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9/28/2009
Seniors must bear their fair share
Seniors must start paying their part. Ok. Someone has to say it. Someone – no, more of us - must call on seniors to pay their part for rapidly escalating health care costs. Those with the income to afford it – those above the same poverty standards the rest of the country will be abiding by when it comes to getting help with health care costs.
Enough is enough.
I’ll be characterized as a big bad ogre. Insensitive heartless conservative. Or soulless naïve blogger. I guess I’ve been called worse.
Medicare is falling apart, has projected liabilities in the tens of trillions, and the House voted last week to exempt still more seniors from scheduled Medicare B premium increases of $8 to $23 per month.
About 42 million seniors and people with disabilities are enrolled in Medicare Part B. By law, about three-fourths are exempt from premium increases when there is no increase in Social Security payments.
The Social Security Administration projects no cost-of-living increases for the next two years because the adjustments are pegged to inflation, which has been negative this year.
Most of the 11 million or so patients who are not exempt from premium increases are low-income people who also qualify for Medicaid. Among the rest who are not exempt, a little more than 2 million are high-income seniors - singles making more than $85,000 a year and couples making more than $170,000. Also, about 1.3 million new enrollees would not be exempt.
Without congressional action, the Medicare trustees have projected that standard Medicare Part B premiums would go from the $96.40 a month to $104.20 a month in 2010. The Congressional Budget Office projects premiums could go to $119.40. Is this too much to ask of middle and upper income seniors? What burdens are other Americans bearing in health care cost increases next year?
And the only Wisconsin U.S. Representative that had the moral courage to vote against more breaks for seniors was Paul Ryan, who has been very credibly railing for years about the pending (very soon pending) Medicare train wreck. So who’s going to pay the additional Medicare costs that the House advocates exempting hapless older folks from paying?
Charlie Rangel:
Our nation's seniors are already experiencing difficult financial times. The prospect that some may face a disproportionate increase in their Medicare premiums is inherently unfair. Dave Obey press release:
Because of the recession, many people are not getting an increase in their Social Security benefits for the first time in 35 years,” said Obey. Recipients who are not likely to get a cost-of-living increase (COLA) next year would have an added burden to pay for higher Part B premiums. But this bill protects them. “Without the offset, many would see their monthly Social Security check decrease as a result of the increase in Medicare Part B premiums. And of course, AARP gets into the act.
David M. Certner, legislative counsel at AARP, said, “It’s unfair to single out seniors to pay more for their health benefits when other high-income people are not being asked to pay more.” Nobody wants an increase. Always someone else is supposed to pay the bill. Who? Do seniors get it that it’s their children and grandchildren who will be tremendously burdened with these costs that are apparently more “unfair” to seniors than anyone else in America?
Jo Egelhoff, FoxPolitics.net
COMMENTS
Jo,
yes, seniors should pay more if they have the ability to pay. But remember that pandering to senior interests is a political necessity when there is such a huge amount of lying and scare tactics going on regarding health care reform. Real health care reform needs to address end of life care senior care which is hugely expensive and affects Medicare directly. But, try to even mention that reality and you're a dead duck. Also, remember that Medicare part "D" does not allow national bargaining for prescription medicine which most economists say could be one other aspect of savings. In short, raise the premiums to those who can afford it "yes", but lets look at the costs. The fundamental fact is that our "system" is
much more expensive than any other system on the planet and we get no significant benefit for this expense. Our system costs more because of a myriad of factors, most of which could be solved with proper legislation. Nibbling around the edges by increasing medicare premiums, tort reform etc are no better than rearranging the deck chairs on the Titanic.
dave allen (Mon Sep 28 07:45:02 2009)
Absolutely Dave, costs are the key. I've addressed the issue ad infinitum. And as you touch on, costs certainly must be part of the discussion surrounding Medicare - and end-of-life discussions.
Jo (Mon Sep 28 07:55:43 2009)
Jo, guess what? Don't give the seniors proper health care and the children will pay even more. Unless your parents are rich, of which there are not many of those left.
I don't know too many seniors who look forward to spending time unnecessarily in waiting rooms and doctor's offices, though I am sure there are a few.
But I do know of crafty politicians and indstry executives that have banded together to rape the public with things like a $780 billion drug giveaway program that protects the industry against having to negotiate for volume discounts on drug prices.
And then these same politicians holler and scream that "Medicare is going broke." Duh!
But you can't blame the politicians with a good reason, like Jim Sensenbrenner and his $5 million investment in Merck. :-)
That said, I do believe in means testing, even to the point of charging 100% of Medicare premiums for the very rich.
Jack Lohman (Mon Sep 28 08:06:34 2009)
What about all of us not retired people that have been paying into Medicare (matched by employers) for all of our working life and then may not collect a dime if we die before 65 or if we are lucky enough to live to Medicare still have to pay premiums until we die.
