Saving Money By Spending Money
By Greg Hunter’s USAWatchdog.com
Have you ever heard someone say they saved money by buying something on sale? An example would be saving $200 by spending $400 dollars on a new set of golf clubs that were on sale for 33% off. In the real world, spending money is just that– spending money.
When it comes to the health care plan, the President has said we cannot reduce the federal budget deficit unless health care costs can be controlled. The President wants to “save money” by insuring an additional 30 to 40 million people who cannot afford it. You cannot insure that many people for free, and it certainly will not “save money.”
Some estimates project the health care bill will cost at least $1 trillion over the next 10 years. I think that cost will be much higher because government programs almost always grow into bloated government boondoggles. Take Medicare and Medicaid for example, when they started in the 60’s, the two cost a few billion dollars. In 2009, they cost $676 billion.
President Obama spent most of yesterday trying to revive his health care legislation at a bipartisan meeting with Congressional leaders. I think Obama really wants to do the decent thing for Americans without health care. But let’s be honest, if this legislation passes, it will cost more for anyone currently paying for health insurance.
The ironic thing is, while the spending battle over health care continues, there is not so much as a mention of failed mortgage giants Fannie Mae and Freddie Mac. Combined, these bankrupt institutions represent more than $6.2 trillion in liability. (They were taken over by the government in 2008.) Things are going so well in the housing market the Treasury uncapped their $400 billion limits on Christmas Eve 2009. Now, the taxpayer is on the hook for an infinite amount of money for the continued bailout of Fannie and Freddie. This is something taxpayers have to pay for. The President and both parties in Congress are pretending this massive debt simply does not exist.
The word yesterday is the White House will not even address the black hole of Fannie and Freddie until next year (conveniently after the midterm election). Our leaders are sitting around trying to figure out how to spend more money on health care while there is more than $6.2 trillion in additional debt that is not reflected in any budget or even being talked about! Fannie and Freddie represent dire budget and deficit problems for America, and that discussion should take priority over health care.
This week, Yale Economist Robert Shiller said this was the worst housing market he has ever seen and that “it was totally supported by the government.” There is no doubt that Fannie and Freddie will be packed with even more debt to keep the housing market afloat. Meanwhile, at the end of today’s meeting, the President made a not so veiled threat to push health care through the Senate if there is no bipartisan legislation. In September, I wrote a post called “Prediction: Obama Wins Health Care, Loses Economy.” I am sticking to my forecast, but I hope I’ll be wrong. Mr. Obama seems to be hell bent on saving money by spending money. Now, if we can only figure out how to pay for all those “savings” and all the other debt, we will have it made.
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About the Author
Greg Hunter
Greg is the producer and creator of USAWatchdog.com. The site’s slogan is “analyzing the news to give you a clear picture of what’s really going on.” The site will keep an eye on the government, your financial interests and cut through the media spin. USAWatchdog.com is neither Democrat nor Republican, Liberal or Conservative. Before creating and producing the site, Greg spent nearly 9 years as a network and investigative correspondent. He worked for ABC News and Good Morning America for nearly 6 years. Most recently, Greg worked for CNN for shows such as Paula Zahn Now, American Morning and various CNN business shows.
A friend of mine has a great health care reform plan. All contagious diseases are treated free of charge to the patient, including prescription medicine. Any disease or illness that is not contagious, for example cancer or a broken arm, and you’re on your own.
In other words, let government concern itself with public health and those contagious diseases affecting public health.
We get rid of medicare or limit medicare to contagious disease and expand it to everyone.
I favor most of the health insurance reform advocated by both Democrats and Republicans. End cancellation based upon pre-existing conditions and definitely bring an end to the monopolies by allowing health insurance to be sold across State lines.
Even though I’m a smoker, hopelessly addicted I fear, I would fully support making cigarettes available via prescription only.
And while we’re on the topic of health care and drug addiction; it is long past time we stopped treating recreational drug use as a criminal justice issue and start treating it as a health issue.
