American Elephants

Democrats Are Lying to You! So What Else is New? by The Elephant's Child

Why are Democrats so desperately trying to keep the public from understanding that Medicare, Social Security and Medicaid must be reformed? Because the Democrats can claim that they are trying to take care of old people and the Republicans are trying to take away their health-care.  Scaring old people has always worked for them, and they’re not going to let go of the strategy until it decisively fails them.  It is, unfortunately, just that simple.

Democrats, you see, have already reformed Medicare and Medicaid. It’s part of the Patient Protection and Affordable Care Act (ObamaCare). Costs too much?  Simple answer— just pay physicians and hospitals less— way less.  Obama’s advisers on health-care matters: Ezekiel Emanuel, Peter Orzag, Tom Daschle and  Dr. Donald Berwick were all admirers of Britain’s National Health Service (NHS).  The Brits liked their free NHS, which began in 1948,   and continued to support Labour, in spite of increasingly long waits, rationing, dirty hospitals, denied care.

Medicaid patients are already in deep trouble and in many locations unable to find any primary care physician who will see them. Government reimbursement is too low and doctors can’t afford it. Medicare is soon to have the same problem, as ObamaCare continually slashes payments to doctors, hospitals and other providers. But more cuts are planned.

Looming over all is a key feature of ObamaCare— The Independent Pay Advisory Board (IPAB). Under the law, the president would appoint 15 ‘experts’ to the board. Starting in 2014, the board would be charged with making sure that Medicare hits specific spending goals. IPAB cannot touch benefits, deductibles or co-payments;            they have to make the budget fit the targets by controlling fees.  Cost controls. De-facto rationing power.

Once the board has made up its mind, the cuts automatically take effect, unless Congress agrees on an alternative package or can get a supermajority to block IPAB’s plan.  IPAB decisions would be immune from administrative or judicial review. The theory is that  if IPAB is isolated from politics, they can ‘more effectively’ manage Medicare costs.

Unaccountable, immune, cannot be questioned, their word is law—you have no recourse. That may sound fine until it is your kidney dialysis being denied, or your cancer treatment.  What all Obama’s advisers liked about NHS is that the greatest costs for seniors’ medical care come in their final years. Rationing and denying on the basis of ‘cost-effectiveness’ is just efficient bookkeeping, you see, until it’s your body or that of your loved ones who are denied—and you can’t even sue or protest.

Paul Ryan does a wonderful job of explaining his plan, and why it is necessary.

Chrysler Celebrates, Obama Takes Credit, Taxpayers— Not So Much. by The Elephant's Child

Sergio Marchionne, CEO of Chrysler and Fiat, made the following statement today:

We received confirmation this morning…that Chrysler Group repaid, with interest, by wire transfer to the United States Treasury and by bank transfer to the Canadian government, every penny that had been loaned less than two years ago.

Victory dances, a statement from the President from Europe lauding the “tough decisions” he made to help the firm.  He made plans to visit a Chrysler plant in Ohio next week for a congratulatory photo-op. The Democratic National Committee predictably launched an ad campaign attacking those who opposed the bailouts, and saying that if the critics of the bailout had succeeded Detroit would have gone bankrupt.

Despite all the whoop-de-do, the Foundry blog at the Heritage Foundation notes:

But the pro-bailout jig is a bit misplaced. First, despite the congratulatory statements, Chrysler had hardly paid back its debt to the American taxpayer. Notice the careful wording in the Marchionne statement: Every penny that had been loaned “less than two years ago” has been repaid. That conveniently leaves out some $3.5 billion loaned to Chrysler more than two years ago. That includes $1.9 billion provided to Chrysler on May 1, 2009, as well as another $1.9 provided to Chrysler in late 2008.

Some  of this will get paid back when the government sells the remainder of it 6.6 percent of stock in Chrysler(supposedly this summer) but this will not come close to putting taxpayers in the black.  But this doesn’t count other subsidies for Chrysler, and there’s a request for a new $3.5 billion loan from the Department of Energy to fund retooling of plants to build more energy-efficient cars.

This is the enormous problem with the Obama Administration. On the one hand, he wants Chrysler to succeed, on the other he loads them up with demands for more energy-efficient cars (not, as they can figure out how to do it, or not when the market supports it, but right now!). As he gives subsidies and bailouts with one hand, he imposes extra costs with favors to unions and his green-economy fantasy. You could call it trying to have your cake and eating it too.

The bailouts did not prevent Chrysler and GM from going bankrupt — they did go bankrupt. Obama does get credit for forcing them into bankruptcy, but not into the bankruptcy court that has been so successful.  Bankruptcy came with a massive infusion of taxpayer cash, government ownership of the two firms, and an illegal dumping of bondholders interests in favor of politically connected unions.

Bailouts must not become a standard tool of economic policy.  Incentives matter, and firms and investors must face up to the consequences of their own decisions. The public’s view of the bailouts has been largely negative, and the public is correct.  Bailout supporters are attempting to change that perception in order to add bailouts  to the economic toolbox. Bad idea. We need far fewer interventions by Washington in the nation’s economy. Washington just doesn’t do it very well.

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