So if universal health care comes to pass, will we finally get to quit paying into Medicare or will we have to support two systems at the same time.
Edward (Mon Sep 28 08:16:55 2009)
This came with my recent Social Security Statement:Your estimated benefits are based on current law. Congress has made changes to the law in the past and can do so at any time. The law governing benefits amounts may change because, by 2041, the payroll taxes collected will be enough to pay only about 78 % of scheduled benefits.
I think the SS administration is hoping more people die before they retire because then they only have to pay a $250 burial allowance.
Would anyone be dumb enough to invest in a program that "promises" a -22% rate of possible return and that only if you live long enough?
Wait till they means test it and only give it to the truly needy. Too bad Teddy Kennedy never had his means tested.
Edward (Mon Sep 28 08:18:55 2009)
Jo....Sorry, you have it a bit wrong.
Seniors paid all their lives through payroll deductions. Now, after 65, and on Medicare, they still have to pay about $3,200 every year for Medicare and a supplement, which is needed, as Medicare only picks up 80% of the cost, which is only a fraction of the real costs that doctors, hospital, etc. charge. And besides that, there are out-of-pocket costs that Medicare does not pick up. So, it ends up, we pay about $4,000 annually....plus all we put in all our lives. Far from free and certainly we have, and are, paying our fair share.
John Hyland (Mon Sep 28 08:25:13 2009)
Edward, there is no perfect system. The extremes are to "do nothing" and "do everything." The current system is a crap shoot. You pay into the system and if fortunate enough you get to use it. If you die first, you don't. That's what "insurance" is, and we all face the same risk.
If universal health care were designed correctly it would cover everybody's care and we'd do away with Medicaid and BadgerCare and everybody would fall under an "improved" Medicare system (but have the option to buy things under the free-market cash system when not covered by Medicare, such as cosmetic surgery).
But don't you worry a bit, we will NOT do it right. It's going to be done by politicians who are in the pocket of the insurance and pharmaceutical industries. The conservatives will get their wish on this one.
Jack Lohman (Mon Sep 28 08:32:54 2009)
Just a quick comment about medications.
All the competition has resulted in medications going down in price. Walmart started it and others have followed. $4.00 for 30 day supply and $10 for 90 days for most all generics. The only break seniors really get, is on expensive drugs, not generics. That have to take the generic if available.
John Hyland (Mon Sep 28 09:07:07 2009)
Interesting article Jo as I fall into this category. However, Medicare and Social Security were not suppose to pay all expenses for Seniors. I know as I pay $143 a month for supplemental insurance $39 for Medicare D but I am in the donut hole and now its an additional $312 a month plus $243 for long term care. Add it up plus the basic medicare costs. Yes, I chose the supplement that pays all costs instead of paying 20% out of my pocket. I think we should lobby to let the states deliver health care following Dr. John Toussaint's talk here in Appleton and maybe we could get out of this national move which will already cost out children and grandchildren too much.
Carol Diehl (Mon Sep 28 09:10:09 2009)
Want to save money. Tort reform could cut the costs of health care by near 15%. Studies in states like Texas that have done it have shown this.
What makes it all very costly is Medicaid. And to think that nearly 1/3 of those uninsured are eligible for Medicare or Medicaid and have not signed up for some reason. Another 1/3 are upper income people and could by any insurance they may need but fail to buy. Then millons of young prople don't think they need any as they are in good health. Which leaves only 5 to 8 million would really need help. Not the 47 million that liberals have been hollering for years. We also have to allow oinsurance companies to sell nationwide and get more competition. Another cost saver.
So, Tort reform and competition could lower health costs by somewhere between 20% and perhaps even 30%. Then a small program for the 5 to 8 miilion uninsured and we solve all our problems. No need to trash the greatest health system in the world. "Keep it simple stupid" has been around for a long time and seldom used.
John Hyland (Mon Sep 28 09:59:32 2009)
Jack, I wouldn't call insurance companies and drug companies "conservative"--they are anything but! Surely you must know that all major companies have their Democrat lobbyists, and their Republican lobbyists--just watch "Big Sugar" online, and ask yourself if the sugar industry is anything different than any other big industry. IF the gov't stuck to what it was SUPPOSED to do--protect borders and protect individuals, THAT'S IT--we'd all be better off. No more redistribution of wealth. No more passing laws to favor giant corporations, and squelch the small guys with endless regulations. No more favors for businesses that should be allowed to fail. No more interference in minutiae.
For cryin' out loud, liberals always like to tell us about how evil capitalist bankers are...so why did "Bushama" keep sending OUR money to them, and keep the mistake that Dubya started, going!?! Congress changed hands in 2006, so why was it "business as usual"? Consider the comment made by in Dr. D. Graham re. the FDA: "With Congress I would be concerned that there could be a strong correlation there because Pharma is very bright. They fund as many politicians as they can. They get to the Republicans and the Democrats." Or how about this, written a year after a majority of Dems were elected: "A yearly flu vaccine has not been proven to prevent flu-related deaths in people over the age of 65, according to a review in the Lancet medical journal. Nonetheless, the U.S. Centers for Disease Control and Prevention (CDC) recommends the flu shot for this purpose, citing research about the 36,000 yearly deaths and 200,000 annual hospitalizations for flu-related illness in the United States. No studies have conclusively proven that flu shots prevent flu-related deaths among the elderly, according to the review, and some of the support for this practice is based on flawed data."
