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Title: Blog by Novelist William S. Frankl, MD

Archive for July, 2010

We Are Being Buried Alive in Debt! HELP!

Monday, July 26th, 2010

The Obama budget represents the biggest disaster in our entire fiscal history (Michael J. Boskin, “Debt Roulette,” Hoover Digest, July 2, 2010).

In addition to the proposed increase from today’s levels in taxing capital gains, dividends, payrolls, incomes, and the initiation of an energy taxes, the enormous deficits and endless accumulation of debt by the Obama Administration will eventually force growth-inhibiting income tax hikes, a national value-added tax similar to those in Europe, and/or severe inflation.

1. In the first three years of Obama’s term, federal spending will rise about 4.4% of gross domestic product (GDP), far more than during President Johnson’s Great Society and Vietnam War buildup and President Reagan’s defense buildup combined.

2. Spending will hit the highest level in American history (25.1 percent of GDP) except for the peak of World War II.

3. The deficit of $1.4 trillion (9.6 percent of GDP) is more than three times the previous record in 2008.

4. Obama will add more to the deficit in his first two years than President George W. Bush  added in eight years in office.

5. In his first 15 months, Obama will raise the debt burden — the ratio of the national debt to GDP — by more than President Reagan did in eight years.

6. This debt and current and future taxes are rising just as the baby boomers are retiring and the costs of entitlements are growing, which will require major reform.

7. The Obama programs increase the number of people getting more money back from the government than they pay in taxes to almost 50%.

The Obama regime and his minions in Congress are pushing the United States into bankruptcy. Who will bail us out? China? Saudi Arabia? Europe? Or nobody? Will November stem the tide, or are we slated to be the next Greece?

A Taxing Disaster

Monday, July 26th, 2010

Unless something is done soon, 2011 will also come with innumerable tax hikes — including a return of the death tax — that will be REAL killers (Editorial, “The Tax Tsunami On The Horizon,” Investor’s Business Daily, July 21, 2010).

Through the end of 2010, the federal estate tax rate is zero — part of the package of tax cuts that President Bush pushed through to get the economy going earlier in the decade.  But at midnight, Dec. 31, the death tax returns — at a rate of 55% on estates of $1 million or more.  But the death tax isn’t the only tax problem that will foisted on us on Jan. 1.  Many other cuts from the Bush administration will vanish and a new set of taxes will appear.  And it’s not just the rich who will pay:

1.The lowest bracket for the personal income tax increases 50% — to 15% from 10% .

2. The next lowest bracket — 25% — will rise to 28%, and the old 28% bracket will be 31%.

3. The 33 % bracket rises to 36% and the 35%  bracket becomes 39.6%.

4. The marriage penalty reappears and the capital gains tax will go up 33% — to 20% from 15%.

5.The tax on dividends will go up from 15% to 39.6% — a 164 % increase.

6. The capital gains and dividend taxes will go up further in 2013 when ObamaCare adds a 3.8% Medicare levy for individuals making more than $200,000 a year and joint filers making more than $250,000.

7. Other tax hikes include cutting the child tax credit to $500 from $1,000 and fixing the standard deduction for couples at the same level as it is for single filers.

8. Allowing the Bush tax cuts to expire will cost taxpayers $115 billion next year alone, according to the Congressional Budget Office, and $2.6 trillion through 2020.

Raising taxes like this is catastrophic for the economy in general and for the personal lives of all Americans especially those in the middle class and retirees. Thank you Mr. President and the Democrat Party!!

The Dodd-Frank Debacle

Monday, July 26th, 2010

The Dodd-Frank financial reform bill that passed the Senate last week will generate humongous levels of red tape. The 2,300 pages(!) are so complicated that a debate has broken out over precisely how many new regulatory rule-makings it will require (Wall Street Journal “The Uncertainty Principle – II,” Wall Street Journal, July 16, 2010).

Two hundred and forty-three or more new federal rule-makings are on the way; 67 one-time studies; and 22 new periodic reports. This is a minimum estimate, counting only the new regulations mandated by the bill.

