James C. Makens: Why the stimulus is failing

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— An Independence Day column in the Steamboat Today by Nobel Prize-winning economist Paul Krugman implied that President Barack Obama's trillion-dollar stimulus has failed. What was Krugman's advice? "President Barack Obama and his officials need to ramp up their efforts starting with a plan to make the stimulus bigger." Isn't that akin to advising alcoholics to get well by drinking twice their daily intake of alcohol?

In 1956, I studied the required course in macro economics at Colorado State University. This was based on the theories of the English philosopher John Maynard Keynes from his book "The General Theory of Employment, Interest and Money." In a nutshell, Keynes called for deficit spending and infusion of money into the economy by the federal government. This 73-year-old theory is the same and apparently only economic answer now embraced by Obama. If medicine had advanced at this rate, we still would be treating infections by sulpha drugs and amputation. If other technologies had advanced at this speed, we would be using crank telephone and crystal set radios.

Aren't there other economists and economic answers worth hearing? Of course there are.

It should be noted, however, that a common dependency of other economists, including Keynes, is the willing cooperation of private investors, managers of existing companies, and entrepreneurs to invest new capital into the system for purposes of conducting research, expanding operations, replacing obsolete facilities and equipment and in starting different and potentially exciting new enterprises.

This requires confidence in the market and one's government. Unfortunately, there is little confidence today because of the threats and anti-private industry words and actions currently emanating from Washington. One cannot simultaneously be uplifted - encouraged and threatened. FDR, a role model of our current president, told the nation, "There is nothing to fear but fear itself." Fortunately, we have been spared a repeat of these words, for indeed today there is much to fear.

The economist Joseph Schumpter told us that the very success of capitalism leads to a form of corporatism with values that are at odds with capitalism. Thus, he believed that we need a safety valve called creative destruction, in which companies such as General Motors and Chrysler would be allowed to die - not to live on as government/labor union-owned companies ruled by czars. He also believed that a second safety valve existed in entrepreneurship but that the creation of a welfare state would not permit flourishing entrepreneurship.

A government monetary stimulus of even $1 trillion will not work if the famed multiplier effect does not occur. Money is not created by government printing presses but rather by the actions of commercial banks lending funds to credit-worthy borrowers. But banks will not lend money if they are frightened, and credit-worthy borrowers will not take risks and borrow funds if they believe the federal government will take from them the fruits of their labor.

Another Nobel-winning economist, Friedrick Hayek, warned us not to travel "The Road to Serfdom." Hayek was against centrally controlled/planned economies. To be fair, some famous economists surely would find favor in the policies and philosophy of the current administration. Foremost among them would be Karl Heinrich Marx.

James C. Makens

Steamboat Springs

Comments

seeuski 5 years, 1 month ago

dukey, The left wingnut moveon,org attacks on Palin have been orchestrated in order to protect the 2012 election for the worst President ever, Obama.

Palin Ethics Investigator Closely Tied to Democratic Party: "The independent investigator who has accused Alaska Gov. Sarah Palin of violating state ethics laws is a major donor to the Democratic Party as well as a partner in a law firm that represented Barack Obama's presidential campaign.

Thomas Daniel was hired by the Alaska Personnel Board in late April to investigate several complaints against Palin, including one filed by an Alaska resident who claims the governor used her official position for personal gain by authorizing the creation of a trust to use as her legal defense fund."

Only fools can't see the lefty's using the Saul Alinsky, Rules for Radicals, handbook in order to destroy Palin. It will fail and the haters like duke-bets and LTFO will become increasingly agitated and produce more of their personal attacks against their adversarial forum members here as the Worst President in the History of the US continues his downward spiral in popularity. He can't help the fact that the smoke is clearing and all can see the Emperors clothes.

Doctors are quiting the AMA in droves and one who was interviewed this morning reasoned the the AMA's mission statements have been broken in the endorsement of the Worst President in the history of the US's health care plan. It has been exposed that one of the provisions in the last stimulus bill is that it is now mandatory for Doctors to send all patient records to the Federal Government by a certain date. Those who so excitedly want this folly of a plan seem content with the Feds knowing all of our health history. What will be done with that data? I can't help but hear an echo, soilent green...soilent green. The implications of having Bureaucrats grubby hands all over our personal health records is the end of the USA. Hello to the new USSA. Obama czars unite.

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jk 5 years, 1 month ago

seeu, I have an idea. Why don't you make yourself a big Republican banner, and head out north of the salt flats. There you can meet up with your buddy Mr. Strickland attach your banner to his cross and help him drag it across the country. You can get your word out to everyone who drives by and we can get a break from your rants for awhile.

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Duke_bets 5 years, 1 month ago

seeuski - Last comment on this one..................Obama has been on the job for 7 months. How is that the worst in history? GW will hold that title until the end of time. You actually still support Palin? You really don't want to argue for Palin. That will be a losing battle before you get started.

I've also noticed that you still can't spell or write. What the He** does 'soilent' mean? Nothing........It's not a word. You also stated 'apposition'. That is actually a form of a grammatical noun phrase. I believe you meant opposition, which I have for those who lack basic English skills. You have more improper sentences than proper sentences. Sarah Palin may actually be better at spelling. So sad.........

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JLM 5 years, 1 month ago

About that healthcare crisis ---

We have 300MM Americans and approximately 44MM have no health insurance. That's about 15%.

That 15% is made up of one half folks who simply do not desire to purchase health insurance (invulnerable 20 somethings fresh out of college, folks who opt out of the employer's plan) and 12-15MM of them are illegal aliens.

Approximately 110MM Americans are covered by a private employer's health insurance plan and the balance are either government workers at every level or they purchase insurance in the marketplace or they are covered by Medicare/Medicaid.

Most Americans --- 85% --- are covered by health insurance!

Crisis? Hmmmmm, maybe not so much!

Some useful ideas which could be implemented immediatey:

Make all health insurance premiums deductible and provide a tax credit to all employers who sponsor and pay for a plan or a portion of a plan. Health insurance premiums are deductible to a business but are not deductible to an individual because of itemized deduction limitations. Level the playing field.

Tort reform --- get the huge awards out of the system and the huge contingency fees. Let the lawyers be paid by the hour, if they win, not take 40-50% of the damages award. That's simply not fair.