And one more thing, I don’t friggin’ care if these ideas cost more or not. It’s just common sense.
End of rant.
Brad,
Rant all you want. Thanks for your comments.
Greg
Physcal insanity at its worst. This may just shake this nation apart. Texas – Yall keep this up and we are out of here.
Denny,
I used to live in Texas…Loved it! Texas is the only state that was once its own country!! Thanks for checking in on the “Dawg!!”
Greg
The debt monsters that surround us are many, and I think the government is silent on most for fear of civil disorder. Heard anything lately on the toxic assets re-named legacy assets in 2010? Given the OTC derivatives have created a notional debt 10 times global GDP, is there any reason one should not simply make the analogy that already, my dollar before is now worth ten cents?
To keep things in perspective, another useful reference is the federal government presently borrows roughly 45 cents on every dollar it spends. Would you feel comfortable if your personal budget was running that way?
The unfortunate truth is that it has to collapse to correct, as the powers at play will continue to refuse loss recognition.
Susan,
Good stuff. thank you.
Greg
“Some estimates project the health care bill will cost at least $1 trillion over the next 10 years.”
I don’t dispute the numbers, I am guessing you probably got that from the CBO (congressional Budget Office – bipartisan analysts). Why don’t you put here for your viewers that that is the source of your information? I’m guessing you don’t because you know that the CBO also said that the health bills were actually going to cut the deficit in the long-run.
“I think that cost will be much higher….”
You think? Again I am not disputing whether you are right or wrong I just don’t like this idea that all this “thinking” rather than looking at analysis done by professionals (such as the CBO) are not being taken into account when news goes out to our citizens.
I am not a Democrat nor a Republican but I have met people who are much more knowledgeable than me in different fields. I for example am a Marketing Professional that is my expertise. Rather than shoot bias to the people lets just report what the professionals say. Again lets take the CBO’s word that this actually saves our country fiscally in the long run.
Are you preaching that I rent a house rather than get a mortgage? Because gettign a mortgage puts me in debt for 30 years? No you wouldn’t say that because everyone knows that at least with a mortgage you are actually getting a house.
Max (email address: xxxemoppunkkidxx@. . .)
Let’s talk about your comment to me. First, this statement, “Why don’t you put here for your viewers that that is the source of your information? I’m guessing you don’t because you know that the CBO also said that the health bills were actually going to cut the deficit in the long-run.”
There have been so many estimates for the health care legislation, anywhere from several hundred billion to 2 trillion, that I chose the most common one, and that is $1 trillion over the next 10 years. As far as the CBO estimate that you say, “Rather than shoot bias to the people lets just report what the professionals say. Again lets take the CBO’s word that this actually saves our country fiscally in the long run.”
Let’s not! Trusting government projections is simply preposterous based on a history of wildly inaccurate costs estimates for big ticket programs. For example, this analysis is from Dr. Mitch Pearlstein, founder and President of the Center of the American Experiment, a nonpartisan, tax-exempt, public policy and educational institution. Pearlstein wrote in August of 2009,
“Medicare cost $3 billion in 1966. That was it, total. The House Ways and Means Committee at the time estimated that it would cost only $12 billion in 1990, a projection that took the committee’s best guess about inflation into account. Sure, inflation proved steeper than most anyone likely feared at the time. But still, Medicare wound up costing $107 billion in 1990, which was 890 percent more than predicted a sort generation earlier.” Remember this is “nonpartisan analysis.”
As I said in my post, Medicare and Medicaid are now $676 billion per year. It is an exponentially higher cost than the original government estimate. The same will be true for the current health care legislation, especially when you factor in all the “subsidies” for the 30 to 40 million people who cannot afford to pay for health insurance!
You also say you are a, “Marketing Professional that is my expertise.” With your email address being “xxxemoppunkkidxx@. . .,”what do you market?
