Wednesday, October 22, 2008

How Obama's tax plan will destroy Social Security system.

Social Security was begun as a national retirement plan. Workers paid into this plan a set percentage of their income, beginning at 1% in the old days, and received a payout when they reached retirement age. Employers matched this contribution, much like a traditional retirement plan. There is an upper limit of income that is taxed, and a corresponding upper limit on benefits. Although not exact, there is a correlation between what's paid in and the benefits paid out. This made Social Security fundamentally different from a welfare program. This resulted in almost unanimous public support. Some Democrats have said that Social Security taxes are regressive. This is total nonsense. Contributions are capped, but so are benefits. If you raise Social Security taxes for upper income groups but not benefits, it is not a retirement plan; it will then become simply a welfare or “spread the wealth” plan.

Obama says his income tax plan will lower taxes for 95% of Americans. There is just one problem with this, 40% of Americans already pay no income tax. Obama’s response to this is that these people pay Social Security tax. Well, that's not income tax, but a contribution to their retirement plan. So if he wins and implements his tax plan, for the first time in the history of Social Security, 40% of the people who will get retirement benefits will have paid nothing for them. Social Security will then loose all pretext of being a retirement plan, and will become a national welfare program.

This will cause Social Security to lose public support in a massive way. If your retirement benefits have no correlation to your retirement contributions, it is just a welfare program. 60% of Americans that will then pay all Social Security payroll taxes will no longer support Social Security politically. This will be the death knell for the Social Security system, as we know it today. This should alarm everyone, regardless of his or her politics. If you support McCain, get out and vote. If you support Obama, and he wins, urged him to scrap this disastrous tax plan. Leave Social Security contributions out of income tax plans. If you take some peoples income taxes to pay others Social Security taxes, Social Security will be destroyed forever.

Tuesday, October 21, 2008

Can we afford the third war that Obama might bring?

Joe Biden's recent remarks that after Obama is elected, there will be a manufactured crisis somewhere in the world to test him brings up some interesting points. When a nation chooses a young and inexperienced leader, especially one that has a history of opposing armed conflict, it is only natural for America's enemies to choose this time to test us.

This has happened historically many times, not just to America but also throughout history. It happened when we elected John Kennedy and Khrushchev decided to test us with the Cuban missile crisis. It happened when England chose Margaret Thatcher as prime minister and Argentina decided that was the right time to test England. Margaret Thatcher was not young and inexperienced, but in the male-dominated macho world of Argentina, it was just assumed that a woman would not be a strong leader. If they had done their research they would have found out that she wasn't called the Iron Lady for nothing.

Part of this is of no fault of Obama himself. He can't control how old he is or how much experience he has. But part of it is the fact that he ran his whole campaign on the premise that we need to get out of Iraq quickly as possible. This could cause extremist groups all over the world that oppose our presence anywhere to attack us and hope that we leave. He will have no choice but to fight back, and fight back hard, to prove himself and prevent future tests. There is a very strong possibility that this could lead to another war that we don't really have the troops and the manpower to effectively fight right now.

Of course, Obama's supporters will point out that that he is almost exactly the same age and has almost exactly the same years of experience in government as Sarah Palin. Of course, there are two major differences, one she's running for vice president, not president and two she has a reputation for being a very tough fighter.

Although McCain's critics a point out that he might be a little erratic and have a bad temper, that is just the kind of leader that no one really wants to test. Nixon sought to convince the North Vietnamese that he was just a little crazy to improve his bargaining position. Somehow I can't help but think about Richard Pryor's attempt to convince his cellmates, in one of his movies, that he was insane so they would leave him alone.

One of the reasons that virtually everyone in the rest of the world wants America to elect Obama is they think that he will not be assertive on the world stage, and America's power and influence will diminish. And of course each of those countries hopes that partially they will be there to replace that influence. But I believe it is in interest of the United States that we choose a leader like McCain, who no one will dare test. An international crisis and possibly a third war are something we just cannot afford at this moment in our history.

Sunday, October 12, 2008

Obama McCain health care plans fact checked.

Most of the last two years we've seen Obama talk about his health care plan that he says would lower people's insurance premiums by $2500 a year. We watched him first discusses his plan in debates with Hillary, who had a slightly different proposal. Now it is time to put his plan and McCain’s under the microscope.

Obama's health care plan, that he says will lower premiums $2500 dollars a year per person, sounds wonderful. I as an individual pay about 6000 dollars per year for my health care plan. So, taking $2500 dollars off would be great. The key question of course is how to do this. If the government simply gave everybody $2500 dollars a year, for every man woman and child in the country, we would be talking about a yearly expenditure that exceeds the much talked about trillion dollar bailout plan.

As it turns out his plan simply involves the automation of medical records and other paperwork currently in the healthcare industry. An examination of his plan by shows some surprising results. His plan would in fact, lower health care costs, but by nowhere near the percentage he is talking about, and it would take 10 years to accomplish. In addition, there are upfront costs to implement the plan, which someone has to pay for. So the net savings in an Obama first-term would be negligible. In addition, when inflation in health care costs is taken in consideration, and the growth in health care costs usually exceeds the inflation rate, the most conservative inflation estimates would show that Obama’s plan at best, would slightly slow the increase in health care costs for a short time and result in no actual decreases at all.