Make all insurance portable --- can take it from job to job.

Have the AMA credit more medical schools and produce more doctors particularly a class of GPs who can operate in local clinics and bring the medicine to the demand for treatment.

Create a "super nurse" category who can prescribe simple medicines and make house calls. They should work in clinics with the new class of GPs,

Do something about immigration and seal our borders.

These are real world pragmatic things which can be enacted immediately and they do not create a huge redistribution of wealth.

They are real solutions not political solutions and they do not attempt to punish one class of Americans in order to serve another.

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seeuski 5 years, 1 month ago

trump, I could not agree with JLM more in the ideas put forth. Because of your response to my post about what the Republicans have tried but failed at with the opposition, whew I hit the right key that time, I won't waste yours or my time. A pretty standard stalemate in Congress over the years I might add. So the difference between the parties is one side is for a political power grab and the other is for obvious solutions.

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Matthew Stoddard 5 years, 1 month ago

What solutions? It's "Let the free market sort it out." That's what's been happening and that's how we got where we are. That's not a solution; it's a surrender to the status quo.

Plus, where does it say that you have to give up your current provider? In fact, doesn't your employer usually make the decision on who's providing insurance, anyway? Doesn't that take away your "choice" in the matter, unless you switch jobs? You can still do that, as far as I've heard.

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trump_suit 5 years, 1 month ago

Are you guys ever going to stop with the scary stories and tactics? If the Republicans do not like what is coming from the other side of the isle they should offer up some real ideas for change instead of scary stories.

The Heath Insurance ndustry is broken and doing nothing is not an option. I do not support a Gov't run option or a single payer plan, but the Republicans are offering nothing more that scary stories in the night. We need real debate with real choices. Where are they? The conservative right is failing us with its complete lack of new ideas.

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trump_suit 5 years, 1 month ago

PS. I am sure that I am considered to be "left" by many of you. I do not condone or appreciate the personal attacks that I see on these forums and would call on all parties to keep it on topic and leave out the personal.

I will call out individuals for their positions and statements but take offense when personal degredation and slander are your talking points. We are each entitled to our opinion and the right to present our ideas. Those freedoms and rights should be respected by all.

I have seen some of the old retread Repubilcan ideas. Bottom line is that until the insurance industry is required to proviced equitable coverage for all the system will fail. Running these corporations for profit has allowed them to cherry pick those people they consider to be less of a health risk and is one of the primary causes of our current problems.

Three rules:

  1. No more groups. If you have an SSN you are in the "group"and have access to the same plans as Gov't employees or GM workers. No more changing the rates for individuals or small business.

  2. Pre-existing conditions no longer exist. Just like your auto insurance, if your policy is in force the day you go to the Doctor or Hospital you are covered period.

  3. Out-of-Network should not be allowed. All healthcare professionals are part of the "network". Insurance companies can be allowed to set market rates for various procedures but they cannot/should not be allowed to tell you who can provice that service.

Show me a plan that includes these provisions and you will have my support. The real problem is not with healthcare delivery, it is with healthcare insurance.

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JLM 5 years, 1 month ago

The real problem is that people say "healthcare insurance" when they really mean "free healthcare".

Analogies to automobile insurance are quite apropos. Automobile insurance does not cover the cost of operations --- gas, oil, maintenance, cleaning, tune ups, tires, etc. It covers catastrophic accidents and theft.

The automobile owner has "skin in the game" because he has to maintain the vehicle himself.

Health insurance, as discussed today, is anticipated to pay for everything with the first dollar being covered. The patient has no skin in the game. Hell, people want health insurance to pay for them to get an erection!

BTW, who pays for your automobile insurance? Is it the government? Is it the top 50% of wage earners?

No, you pay for your own automobile insurance.

Why is that not the starting paradigm for health insurance?

Because what the Democrats are really talking about is "free healthcare" not healthcare insurance.

You're smart enough to figure out how to insure your car but you're not smart enough to figure out how to insure your health? Huh?

Who do they want to pay for it all?

Well, it's not the folks who are paying virtually no income taxes --- the bottom 50% of wage earners. It's the top wage earners. This is the "free" element.

The health insurance debate is not about healthcare, it's about the redistribution of wealth from the top 50% to the bottom 50% cloaked as an artificial crisis.

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stillinsteamboat 5 years, 2 months ago

Mr. Makens, I know you are a very smart man but where was your advice and criticism when Mr. Bush was taking us down this long and winding road for 8 years?

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Martha D Young 5 years, 2 months ago

Your comparison of President Obama to Karl Marx undermines anything of substance you said. Your judgments are premature and biased toward only one school of economic thinking. Never before has our country been in the financial mess it is, due primarily to the greed of the unregulated securities industry. Was that situation available for analysis in 1956?

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Brent Boyer 5 years, 2 months ago

LTFO: We have published letters to the editor, to go along with staff-written editorials, in the Wednesday and Sunday newspapers for just about as long as we've been a daily newspaper.

Thanks for reading, Brent Boyer Editor, Pilot & Today 970-871-4221

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bubba 5 years, 2 months ago

Stillinsteamboat - I was very critical of Bush's policies and outspoken about them. I still believe that he is one of the worst, most inept presidents we have ever had. Does this entitle me to disagree with the anti-business rhetoric of our current administration (Congress and Senate included)? Bush made a lot of bad choices, but shackling the private sector is not the way to correct them.

Marthalee, I didn't think he was comparing Obama to Marx, as much as saying that far left-wing economists (such as Marx) would agree with the populist notions of sharing the wealth, expanding government care programs, etc. And while the country has never been in this EXACT predicament, we have had numerous economic crises historically. We have always recovered, but the recovery has always been a function of industrial/private sector recovery, government spending just serves to alleviate the suffering of the masses until business gets going.

LTFO - I don't understand your point? Are you saying that anyone who disagrees with the current economic policies hates America? Sort of like, I don't know... "you are either for us or you are against us?" You can't address any of Makens' points, much less copy the spelling of his name accurately, so you have to resort to name calling, which leads me to believe you may not have even read his article, much less understood it.

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Fred Duckels 5 years, 2 months ago

The lefties seem to be screaming for censorship when other ideas are presented. The last stimulus was a little infrastructure work and the rest goes to Democratic backers and their agenda.

