What is the justification for spending such large amounts of money?

[Syntho-sis]

A trillion dollars is ALOT of money..

 

Where the heck are the health-care overhaul people getting this money?

 

http://news.yahoo.com/s/ap/us_health_care_overhaul

 

I thought we had a deficient? Can someone explain the logic of this? If there is any..

[swansont]

From the article

 

It would cover more Americans — but also includes a new tax on investment income that Republicans object to.

 

…

 

Estimated to cost about $1 trillion over 10 years, Obama's plan would be paid for by a mix of Medicare cuts, tax increases and new fees on health care industries.

 

There's also the sunset provision on the Bush tax cuts that expires next year, IIRC.

[Mr Skeptic]

Well, the funny thing about money is that it is kind of useless if you don't spend it. The trick is to spend it on good things when you need them. Healthcare, in my opinion, is one such good thing we need now. (This is not an endorsement of the healthcare bill we currently have.)

[Pangloss]

This would be almost a trillion dollars in new spending over ten years for the express purpose of covering about 31 million Americans. That should cost maybe half that much at best, and frankly I don't think it should be spent for that purpose at all until we know exactly why those people aren't covered. I'm fine with safety nets, but people who don't get health care because they're young and healthy and they "need" an Xbox are idiots and I shouldn't have to pay for that.

 

The administration claims that it will reduce the deficit by more than its cost, but that's twenty years off. There's no guarantee of that, and in the meantime if we don't get spending under control within the next FEW years it's going to exceed GDP (it's already been cleared by last week's bill to fly all the way up to 80%, and that's only if GDP doesn't shrink, which nobody believes).

 

The disconnect is beyond bizarre.

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BTW, $950 billion is $3,167 per person, and that's assuming every single person pays their share (which we know is impossible, otherwise we wouldn't be doing it). So basically double that, then divide by ten years, and that's something like $633 per person per year. Now add the interest we'll have to pay on the debt we'll have to acquire in order to pay for this. $700? $800? Per year.

 

Not a pretty picture. And that's JUST to pay for the 31 million Americans who are not presently covered by a health care plan. All the rest of that stuff in the proposed plan could be done basically for free, or okay throw in ten billion a year in cost for managing new rules. Trivial.

 

We need fix health care first, not create new entitlements we can't afford.

Edited February 22, 2010 by Pangloss
Consecutive posts merged.

[Moontanman]

Didn't we just bail out the American Financial (banks, wallstreet investments and large industry) system to the tune of close to one trillion dollars spent almost immediately? Health care has to be at least as important as bailing banks who gambled with money they didn't really have.

[bascule]

This would be almost a trillion dollars in new spending over ten years for the express purpose of covering about 31 million Americans. That should cost maybe half that much at best

 

Unfortunately the Democratic ADD is currently going for the more expensive approach of not including a public option, because, well, I guess a public option is socialism, or something?

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A trillion dollars is ALOT of money..

 

Where the heck are the health-care overhaul people getting this money?

 

http://news.yahoo.com/s/ap/us_health_care_overhaul

 

I thought we had a deficient? Can someone explain the logic of this? If there is any..

 

I'm curious if you had similar concerns about the Medicare Prescription Drug, Improvement, and Modernization Act

[Syntho-sis]

I still don't understand..

 

What happens when a person tries to buy something on credit? Well they become indebted. What happens when they continue to do it? Even more debt, which lowers their credit score and all that jazz...They can't buy as much on credit.

 

What happens when a country does that? You get PIIGS.

 

Not only that, it's not even their money, it's ours.

 

You know we had a surplus 10 years ago? They were planning to continue that..

 

Where the heck did all the money go?

 

War? hahaha no...

 

Look at this. And this.

 

You see those diesel generators? See how much they are getting sold for? That stuff never goes bad..You take an engine and dump it in diesel gasoline and you can make last almost indefinitely..

 

Who's selling this stuff so cheaply? None other than the department of defense..

 

Explain that please..

[Phi for All]

Who's selling this stuff so cheaply? None other than the department of defense..

Well, they're doing it through a civilian business, but personally I don't think it's right to have an "exclusive contractor of the Defense Reutilization and Marketing Service (DRMS) for the sale of surplus and scrap assets of the United States Department of Defense (DOD)." How does one company get an exclusive on something as big as this? This is not how the politics of capitalism should work.