Now, just WHO really benefits from all these vaccines? It's certainly not the people who receive them but the MANUFACTURERS. The last big epidemic we had, I can't remember how many, (as there were so many), older people were admitted as inpatients, due to flu...and they all were vaccinated! How about this one from 2007: "On July 11, the U.S. House of Representatives passed the bill HR 2900, which grants additional power to the U.S. Food and Drug Administration (FDA) while at the same time ensuring deeper financial ties between the agency and pharmaceutical companies. FDA will actually be allowed to work with drug and biotech companies to develop and launch new drugs. In an unprecedented conflict of interest, the new law places the FDA “in charge of drug design, drug patents, drug licenses, and the creation of new marketing entities/companies.”" HMMM, didn't the Dems have a 31-seat majority in 2007?
As to what's going on right now, how about the proposed mandatory H1N1 vaccine? Swine flu isn't any different from ordinary flu, and the vaccine has not been properly tested! I don't know ANY of my colleagues that will get it! Even those who normally would get a flu shot! And the gov't wants to force KIDS to be the guinea pigs for an untested vaccine! All the swine flu hype is plain and simple, about creating a market for the drug companies' products! We all know who stands to win, and it's NOT the patients! Just read the following: "Pharmaceutical giant Baxter International announced on June 12 it has a patented cell-based technology which reduces the development time to 13 weeks, down from the usual 26. Baxter’s vaccine could be ready as early as this month. Baxter is nothing if not aggressive about getting their influenza vaccines to market. In December, a Baxter facility in Austria sent a human flu vaccine contaminated with deadly H5N1 live avian flu virus to 18 countries, including the Czech Republic. According to a report by The Times of India, the two viruses seem to have been “mixed in error.”[11] The report continues, “Accidental release of a mixture of live H5N1 and H3N2 viruses could have resulted in dire consequences. While H5N1 doesn't easily infect people, H3N2 viruses do. If someone exposed to a mixture of the two had been simultaneously infected with both strains, he or she could have served as an incubator for a hybrid virus able to transmit easily to and among people.” Czech newspapers questioned how the potentially deadly contamination was possible. Baxter’s position is it was human error. Other sources, however, maintain the cross-contamination was virtually impossible in light of Baxter’s adherence to the highest level of laboratory safety, Biosafety Level 3 (BSL3).[12] The same Czech newspapers, among others, questioned whether Baxter was involved in a deliberate attempt to start a pandemic.
As difficult as it is to contemplate an American pharmaceutical corporation could make such a potentially lethal mistake, or worst yet, intentionally orchestrate a deadly flu pandemic, the fact of the contamination is undisputed. How comfortable are you with the thought you or your loved ones could be forced to receive injections of a fast tracked swine flu vaccine made by Baxter? An untested vaccine for a flu virus you may not contract, and which will probably only cause moderate discomfort if you do get infected? Novartis, another Big Pharma player, also announced on June 12 that it, too, has produced a swine flu vaccine using cell-based technology and the adjuvant MF59. An adjuvant is an additive designed to generate a stronger immune response to a vaccine. In other words, its purpose is to kick your immune system into overdrive so the size of the dose and number of vaccine doses you receive can be reduced. The MF59 adjuvant is oil-based and contains Tween80, Span85, and squalene. In studies of oil-based adjuvants in rats[13], the animals were rendered crippled and paralyzed. Squalene brought on severe arthritis symptoms in rats, and studies in humans given from 10 to 20 ppb (parts per billion) of squalene showed severe immune system impact and development of autoimmune disorders.[14]" (All articles from the mercola.com website.)
I see nothing "conservative" about an intrusive gov't that is helping giant pharm companies market their nasty products. As to seniors, the problem I see with all ages, but especially the seniors, is that most of them want to eat all the junk they like, poison themselves with additives, smoke, drink, etc. and then they turn around and expect us to "fix them". They have a "just give me a pill" attitude. The older a person gets, the more they're affected by poor lifestyle choices. The people who take care of themselves, usually don't end up in the ER! True, there ARE some who are the "old" old, who do, but often it's their first visit, they are NOT on a boatload of meds, all of which have unknown interactions with each other, and they often don't even see a dr, because they haven't needed to!