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bubba 5 years, 2 months ago

So more name calling and baseless accusations, and no discussion of the issues.

Since you completely understand the issues, could you please explain to me how the economy is going to recover while the government is preventing private investment in the economy by re-writing bankruptcy laws and continually voicing anti-business rhetoric?

It seems to me that contrary to your assertion, one could discuss this issue with Mr Makens, who has studied economics and can write coherently, even citing policies. You on the other hand, have not shown any ability to hold a discussion on the topic, so let's hear it, how is the economy going to recover based solely on government spending, while the tax base is shrinking?

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bubba 5 years, 2 months ago

And by the way, I was not complaining about the rules of this forum, I was politely suggesting that you are both a hypocrite and an idiot, but apparently manners and subtlety are both lost on you.

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seeuski 5 years, 2 months ago

The world according to LTFO. "You don't like the rules on this forum or the way some play go and whine somewhere else."

That from the biggest whiner. What ever happened to freedom of speech? Everyday in the Pilot we get two opinion pieces, 95% from the fish wrapper NY times. Lets bash Sarah Palin 4 days in a row by the little miss muppet of the media, Moron Dowd. I am sure everyone is on the edge of their seats waiting for the next brilliant stream of paranoia after we learn of Cheney and the secret torture chambers. LOL!!!! Put down the pipe and chill out. Or should we discuss the 40 secret czars that report only to Obama? Or the firings of the IG's who uncovered Obama misappropriations, or what I call the theft of our money? Kevin Johnson didn't mind to the tune of a cool mil. The fact is that every time Obama puts on his dog and pony act, like tonight's TV preemption, we are all receiving torture treatment. LOL ha ha.

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JustSomeJoe 5 years, 2 months ago

Maken's entire article became more bird cage lining when he started with an illogical and irrelevant analogy about alcoholics and fiscal discipline. It was as a lame of start as I've ever seen, and that includes Akin's "Patriot" series.

As for citing policies Bubba, what policy did he cite? Deficit Spending? Deficit spending has been a key platform of almost every president in recent memory. I will say he strung together a collection of out of context quotes and meaningless examples to not make a point. What was the point, not to go on the road to serfdom? His article is simply another "conservative commentary" that most will ignore. Put him with Rick Akin and Gary Hofmeister as commentators with no point to make, only an axe to grind.

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seeuski 5 years, 2 months ago

To those who are still under the Obamamania spell, it is wearing off on a lot who were fooled during the elections but as "The Who" sang, "we won't get fooled again". I got a song for ya it's called, watching the poll numbers drop. Many Americans are singin, I can hear em. We won't get fooled again!!

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seeuski 5 years, 2 months ago

????What is LTFU trying to say?????

Spit it out. I'll help you, Obama is steeling the US treasury blind and spreading the wealth around as he promised and until he is frog walked out with his fake birth certificate in hand we won't know just how bad.

Now, back to your Chaney Limbaugh rants. Blah blah blah.

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bubba 5 years, 2 months ago

LTFO, say something intelligent. I dare you. Since you understand completely the issues involved, explain to me why the article above is wrong. Try to use small words though, because after all, I am just a monkey.

Actually, Justsomejoe, I guess I mis-spoke by using the word 'policy,' when I probably should have said 'economic theory.' As in quoting nobel-winning economists, rather than calling people monkeys.

Deficit spending has been a big part of every president's policies for a long time. Bush spent uncontrollably, while counting on his (often misguided) economic policies to create growth in the economy to cover the bill through increased tax receipts. The new administration has accelerated spending, and enacting policies that appear to be keeping investor's and business' dollars on the sidelines, which limits the effectiveness of any stimulus, Mr Makens called it the multiplier effect, it could also be said that increasing the supply of money while simultaneously scaring potential investors into holding their cash near and dear is reducing the velocity of money. When the velocity slows, taxes decline, because when money doesn't change hands, goods and services don't get purchased, so nobody makes any money, thus tax receipts decline.

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JLM 5 years, 2 months ago

The simple truth of the matter is that the actions of the Obama administration thus far have been ineffective. Measure its effectiveness by the results, not rhetoric.

Remember when the Stimulus was going to prevent us from cracking 8% unemployment? When we were just about to spin into a "catastrophe" if we didn't approve the Stimulus?

Unemployment nationally is over 10% with states like Texas @ 6% holding the dike against a more serious level. Some states and some regions within some states are at an effective rate of unemployment of over 20%. Segmented unemployment (older workers, minority workers) may approach 40%.

Does anyone really think that the Stimulus is working? Or will ultimately work? Even the Administration itself does not think it can spend 11% of the money by year end. Does anyone think that the unread 1200 page Stimulus bill was anything other than a wholesale steroid injection into the coronary artery of bigger government and a compilation of every Democratic wish list pork project?

It was a feeding frenzy, a celebration of turning the government over to a liberal majority who had longed for such an orgy of spending.

Along the way, we have undermined the basic laws of economics in the automobile and financial services industries. Does anybody really think that GM is going to survive? Detroit? Michigan?

Already the Obama administration has written off over $23B of its GM investment in the bankruptcy proceedings. The ink wasn't even dry on the money they injected into GM and already it is gone and gone forever --- in the Bankruptcy Court mind you so there is no illuson of recovery.

GM's sales are down 22% for the first half of 2009. Their market share --- remember this was the largest automobile company in the world once upon a time --- is a miserable 12%.

When GM hits 10% market share, the party is over because the automobile industry is at least 20% overcapacity. Even having Joe Biden change your oil is not going to work.

Sales tax receipts as a trailing indicator show a similar problem.

Are there any bright spots you can point to to counter these observations? I think we are in trouble and President Obama is not an effective leader to get us out of these troubles.

