Right verses Left ~ Responding to Republicans’ Fears this Election Year

Greed, which drives capitalism, must be constrained at some point. But market competition these days, given the demise of organized labor and the growth of oligopolies, is totally disinclined to do so.

July 2, 2012 — According to a recent Wall Street Journal/NBC poll, the president’s reelection chances are looking up slightly, especially in battleground states where he leads Romney 50 to 43 percent among respondents. The recent Supreme Court’s decision on the constitutionality of the Affordable Health Care Act, welcome news among liberals, could, however, work against him considering how it might serve to galvanize the law’s detractors behind his presumptive rival, Mitt Romney. Nevertheless, republicans are nervous given that it’s still a close race just four months prior to the election and that four more years for Obama could mean two moderate to liberal justices to replace aging conservatives. This could mean a liberal court for at least a decade. His reelection would most definitely mean the survival of his health care law and the full implementation of its provisions. Yes, the stakes are high.

I recently received an e-mail question from a lady who, although a staunch republican, remains one of my dearest friends, this notwithstanding our conflicting political views. She said, speaking of the Affordable Health Care Act, “Curious to know how you can justify this burden to small businesses in America.”

To her message she added a quote by a Texas Congressman, Kenny Marchant, which was made following the Supreme Court’s surprise ruling last week.

“The decision doesn’t change the fact that millions of small businesses are going to be deluged with new taxes and job-killing regulations imposed by Obamacare. It also doesn’t change the fact that Obamacare is bad public policy that imposes new taxes on all Americans. Because of the Court’s decision, the quality of health care for millions of Americans will be greatly diminished, employers will be forced to drop health care insurance for their employees, and small businesses will need an army of compliance officers to navigate the Obamacare bureaucracy. Obamacare is unsound policy and disastrous for our nation’s fiscal solvency.”

She concluded her message with, “I believe the federal government keeps getting bigger and bigger which only drains more $$. The feds need out of the taking care of individuals business. I am not ready for a socialistic society. I believe the states can do a much better job.”

Here’s how I responded: “… every republican politician and conservative talking head is saying these same things, over and over, almost as if from the same script. But saying them over and over doesn’t make them so. I am equally convinced that that this is not only the right thing for the American people, it will eventually prove to be what it was intended to be — the “Affordable” Health Care Act. This will not be a burden to small business. It will be a boon. Now people will be better able to pursue their entrepreneurial ambitions, free from the fear of losing their employer-provided insurance coverage. Small businesses will be more willing to hire young college graduates because they won’t have to offer them health insurance initially and, for businesses of fifty and fewer employees, these are exempt from the requirement to provide insurance. Further, there will be more competition between insurance providers and this will eventually bring premiums down.

Read this which contains pros and cons attributed to the new law: http://useconomy.about.com/od/healthcarereform/f/What-Is-Obama-Care.htm. The pros are according the non-partisan Congressional Budget Office (CBO). The cons are from the conservative think tank, the Heritage Foundation. You can believe the claims made by whomever you choose. I chose to believe the non-partisan source.”

Now she’s telling me that this didn’t answer her question – “Just more one side against the other.” Her concern, she clarifies, is not just about Obamacare, it’s about everything – that the government keeps getting bigger and bigger draining more and more money from the economy. So, “Okay,” I answered,” define your terms. I want to be sure I answer your “actual” question. How do you measure the size of government?”

Thinking about how I might respond after she answers, I am anticipating that she might say government growth is measured by the amount of money it spends. Alternatively, she might answer that it is measured by the number of new government employees, or the number of new regulatory agencies, or the number of new regulations imposed on the private sector, and/or their cost burden. I don’t know how she might answer, so I’m researching each measure.

As to the first measure, the amount of money being spent: The Romney campaign would have us believe that government spending under Obama has accelerated at a pace without precedent in recent history. The truth is, according to PolitiFact, is that the rate of government spending growth has been lower under Obama than under any recent president http://www.politifact.com/truth-o-meter/statements/2012/may/23/facebook-posts/viral-facebook-post-says-barack-obama-has-lowest-s/. It is true that spending, as a percent of our GDP is up, but let’s be fair. Revenues collected, because of the recession, the Bush tax cuts, and the president’s own tax cuts for the middle class to combat the recession, has been way down.

Now to the growth in the number of federal government employees. At the end of 2010, according to the U.S. Office of Personal Management http://www.opm.gov/feddata/HistoricalTables/TotalGovernmentSince1962.asp, there were 35,000 fewer non-military federal government employees than there were under the Reagan administration. Yes, the total has increased slightly since 2010. But there are still more than two million fewer federal employees than there were at the highest point in recent history. It has been during Republican administrations, not Democrat ones, that the size of government, by this measure, has increased the most.

