A Careful Look at Issues

When it comes to saving health care costs, nothing beats dying young. Obamacare requires insurance carriers to ignore pre-existing conditions and health risks, with one exception. Being a meth addict or terminally ill will have no effect on an individual’s premiums, nor will a passion for base jumping or tightrope walking. But the line is drawn at smoking. Insurers, subject to state regulations, may tack on up to 50% of the unsubsidized premium on to an insured person’s insurance bill. Since the subsidy may be 90% or more, the effect is to increase the bottom line by up to a factor of ten in the worst case. The oddest part is that smoking actually decreases life time health care costs.

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Obamacare is now unraveling. Over five million people have lost their health insurance, and if they manage to log on to the government website, many are finding policies with twice the monthly premiums and twice the deductibles. Young people are being encouraged to sign up for expensive policies. They are told it would be foolish to be uninsured, so never mind the price. The question is then: At what price is health insurance not worthwhile? As President Obama says, it’s complicated. But for some, going without insurance is a better bet than it might seem.

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The election was a clear choice, and the people have spoken. The people want free birth control, free abortion, and free just-about-everything from birth to death. They want it paid for by rich people. What they will get is slow death by regulation. It’s inevitable. Legislation is in place to control banking, energy, health care, education, and a myriad of the details of life. The script for the next four years is bureaucracy producing a rising tide of regulations to consolidate control over peoples lives. Congress will provide sideshow distractions, but the main event will be the growth of bureaucratic power.

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Bill O’Reilly has been on a rampage recently complaining that because oil supplies are now ample, prices should be low. He’s had a couple of guests try to explain it to him, but he’s not one to sit still for a long explanation — or actually for a short explanation either. There’s not much chance Mr. O’Reilly will read my explanation, but I suspect many other people have similar misunderstandings so I’ll go ahead explaining anyway.

Vice President Biden created a stir in a speech in Flint, Michigan by claiming that by opposing the Administration’s latest Stimulus bill, Republicans would force cuts in police and as a consequence rape and murder rates would rise. Biden cited as proof what turned out to be bogus statistics on crime in Flint. Not only were the data faulty, the logic of the argument fails as well. Opposition to a particular program does not logically equate to opposing the goals of the program.

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There are a three elements to economic recovery: people must need to buy things, they must have the money to buy them, and they must be believe that that the future is worth investing in. Every economic downturn leads to people postponing purchases of new cars, new homes, and new consumer goods. After a while, we expect people to be compelled to catch up with purchases; the old car cannot be fixed and must be replaced, and so forth. What’s remarkable about the current poor economy is how little of the automatic bounce back we’ve seen. We look to the factors of money and confidence to explain the lack of recovery.

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Aug 30

Tax loopholes are not mistakes. Loopholes are incentives designed into the tax code to encourage behaviors that the government prefers. Home ownership is considered a good thing, so the interest on a home mortgage is a tax deduction. That makes owning a home more affordable, so home ownership is encouraged. The mortgage deduction is a loophole. The pattern of all loopholes is that they cause economic decisions to be altered away from some things and towards others. The tax code has over 60,000 pages, with each loophole designed to favor something deemed good, at least by the Congressman who managed to get the loophole included.

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The debate over raising the debt ceiling has passed, but the debt crisis will be with us for years to come. Unlike news of celebrity meltdowns and notorious crimes, the debt crisis has some tricky points that the press has not well explained. Everyone needs to know about debt ceilings and default and their consequences, taxing the rich, what the people really want (a miracle, of course), and the balanced budget amendment. There never was a danger of default, but the shape of the real problem has been left ill-defined by the press.

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Wind and solar power are expensive, realistically four to six times the cost of conventional energy sources. If we are going to convert to electric cars we will need lots of energy to make the batteries for the cars as well as to charge them. In a separate category, the global warming scare tries to impress upon us the need to avoid fossil fuels immediately for fear we all fry by 2010, or whatever the current date of doom. Underneath these discussions is the question of how much oil is left. When the oil equivalents like oil shale are counted, we have about 300 years.

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“Money should not go to Planned Parenthood because money is fungible and can be redirected to support abortion.” No, sorry, money is not fungible and government accounting rules see to that. “If Planned Parenthood is not funded, women will die because there is no other way to get health services.” No, sorry, there are many health service providers. The arguments echo the controversy over faith-based initiatives, in which Liberals argued that money given to churches for any purpose amounted to supporting religion.

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