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seeuski 5 years, 1 month ago

There is an agenda being played out by Obama and his growing list of czars and who they are should scare the heck out of people. I don't think Obama is trying to fix the economy, he is trying to build a new regime under his Government umbrella. Why else fire IG Walpin for finding the $million$ in stimulus money that went to Kevin Johnson? The preparations for the next Presidential elections are already at work, even here in Steamboat. We have a small invasion of the College age Americorp workers here who spend several hours a week with high school students. These are the voters of 2012. Americorp is connected to ACORN. ACORN is an Obama action mechanism that was used to perfection last year. This activity is being replayed in every town in America. If any of you are parents of high school age students and are not Obama maniacs I would monitor what information the Americorp folks are feeding the kids. "Barack Obama was a founding member of the board of Public Allies in 1992, resigning before his wife became executive director of the Chicago chapter of Public Allies in 1993. Obama plans to use the nonprofit group, which he features on his campaign Web site, as the model for a national service corps. He calls his Orwellian program, "Universal Voluntary Public Service." "The government now funds about half of Public Allies' expenses through Clinton's AmeriCorps. Obama wants to fully fund it and expand it into a national program that some see costing $500 billion. "We've got to have a civilian national security force that's just as powerful, just as strong, just as well-funded" as the military, he said.

The gall of it: The Obamas want to create a boot camp for radicals who hate the military - and stick American taxpayers with the bill."

That is what I call a stimulus package we can believe in.

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JustSomeJoe 5 years, 1 month ago

Bubba - I think my original point still stands very well. Makens didn't make a point, and didn't even come close. JLM makes more points than Makens letter, even if I disagree with most of them. Quoting a Nobel prize winner doesn't mean anything and I certainly didn't call anyone a monkey. I leave that for the wingnuts and headcases spouting conspiracy theories (on both sides).

I disagree strongly with your point that Obama's policy's are keep investors and business' dollars on the sidelines. What's really changed in six months or a year? Are investors getting a better return on their dollar in a CD or savings account? I don't think your point holds any water vis a vis a reaction to the stimulus plan. Our economy has been slumping for multiple years, it didn't start November of last year or January of this year.

Did anyone here expect the economy to recover six months after a new president is sworn in? There are no quick fixes in macro-economics. Did anyone here expect that a McCain-Palin administation would have righted our listing ship using the same policies of the past eight years?

Making a claim that the stimulus bill has failed at this point is simply hyperbole and partisan rhetoric. You can point to GM, but is an automaker that has been failing for decades an indicator of the US economy?

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JLM 5 years, 1 month ago

Any reasonable person would willingly concede that six months may be a pretty short time period in which to post grades --- granted. However a reasonable person would also note that it is 12.5% of an entire Presidency and that the President had a 60 day grace period until the Inauguration to study the situation.

Eight months after Pearl Harbor with a good bit of our Pacific fleet still wrecked, America launched its counteroffensive against the Japanese at Guadalcanal.

It is not just the results --- which granted may be just a bit premature, premature mind you not rejected out of hand --- but it is the quality of the planning, the decisionmaking, the fulfillment of the promises made and the leading indicators.

Unfortunately, even conceding that six months is a bit short time period, the initial indicators are not very good.

Job creation --- nonexistent! The absurdity of saying --- jobs created or "saved" GMAFB!

Actual government spending manifesting itself in the hinterlands --- not yet!

The transparency of the decisions made and the communication of the plans hatched --- clear as mud and as nasty a bit of political theatre as ever performed in Sodom on the Potomac.

Sales tax receipts --- going down, down, down!

Embracing and taking responsibility for the results --- not happening, still stuck in the adolescent "it's W's fault" blame game.

The GM saga will turn out to be a disaster entirely of the making of the Obama administration with its absurd "car czar" --- who has already resigned --- and it's "car committee" which has not a single real American car amongst their entire livery.

Sure, folks, six months is a bit short of a time period but still Johnny is starting to measure up as a bit of a dunce!

You cannot make war against the most productive segment of the economy and expect them to jump start, invest and create jobs. The current administration is arguably just not smart enough to see the obvious.

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bubba 5 years, 1 month ago

Just some Joe, I think you may have missed my point too. I do not disagree that it is too early to judge the effect of a stimulus, especially one that less than 10% of the total funds have been distributed from. Makens' point, and my point, is that the Keynesian model of large government expenditures aimed at strengthening the economy only work with a multiplier effect - that is, printing money without creating an incentive for businesses to use that money is unlikely to have the desired effect.

As far as GM and Chrysler, I do not think that saving or allowing them to fail would have had nearly the lasting impact on the economy as the way the bankruptcies were handled. For the economy to function properly and grow, there needs to be a supply of money available to lend to businesses, i.e. a properly functioning debt market. By putting unsecured creditors, unions etc. ahead of secured creditors, and taking it one step further by villainizing the secured creditors who had bailed out these companies last time they almost failed when they didn't want to accept the terms of the bankruptcy (which is supposed to be their legal right), the precedent set has made it a lot less likely that large investors will take on the bond issues that corporations need in order to fund R&D, create jobs, all those things that increase the tax base.

Similarly, I believe that many of the corporate tax ideas that have been floated in the past year have businesses scared to invest, windfall profit taxes, taxes on income earned and kept overseas, etc... As a business, even if the debt markets were functioning, which may or may not be the case, I would be very hesitant to borrow a bunch of money now to invest, knowing that if my investment truly pays off, I may be subject to an as yet undefined windfall profit tax, or a scaled capital gains tax, or any of the other ideas that have been run up the flagpole.

You may disagree with this point, but when you say 'Makens didn't even make a point' seems more like you missed it than disagree with it.

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Duke_bets 5 years, 1 month ago

seeuski - Why didn't you answer the question of your intelligence by LTFO? That was hilarious!

You bash Obama on every stance. Here's a solution.........Move to Canada.

You voted for Palin and continue to call Obama corrupt. That is irony at its finest. Your almighty dimwitted Governor of Alaska couldn't even finish her term. And, it's not because she is running for president in 2012. She will only be heard from in news reports involving scandal. Maybe an article or two in 'Guns and Ammo' on how to gut a moose.

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Matthew Stoddard 5 years, 1 month ago

The TARP money is only technically 10% spent, with a lot more to be put into use...if it gets that far. The bad part is a lot wasn't put to the most promising areas that would have helped the National level. I wonder even more if those states whose Governors turned away a lot of money would have been doing better had they taken it, but we'll never know that.

Jobless claims last week were 4000 more than expected (less than 1% of the expectation), but the estimate for July in total is supposed to be lowest since April, according to FOX News this morning. Of course, that means some people have stopped looking.