Okay, now to the number of new regulatory agencies, the number of new regulations, and the economic burden they impose. According to the Heritage Foundation (a conservative think tank), citing Government Accountability Office statistics, there were 75 major regulations adopted in Obama’s first two years in office. This compares to 120 during Bush’s entire first term. Yes, fiscal 2010 saw a record 43 new rules adopted. But, were these new rules needed? Given what has happened on Wall Street in recent years, what happened in the Gulf of Mexico with the BP oil spill, the growing problems with air quality over major cities like Dallas, water pollution from drilling/fracking operations, and how insurance companies have been denying coverage and dropping that of policy holders when they most need it, I believe that they were needed.

Our current health care system, which costs us eighteen percent of our GDP, has been growing in cost by sixteen percent per year and is rated, according to the World Health Organization as only the 37th best in the world. It is inhumane and it’s well past time for us to change it. That’s my stand on the matter.

Greed, which drives capitalism, must be constrained at some point. But market competition these days, given the demise of organized labor and the growth of oligopolies, is totally disinclined to do so.

I agree that regulatory activity is likely to pick up in coming years as agencies start implementing two of Obama’s major initiatives — the Affordable Care Act and the Dodd-Frank financial reform law. There will be economic costs associated with these initiatives. But there will be economic benefits as well. The “net benefit” — savings plus other factors, such as the economic value of lives saved – cannot be accurately calculated.  But they can be anticipated. It’s not just whether and to what extent needed regulations impact corporate profits. What’s also important to look at, according to the White House’s Office of Management and Budget (OMB) Watch, is how these regulations improve peoples’ lives.

Please feel free to post a comment, whether you agree or disagree.

Published in: on July 2, 2012 at 1:50 pm  Comments (6)  

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6 CommentsLeave a comment

  1. Very nice research and points. Its a shame all it will take is an outraged Beck, Coulter, Limbaugh or Hannity a few seconds of fabricated nonsense to bring your friend back into the fold, but I admire your tenaciousness.

  2. Mr.Garry,

    There were only two “redeeming” aspects of the Supreme Court’s ruling on Obamacare. The first is that it was NOT held as constitutional using the commerce clause of the Constitution. The second is that states are no longer in fear of losing all Medicaid funding if they choose not to participate in the expansion of the Medicaid programs in their state, which was mandated in the law as passed. Even though the Medicaid expansion aspect did state that the federal government would pick up a substantial amount of the costs of such expansion in the first few years, the bottom line is that any federal money used for this purpose is still money extracted from the public in the form of taxes. The only difference is what tax pool the money would come from – state or federal. This aspect sounds like extortion on the part of the federal government, had it remained in the law, since eventually the states would have to absorb the additional cost of the program.

    According to information posted on the website of the House Ways and Means committee on June 28, 2012, the estimated total gross taxes of the 21 taxes imposed by Obamacare has increased from $569.2 billion to at least $675.3 billion and maybe as much as $804.6 billion for 2013 – 2022. (http://waysandmeans.house.gov/News/DocumentSingle.aspx?DocumentID=301425 ). This information also states, and indicates each one, that 12 of those 21 taxes in Obamacare that can affect Americans earning LESS than $200,000 per year for singles and $250,000 for married couples (which President Obama assured us would not happen!).

    I tend to agree with your friend on the aspect of the federal government getting bigger and bigger, not only with Obamacare, but right in Obama’s back yard. According to a Newsmax article published on June 30, 2012, salaries paid to White House employees increased 14% under Obama, or close to $5 million in three years. (http://www.newsmax.com/US/white-house-salaries-Obama/2012/06/30/id/444092?s=al ) These salary amounts were also posted on the White House website, and interestingly enough, released during a 4:39pm media dump just before the weekend. These Bush – $37.8 million compared to $33.1 million, respectively. I guess I should have taken more art classes in high school because I might have been able to get a job as “chief calligrapher” for Obama and knock down $96,725 annually, or at least start as a “calligrapher” for a measley $85,953 annually. Come on now… what in the heck does the White House need with a calligrapher, much less a “chief calligrapher”? What do these people do that is so essential to the operation of the government of this country? Why doesn’t Obama control spending right in his own household where he has total control? It’s hypocritical to preach reduced government spending, and then not control it in your own bailiwick.

    As for the growth, or decline, in the number of federal employees you state that the total has increased slightly since 2010, but still more than two million fewer than at the highest point in recent history. I have not read the cited link, but I wonder why you didn’t specify what this “highest point” actually was. I would also remind you that with Obamacare, it’s estimated that the IRS will have to add an estimated 16,000 new employees to handle their new responsibilities under the law. And if the “mandate” under the law is NOT a tax (despite what the Supreme Court said) why is the responsibility for collecting any owed monies from citizens relegated to the IRS, of all agencies? It’s such a well-respected federal agency that is consumer friendly, right? Since it’s a health care program, why doesn’t HHS oversee this delightful prospect?

