Tuesday, August 11, 2009

The Arrogance of Government Spending

If you ever want to see a troubling dichotomy in our economy, look no further than the spending behavior between the private and public sectors. Right now, the private sector is now immersed in "thrift". The topics of consumerism and personal finance are now top-heavy with information and news about "how to save money". More and more folks are turning to frugality and trying to find ways to cut costs and reduce expenses. The major exception is government. Government spending at almost all levels are still too high. The federal government is the worst with trillion-dollar spending gone wild. Even beyond policies that affect all of us, our political leaders are spending more on themselves personally than ever before. I immediately think of an example:

During late 2008, our congressional leaders were basking in the media limelight by scolding auto industry executives for using private jets especially at a time when billion-dollar bailouts were being debated. But...

During 2009, those same politicians are now pushing to spend $550 million of taxpayer money to acquire private jets for their personal travel usage. More lavish travel and lavish entertainment while those actually paying for it are struggling. What expensive hypocrisy!

There are many solid reasons why the public is angry at politicians and disgraceful, lavish, excessive spending is a primary reason for the justified angry and outrage. The arrogant politicians are squandering the nation's resources at a time when our economy is struggling and millions are dealing with financial pain.

Millions are dealing with financial hardship, bankruptcy, foreclosures and tighter budgets yet our leaders are living lavishly and spending trillions without care or consequence. The payment of these trillions will have to be painfully inflicted on taxpayers and consumers and their children and grandchildren.

Congress and the President should use these tax-payer funded jets to go to Zimbabwe to see what could happen when exorbitant spending and inflating go too far. Remember this when they say to you "Aw gee...we have deficits...we need you to pay more taxes".

It is a important to communicate our dissatisfaction with the politicians running Washington and many of our states and cities. Call them...write them...meet them. Our country needs it.

Paul Mladjenovic

Tuesday, August 4, 2009

"Single Payer Option " is a fallacious idea

Many people like the proposal for what is called the "single payer option". This is the foundation beneath most universal healthcare proposals. Part of the false allure of the "single payer option" is the idea of alleged efficiency. In other words, why have adminstrative costs among many private options when there would be greater efficiency with a "single payer" and therefore less administrative cost. This is WRONG. Let's get some clarity about the "single payer option".

1). People like the idea of the "single payer option" because they think that SOMEONE ELSE will pay for their healthcare; the government. This is tied to the dangerous myth of something called "government money". There is no such thing. Any money that the government has really comes from 3 sources; taxes, borrowing and currency creation. Taxes is money taken by FORCE from the private sector (taxpayers). Borrowing is receiving money today from others (such as the Federal Reserve or countries such as China) and must be paid for in the future (with future taxes). Currency creation means that the Federal Reserve (our central bank) creates money out of thin air and provides it to the federal government or other institutions (this results in inflation which is really a hidden tax paid by consumers).

2) The "single payer option" claim to efficiency is, at best, misleading. What "efficiency" it may or may not generate in adminstrative matters is entirely irrelevant since the single payer option's cost would sky-rocket because it tremenedously warps supply and demand for health goods & services. You see, those that favor the single payer option do so from a "static" point of view and not a "dynamic" point of view. The dynamic point of view takes into effect the changes in behavior that will undoubtedly result as a consequence of the single payer option. If the public believes that they are forced to pay for healthcare and that the government will ultimately provide for the service, then this will stimulate demand and increase consumption of healthcare services. However, it won't stimulate supply. Therefore, even if the alleged administrative savings do mireaculously show up, it wouldn't matter since over-stimulated demand for healthcare would drive costs much higher than expected.

In the private sector, costs are better contained than in any government scheme for obvious reasons. Any company that lets costs get out of control would face eventual bankruptcy. Government costs, however, are FORCED upon others such as current taxpayers, future taxpayers or consumers. In the event that government does contain costs, it can only do so by FORCED rationing. In the long run, government-run healthcare ultimately fails.