As for unemployment numbers, from SEP 2008 to JAN 2009, went from 6.2% to 7.6%, in a 5 month period. From FEB 2009 to JUN 2009, they went from 8.1% to 9.5%. Both 5 month time periods under a different Pres marked a +1.4% change.

Now, in Bush's first term, he inherited a Recession, supposedly, yet the last 4 months of 2000 had unemployment under 4% barely. When 9/11 came, unemployment didn't go up as far as it did this time, but it took til JUN 2003 (1.5 years approximately) to peak and another 2 years approximately to come back down to 5%.

As for GM & Chrysler...allowing them to fail would have had those unemployment numbers further up a lot sooner, with most likely a less of a chance to recovery thru bankruptcy as GM did.

10 Banks have already been okayed to pay back up to $68 billion of TARP money as of June. Goldman Sachs already repaid it's $10 billion share. 22 smaller banks have already repaid there share, although it's minor in comparison.

Just the facts. You can Google it yourself, if you doubt it. Heck- most of the info is from FOX News, even.

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JLM 5 years, 1 month ago

A recession is defined simply as two consecutive quarters of contraction in GDP. It is not a subjective assessment but rather purely arithmetic.

Obama does not particularly deserve any more or less responsibility for current levels of unemployment though he was in the Senate during the time period prior to his becoming President and he gets as much blame as any other Senator.

He certainly is responsible for the platitudes he spouted in his mad dash to pass the Stimulus and the grossly misleading assertion that the passage of the Stimulus would ensure that unemployment would not exceed 8%. An assertion that any responsible economist knew at the time President Obama could not possibly know.

The predicament of the car companies is also not President Obama's fault. The wheels had begun to come off some 20 years ago when the unions were able to strong arm managment into a death spiral of increasing pay and benefits as operations were becoming more competitive and folks like Toyota were regularly eating out of Detroit's rice bowl.

President Obama's responsibility began when he made the political calculation to support the unions and to "rescue" Detroit for what appears to be purely political motivations. The loss of over $25B in less than 90 days in the Chrysler and GM bankruptcies is simply folly.

The fact that Ford has been able to weather the storm shows the foolishness of the Obama Motors approach. Having spent $25B to avoid bankruptcy, the end result was the loss of that money and more in the bankruptcy court.

Perhaps the most damning act of the Obama administration was to hector the legitimate secured bond holders and to question their patriotism in discharging their fiduciary duty to their investors. Not only was that contrary to bankruptcy and securities law, it was a blatant attempt to feather the nest of the UAW which has essentially emerged in control of Obama Motors.

If employment was in fact the driving force, then the $50B would have certainly secured the continued employment of the entire Detroit work force and then some. Divide $50B into the 500,000 jobs which were at risk and see what you get --- a damn expensive cost per job supposedly saved.

Odder still is the realization that the reorganization plan for the "new" GM requires it to shed almost 55% of its employees anyway.

We are deep into an oriental face saving exercise here --- a damn expensive one to boot!

Worse still? GM's sales continue to slide.

Hell for $50B one should get some improvement, no?

Less than 24 hours after the President's press conference, it is fairly apparent that healthcare is not going anywhere any time soon. President Jimmy Obama is coming down to earth and it may not be a soft landing.

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seeuski 5 years, 1 month ago

Below 50% approval rating reported by Rasmussen. People are seeing through the smoke and mirrors.

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aichempty 5 years, 1 month ago

Deficit spending to ease short-term unemployment is a stop-gap measure that's comparable to stuffing the holes in the Titanic with money to delay sinking until rescuers arrive.

Depending on how fast the water comes in, it may work, and it may not.

Deficit spending is like any of us who get a mortgage to buy a house so that we control more value than we own. We don't have to save the money up front before we can live in the house. Expansion of our economy through credit and deficit spending is perfectly valid as long as we can eventually pay the bills.

The danger of putting all that money into infrastructure and temporary jobs is that it's like getting a construction loan to cover a house you're building yourself, and paying for the land, fees, labor, materials and also drawing a salary for yourself from the loan. When the house is finished, will you be able to make the payments? Not without a job, you won't. Your "job" disappeared when you finished the house and stopped drawing a salary from the loan. Now what? Foreclosure? Usually . . . .

Mr. YoMama is banking on the entrepreneurs and businesses recovering and transitioning those temporary jobs back into long-term employment. The stimulus money is a loan, distributed through government funded programs, designed to keep the whole engine of the economy running in the meantime. It's like borrowing money out of your bank account to expand your business, depending on being able to pay it back later.

The problem is that environmental regulation, taxes, placing a health care cost on small business, and all these other grand plans are hobbling the real ongoing businesses that have to prosper in order for this scheme to work. He's making it more expensive for real businesses that are already in trouble to do business, and if they cannot handle the extra burden, when the stimulus money runs out we'll have some new roads and bridges and the same number of unemployed people in the end, plus a huge government debt to service.

So, Obamanomics 101 is in session, and we'll see if works in the real world somewhere down the road. At least the rotten economy is keeping energy costs down, meaning that the unemployed are carrying the burden for those of us benefiting from cheaper oil prices.

However, with the minimum wage going up today to $7.25, the unemployed will be getting a raise when they eventually find a job. This is like the "underwear gnomes" on South Park. Phase I was, "collect underwear." Phase III was, "profit." How Phase II ties them together, and what it turns out to be, is the problem.

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JLM 5 years, 1 month ago

The primary flaw with Obamanomics is that you cannot tax and make war against the slice of America which is supposed to create the jobs. Not if you really want to succeed?

The secondary flaw with O'cs is that the Porkulus itself is not working and is not going to work if it is being deployed on Congressional pork projects.

Mid-term grades are coming in and GDP and sales tax figures are indicating failing grades for the O-zer.

Not something to gloat about but guess what --- governing philosophy and bottom line executive do appear to matter.