Finally, this last graph in your email, where you wrote, “Are you preaching that I rent a house rather than get a mortgage? Because gettign a mortgage puts me in debt for 30 years? No you wouldn’t say that because everyone knows that at least with a mortgage you are actually getting a house.”
The latest housing figures released just last Friday from the National Association of Realtors report home sales are down 7.2 percent in January. In another report, prices are down an additional 10% in some regions of the country. Yes, with a mortgage you will get a house but how much of your down payment will be there in 2 or 3 years? People keep asking, is this a good time to buy a home? Yale Economics Professor Robert Shiller told USAWatchdog just last month in an exclusive interview, “Even if (interest) rates do not go up prices can still go down.” Guess what?—they did!
“Analyzing the news to give you a clear picture of what is really going on.” is boldly stated in the header of this site. It is what USAWatchdog is all about, and I am going to continue to do what I proclaim. Thank you for your email. I hope you continue to log on to the site.
Greg,
I realize looking back at my comment that it may seem as if I am completely for this bill. That I back the Democrats. I’m sorry that is not the case at all.
I am only saying that for me doing nothing is not the right way to go, and that I support a shake up in the status quo to a plan that does basically nothing.
I wish the bills were much less expensive. I don’t want government involvement as much as you want. In fact I want to see more free market principles.
Here are some points:
1. Cover from anti-trust legislation should be out.
2. No denying for pre-existing conditions
3. Everyone forced to get insurance on their own not through employers. (Believe me people would be a lot more angry at the health care costs if they were paying out of pocket the total amount of their care.)
4. The first and second most basic plan’s costs can’t rise more than inflation.
5. An insurance exchange online so people can go and compare plans
6. Tort reform
7. Buying insurance across state lines
8. If the same drugs are cheaper in Canada the government can allow businesses who sell here to buy from there.
9. Electronic health records
10. Medicare advantage out
Those are my main points.
I would also go as far as to say that if you wanted a radical cut in costs without government intervention we;
1. Cap the amounts of advertising an insurance company pays
2. Cap the amount of salary and bonuses and allow unlimited amounts of pay in stock to executives
3. Take out Medicare completely and put the elderly into the fray with everyone else, forcing the burden on our private corporations who in your mind apparently are better at dealing with costs.
4. Remove the insurance companies from the stock market. A business on the stock market thrives on the stock price going up. Stock price goes up on profits and revenues. In the end those actually raise costs to cure patients.
Again, I despise the way you set up your arguments but when you complain about government and don’t give real concrete money making solutions, you cannot complain either. That is why these are my ideas, these are what I tell my Congressmen, but for now with what I’m given I still support a shake up, and so I support the Democratic bills. A shake up brings in new players, new way of doing things, a new mentality. We aren’t exactly headed in a great direction now.
Remember government has to work for the people. If government can bring down medical payments for seniors through medicare it is a successful program. What we need to do is get rid of things that do not benefit us in a direct way (Tax cuts for oil corporations, etc.)
Max,
Thank you for your well thought out comment.
Greg
now that the ins. companies have raise there rates 30% are more. When the new health care becomes law. The price can come down 2% the politicians will say its saving money an the ins. companies just have more tax money an slaves.
Robert,
Good point! Thank for the comment.
Greg
Hello Robert,
Anthem BlueCross has been in the news here in California. A national radio host who is also a business and financial reporter stated that Anthem was forced to increase their premimiums because:
1. they had the lowest premiums in CA
2. their pool was decreased because young people who don’t get sick dropped their insurance leaving older people who use healthcare in the pool (the bad economy is forcing young people to stop paying for something they don’t use)
3. the state regulates Anthem and requires companies to have minimum reserves to cover payouts (we have an insurance commissioner who regulates all insurance)
4. Anthem’s profit margin is about 7%
5. Insurance companies use net profits to increase their reserves
6. Gov. Brown (moonbeam is now our Attorney General) is criminally sueing Anthem, et allia, because of the above.
Government creates a problem, and then demonizes all involved.
markm
Hello Greg,
You wrote: “Mr. Obama seems to be hell bent on saving money by spending money. Now, if we can only figure out how to pay for all those “savings” and all the other debt, we will have it made.”
