with a $100 dollar bill. Currently the largest
A packet of one hundred $100 bills is less than 1/2″ thick and contains $10,000. Fits in your pocket easily and is more than enough for week or two of shamefully decadent fun.
Believe it or not, this next little pile is $1 million dollars (100 packets of $10,000). You could stuff that into a grocery bag and walk around with it.
While a measly $1 million looked a little unimpressive, $100 million is a little more respectable. It fits neatly on a standard pallet…
And $1 BILLION dollars… now we’re really getting somewhere…
Next we’ll look at ONE TRILLION dollars. This is that number we’ve been hearing about so much. What is a trillion dollars? Well, it’s a million million. It’s a thousand billion. It’s a one followed by 12 zeros.
You ready for this?
It’s pretty surprising.
Go ahead…
Scroll down…
Ladies and gentlemen… I give you $1 trillion dollars…
See the guy….
Notice those pallets are double stacked.
……and remember those are $100 bills.
So the next time you hear someone toss around the phrase “trillion dollars”… that’s what they’re talking about
Oct 01 2008
give home loans to people who could not pay the mortgage.
Bill Clinton and Barney Frank thought it a good idea to give home loans to people who could not pay the mortgage.Nancy Pelosi is pointing the finger in the wrong direction.
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Subject: NY Times Article – Fannie Mae Eases Credit To Aid Mortgage Lending
9-30-1999
http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F9
58260&scp=1&sq=fannie&st=nytFannie Mae Eases Credit To Aid Mortgage Lending By STEVEN A. HOLMES
Published: September 30, 1999
In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.
The action, which will begin as a pilot program involving 24 banks in 15 markets — including the New York metropolitan region — will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.
Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates — anywhere from three to four percentage points higher than conventional loans.
”Fannie Mae has expanded home ownership for millions of families in the 1990’s by reducing down payment requirements,” said Franklin D. Raines, Fannie Mae’s chairman and chief executive officer. ”Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.”
Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.
In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.
”From the perspective of many people, including me, this is another thrift industry growing up around us,” said Peter Wallison a resident fellow at the American Enterprise Institute. ”If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.”
Under Fannie Mae’s pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 — a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.
Fannie Mae, the nation’s biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.
Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.
Home ownership has, in fact, exploded among minorities during the economic boom of the 1990’s. The number of mortgages extended to Hispanic applicants jumped by 87.2 per cent from 1993 to 1998, according to Harvard University’s Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 per cent and the number of Asian Americans by 46.3 per cent.
In contrast, the number of non-Hispanic whites who received loans for homes increased by 31.2 per cent.
Despite these gains, home ownership rates for minorities continue to lag behind non-Hispanic whites, in part because blacks and Hispanics in particular tend to have on average worse credit ratings.
In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae’s and Freddie Mac’s portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.
The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants.
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