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seeuski 5 years, 1 month ago

I just wonder if anyone else out there is as curious as I am as to why the Dems started talk about an additional stimulus package? A couple of days ago we had that moderate voice of the NY times, sarcasm added, Paul Krugman saying that we needed a larger stimulus echoing what many Dems like Pelosi was parroting. Obama tried the good cop role by telling us he would be against it but it wasn't too long ago in a TV interview Obama said we had no money "we are broke" he said. So the constant media talk of the 90% of the supposed stimulus package that has yet to be spent is where? The suspicious aspect of this is the firings of the IG's, especially Walpin, who uncovered a million bucks of the money in the personal hands of Kevin Johnson. I believe that is the tip of the iceberg. In other news: Our dear leader today spoke of his idiotic statement regarding Sgt. Crowley and could not succumb to an apology for his accusations of the Sgt. "acting stupidly". That is just what we need as PUTUS, the first Black president elected in large part by a majority of whites creating an OJ style of tension amongst Americans. He should have given half the apology he has been giving to our enemies around the World on the Global Apology Tour.

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seeuski 5 years, 1 month ago

Instead of blaming the media. Mr. President, sir, those words were yours not the medias.

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aichempty 5 years, 1 month ago

If this gentleman had returned home and found his place ransacked because nobody cared enough to call the police when they saw someone forcing their way in, what would he have said?

Unfortunately, Sir, the face of crime in America is very often black and that's not the fault of the victims now, is it?

There are millions of respectable people of all races who get caught in situations like this with police, and anybody who thinks that the average cop is not going to deal with hostility from them with suspicion is naive. There could have been a dead body in the house. Unusual actions generally are related to an unusual situation, and this dude in Mass was the only one who knew what was going on when he started breaking into his house. Why not call a locksmith? What's the hurry?

The problem is racism alright. Black racism that claims a special privilege due to past oppression while at the same time the faces on the news of people committing violent crimes happen to very often be black.

This guy should give thanks they didn't chase him home and taser him in his bedroom. That's what would have happened if he had claimed to be a white alcoholic woman fleeing from a traffic stop, right?

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seeuski 5 years, 1 month ago

I can't wait to hear the tape of the incident that was made when the Officer keyed his mike. Obama is going to have to apologize and not continue to duck and weave by saying both men reacted improperly. The Officer showed extreme patience after having the moron Professor insult his mother, what a chump. Still waiting though for a statement from Obama's Pastor, Mr. Wright.

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seeuski 5 years, 1 month ago

Ha Ha Ha. Good one jk. Sorry things are not going so well for your choice in POTUS but we warned you this kind of stuff was coming before the election. And if you think I am ranting in comparison to the personal attacks by the left here, well sorry, my apposition to what is going on will continue. Your post is an example, attack the messenger personally because you have no valuable retorts. But its fun.

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JLM 5 years, 1 month ago

This Gates incident is a perfect example of the reverse racism which is practiced by black elitists, the sense that they can say or do anything because they are entitled to deference and special handling because of their race.

The police officer was attempting to safeguard the property of the professor and the professor escalated an understandably confusing incident into a racial malestrom because he wasn't treated with the deference he believes he is entitled to as a black Harvard professor.

What honest and forthright person would take offense at a police officer in this situation wanting to ascertain one's true identity.

President Obama showed himself to be cut from the same bolt of cloth with his absurd knee jerk defense of his friend while attacking the police officer who was simply doing his job and apparently doing it quite well.

Then Obama says they should all have a beer together. I think I now understand how Obama intends to handle Iran's madman, eh? LOL

"OK, so I called you a stupid racist, can't we just have a beer together?" Hahahahahaha!

Racism is alive and well in Harvard and the White House. Good on you, Officer Crowley! President Obama is just another well educated black elitist who thinks he is entitled to special treatment simply because of his race and that the failure of white America to provide such deference is proof of racism. Sheesh!

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seeuski 5 years, 1 month ago

trump, When I have the time I will search out the Republican Bills that have been shot down by the Dems in regards to health care reform and post them here for you. Your response is a common one in this debate and there is answers to your question. Until later, enjoy the day.

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seeuski 5 years, 1 month ago

Duke, Mr. online English teacher and key stroke correction agent. Or, Mr. know nothing left wing hater. I'd say the latter.

Obama is still "The Worst President in the History of the USA".

Dukey's feeling is, "Obama is the Greatest Dear Leader in the New USSA"

Are we covering enough ground in your childish style of personal attacks? Or shall we go further?

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trump_suit 5 years, 1 month ago

Actually in this case I agree with much of JLM's last post. As I have tried to put forth, the insurance companies have been allowed to divide us into groups that they want to assign different levels of risk to. Why is it the small business health policies cost so much more than large companies with the same coverage?

Bringing the gov't into it will not gain us anything but another large entitlement program. What is needed is an effort to get costs under control with torte reform and some of JLM's ideas above.

The bottom line is that insurance companies should be required to treat all Americans the same with the same risk factors and costs when assigning premiums and let the consumer choose his/her level of insurance coverage.

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seeuski 5 years, 1 month ago

Right on trump couldn't agree more. Stoddard, it is difficult to comment on a Bill of over a thousand pages that has not been read by most people, including the President. But there are some provisions that have been reported on and one that I have seen commented on by a Senator states that yes, we can keep our current policies but, if any changes are made to a policy which would require a change of coverage then you would not be allowed to re-up the private coverage and would then be forced onto the Government coverage. It also has a provision that forces all new enrollments onto the Government policy. The newest CBO report effectively kills Obama's claims that we will save billions in the immediate future. Why doesn't the Obama plan call for tort reform? This question alone tells me that it's all about political power by not upsetting the Lawyers Unions.

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Matthew Stoddard 5 years, 1 month ago

Seeuski- so where's the Conservative Bill to read? So far, I see a lot of Far-Right talk, but I don't see anything on paper. All I've seen is the nay-saying since Clinton's bill, but I've never seen the Republicans put forth their own bill, even when in control of Congress for 12 years. Not once...ever. (And the Medicare overhaul was more a status quo- while it brought some prices down, others went up. Nothing changed.)

They'll talk about it and say "We have to slow this down," and when it grinds to a halt, they walk away until the next time it comes up from the opposition instead of coming up with something real to oppose it. That's how the extremes on either side work, and the true lemmings allow it to happen instead of demanding action.

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trump_suit 5 years, 1 month ago

Matthew makes an excellent point here. The Republicans have lost much or all of their credibility on this issue by continuing to argue for "status quo" and let the free market reign.

