Fiscal Policy
CBO: ObamaCare’s Gross Costs Over 10 Years May Be Nearly Twice White House’s Original Projections
Universal healthcare. A noble idea- if a nation can afford it.
As for “ObamaCare,” the more time that passes since the Affordable Care Act was enacted on March 23, 2010, the more expensive the projected numbers are getting.
Howard Sheppard reported on the website of Central Pennsylvania FOX affiliate WPMT FOX 43 yesterday:
The gross costs of the national healthcare law rammed through Congress by President Barack Obama will reach an estimated $1.76 trillion over 10 years – nearly twice the amount originally projected. The figure, which the Congressional Budget Office (CBO) revealed on Wednesday, is bound to cause embarrassment to the administration as it comes just as debate on “Obamacare” is starting to heat up again, two weeks before the Supreme Court is set to hear arguments on whether the Affordable Care Act is unconstitutional…
Original White House estimates said the gross cost of the healthcare act would be $940 billion over a decade, but the CBO’s new figures raise that figure to a shade under $1.5 trillion. For the 10 years from 2013-2022 that increases even further to $1.76 trillion.
(Editor’s note: Italics added for emphasis)
Back on March 1, I noted that according to a Government Accountability Office (GAO) report released February 26, ObamaCare will increase the long-term federal deficit by $6.2 trillion.
$6.2 trillion.
Considering the growing instability of the U.S. financial house of cards, one might wonder if the costs associated with universal health coverage won’t be the straw that eventually breaks the camel’s back.
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
Source:
Sheppard, Howard. “CBO: Obamacare estimated cost nearly double to $1.7 trillion.” FOX Central Pennsylvania. 16 May 2013. (http://fox43.com/2013/05/16/cbo-obamacare-estimated-cost-nearly-double-to-1-7-trillion/#axzz2TYdCQnzp). 16 May 2013.
CEO Survey: Illinois 3rd Worst State In Which To Do Business
Last week, Chief Executive magazine announced the results of its 9th annual survey regarding the best and worst states in which to do business. From their website:
In its ninth annual survey of CEO opinion about the best and worst states in which to do business, 736 CEOs—the highest response on record—rendered their verdict. Business leaders were asked to grade states with which they are familiar on a variety of competitive metrics that CEOs themselves regard as critical. These include: 1) taxation and regulation; 2) quality of workforce; and 3) living environment. The tax and regulatory grade includes a measure of how CEOs grade a state’s attitude toward business, a key indicator.
The best states in which to do business?
1. Texas (9 consecutive years now)
2. Florida
3. North Carolina
4. Tennessee
5. Indiana
Nice job Indiana!
The “Top 5” were unchanged from last year.
And the worst states in which to do business?
1. California
2. New York
3. Illinois
4. Massachusetts
5. New Jersey
Nice going Illinois. Second year in a row in that position.
The faster Illinois residents dump incompetent and ill-intentioned lawmakers, the sooner the state will be able to make headway on a number of real issues. Avoiding insolvency (somewhat of a stretch at this point) and job retention/attraction readily come to mind here.
By the way, our neighbors to the north- Wisconsin- climbed three spots in this latest survey to number 17. JP Donlon wrote on May 6:
More and more states are getting the pro-growth message. Wisconsin governor Scott Walker’s position is typical of this new thinking. “I’ve never seen a store get more customers by raising its prices, but I’ve seen customers knock down doors when they cut prices,” he says.
You can view the rankings of all 50 U.S. states on the Chief Executive website here.
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
Source:
Donlon, JP. “States More Aggressive in Competing With One Another.” Chief Executive. 6 May 2013. (http://chiefexecutive.net/states-more-aggressive-in-competing-with-one-another-2013). 13 May 2013.
Glenn Beck: ‘We Are The First Responders’
Glenn Beck, the conservative radio/television host, political commentator, and author, gave the keynote address at the National Rifle Association’s 2013 national convention that just wrapped up in Houston. Beck, who I actually met and spoke to briefly when I was in Dallas at the end of March for the FoodInsurance™ “Ready, Set, Prep” Summit, pointed out the following concerning the term “first responders” as he spoke about different firearms that “tell the story and teach the story of the 2nd Amendment.” From his speech:
9/11- Walter Reaver’s Revolver
September 11th, 2001. A moment in history that will define this generation. While victims were running away, men, were running into those buildings. Amazing men like young Walter Weaver, a member of the NYPD and an NRA life member. He was last seen in the World Trade Center trying to rescue people. He was in the lobby trying to free people trapped in an elevator. A servant fighting for the individual’s freedom until the very end.
