health bill and higher taxes

[littlebuddy]

Charles Krauthammer: Washington, D.C.

Health bill brings higher taxes


As the night follows the day, the value-added tax cometh.
With the passage of Obamacare, creating a vast new middle-class entitlement, a national sales tax of the kind near-universal in Europe is inevitable.
We are now $8 trillion in debt. The Congressional Budget Office projects that another $12 trillion will be added over the next decade. Obamacare, when stripped of its budgetary gimmicks -- the unfunded $200 billion-plus doctor fix, the double counting of Medicare cuts, the 10-6 sleight-of-hand [[counting 10 years of revenue and only 6 years of outflows) -- is at minimum a $2 trillion new entitlement.

It will vastly increase the debt. But even if it were revenue-neutral, the health care bill pre-empts and appropriates for itself the best and easiest means of reducing the existing deficit. The bill's $500 billion of cuts in Medicare and $600 billion in tax hikes are no longer available for deficit reduction. They are siphoned off for the new entitlement of insuring the uninsured.





This is fiscally disastrous because, as President Obama himself explained last year, our unsustainable fiscal path requires control of entitlement spending, the most ruinous of which is out-of-control health care costs.

Obamacare was sold on the premise that, as Nancy Pelosi put it, "health care reform is entitlement reform. Our budget cannot take this upward spiral of cost." But the bill enacted accelerates the spiral: It radically expands Medicaid [[adding 15 million new recipients/dependents) and shamelessly raids Medicare by spending on a new entitlement the $500 billion in cuts and the yield from the Medicare tax hikes.

Obama knows that the debt bomb is looming, that Moody's is warning that the Treasury's AAA rating is in jeopardy, that we are headed for a run on the dollar and/or hyperinflation if nothing is done.

Hence his deficit reduction commission. It will report -- surprise! -- after the November elections.

What will it recommend? What can it recommend? Sure, Social Security can be trimmed by raising the retirement age, introducing means testing and changing the indexing formula from wage growth to price inflation.

But this won't be nearly enough. As Obama has repeatedly insisted, the real money is in health care costs, which are now locked in place by the new mandates.
That's where the value-added tax comes in.

For the politician, it has the virtue of expediency: People are used to sales taxes, and this one produces a river of revenue. Every 1 percent of VAT would yield up to $1 trillion a decade [[depending on what is excluded -- if food is exempted, for example, the yield would be more like $900 billion).

It's the ultimate cash cow. Obama will need it. By introducing universal health care, he has pulled off the largest expansion of the welfare state in four decades. And the most expensive. Which is why all of the European Union has the VAT. Huge VATs. Germany: 19 percent. France and Italy: 20 percent. Most of Scandinavia: 25 percent.

American liberals have long complained that ours is the only advanced industrial country without universal health care. Well, now we shall have it. And as we approach European levels of entitlements, we will need European levels of taxation.

Obama set out to be a consequential president, on the order of Ronald Reagan. With the VAT, his triumph will be complete. He will have succeeded in reversing Reaganism. Liberals have long complained that Reagan's strategy was to starve the [[governmental) beast to shrink it: First, cut taxes then ultimately you have to reduce government spending.

Obama's strategy is exactly the opposite: Expand the beast, and then feed it. Spend first, which then forces taxation. Now, with the institution of universal health care, the beast will have to be fed.

And the value-added tax is the only trough in creation large enough.
As a substitute for the income tax, the VAT would be a splendid idea. Taxing consumption makes infinitely more sense than taxing work.

But to feed coming expenditures, the VAT must be added on top of the income tax.
Ultimately, even that won't be enough. As the population ages and health care becomes increasingly expensive, the only way to avoid fiscal ruin [[as Britain, for example, has discovered) is health care rationing.

It will take a while to break the American populace to that idea.
In the meantime, get ready for the VAT. Or start fighting it.

[Pam]

You couldn't have posted this in one of the other 26 threads on health care?