 

I remember reading about what Haliburton did with broken down Humvees used by our ground forces in Iraq. They claimed that sand in the internal workings made it too difficult to repair broken units so they were decommissioned and sold as scrap assets (I've checked and I can't find the original article I read, tbh). Apparently, if the vehicle wouldn't start, they just ordered a new one instead of even trying to fix it. I'd love to know how much it took to fix these decommissioned vehicles once they were sold for scrap.

[npts2020]

Since the military is such a waste of money, does that mean we should privatize it? Would the government then just bid on the contractor it felt was best for providing the services required?

[Phi for All]

Since the military is such a waste of money, does that mean we should privatize it? Would the government then just bid on the contractor it felt was best for providing the services required?

I think it would be a very dangerous thing to have private armies attached to megacorporate concerns. It could be argued that big business owns the government, and the government runs the military, so big business already owns the military, but giving big business the legal right to field their own troops is just insanity, imo. Something about absolute power comes to mind....

 

Much of the war services in Iraq (except the actual fighting) traditionally done by the military themselves is privatized to just one company, and while you might think that would offer some cost savings, it really doesn't. If it's not more efficient and cost-effective, why do it other than to add a stratum of profit for a megacorporation?

[Pangloss]

Still trying to figure out why Jennifer Government hasn't been made into a movie. George Clooney would be a perfect John Nike. Oh well.

[bascule]

What happens when a person tries to buy something on credit? Well they become indebted. What happens when they continue to do it? Even more debt, which lowers their credit score and all that jazz...They can't buy as much on credit.

 

That's not how it works at all. Some of the people who are deepest in debt have the best credit. I have about $250,000 worth of debt and excellent credit. I'm guessing that's more debt than you're in, and chances are I probably have better credit.

 

Where the heck did all the money go?

 

War? hahaha no...

 

A trillion dollar war and you just laugh?

 

Republicans let paygo lapse and spent lots of money, both on war and other spending bills, like the aforementioned Medicare Prescription Drug, Improvement, and Modernization Act. They also cut taxes, decreasing revenue. Spending more money while decreasing revenue is a great way to accumulate massive debts.

[Sisyphus]

A big part of getting a high credit score is having debts and paying them off on time, thus demonstrating that you are stable and responsible enough to do so. There are lots of other things that go into the calculation, but that's pretty fundamental.

 

It's not exactly a "financial responsibility index." It's a "statistical likelihood of being a good investment for lenders" index.

[Pangloss]

Well that's a good point, and the US is obviously still a good investment. I think both political parties have taken advantage of that, playing on the apparent public assumption it will always be so and that we can just throw money at any problem and not worry about paying it back. That can surely only go so far, and yet here we are planning on doing more of the same for the foreseeable future.

 

Whether it's a trillion dollar foreign war that may or may not save helpless victims or a trillion dollar health care plan that may or may not save sick people, does it really matter? They've become the new norm, and while they may make since in some rare cases, having them become the norm when we're already spending 50% over income seems like a recipe for disaster.

[bascule]

Whether it's a trillion dollar foreign war that may or may not save helpless victims or a trillion dollar health care plan that may or may not save sick people, does it really matter?

 

The moral issues of spending a trillion dollars to help tens of millions of Americans versus spending a trillion dollars to kill foreigners in an unnecessary war aside, there's actually a plan to pay for the healthcare bill. There was no plan to pay for the Iraq War. The plan was: borrow money, which was pretty much the MO under the Bush Administration.

[Pangloss]

The moral issues of spending a trillion dollars to help tens of millions of Americans versus spending a trillion dollars to kill foreigners in an unnecessary war aside, there's actually a plan to pay for the healthcare bill. There was no plan to pay for the Iraq War. The plan was: borrow money, which was pretty much the MO under the Bush Administration.

 

That plan wouldn't have passed PAYGO, bascule. PAYGO requires that expenses be offset by income NOW. Not some wild-a guess about something that may or may not happen twenty years down the line. So really you're just illustrating my point -- some people want a trillion dollar spending plan for this. Other people want a trillion dollar spending plan for that. Whatever the ideological preference of the moment, it needs to be assuaged by a trillion dollar spending plan.

 

A trillion here, a trillion there, and pretty soon we'll be talking about some real money.