Re. Medicare, we hear about other bailouts; why haven't we heard much about the billions taken from general funding to bail out Medicare, which will be completely unfunded by 2025 or so? The bottom line is, IT DOESN'T MAKE SENSE for a bankrupt gov't to promise people something it doesn't have money for! Wake up! This isn't "Rep/Dem" or conservative/liberal anymore; it's about the fact that WE DO NOT HAVE MONEY FOR THIS. China is a net seller of Treasuries now! People in Asia know America for the financial joke it is! Simply printing more paper (called money) will only lead to hyperinflation. As it is, if we get Obamacare, the seniors WILL have a "duty to die"; just read the bill, and you'll see for yourself!
emily matthews (Mon Sep 28 10:16:22 2009)
John, I agree that we indeed need tort reform (medical courts) but the biggest cost savings will be in the reduction of CYA testing. But I think the number is closer to 5%, and it could even be zero because this testing is profitable to the physician under the current fee-for-service system and much of it will continue nonetheless.
Extending insurance competition across borders would be a mistake. The inefficient "insurance system" should be eliminated, not expanded. If insurers have to cut costs to compete they'll do it by cutting care, not their exorbitant salaries and bonuses and broker commissions and et al. For health care providers it is a nightmare dealing with the 450 insurers already in the state. Extend that to 1500 nationwide companies and it becomes unmanageable. That's not what I'd call the KISS solution.
Jack Lohman (Mon Sep 28 10:18:29 2009)
>>> "...squelch the small guys with endless regulations."
You mean, Emily, eliminate regulations and laws? Yea, if 100% of our people and executives were 100% honest and had good "values" and were "compassionate," I suppose I'd agree. But they aren't, as our recent economy crash has proven.
And oh, I am reminded of the preamble to the US Constitution:
"We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."
I agree that our politicians have taken a bigger bite than justified, but with the (legal) cash flowing from the special interests as it is, what else can you expect?
>>> "So why was it "business as usual"?
Because we only voted in new puppets, we did not vote in new special interests. The same people are controlling this congress as controlled the last congress.
>>> "HMMM, didn't the Dems have a 31-seat majority in 2007?"
Same answer as above. Follow the money.
And while I am concerned as you about the flu vaccine, I am bothered that you rely on Mercola. Isn't he a quack?
>>> "The bottom line is, IT DOESN'T MAKE
SENSE for a bankrupt gov't to promise people something it doesn't have money for! Wake up!"
Ahhh... And it doesn't make sense to increase taxes on the top 1% of wage earners, even though they now own 25% of our nations wealth, and many of them got it through ripping off the public?
I see.
Jack Lohman (Mon Sep 28 10:42:10 2009)
"Quack" is a label that the status quo likes to apply to those who challenge them. Mercola certainly documents everything he says, which is better than the drug reps that come to my ER with "studies" PAID FOR BY THEIR COMPANY "proving" their drug is better.
Unfortunately, MOST "research" is funded this way: by entities who stand to gain economically. Take Mary Enig. Waaaay back in the 1970s, she was a grad student and discovered the harmfulness of trans fats. When she blew the whistle, her funding was cut. And when did we finally hear the facts about trans fats? 1999 or so?
If you want to be truly "health" educated, you need to look elsewhere than the politically-correct advice that is popular. Start looking at westonaprice.org, or, yes, mercola, to get a well-rounded view.
As to quoting "general welfare", that's about on the level of Bevis and Butthead or Family Guy. "Heh, heh, heh, see it SAYS 'welfare'." You know stinkin' well the Founding Fathers didn't have the current system of redistribution of wealth in mind!
And you OUGHT to know that the first collective farm experiment in colonial times was a disaster, and it was only after everyone had to depend on the fruits of THEIR OWN labors, that everyone actually worked hard enough to raise enough food.
As to "taxing the rich", I don't recall mentioning that at all. Your mentioning of it seems totally random, and is obviusly to set up a straw man for you to attack, rather than addressing the real monetary concerns the US has. You can't get around the fact that the rest of the world isn't in the mood to buy dollars much, anymore. Nor will they take VISA much anymore; they prefer their own credit card companies at least in Asia.
The answer is to prevent the "rich rippers off" from "ripping off the public" in the first place, through legislation that rewards large monopolies and crushes smaller competitors. Why do the Rockefellers get farm subsidies? Because they "helped" the govt write the farm subsidy legislation!
If there WERE no subsidies, taken from MY tax dollars (not "the rich"), having millions of acres wouldn't make economic sense anymore, as this is just too big to manage; and smaller, more efficient farming would result. (YES, smaller farms ARE more efficient). Start your education on this aspect by reading "The Untold Story of Milk", which describes in part how larger dairies got the gov't to regulate smaller guys out of business.
I repeat, the USA is currently bankrupt; and promising more dole to more people does not make sense. Don't let your political views get in the way of these FACTS. IF we get financially sound again, then we can argue politics, but for now, I'd say the US--the biggest debtor nation in the world--is a sinking ship, and Medicare-for-all is the least of the things we ought to worry about.
emily matthews (Mon Sep 28 13:54:06 2009)
I'm on Mercola's email list and my question was a legitimate one that I would expect a nurse to answer. Don't make excuses for him, but is he too much supportive of natural cures? Isn't that what he mostly sells on his site?