After the towers fell and the nation mourned, we sifted through the rubble, this is all that was left as a reminder of Walter Weaver. A silent token of liberty.
Walter Weaver, I’m sure wouldn’t want to be called a hero.
He was simply an American.
He was an example of what we all should be—men, who just do the right thing when time calls our name.
When there is an emergency or trouble we are the ones that should run to help. We must be the action on the other end of the 911 call.
I don’t know, but I believe Walter Weaver would tell you that he wasn’t trained to be hero by the police academy.
But he was raised in a culture that taught him about self-sacrifice and to always do the right thing, even when no one else is watching. He had those things long before he wore a uniform.
How many of us can say that.
Good cops, bad cop, it doesn’t mean you take all the badges. It’s the people, not the badge.
As good as the policemen in our country are. When you are in trouble the average police response rate is 8 minutes; most crimes take less than one.
If a responsible citizen with a gun had been in that movie theater in Colorado, or if members in the audience in that theater were allowed to bring their gun into the theater and not leave them locked in their cars, how many lives would have been saved?
How many of the mourning, children would instead have been able to spend time over breakfast with their mom or dad this morning if someone good was allowed to have a gun?
While our politicians from the local to the federal level have spent us into oblivion, and our public services are being obliterated and our police force is being cut.
I will no longer accept the media falsehood nor reinforce it by calling our brave men and women in blue on our cities and streets first responders. It’s time for America to recognize WE are the first responders.
They are the 2nd responders, we are the first responders.
When there is trouble let us be the first on the scene to help.
Let us be the first responder when someone is sick or hungry or frightened.
Let us be the first to share our bread with the hungry; Let us be the first to open our hearts to the homeless poor; Let us be the first to remove the yoke of injustice.
I don’t know what America will choose. But for me and my family, I choose to stand with courage. I choose to stand with selflessness. I chose to stand with God with Malice toward none and charity to all.
That’s who we are.
Forget what the media says, I know that’s who we are.
You can read Glenn Beck’s entire speech here on GlennBeck.com.
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
Peter Schiff On GDP Calculation ‘Makeover,’ Delaying Our ‘Day Of Reckoning,’ And Gold Speculators
Lots of catching up going on around here today. I just got finished watching Peter Schiff’s latest entry on The Schiff Report YouTube video blog. The CEO/Chief Global Strategist of Euro Pacific Capital zeroed-in on the “makeover” in calculating U.S. gross domestic product, delaying our “financial reckoning day,” and the situation small speculators may find themselves in after helping fuel gold’s price drop the other week. Regarding GDP, Schiff pointed out the following in yesterday’s video blog post:
When the government gets around to delivering the news for the second quarter, the U.S. economy is going to be quite a bit larger than it was during the fourth quarter. Now, it’s not going to be because we’re actually more productive, it’s because the government is going to launch a brand new methodology for computing the GDP. They’re going to change the way they’ve been doing it all these years. And they’re going to start to include a bunch of things that in the past, they never included. They’re going to include things that no other country includes when they calculate their GDP. And as a result of this makeover, these brand new additions, I think instantaneously the U.S. economy is going to be 3 percent larger. That’s a big number. It’s like 4 or 500 billion dollars of GDP is going to be conjured out of thin air just based on the change in the methodology for computating GDP.
You know, this is what the government does. They change the way they compute statistics. Unemployment’s too high? Okay, we’ll calculate it another way. Now it’s not as high. Inflation’s too high? Wait a minute, let’s find another way to calculate the inflation rate. Oh look, we’ve solved the inflation problem- there’s not that much inflation.
Now, the government wants the economy to appear bigger. Why? Well, because it makes the debt-to-GDP look smaller. A lot of people are talking about debt-to-GDP now. Well, if they can make the GDP larger by figuring out another way to calculate it, well now they can make that ratio appear better.
Also, people are talking about government spending as a share of GDP. Okay, let’s make the GDP larger, and that means that government spending has now come down as a share of this larger number.