Edited February 24, 2010 by Pangloss

[Syntho-sis]

Good points Pangloss.

 

How long before China decides that we aren't a good investment?

 

What if they decide to get rid of their dollars and switch to Euros? That would utterly decimate us imo. OPEC is already talking about using Euros. Our trillions and trillions don't even mean anything in the first place. We have nothing to back them up, it's just paper. It's like we've become a commodity and we have to hope some country that actually does have an industry will buy our dollars. We no longer produce anything except debt.

 

IMO the biggest problem we have is our economy and it's not being handled correctly. I mean think about it. We just come out of one of the worst recessions we've ever had, and they're already talking about spending trillions of dollars on healthcare and eventually energy. Money that we don't have right now. Money that will come out of the American people's pockets, who are just now struggling to make it.

[SH3RL0CK]

Short term, the USA looks like a bad investment, but a longer view should be taken.

 

Good points Pangloss.

 

How long before China decides that we aren't a good investment?...OPEC is already talking about using Euros. ...

 

But what is the alternative? As Greece has recently shown, the Euro isn't necessarily a better investment. The public debt of the USA as a % of GDP is similar to, or less than, other Western nations. China is already investing in itself heavily, but the lack of transparency and the probable corruption makes China (and a very large part of the developing world) a risk as well. So where does China, OPEC, Japan, and Russia invest given the USA may be the best of a bunch of bad choices?

 

I agree the USA needs to be more financially responsible, and I do think that will happen. The sunset of the Bush tax cuts will help regarding the public debt immensely (though I would prefer a reduction in the overall size of the government). People are starting to hit the AMT, and that trend will accelerate in the coming decade which is going to greatly increase the IRS revenue. When the economic recovery happens, the tax revenues will greatly increase and that will help. And, when the recovery happens, the lack of stimulus spending will also help. And, the winding down of the Iraq war will help. I don't see a real problem in the medium term.

 

In the long term, medicare and social security will bury us, unless the USA decides to not fully pay this obligation (what I think will be the resolution to the pending SS and medicare crisis).

[Sisyphus]

Well that's a good point, and the US is obviously still a good investment. I think both political parties have taken advantage of that, playing on the apparent public assumption it will always be so and that we can just throw money at any problem and not worry about paying it back. That can surely only go so far, and yet here we are planning on doing more of the same for the foreseeable future.

 

Whether it's a trillion dollar foreign war that may or may not save helpless victims or a trillion dollar health care plan that may or may not save sick people, does it really matter? They've become the new norm, and while they may make since in some rare cases, having them become the norm when we're already spending 50% over income seems like a recipe for disaster.

 

Oh I agree. I was just saying that borrowing money is not inherently irresponsible, if there is an actual plan to pay it back. And we shouldn't be throwing around 100 billion dollars (yearly cost) we don't have. But maybe that isn't what we're really doing. If it really is successful in lowering health insurance costs, in the long run it would actually save money.

[bascule]

That plan wouldn't have passed PAYGO, bascule. PAYGO requires that expenses be offset by income NOW. Not some wild-a guess about something that may or may not happen twenty years down the line.

 

Yes, we've already discussed that in other threads. So... good! I like PAYGO. However, I never said anything about PAYGO, so that's a bit of a red herring here.

 

There was no plan to pay for the Iraq War. None whatsoever. The plan was to borrow money and let some future government figure out how to pay it off.

 

Do you at least agree that having some plan is better than no plan at all?

[Pangloss]

The sunset of the Bush tax cuts will help regarding the public debt immensely

 

Do you at least agree that having some plan is better than no plan at all?

 

Rescinding the Bush tax cuts does nothing about the debt' date=' because the proposed budget spends far more than it takes in.

 

And having a new spending plan and doing nothing about its cost during your entire time in office is NOT better than no plan at all. It is [i']exactly the same[/i].

 

IMO you should break away from thinking that because Democrats propose a thing, it's better. These people are not better. They are exactly the same. They simply suit a different ideological outlook (in this case, yours) better. We're just popping back and forth between differently-shaded sets of ideological blinders, here. That is not improvement, in my opinion.

 

 

If it really is successful in lowering health insurance costs, in the long run it would actually save money.

 

Yes, and if a plan comes along that actually does something about health insurance costs somebody please let me know so I can stand up and cheer.