And I know all about the bedroom arrangement of the drug/FDA partners, so we don't have to go there.
But more to the subject, my mentioning "taxing the rich" was in response to your "the government is broke" hysteria. Yea, it is. But only because conservatives have made such a big deal about taxes, even when other countries tax at higher rates and are less in the tank. No, I don't believe in over-taxing, and that is why I have battled over-spending. But that occurs because our corrupt political system demands it, and right-wingers are wearing blinders when it comes to that subject.
Increase SSI and Medicare spending? You bet, at least until the boomers die off and we decrease life expectancy. Until then increase taxing on the wealthy. But in the meantime decrease corruption so we can decrease spending, and maybe taxes won't have to go up a bit.
Jack Lohman (Mon Sep 28 14:21:42 2009)
You really don't need another comment, but here's one anywy. My parents never paid a dime into Medicare.
They are part of the "well off". Who are, exactly, the well off? Let's have a look.
64 % of the wealth of this nation is held by persons over the age of 70. No surprise there; they've had longer to accumulate it.
Seniors aren't allowed to get drugs from Canada. Why? More to the point, why not?
My parents spend over $2700 a MONTH (their share) for medications for their various problems. They can afford it. And yes, they get a LOT of hospitalization paid for by the govt.
They also have supplemental hospital insurance. My mother has been hospitalized 7 (SEVEN) times this year.
I would estimate the cost at well of $100K.
Granted, she has more than 10 cats' lives and has had darned near everything but leprosy. She's 87 years old, bless her soul.
We're living longer. Perhaps it's also time to adjust the retirement age of eligiblilty. I hate that idea, given my age.
The govt. needs to quit allowing the exporting of drugs to other countries at reduced rates while prohibiting our own citizens from the same benefit.
They need to stay out/ (GET THE HECK OUT) of medicine. But having said that, it's time to put some serious teeth in some serious regulation that ALLOWS for REAL competition.
WHAT NEEDS REGULATING MOST are hospitals and they're not being talked about by anybody. How 'bout it?
But what about the poor souls who can't
steve wells (Mon Sep 28 17:33:14 2009)
I guess we have to agree to disagree on this one. For over 45 years I considered it a badge of honor to “bust out” of paying SS taxes later in the year. It was my way of getting ahead in my mind. For most of those 45 years I earned my dollars by working 55-60 hours a week (including 3 evenings and Saturdays). Toward the end of my career SS taxes were rapidly increased to a threshold beyond what I could earn and bye bye benchmark. No problem, I got to pay the “other half” of the taxes for the 100 plus people I employed by then as a result of saving my money (My wife and I started with literally nothing) and getting the chance to own a business of my own. The American dream come true!!!
PS: I wish there was a way I could add up all the payroll, sales and property taxes I paid. The small businessman is truly the unsung hero in the American economy.
James (Mon Sep 28 07:44:15 2009)
Atta woman, Jo. Yep, people, it's time to pony up the sacrifices. Medicare, Medicaid and Social Security will eventually bankrupt this country and responsible patriots should relinquish some entitlements for the benefit of their country. Yet, you see the response from your readers, including the putative conservative and patriot John Hyland: Oh, no, not mine. I deserve that.
Susan Squires (Mon Sep 28 19:58:25 2009)
Jack, Mercola does sell some things, and I don't believe everything he says, but the point is, he mostly recommends proper exposure to sunlight and proper diet.
All of his news is from other reputable sources, and he properly notes that. He exposes a lot. My answer is also legitimate: Quack IS a label the status quo likes to use for those who challenge them!
If you want to see true quackery, look at the chart in "The Cholesterol Myths" by Uffe Ravnskov. It shows what Ancel Keys did with the data he collected to make it APPEAR that high cholesterol was dangerous; he simply OMITTED the stuff that didn't "fit" the curve he wanted to draw. That's just one example.
What about the Brazilian cardiologist who proved that MIs are caused NOT by "blockages" but by inflammation. He did almost 50 years of research on this, yet have you heard of him? See what I mean about political correctness in medicine?
Steve, hospitals are regulated up the yin-yang. We have JCAHO, plus all the Medicare requirements for billing that keep changing yearly. It's so bad that there is now a special RN "coder" position going, so we can get paid by the govt. And woe if there's a mistake! THEN, the hospital gets penalized--hugely--for a MISTAKE.
And yes, most hospitals write off many of those who can't/won't pay. Or we help people find community resources.
The trouble is, with so many middlemen (aka insurance co's and Medicare/aid) nobody really knows how much ANYTHING costs anymore.
We should go back to major medical coverage only, and cash for everything else.