Schiff, who correctly predicted the U.S. housing bust and “Panic of ’08,” had this to say about the coming U.S. financial crash:
The fact of the matter is, governments are borrowing too much, they’re printing too much, they’re spending too much, and it’s all in a vain attempt to try to artificially stimulate an economy that’s been overstimulated, and to delay the “day of reckoning.” And the problem is, the longer they delay it, the more we have to reckon with. And, ultimately, we’ve going to have to pay a huge price for the fact that we didn’t deal with these problems sooner, rather than later.
“Slow ‘growth’,GDP makeover, Keynesians demand more debt and inflation”
YouTube Video
Finally, Schiff, who’s also the CEO of Euro Pacific Precious Metals, talked about gold’s recent price drop, who he thought was behind it, and what may be in store for them. From the video post:
I think the major selling in the metals market has come from the small speculator that trades on the futures market, that trades on the ETF. That’s where all the selling has been. The small speculators. I don’t think the larger investors have cashed in. They’re probably holding on. And the real buyers, the buyers in the physical market- who are not just trying to jump on a moving train to try and catch a small move because they want to get in on something that’s going up- the physical demand has been ongoing and consistent for years. But you have had some of the “Johnny Come Lately” hot money among smaller speculators. They’ve jumped on, they’re the ones that have sold, they cashed out. In fact, I think you have a lot of small speculators that are now short gold, that sold into the lows, and that are holding onto these positions with losses. And we’ll see how long they can hold those losses as the price moves higher and we turn up the heat. I think a lot of those people that were quick to short the market are going to end up covering at much higher prices.
Good insights as usual from this “crash prophet.”
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
(Editor’s note: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein)
City Of Chicago On Review For ‘Possible Downgrade’ By Moody’s
“We still have a very strong bond rating. Our fiscal position is getting better every year and we are aggressively managing our liabilities and obligations.”
-City of Chicago Comptroller Amer Ahmad, July 20, 2012, as noted in a July 22, 2012, Chicago Sun-Times article
I’ve been warning Survival And Prosperity readers for some time that the City of Chicago’s finances are not as peachy keen as City Hall would like outsiders to believe.
So much so, the City’s credit rating is on review for a possible downgrade by Moody’s Investors Service. From the Moody’s website earlier today:
Moody’s has announced its final approach to the way it will analyze and adjust pension liabilities as part of its credit analysis of state and local governments. These changes reflect the rating agency’s view that pension obligations are a significant source of credit pressure for governments and warrant a more conservative view of the potential size of the obligations. As a result of this new approach, Moody’s has also placed the general obligation ratings of the cities of Chicago, Cincinnati, Minneapolis, and Portland, OR, and of 25 other US local governments and school districts on review for possible downgrade. The entities whose ratings have been placed on review have large adjusted net pension liabilities relative to their rating category…
Moody’s rates over 8,000 local governments in the United States. Less than 1% of those with general obligation or equivalent ratings have been placed under review because of the new pension adjustments.
(Editor’s note: Italics added for emphasis)
Great. Chicago is in another “select group” it really doesn’t want to belong to these days.
You can read the entire announcement on the Moody’s website here.
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
Quote For The Week
Elections should be held on April 16th- the day after we pay our income taxes. That is one of the few things that might discourage politicians from being big spenders.
-Thomas Sowell (American economist, social theorist, political philosopher and author. 1930- )
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
Lake County Paper Ridicules Cook County Gun ‘Control’
Going forward, I’ve got to remember to read the Lake County News-Sun’s “Talk of the County” section more often. From the website of the Waukegan, Illinois-based paper last Friday:
Cook County
Cook County has added another tax to penalize legal gun buyers while the criminals continue to break any and all gun control laws.
Yep. Our neighbors to the north pretty much nailed it on the head.
And how about this gem:
Haw, haw
This has to be the grandest April fool joke that the world has ever heard of, or someone is going nuts beyond remedy. President Obama has declared April as National Financial Capability month. Unbelievable! Haw, haw. How incredulous coming from someone who cannot even prepare a budget and who spends borrowed money as if he were leaving the planet!
Funny but sad at the same time.
Especially since, if I recall correctly, President Bush the Second had the same problem when it came to spending.
Haven’t you heard? The nation does have a spending problem.