The system is clearly broken and there should be some conservative ideas about how to fix it instead of the constant drumbeat of negative rhetoric about the Democratic plan.

Give us some viable alternatives and you might find some support. Leaving the current system alone is not an acceptable alternative.

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seeuski 5 years, 1 month ago

Lets take a vote Stoddard, I vote no on Government run Healthcare. What is your vote? Do you support changing our medical services as prescribed by this Bill? Even after the CBO twice last week said it won't cut costs?

The Republicans do have a plan: "Insurers in the state exchanges would have to offer plans that "meet the same statutory standard used for the health benefits given to Members of Congress." They would also be discouraged from "cherry-picking" patients; the bill calls for a non-profit, independent board to penalize companies who try to do so. "

http://www.cbsnews.com/blogs/2009/05/20/politics/politicalhotsheet/entry5028816.shtml

These goals and ideas aren't new, they have been debated in Congress and on campaign trails for years. The Republicans just want to prevent a huge welfare program that will tax us into a depression. Besides, I kind of like the Doctor/Patient privacy that currently exists. That would end with this plan.

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Fred Duckels 5 years, 1 month ago

JLM mentioned the Gates incident. Can anyone tell me how the leader of the free world got there by being completely ignorant of responsability, and the chain of command? O's first move would be going to the governor of Mass. and work down the chain and handle matters the same as any rookie member of any organization. This hip shooter does not have a clue, but then he is so busy campaigning that they have probably not had an organizational meeting yet. If O worked for me he would be in my office tomorrow morning to get a lesson on how an organization works. Any rookie making this mistake would need immediate attention.

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Matthew Stoddard 5 years, 1 month ago

The Patients Choice Act (not even in bill form yet...just a 13 page plan)

1) In 2005, the average Individual Policy was approximately $3600...not as low as the $2700.00 individual tax credit, not including the Out of Pocket expense. (This would be the Individual's total without employer payments- not what currently just comes out of your paycheck. Remember that part.) There is also nothing noted about Premium control, should Insurers come into this plan. That $2700 Individual tax rebate will already cost you more, and could end up costing even more for the Insurer to handle the higher risk cases. That could mean more Out of Pocket to the insured.

2) The plan offers no incentives for Insurers to join the State Exchanges. Why do that and have to accept the cases for elderly or more infirm at a lower rate if they don't have to?

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JLM 5 years, 1 month ago

What e-bay, CraigsList, Amazon, Costco and Sam's are to retailing is what the insurance industry needs --- a shift in the paradigm which refocuses the health care effort from one of the assumption of unendingly increasing health care costs to one of harnessing the power of the free market, creating purchasing cooperatives, getting rid of the administative middle man and inserting financial competition into the system.

There are already some interesting inroads being blazed.

Did you know that in many marketplaces the cost of an MRI is time dependent. Lower cost @ 4:00 AM than at 4:00 PM. I know I got a 4:00 AM MRI for $400 v a 4:00 PM MRI for $1600. And, I had health insurance.

There are many individual doctors who are forming executive practices (typically 300-500 patients) with prepaid fee arrangements (primarily with affluent individuals initially) which effectively cut out the administrative middle man (the insurance company). These plans typically cost $10,000 per year for unlimited doctor visits, two complete physicals each year, a wellness program and treatment with no pharmaceutical or surgery coverage. While $10,000 seems like a very large expenditure if you do not get sick that year, in the long run it may be reasonable.

What we do not need is to simply transfer the health care cost of the bottom half of America to the top half of America.

BTW, what government program in the last 15 years has been as successful as e-bay, CraigsList, Amazon, Coston or Sam's? Just wondering cause the government is asking us to re-create an entire industry from scratch and I was wondering if they had any track record do that? Hmmmm.

Trust the free market but remember it ain't free!

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seeuski 5 years, 1 month ago

Stoddard, Will you at least take a position? Are you ready to accept the Obamacare program? It would be nice to actually know your position on an issue rather than reading the centrifuge. Good night.

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Matthew Stoddard 5 years, 1 month ago

At this point, yes I am...until something better comes along. The Patients Choice Act is not that something. Do you support the that plan, knowing that the tax credit is less than the average person pays out? Of course, because you love your plan. But guess what? Free Market says that if the ones who join do have to increase premiums...others probably will just to "keep competitive," as the saying goes. So far, it's no-win situation. Both plans have their faults, but a public plan will really incite competition due to less overhead for advertising & bonus payouts.

Any plan that is good enough for the people I vote for, should be good enough for me.

And at least I'm reading what's put out.

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seeuski 5 years, 1 month ago

Ok so that is a yea kinda. The problem is that we only get one chance because once the Congress runs our Healthcare we will have no chance to take it back. Don't you have any misgivings as to why the Blue Dog Democrats are against this takeover? Could it be that this takeover mandates tax payer funded abortions? Could it be that this takeover will cripple the economy and the CBO has all but said as much? Could it be that this takeover mandates minority funded programs and Physician education? More of the spread the wealth reparations. No, I say I like what the Conservatives are putting forth on Health Insurance, not Healthcare disruption. At least if those proposals are put in action and we don't see costs go down we still have options. Keep the Congress off of my personal medical records and out of my life.

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Matthew Stoddard 5 years, 1 month ago

Conservatives are still looking at not covering everybody. That's part of the problem- those without health insurance still get treatment...just like now. So, you're already spreading the wealth to the non-insured thru your current medical procedures and will continue to do so.

And you don't want the Government in your personal medical records, but I guess you don't mind them on your phone calls? Just hope you aren't talking to your doctor on the phone, I guess?

And you have nothing to hide and no worry about pre-existing conditions with this bill, why do you care if the Government looks at your records. (Plus, that isn't in the Bill as it reads. You've been watching too much Hannity.) And it isn't about spreading the wealth- it's about spreading health care, unless only the wealthy should be healthy, in your opinion.

And it wasn't a "kinda." If these are the only 2 choices, I'm going for the Bill, not the Plan.