Jack, getting back to the fact that the US is bankrupt, it's not about spending and/or taxes! Get YOUR blinders off! It is about the fact that other countries are not willing to finance our debt anymore. About the fact that you cannot keep printing Monopoly money without some form of real wealth to back it up.
If you could simply print your way to wealth, the US could print up the money tomorrow to pay for EVERYTHING, but it does NOT work that way. Ever since Nixon (or Kennedy?) took this country completely off the gold standard, things have been deteriorating to this point. The dollar used to be the default currency of the world, and that helped keep USA well-off, but the party is ending!
The former USSR had currency that wasn't traded internationally, and was worthless outside of the country that printed it. Same for Confederate money in the War between the States. Our US dollar is fast becoming like them.
The US economy is not in its own little private bubble. We have the WORLD to contend with, and they are getting sick of the dollar. WE ARE BROKE. And we cannot expect our great-granchildren to keep picking up OUR tab!
emily matthews (Mon Sep 28 20:04:13 2009)
Jack, here's an excerpt from "Money and Markets":
Unfortunately, most people have no idea this is happening, and even if they did, no sense of how it could impact them. Their typical reaction:
"I don't care how much the dollar is falling in Japan, Europe, or any other country. All that concerns me is what happens with my money right here in the United States."
But there are four fatal flaws to this rationale:
Fatal Flaw #1. Your money isn't just falling in far-away markets. It's falling everywhere.
When the value of your money crashes globally, it also falls domestically.
Already, the cost of more than 90 percent of the products sold at Wal-Mart (all produced overseas) is being impacted.
Already, the vast majority of products sold in electronics stores, furniture stores, and appliance stores are being affected.
Ditto for the lion's share of the oil, gasoline, and heating oil you buy.
So when the dollar falls, you ultimately pay.
Fatal Flaw #2. Your money isn't really yours. A lot of it is actually theirs.
It's been loaned to America by the very same foreign countries where the dollar is falling the fastest — Japan, China, the Eurozone, and other countries. And it's being loaned to America ...
To finance the massive $1.58 trillion federal budget ...
To fund our addiction to debt ...
And to once again fuel the borrow-and-spend binging that helped create the financial crisis in the first place.
Fatal Flaw #3. When they want their money back, they GET it back.
When foreign central banks and investors want to pull their money out, they don't have to grovel to the U.S. Treasury Department or wait on line at the Fed. They merely issue sell orders to liquidate their U.S. investments, convert them into cash, and exchange them for other currencies.
So far, this process has typically been orderly, with no panic. But if the action in the Japanese yen on Friday is any indication, it may not stay that way for long.
Fatal Flaw #4. They can sink YOUR investments.
The more the dollar falls, the more they want to sell. And the more they sell, the further the dollar falls.
But dollars aren't sold in a vacuum. Whenever foreign investors and governments sell U.S. our dollars, they're also selling U.S. stocks, bonds, and real estate.
And that's how it comes back to bite ordinary Americans on the rear end, causing potentially big losses in the $67.2 trillion of household wealth.
The Unfathomable Risk
Our Leaders Are Taking
The U.S. dollar is not going to die. But our leaders are taking an unfathomable risk with our money and our destiny as a nation.
Every time we run budget deficits, we must go, hat in hand, asking for money from central banks and investors in Asia, Europe, and even Latin America.
Every time we run a trade deficit, spending more on imports than we earn on exports, we run back for still more money from Asians, Europeans, and Latin Americans.
And now, after thousands of such trips and billions of such transactions, the U.S. now has a total of $7.9 trillion in liabilities to foreigners.
Why It's Now Far More Difficult to
Postpone the Day of Reckoning
Until recently, we were able to continually postpone our day of reckoning as a nation.
The U.S. dollar was king, the only reserve currency. And the U.S. financial market was the only game in town big enough to satisfy the needs of overseas investors. So they had to keep most of their money in dollars, whether they liked it or not.
They had no choice.
Whenever they lost faith in other countries — Argentina, South Africa, Thailand, or even a country like Great Britain — they could pull out along with hoards of others, sending those financial markets into a tailspin. But when the United States made similar mistakes, it got away with it.
And so it was that we merrily ran huge deficits, borrowed to the hilt, and continued to party as if nothing were wrong. And that's why, despite it all, overseas investors continued to pour more and more money into America.
In the 1980s, it was primarily cash-rich Japanese who led the way, investing billions in U.S. stocks and bonds, helping to lift the Dow and Treasuries out of their worst slumps of the postwar era.
In the 1990s, it was mostly Germans who played that role, helping to drive the big tech boom.
And in the 21st century, China has become the big provider of new funds to the U.S.
But now, dear Subscriber, all of this is changing and we're nearing the end of the line:
* Foreign central banks have sought — and begun to find — viable alternatives to the U.S. dollar as a reserve currency.
* China and others have pushed progressively harder to replace the dollar with a basket of currencies.
* The United Nations has proposed a similar scheme, creating a new monetary system.