    As for the promulgation of federal regulations related to the enactment of Obamacare and Dodd-Frank, I suggest you haven’t seen anything yet. Surely there will be a dearth of regulations from Obamacare, a law that’s over 2,000 pages in length. God only knows what regs will come out of Dodd-Frank, especially since one aspect of that law is not controlled by Congress – the budget of a newly created agency whose employees are all appointed without any advice/consent from the Senate. Where’s the regulations for THAT monstrosity? Yet to come, I suspect.

    I have little faith in anything put out by the World Health Organization related to our nation’s standings in health care compared to other nations of the world. If we’re so bad at health care, why to people from other lands continue to come to America for health care? Such as from Canada that has a nationalized health care “service.” As part of the U.N. (I think) the WHO is suspect from the beginning on anything it puts out. But the U.N. is a whole different problem.

    Your statement “Greed, which drives capitalism, must be constrained at some point.” According to dictionary.com, the definition of greed is “excessive or rapacious desire, especially for wealth or possessions.” By this definition, are you alleging that everyone in this country who tries to start a business or becomes successful at a business is automatically “greedy” merely because he or she did so in a capitalistic setting? That’s a pretty broad accusation to be throwing out there, and if I were such a talented person that could start up a successful business I’d be less than pleased with your accusation. Granted, there are persons who will become greedy with success, but to say that every person who is successful in business is automatically “greedy” is an accusation I don’t think you can prove, despite your prowess at Internet research. How would you propose to “constrain” greed and how would you define it and enforce rules/regulations against it? If the only way to control/remove this “greedy” form of life would be to somehow “outlaw” capitalism, what would you replace it with? Some type of socialistic control? Each according to his need & each according to his capabilities? Isn’t that what the Russians tried in the last century? More government regulations, I suppose, that would have to come with yet more legislation, that you might actually be able to achieve under Obama, especially if through some miracle the democrats regain total control of both houses.

    I am imploring my 5 children to remain vigilant of what their government under this administration is trying to do to them and their children (a total of 7 grandchildren for me) and do whatever they can to protect themselves. I probably won’t live long enough to see all the long-term damage that will result from Obamacare and just about everything else this narcissist has wrought on this country. That is to my “relief,” but I fear for my children and grandchildren and am relatively powerless to protect them from this scourge at this stage in my life.

  3. This is an excellent response, Curtis. No, really. You should offer your services as a script writer for radio talk show hosts like Sean Hannity, Glenn Beck, Bill O’Reilly, or Mark Levin. Your arguments surpass most of what I’ve heard from them. They’re certainly more reasonable than Rush Limbaugh’s rants.

  4. Tell me again, where will the funds come from to support this program. Oh yes, the tax on tanning salons. The money will just roll in. The best part is that the tax will not bother Obama’s base , except maybe for trial lawyers whose pasty white “nieces ” need a little color. I am all for taxes on idiots as long as it applies to idiots on both sides

  5. My humble definition of greed is the pursuit of wealth at any cost. As I know a very successful venture capitalist and have watched him destroy a large local corporation while making loads of money for himself and his investors, I can understand the skepticism of some towards Bain Capital. But back to the subject. There will be tax credits for the companies that employ less than 50 people, that comprises 96% of the small businesses in the country. Those with over 50 will be fined $750.00. As an owner of a small business with 64 employees that always provided health insurance, that is a bargain. If you have more than 50 people and don’t provide good benefits then you are either greedy or a poor businessman in my mind. The health care act should provide a level playing field for all employers by evening out the costs of doing business for all.

    I know the Supreme Court defined the penalty as a tax, but Roberts needed to do that to justify his opinion. Calling it a cookie doesn’t make it a cookie, calling it a tax does not make it a tax. It’s a penalty levied against your tax refund and collected by the IRS, nothing more. And saying it should be left up to states makes no sense at all. How would civil rights in Mississippi look today if we left it up to them. How many states would have participated in Social Security or Unemployment insurance if left up to them?

    And all this talk about Socialism reminds me of the 50’s, only then everyone was communist. Seems the fear mongers always have to yell something.

  6. The Affordable Care Act contains some tax provisions that are already in effect. More will be implemented during the next several years. There is a list of provisions for which the IRS has issued proposed and/or final guidance at: http://www.irs.gov/newsroom/article/0,,id=220809,00.html. Yes (WINK, WINK) a 10 percent excise tax on services provided at tanning salons is included. The end of the Bush tax cuts will go a long way to provide necessary revenues, Mr. Bayless. They have contributed nothing to our economy, save for running up our national debt.

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