The U.S. Chamber of Commerce adds to this estimate by including additional rule makings mandated by this legislation:  American businesses will experience 533 new sets of rules. Sarbanes-Oxley, Washington’s last atrocious exercise in financial regulatory overreach, had only 16 new regulations!

But even these analyses do not count the duplicate rule-makings, when different agencies create different rules governing the same activity, as they are stipulated to do under Dodd-Frank.

In the near term, Dodd-Frank will result in  higher cost of credit, and a bigger market share for the mega banks that can more easily absorb the new regulatory costs.  In the longer term, the bill will very likely not prevent (or effectively deal with) the next financial crisis.

Our economic status as a financial force in the world is being destroyed by an out-of-control Democrat Congress and presidential regime. And note that Dodd and Frank were partly responsible for us falling into this severe recession. Will November stem the tide, or will things continue to deteriorate?

Say Goodbye to Your Doctor?

Monday, July 26th, 2010

With the enactment of ObamaCare, the country’s largest insurers are beginning to offer affordable plans with reduced premiums that offer participants a more limited menu of doctors and hospitals (Reed Abelson, “Insurers Push Plans That Limit Choice of Doctor,” New York Times, July 17, 2010).

These plans are being tested in places like New York, Chicago, San Diego, and other cities. Such plans will likely appeal to small businesses that already provide insurance to their employees, but are upset about the ever-increasing cost of coverage.

Large employers have already started to show interest, and insurers and consultants expect that ultimately, businesses of all sizes will gravitate toward these plans in order to cut costs.
More Americans will now be asked to pay higher prices for the ability to choose or keep their own doctors if they are outside the new networks. This will occur despite the repeated assurances from President Obama and others in his regime that consumers would hang on to a variety of health care choices. Companies might reduce their premiums up to 15%, the insurers  offering the more limited plans indicate.

The plans will likely be popular with individuals and small businesses who are mandated to purchase coverage in the insurance exchanges, or marketplaces when ObamaCare takes effect fully in 2014.

Millions of Americans, including many of the previously uninsured, who will buy their coverage through exchanges, will be willing to accept restrictions to get a better deal.

These changes are likely to cause a significant and deleterious effect on the practice of medicine, hastening the already tenuous patient-physician relationship, and worsening a projected serious physician shortage by 2020.

Single Payer on the Horizon?

Monday, July 26th, 2010

The rising cost of health insurance is causing some small Massachusetts companies to drop coverage for their workers and encourage them to sign up for state-subsidized care, a trend that could seriously impact the state’s already-stressed budget (Kay Lazar, “Firms cancel health coverage; With cost rising, small companies turning to state,” Boston Globe, July 18, 2010).

Many of these small companies — retail shops, day-care centers, restaurants, hair salons, and others — usually pay low wages. So when these employers drop their plans, their workers qualify for state-subsidized health insurance.

The state’s 2006 health insurance overhaul plan included regulations that discouraged low-wage employees from opting for state health insurance instead of their companies’ often more expensive coverage.  It denied eligibility to any one whose employer offered coverage in the past six months and paid at least 33 percent toward the individual’s plan:

But some of these small companies now have terminated their group plans and tested those regulations, and found that their employees were accepted for state-subsidized coverage. And these companies have found it is far cheaper to pay the state penalty for not covering their workers — roughly $295 annually per employee — than to pay thousands more in premiums.

But, in 2014, when most of ObamaCare goes into effect, the penalties for small companies that don’t provide health insurance coverage will be less onerous than in Massachusetts.  That could tempt small companies to opt out nationally, sending more workers to the public rolls.

ObamaCare does not impose any penalties on companies with less than 50 employees that don’t offer coverage.  But for companies with more than 50 workers, ObamaCare comes  down much harder than does the Massachusetts law.

Thus, we see in Massachusetts things to come: a burdgening “Public Option,” which will ultimately become a “Single Payer System,” a major goal of the Obama regime.

William S. Frankl, MD, All Rights Reserved