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
Source:
“Talk of the County.” Lake County News-Sun. 5 Apr. 2013. (http://newssun.suntimes.com/news/19270481-418/talk-of-the-county.html). 10 Apr. 2013.
Illinois Public Pension Funding Gap Now Over $100 Billion?
It’s been depressing to watch the public pension funding gap keep growing here in Illinois.
The last time I blogged about the subject (March 4), the unfunded debt to the five state pension systems amounted to $96.8 billion.
When I first reported on the public pension crisis on April 28, 2011, state employee pensions were underfunded by more than $80 billion.
And this weekend, I saw on the Crain’s Chicago Business website that the pension shortfall has now passed the $100 billion mark. Paul Merrion wrote this weekend:
Sometime this month, Illinois probably exceeded $100 billion in pension debt, a sorry milestone in the state’s long slog to fiscal hell.
Illinois would be only the second state to reach the 12-digit mark. But California, the previous epic fail, has a much larger tax base and is on the mend.
Pension statistics tend to make eyes glaze over, and the $100 billion moment is an unofficial, back-of-the-envelope calculation. But it’s an undeniably big and potentially symbolic number as state legislators wrestle with the shortfall in money owed to current and future retired teachers, judges, state workers and even lawmakers themselves.
(Editor’s note: Italics added for emphasis)
“A sorry milestone in the state’s long slog to fiscal hell.”
Nicely-worded. And something the state’s residents really need to digest, seeing that “every man, woman and child living in Illinois” is on the hook for $7,767 for this debt according to Merrion.
I’ll tell you one thing. Hearing this latest fiscal faux pas makes me question the wisdom of buying a home in the state this spring considering what looks to be coming down the pipeline. Which sucks, because rents are astronomical for suitable property in the areas where my girlfriend and I prefer to live.
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
Source:
Merrion, Paul. “Illinois hits a sorry milestone.” Crain’s Chicago Business. 25 Mar. 2013. (http://www.chicagobusiness.com/article/20130323/ISSUE01/303239976/illinois-hits-a-sorry-milestone). 25 March. 2013.
Chicago Fast Becoming Undisputed ‘Gang Capital Of America,’ Needs More Police On Streets
“Illinois is number one per capita in gang membership for population. We have more gang members in our state, it is a long-term economic threat to our future.”
-U.S. Senator Mark Kirk (R-IL), in a phone interview with the Chicago Sun-Times that appeared on their website on March 15, 2013
Last Thursday, Chicago Mayor Rahm Emanuel unveiled the “Chicago Plays” Playground Program, where the Chicago Park District will rebuild, repair, and refurbish 300 playgrounds in neighborhoods across the city over the next five years using capital funds.
On Saturday, the Mayor announced more city dollars will be used to develop seven targeted Chicago neighborhoods through a new “Opportunity Planning” initiative.
Now, these sound like terrific projects. However, as Chicago is increasingly-seen as being a “war zone” these days, posing a real threat to the local economy (tourism, businesses) and the retention of residents, wouldn’t it make more sense that municipal funds are concentrated on combating violent crime first?
A serious effort to address the manpower shortage in the Chicago Police Department is probably a good place to start, with more cops on the streets (paid via overtime) possibly contributing to the historically-low number of murders in Chicago last month.
Otherwise, should crime be allowed to run rampant, the proposed developments may end up being pointless and those rebuilt, repaired, refurbished playgrounds might be empty, save for some gangbangers watching over their turf.
And Chicago has plenty of those around these days.
Consider the following from the website of Chicago Crime Commission, an independent, non-partisan, civic watchdog organization of business leaders dedicated to educating the public about the dangers of organized criminal activity, especially organized crime and street gangs. Talking about their recent publication, The Gang Book 2012, a comprehensive compilation of data and information concerning street gangs in the Chicagoland area, the Commission said:
There are an estimated 70 to 100 gangs in the Chicago metropolitan area with a membership of between 68,000 to over 150,000.
“Over 150,000”
Back on March 2, 2011, I blogged about DEA and local law enforcement estimates of there being over 100,000 gang members and 75 to 100 street gangs in the Chicago metropolitan area.