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seeuski 5 years, 1 month ago

Wow Stoddard, I think we'll just have to move on here I don't see any common ground. I did just post on another topic and will paste it here too:

Interesting, I just got done watching Dr. Gupta on CNN discussing the differences of what the Government plans cover against the private plans. Most private plans cover a colonoscopy the Gov doesn't. Lipid blood tests are covered every 12 months by private carriers and once every 5 years by the Gov. There were several other examples but the one that is most alarming was the procedure for determining who gets what. An Executive Commission that answers to the President will take 30 days for a review before they send their findings up the chain. No way, no how would I ever go for this sham.

That about sums it up for me and that is without all the other warts that go along with having the Government run our lives.

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Duke_bets 5 years, 1 month ago

seeuski - Did you replace your keyboard with one that is missing the 'period'? By the way, what's in your koolaid?

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JLM 5 years, 1 month ago

The Plan is very simply --- "free" health care for the bottom 50% paid for by the top 50% with the millionaires paying the most.

Just like the IRS and Federal taxation wherein the top 50% writes checks and the bottom 50% receives checks.

Maybe we can get the IRS to administer it too? Heck, they're a consumer friendly bunch of guys, no?

Of course, the implications of taxing existing company sponsored plans, taxing citizens for the value of their health insurance, taxing companies who provide no health insurance are all within the purview of the IRS --- so this is going to work real good, just like the IRS.

This is not "insurance" which deals with catastrophic events. It is not like automobile insurance in which the insured still pays for the basic operations and upkeep of the vehicle. It is a first dollar "free" healthcare program which will even insure an erection for even those with no skin in the game.

It is socialism. A pure form of socialism. An ill advised experiment in socialism.

And it will be administered by the government. Eventually every important decision as to your health and insurance will be blessed by a government official. It is pretty damn scary to me because I cannot think of a single government program which could hold e-bay, Costco, Sam's Club, Amazon.com or craigslist's jock.

It will not provide superior health care. It will provide health care the equivalent of English dentistry --- bad.

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Duke_bets 5 years, 1 month ago

seeuski - Talk about childish personal attacks. Were you reading my posts or yours.

I have never mentioned that Obama was my favorite. I'll let the next 7.5 years decide on his place in history. You are a hater of our current president because you were brainwashed by GW. You did vote for him twice, right? Then, you voted for Palin. And, your writing skills are far worse than most elementary children. So, how can anyone take your posts seriously? You bash everything with a Limbaugh type of comment.

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seeuski 5 years, 1 month ago

Stoddard, I think my phone conversations are fine and safe as I make no calls overseas and I have no terrorist contacts, unlike the current POTUS who hangs with the likes of Wright, Farrakhan, Khalidi, Shabaz, Ayers, Bakri, Odinga, Auchi, Rezko and others. Stoddard, If you feel having your personal medical records in the hands of politicians who would also be in charge of whether you receive certain procedures, well great. I am not ready to give up on that amount of privacy. And yes, this is a spread the wealth Bill, the reports are that tax payer money will go towards abortions and moneys will be directed towards programs that are nothing more than affirmative action and welfare. I am sorry but this is the hijacking of personal medical health and I am out. And why do you keep pounding the "only the wealthy" theme? No Hospital turns away needy patients and I would rather pay more in insurance premiums than taxes to pay for it. Will you please let me know what I can watch? I need those kind of controls so I won't go astray of the koolaid infomercial talking points. How sad, those that trust the media.

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Matthew Stoddard 5 years, 1 month ago

Why? What are you ashamed of in your medical history that it should remain secret, especially in light of the disabling of the pre-existing conditions clause?

And pay more with Insurance premiums than in tax? What's the difference, either way? Plus, odds are, your insurance premiums will go up at a higher rate than your taxes, considering that the past shows your insurance premiums will go up higher than your taxes will.

And you're right: no hospital will turn away anyone...including the uninsured, even those that can't pay. That is what causes medical costs (not insurance rates) to go up. That means more of your money will be needed for your own procedures due to escalating costs.

Doesn't sound like a winning situation to me, at least.

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JLM 5 years, 1 month ago

The privacy implications of medical information and international phone calls are a tad different. Just a wee bit.

If however when I get that lovely colonoscopy they find a terrorist up there, then yes they can root through my medical records for some other incriminating info. LOL

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Matthew Stoddard 5 years, 1 month ago

And, here's yesterday's CBO news: The Dem's plan WON'T cause all private insurers to go under. Far from it, in fact. That was a strong Far-Right talking point, too.

http://www.reuters.com/article/governmentFilingsNews/idUSN2754421620090727

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JustSomeJoe 5 years, 1 month ago

It's despotism when we lose, freedom when we win. We should have more confidence in the people and the country than this. One should think the opposition party should also have more charity to their political opponents who after all are contending with hideous problems bequeathed to them by : by : well suddenly Republicans cannot seem to remember who preceded Barack Obama in office. To listen to most Republicans, you'd think that the bailouts and takeovers started on January 20, 2009, not the previous March. You'd never know that TARP was supported by almost every Republican commentator, including the editors of National Review. Or that Vice President Cheney argued urgently in favor of the rescue of the Detroit automakers. Or that Fannie Mae and Freddie Mac enjoyed the backing of Republican as well as Democratic lawmakers.

One bad election converts conservatives from ardent admirers of the American people to glum declinists who can see only a miserable moldering of a once great nation. I should have thought that conservative patriotism was made of stronger stuff.

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seeuski 5 years, 1 month ago

Stoddard, After the first CBO report came out last week and showed that the plan would not lower costs but add to the deficits, Obama illegally calls Douglas W. Elmendorf into the Oval office and bingo, you have what you are now giddy over. Enjoy the koolaid.

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seeuski 5 years, 1 month ago

OK Stoddard, Here is a quote from the article about the CBO report you seem to like so much.

"The latest CBO analysis also said the healthcare reform proposal would increase budget deficits in the long run even though a proposed new tax on millionaires would help cover costs over the next decade."

The stuff you like are most likely:

"The analysis by the nonpartisan Congressional Budget Office said a government-run health insurance plan proposed by Democrats would not drive private insurers out of business, and most people would still choose to get their medical coverage through their employers."

More to come on that statement as the actual provisions in that bill come to light.

See ya.

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Matthew Stoddard 5 years, 1 month ago

So- you can't trust the CBO, is what you are saying? Or do you only trust them when you agree with them? Sounds like someone added a little vodka and formaldehyde to their own kool-aid.

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