 

There are some things to be optimistic about in the current plan, but for example I don't think a government panel to approve rate hikes (which is part of the current plan) is going to solve the problem. Many states (including mine) do this, and it doesn't seem to work -- companies just ask for twice what they need, they ask it every time whether they need it or not, and they put up justifications that cannot be verified, and the panel always approves them because to say no just means having to say yes next time. Outside panels can't look at actual reasons they can only look at what a company shows them.

 

There are so many ways for us to lose in the current environment that I wonder if we may be reaching a point where we may not be able to solve it. Ultimately we may have to have socialized medicine just because we can't get anything else done.

Edited February 24, 2010 by Pangloss

[Phi for All]

IMO you should break away from thinking that because Democrats propose a thing, it's better. These people are not better. They are exactly the same. They simply suit a different ideological outlook (in this case, yours) better. We're just popping back and forth between differently-shaded sets of ideological blinders, here. That is not improvement, in my opinion.

I have to agree with this. Too much is happening that benefits big business, going (at least) all the way back to Clinton giving away television and radio to mega-concerns, through Bush and the no-bid military contracts, oil and big-pharma concessions, and now Obama with the continuation of the wars, the bailouts and the botched efforts at healthcare reform. We don't seem to have learned anything, and big businesses just keep getting bigger at our expense, insinuating themselves between our tax dollars and effective spending.

 

We had the chance to experiment with allowing just one business sector to fail so we could see what the impact would be, but we chose to bail them all out, some with absolutely no direct financial benefit to the taxpayer. We should have learned that a war on terror can't be fought with military might, but we blew that too, even when it can be shown that in Islamic areas of central Asia where schools were built to offset the fundamentalist teachings of the madrasahs, anti-western sentiment becomes almost non-existent. Things will never get any better until the people learn to make themselves heard over the big business lobbyists.

[swansont]

Rescinding the Bush tax cuts does nothing about the debt, because the proposed budget spends far more than it takes in.

 

Does nothing? C'mon, this is grade school math here. If your income level goes up, your debt will not be unchanged, as compared to your income remaining constant. In this case, the debt rises more slowly. That is not the same as nothing.

 

And having a new spending plan and doing nothing about its cost during your entire time in office is NOT better than no plan at all. It is exactly the same.

 

From the article

 

Obama's plan would be paid for by a mix of Medicare cuts, tax increases and new fees on health care industries

[Pangloss]

Does nothing? C'mon, this is grade school math here. If your income level goes up, your debt will not be unchanged, as compared to your income remaining constant. In this case, the debt rises more slowly. That is not the same as nothing.

 

I agree that the tax cuts have to be rescinded at this point, I'm just pointing out that spending increases have vastly outpaced revenue. That's elementary math too, swansont.

 

 

And having a new spending plan and doing nothing about its cost during your entire time in office is NOT better than no plan at all. It is exactly the same.

From the article

 

Obama's plan would be paid for by a mix of Medicare cuts' date=' tax increases and new fees on health care industries[/indent']

 

 

Your quote does not contradict mine, and I've bolded mine to indicate why. That's elementary too, swansont.

 

C'mon yourself.

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What I'm trying to say is that ultimately, in the final analysis, it doesn't matter

why

spending has increased beyond our means, it only matters that it

has

. I am increasingly of the opinion that we are like a fat person who just can't stay on a diet. Whether it's the left saying we need X, or the right saying we need Y, does it really matter if we can't afford X

or

Y? We have to stop saying that one type of spending is better than the other because of some ideological reasoning. All that's producing is more spending that we do not have the means for.

 

As you say, swansont, it's elementary math.

Edited February 25, 2010 by Pangloss
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[bascule]

Rescinding the Bush tax cuts does nothing about the debt, because the proposed budget spends far more than it takes in.

 

It's certainly better than cutting taxes and spending more money, which is what the Republicans did.

 

IMO you should break away from thinking that because Democrats propose a thing, it's better. These people are not better. They are exactly the same.

 

You mean like reinstating PAYGO, whereas the Republicans let it lapse, shortly before a costly and unnecessary war with no plan to pay for it, and creating a huge new entitlement?

 

They are not exactly the same, Pangloss. The Democrats tax and spend. The Republicans cut taxes and spend. Clearly one of these strategies is better than the other.