I often wonder why Hillary and Obama, both in the Senate, simply didn't put forth a plan that would lower everybody's cost of insurance by 2500 dollars year. If it were so easy the plan would have pasted in the Senate a hundred to nothing. But there is no free lunch, and as Obama himself said previously in his debates with Hillary, if fixing health care were easy, it would've already been done. So unless Obama has some great secret strategy and again, if he's got some great secret strategy to do this why have we not heard about it in the Senate? Perhaps the conclusion has to be that he himself knows his plan will not work when put under the microscope of a Senate hearing. If there was an easy solution, he's right, it would have already been done.

McCain’s health care program is based around the elimination of what has been since World War II, the employer-based health care plan. Employers began to increase the benefits to their employees, like health care, because they couldn't legally raise wages. This system has developed over time into one in which most people rely on employers for their health insurance. McCain's plan would allow more individuals and not their employers to choose their own health care plans and to help pay for it, a 5000 dollar tax credit. The problem with this plan, is that most individuals are completely unqualified to compare one health care plan to another. These plans have page after page after page of fine print with exclusions on things that are paid for or not paid for. It is almost impossible for most people to make a reasonable choice of a health care plan without hiring a lawyer to look over the contracts and see exactly what is covered and what is not. Even if you could determine what's covered in each plan and what's not covered under each plan then you have to guess what illness you're going to get to be able to make any kind of reasonable decision on which health care plan was actually better for you. John McCain's plan depends on the free market to lower rates. The problem with this approach is that the free market lowers rates by putting those very exclusions of treatment into their contracts to lower their costs and therefore offer a plan that sounds good but costs less, so people will buy it. They'll find out that the plan doesn't cover whatever it is they needed for it to cover when they are in the hospital and it's too late.

Before consumers can reasonably be able to shop for health care plans, a major problem in the insurance industry needs to be addressed. If anyone is ever going to hope to be able to make a reasonable choice between competing health care plans, there must be some standards that all health care plans must meet. There must be a national minimal coverage standard so that everyone knows if they purchase an insurance policy, that policy will cover everything in those standards. Insurance companies could add benefits, like John McCain's debate mention of hair transplants, cosmetic procedures, etc, and sell premium or super premium plans at additional cost. But the consumer must know that if you purchased a health care plan, all basic health care needs are covered. People must be able to trust that if they purchase something in this country called a health insurance policy, and they get sick and go to the doctor then that is covered.

There must also be some standardization as to how insurance companies calculate deductibles, co-pays and maximum out-of-pocket expenses. These three items are the key to choosing a policy. Once you understand what a health care policy is, i.e. one that meets the minimum national standards to be called a health care policy, the next question that you have to ask is what you're co-pays are, what you deductible is and what your maximum out-of-pocket expenses are. These standards would tell a customer that a policy that has a $1500 deductible is, in fact, a better policy than one has a $2500 deductible. They would not have to hunt for some fine print containing coverage exclusions, or something else that makes what appears to be a better policy in actuality a worse policy for the consumer. The basics contained in a health care policy must be standardized. There must also be standardization in how insurance companies list and advertise the three basic components that can be used to compare plans, i.e. co-pays and deductibles and maximum yearly out-of-pocket expenses. Ever try to read the small print on the bottom of your TV screen during an insurance commercial? This standardization would let people look at a short summary and determine which health care plan is really best for them. Insurance companies would compete on the basis of their own internal efficiencies or inefficiencies, their level of customer service and the efficiencies or inefficiencies of their network of health care providers they contracted with to provide the services, but not on which services are covered and which are not in the standard plan.

Once the deductibles, doctor co-pays and out of pocket expenses are standardized and the minimum coverage is standardized, you can make a rational decision with a one-page sheet of information of which plan is actually better for you. Do you want a plan that has higher premiums but a lower deductible so that once you budged for your monthly premiums; your health care is covered? Or do you consider yourself a healthy person that wants to pay lower premiums with higher deductibles so that you would use your insurance for the worst illnesses and pay for more routine visits out of pocket?

This standardization would also greatly reduce costs to health care providers. They spent an enormous amount of time and resources trying to determine what procedures are covered, and getting paid for them by the insurance companies, for each of their patients and they’re many different plans. The enormous amount of paperwork involved in this today is a part of what Obama’s plan would computerize or otherwise automate. But why not eliminate it instead of automating it? Your doctor should spend his time deciding how to treat you illness, not on how to classify it so it’s covered by your health care plan.

Saturday, October 4, 2008

Change you can trust, a slogan that could turn around McCain's campaign?

Change you can trust contrasts beautifully with change you can believe in.

Everyone wants change, only with a team that we can trust to implement it. If you're in a tough spot, you want someone to come to help you that you can trust, not someone you believe may want to help you.

John McCain, polls show, is rated as highly qualified and highly trusted. This slogan, change you can trust, reinforces this message.

It can even be added on to John McCain’s current slogan. Country first, change you can trust. Or perhaps Change you can trust that puts Country first. Or how about Change you can trust that puts America first

It implies without directly saying it that the other side is perhaps a little less trustworthy.

It also reinforces the message that in a time we are facing battle with Al Qaeda worldwide and two conventional wars, John McCain is a commander in chief you can trust to lead us to victory.

There are 30 days left before Election Day. Sarah Palin’s debate performance was good, but it's really up to John McCain to win.





John, are you listening???