Speaking of the Commission and their book, there’s this from Wikipedia:
The newly released Chicago Crime Commission publication, “The Gang Book 2012”, conveyed the statistic that Chicago has more gang members than any other city in the United States: 150,000 members. Traditionally Los Angeles County has been considered the Gang Capital of America, with an estimated 120,000 (41,000 in the City) gang members.
Chicago has a higher rate of gang membership per capita than Los Angeles. The state of Illinois has a higher rate of gang membership (8-11 gang members per 1,000 population) than California (5-7 gang members per 1,000 population).
Sounds like Chicago is making good progress in wrenching away the title of “Gang Capital of America” from L.A.
I hear it being said more and more these days:
Chicago has a gang problem, not a gun problem.
I have a feeling City Hall realizes this already- but won’t take significant action on it for a number of reasons.
In which case, Chicago should prepare itself for becoming the undisputed “Gang Capital of America,” and eventually realizing that economic threat- among others- which Senator Kirk warned about.
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
Illinois Governor Pat Quinn Goes After Corporate Tax ‘Loopholes’ To Pay Bills
“Thirteen area companies say they may cut more than 1,100 jobs in the near future, according to the state’s Worker Adjustment and Retraining Notification (WARN) Act report for February.”
-Chicago Tribune, March 5, 2013
Yesterday, Illinois Governor Pat Quinn proposed a $62.4 billion budget for the State of Illinois in 2014. Ray Long reported on the Chicago Tribune website Wednesday:
Quinn also proposed whittling down the state’s $10 billion backlog of unpaid bills by closing what he calls corporate tax loopholes, a move that business groups say amounts to tax hikes on them. Quinn suggested suspending three so-called loopholes that bring in $445 million a year: the federal production activities break, the non-combination rule and the foreign divided allowance.
(Editor’s note: Italics added for emphasis)
From a transcript of the governor’s budget address to the Illinois General Assembly:
Over the next 12 weeks, we should work together to enact legislation that suspends unnecessary corporate tax loopholes and dedicates the resulting revenue to a new Bill Payment Trust Fund.
For example, we should suspend the Foreign Dividend corporate loophole. We should also join other states that have decoupled from the Federal Production Activities loophole. And we should suspend the Non-Combination Rule that allows big corporations to shift their income to locations outside Illinois. Together, these three loopholes alone cost our treasury about $445 million per year.
Suspending corporate loopholes like these until the bills are paid will be good for our vendors and good for our economy.
You know what’s “good for our vendors and good for our economy?” Legislators in Springfield not spending taxpayers’ hard-earned money like drunken sailors. Illinois, like Uncle Sam, has a debilitating spending problem. If the state didn’t spend so much, it might be able to afford to pay its vendors.
Governor Quinn added in his budget address:
Why should we give costly, ineffective loopholes to some of the biggest and most profitable corporations on earth, when we have bills to pay?
Maybe because the jobs these corporations provide are desperately-needed by your constituents? The state’s “official” unemployment rate was 8.6 percent at the end of last year, significantly above the national rate. These days, the “Land of Lincoln” is fast-acquiring a reputation for being bad for business (raising corporate income taxes 46 percent at the beginning of 2011 can have that effect), with our neighbors only too happy to poach companies looking to move to this part of the Midwest or in the start-up phase. And with the businesses go the jobs.
Does it really make sense to pursue “a move that business groups say amounts to tax hikes on them” in light of all this?
After all, if these loopholes are really so evil and detrimental to the State’s bottom line, why would the Governor propose to suspend them only “until the bills are paid?”
Rather than becoming even more business-unfriendly, the State of Illinois, its vendors, and its constituents are better served by a reinvigorated program that attracts, grows, and retains business here. Financial incentives will almost certainly play a role in this initiative. And with the businesses now come the jobs. Along with the tax revenue to pay off our “tab” from all that drunken spending over the years.
Keep on antagonizing the private sector, and the state will continue on its present course of becoming one giant ghetto smack dab in the middle of the Midwest.
You can read Governor Quinn’s entire 2014 budget address here.
By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)
Source:
Long, Ray. “Quinn blames lawmakers for inaction on pension reform.” Chicago Tribune. 6 Mar. 2013. (http://www.chicagotribune.com/news/politics/clout/chi-quinn-blames-lawmakers-for-inaction-on-pension-reform-20130306,0,971611.story). 6 Mar. 2013.
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