* And this past week, as I mentioned at the outset, even Japan, America's staunchest and richest financial ally, is beginning to abandon its long support for the U.S. dollar.
emily matthews (Mon Sep 28 20:10:55 2009)
Yea, Atta woman Susan. Let's just steal the money the elderly contributed over the years and put them out on the street.
Or, let's fix the problem by taking the unjust stealing of assets out of the system.
And Emily, along that line you can spout what the "financial experts" say, but I go to the very basics. When I owned my company, had I an employee that took money from outsiders in return for corporate assets, I'd have him jailed. But we allow that to happen every day in the political system when politicians take campaign cash (bribes) and then pass taxpayer assets to the givers.
Call it deregulation, as happened in the financial industry. Call it deregulation, as is happening in the oil industry where speculators drove gas prices to $4.00 per gallon before they jumped out with their booty. Call it control of healthcare which has plunged our nation's profits into the insurance and pharmaceutical industries.
The point is that no COMPANY can survive internal corruption and no COUNTRY can survive internal corruption either. Your own hospital could not survive if its employees were stealing from it.
See my most recent blog post (Keeping jobs in the state…) and the link to the chart. How much more wealth transfer can this country take?
Jack Lohman (Tue Sep 29 06:08:59 2009)
Jack, I agree that there is corruption in politics, and in large businesses that are in bed with politicians. The corporations help WRITE the regulations! If you do ever read "The Untold Story of Milk" you'll see that regulations are usually used to drive small competitors out of business. How do you think these corporations got so big to start with? They leveraged the arm of the gov't! Why else do Rockefellers get farm subsidies!?!
Our township never needed a building inspector, (until forced to get one by the state) because everyone knew who was a good builder and who to be suspicious of. We didn't need regulators, the potential problem took care of itself.
We used to have multitudes of small dairies in our county, till they were regulated out of business. Same for family-run butchers, who were regulated out of business. Technically, we aren't even supposed to butcher our own animals on our own land anymore!
All of which benefited the giant corporations, which turn out toxic milk that sickens my kids, and meat that rots a day after you bring it home from the supermarket. Corporations benefit from "regulations"; family businesses don't. And family businesses don't NEED to be regulated, as everyone who uses them, knows them; even in cities this is true. When I was a child, my mom used the local FAMILY grocery store in West Allis.
I also agree with your fact that politicians take bribes via lobbying, which is why gov't SHOULD STICK TO THE BASICS of what they are ordained by God to do: protect the borders, and protect individuals, and NOT redistribute wealth or create favored entities (giant corporations) through regulating small guys out of business. If there were NOTHING FOR LOBBYISTS TO GAIN, because the gov't became constitutional again, and got out of all this meddling, they WOULDN'T BOTHER LOBBYING ANYMORE.
A child only nags for candy if it thinks it can get some. Lobbyists only lobby if they think they can get something. If the gov't stuck to a constitutional position, and stopped trying to "help" all and sundry, the lobbying would stop, the same as the kid would stop nagging if mom never gave in!
If you are really concerned "about the basics", then get this basic FACT: America IS broke, and the rest of the world is sick of bailing us out! This is about as basic as you can get!
emily matthews (Tue Sep 29 07:55:17 2009)
I see Squires is still at it. The ultimate liberal. I have, and are, paying for Medicare. Better re-read my previous comment. All seniors pay about $4,000 per year plus we paid in all our lives through pay-roll deductions. What's so hard about understanding that?
Get a life Sue and start understanding the system. Most will probably never use up what they paid in...same with SS.
John Hyland (Tue Sep 29 08:34:14 2009)
Some readers and commenters seem to imply that all insurance companies, all doctors, all hospitals are crooked and stealing from the public. How ridiculous. Most doctors do not try to and give unnecessary diagnostic tests and the same with medications. There may be an occassional bad apple but not unlike any other profession. There are bad ministers, bad accountants, bad retailers, you name it. The jails are full of them. I'm 81 and and have had 16 operations and on 12 prescriptions which have been keeping me alive since I had to start using some over 40 years ago. Smoking was the culprit until I stopped in 1966. Everyone smoked at that time and before. We finally are getting rid of that in our society with near 85% non-smokers. Now let's do something about alcohol. Especially here in Wis which is the worst state.
John Hyland (Tue Sep 29 08:46:57 2009)
Emily, only by reverting to the old west will we have a government of your choosing. Then we didn't have lobbyists and campaign corruption, though we did have a lot of shoot-outs with real bullets.
Jack Lohman (Tue Sep 29 13:01:33 2009)
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• Solberg: Healing After an Abortion
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• Join the blaze orange army and say ‘Enough is Enough’
• The future of government-run health care
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• Talk health reform with Feingold (Th), Petri (today)
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• The $2.7 billion Wisconsin deficit no one told you about
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• Rahmlow: Why is Van Hollen dodging the Nebraska deal?