Your satire is well taken. Your humor works because their is truth to what you wrote. Economics and physics are married to each other. The creation of wealth requires the judicious use of resources and energy. An economic endeavor that requires vast quantities of resources is a failed endeavor. To create wealth is to understand the science of physics.
I heard a ditty regarding some of the academics who populate the administration. It goes like this:
“An official from the Obama administration was dispatched to GM to order GM engineers to create a “Green” vehicle that runs on batteries, does not require electricity from the grid, has a range of 500 miles on one charge, carries an entire family and their luggage, and is very competitively priced. The engineers replied that the laws of Physics would have to be changed for GM to accomplish that. The Obama staffer replied: ‘which laws need changing as I will report back to Washington and get those things fixed for you!'”
Hello Brad:
Your health care compromise regarding communicable diseases is a good one. Would you include self-inflicted communicable diseases (STD)? I would not.
Hello Susan:
I like what you wrote. Unfortunately, I believe we need a collapse in order to correct the inbalances. California and Greece are the canaries in the mine shaft. A judge has ordered the Governator to repay state workers for illegally furloughing them.
markm
Mark,
Thank You for weighing in.
Greg
Hey Mark,
I reject your premise that “communicable diseases (STD’s)” are self-inflicted.
All the Best,
Thrash
Hey Brad,
Where did you get that quotation? It did not come from me! The vast majority of communicable diseases are NOT self-inflicted. That is a ridiculous statement as you cut-and-pasted it.
Except for people who are raped or being cheated on, STDs are self-inflicted.
Are we discovering a fundamental difference of opinion between you and I on the responsibility of individuals to take care of themselves and avoid the pitfals of life?
You need to pay for the consequences of your lifestyle, while I need to pay for the consequences of my one drink per day, no drugs, healthy diet, SCUBA diving, hunting, fishing, and travelling the world lifestyle.
markm
Mr. Hunter,
As always, great Coast to Coast show on 03/22. Love your website, as well.
Could not help but laugh at your story “Spending Money to Save Money”. The comment about the person who says he’s saving you money by buying a bunch of stuff on sale was good. You must be married. My husband likes to tell the story of his stepmom’s coming home after shopping one day, talking about how she “saved” all this money on this, that, and the other b/c she got it all on sale (about a thousand bucks in total)…and his dad’s responding, “I don’t think I can afford to keep ‘saving’ money like this.”
I keep hearing gloomy economic news. There are many things that will make the upcoming depression worse than the one from the 70s:
1. The concept of “I cannot afford this” doesn’t exist anymore. We’ll just keep right on running up bad debt. Jimmy Carter spoke of conservation and people did it; nobody’s preached that in ages.
2. Our entire economy in 1975 wasn’t based on people eating in restaurants and traveling a lot; we still made things then. You know, things we could sell.
3. My entire generation (born in ’73) and those who’ve come since don’t understand the idea of ratcheting down one’s lifestyle when times get hard. We have lived the ever-expanding life the early 60s politicians envisioned for the future. More, more, more!! Bigger, bigger!!
4. We don’t have the constitution/fortitude to face hardship. I mean, we younger folks. We can’t stand to see a dead mouse in a trap, so we probably don’t have the guts to kill (or die) for what we believe in, either.
5. Everything is now a “right”–nobody goes hungry, thanks to welfare, so we don’t know how to do without. We literally don’t know how to grow food, sell eggs, unknit old sweaters to make new ones, turn to our own families, etc., like our grandparents and great-grandparents did during the Depression.
Anyway, great show. Hope to hear you back on C2C soon.
PS I hope status symbols don’t make their way back. Sheesh.
Brigitte,
I like the way you think. Thank you for posting this comment!
Greg