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| 2009 |
December
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November
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October
• The Lawton-Bader files
• Yup, it’s the TAX LEVY, not the tax RATE
• Ellis: costly automobile insurance laws must be rolled back
• If not Barrett, who?
• The subsidy game
• Burri: Bailouts, Banks, Health Care, and the Mob
• Attend Appleton Schools budget meeting tonight
• A public option WON’T increase costs? That’s delusional!
• Appleton Schools budget meeting Monday
• Wisconsin should be screaming for accountability
• Burri: If anything, we need more obstructionism around here
• WI on the leading edge - in the wrong direction
• Rep. Montgomery: Utility Customers Join State’s Crime-Fighting Efforts
• Public Conservation and Recreation Lands Total 16.5% of State
• In the crow's nest of the Titanic, shouting 'Iceberg!'
• Is Rep. Nelson a political hack?
• Health care: The road ahead will be brutal
• Kagen's pandering again
• Birthers - good stuff for you
• How much do we bend over backward for seniors?
• The trouble with health care is paying for it
• Two-parent families: The Gold Standard
• Burri: Kids... the joys and blessings
• Very, very worried about health care
• Rep. Huebsch: Wisconsin is proof government health care isn’t the answer
• School district contracts push up tax levy
• What? Obama, the Peace Prize?
• TODAY - hearing on Campaign Finance Reform
• Appleton School District tax levy up way too much
• CBO report is out - and the bill isn't even written yet?
• So, how much do YOU budget for health care?
• Burri: Copenhagen trip was amateurish
• “Sotomayor, you have blood on your hands...”
• Cap and Trade. Always follow the money
• Rep. Kagen gets (almost) free health services
• I actually agree with Rep. Kagen
• Future Wisconsin Conference for Conservatives, October 10, Wauwatosa
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• Important votes Tuesday, including Appleton Common Council
• Democrats are becoming supply siders??
• Further debunking Hillary myths
• WEAC has created an unsustainable monopoly
• From Mark Gundrum: One of the greatest honors an American can experience
• 'Operation Chaos' working?
• Joe Martin the best candidate in Appleton's 8th
• State programs to cut? - Volume II
• Oh the naivete of youth
• Not just disingenuous - flat wrong
• Steve - you will be missed
• Make cuts only AFTER you're elected....
• Getting serious: What programs can we cut?
• Rep. Steve Kagen joining me on Jerry Bader Show today
• Rep. Van Roy: Dental Care Pilot Program
• Has Dave Obey turned the corner on earmarks?
• Speaker Huebsch: Governor turns down Federal Aid?
• Mark Rahmlow: "We're Broke."
• As taxpayers, how do we know if it's a Chevy or a Lexus?
• This is trash talk - about a veteran
• Frank Lasee: Take time to get the Compact right
• 'The Gableman Ad' - is it racist?
• Roth thankful, Kagen shaking money tree
• Gov. Doyle's office not enamored with Freedom of Information
• Governor Doyle will never do it
• Leadership on smoking ban? Not Hanna
• Rep. Van Roy speaks out about smear ads
• You're threatening me about potholes?
• Losing the Hastert seat is NOT a trend and NOT curtians for the GOP
• First suggestion for 'slashing' programs
• Big money-saver for municipalities
• More one time fixes. Nuts.
• Any chances???
• I'm doing the Jerry Bader Show, today, the 11th
• Representative Frank Lasee: Final Waltz of the Season
• Guest Blog: It's not the county's business to be in the nursing home business
• Yup, Hillary won Texas and Ohio
• Gableman/Butler race featured - and it isn't pretty
• Lies from Planned Parenthood and NARAL
• He who sacrifices liberty.....
• Duh.
• The Troha sentencing, Doyle and that $200K
• Guns, passion and "originality"
• How hard is it anyway, to shut down a government program?
• Voting is a PRIVILEGE. And so are property taxes....
• Guest Blog: Governor Doyle, cancel your Ireland trip
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• Lots of ideas. No money.
• The Cigarette Tax - "Poor Policy Instrument?"
• School budget Lite?
• Frankenstein - not in the library, but in the legislature
• A librarian, a legislator, a president
• $1.25/pack - NO, NO, NO, and NO
• Kagen and Reagan in the same breath?
• Menasha: behind the 8-ball, but not biting the dust
• Any way you slice it, Wisconsin government wants (further) in on health care
• The World is Flat...what about health care?
• The PAC - too precious to fail. Day 3
• News follow-ups: Appleton West, Kagen at the White House
• Fox Cities PAC - too precious to fail - Day 2
• Fox Cities PAC - too precious to fail
• New Transit Tax coming your way
• Rep. Petri has his finger in the dike - I guess
• AASD Retirement Costs Burdensome
• Health care, health care, health care, health care
• Water rate increase was no slam dunk
• Education for all is just a bad dream
• New Year's resolutions from a parade snob
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