[ghettopalmetto]

Charles Krauthammer: Washington, D.C.

Health bill brings higher taxes


As the night follows the day, the value-added tax cometh.
With the passage of Obamacare, creating a vast new middle-class entitlement, a national sales tax of the kind near-universal in Europe is inevitable.

Does one really need to read any further to know this is an absolute bullshit column? There have been exactly ZERO proposals for a VAT to fund health care.

[rb336]

more baseless fear-mongering from one of Town Hall's most insipid "commentators".

btw, there is a fairly strong body of evidence that VATs are actually good for the export economy - VAT credits for export work as a reverse tarriff

[Detroitej72]

Liberals have long complained that Reagan's strategy was to starve the [[governmental) beast to shrink it: First, cut taxes then ultimately you have to reduce government spending.

Two things that stand out in that sentence. First, why do cons always toss the "liberal" tag to anyone who dares to think differently than them? More proof of the indoctrination of the ditto heads.

Second, in case you didn't notice, Reagan's strategy was to starve the government by cutting taxes to the wealthy and drastically increasing the deficit by spending very un-conservatively.

Anyone who ever reads the papers knows that Krauthammer is an unapologetic conservative who is hardly impartial.

[johnsmith]

Two things that stand out in that sentence. First, why do cons always toss the "liberal" tag to anyone who dares to think differently than them? More proof of the indoctrination of the ditto heads.

Awww, you don't like the word "liberal?" Why do you use the words "ditto-heads" and "cons" then, hypocrite?

I think these categorizations should not be used, as people cannot simply be grouped under two labels. But, as you see here, the "cons" keep using them, as do the "liberals."

[Zacha341]

Excellent points JS! The whole categorization thing is going to be our undoing - better than any bullet, or act of terrorism, initially. Right or Left we best step outside of partisan loyalty and look at facts BEYOND the label preamble, post-amble and ambling in between!!!

Good ideas and reasonable cautions are too often held captive or jettisoned as lies, wrong or dismissible if they come from the wrong side!! Meanwhile while we fight like children the world watches......

Awww, you don't like the word "liberal?" Why do you use the words "ditto-heads" and "cons" then, hypocrite?

I think these categorizations should not be used, as people cannot simply be grouped under two labels. But, as you see here, the "cons" keep using them, as do the "liberals."

Originally Posted by Detroitej72
Two things that stand out in that sentence. First, why do cons always toss the "liberal" tag to anyone who dares to think differently than them? More proof of the indoctrination of the ditto heads.

[ghettopalmetto]

Awww, you don't like the word "liberal?" Why do you use the words "ditto-heads" and "cons" then, hypocrite?

The term "dittoheads" was coined in the early 1990s by Rush Limbaugh's audience to describe themselves. Sorry if you just got interested in politics on January 20, 2009. Please catch up.

[gibran]

always consider the source...and that source is just about as vile as they get...with the inclusion of Beck, Palin and Rush ....

we are at at dangerous point when the rhetoric of hate over rides the voices of common decency....you have to ask yourselves ...what does this velocity really serve...Kruat and the neocons hate Obama...period and their cover is the Health care reform ...but in reality we all know they just hate all that he stands for...and this rhetoric of "gag me" false patriotism is just that...

actually the word neocon is a recognized movement with followers and a agenda...

[Papasito]

Holy copy/paste :O

[oladub]

Does one really need to read any further to know this is an absolute bullshit column? There have been exactly ZERO proposals for a VAT to fund health care.

ahem, beside Paul Volker...

"A VAT is a tax on the transfer of goods and services that ultimately is borne by the consumer. Highly visible, it would increase the cost of just about everything, from a carton of eggs to a visit with a lawyer. It is also hugely regressive, falling heavily on the poor. But VAT advocates say those negatives could be offset by using the proceeds to pay for health care for every American -- a tangible benefit that would be highly valuable to low-income families. "
-VAT Levy Viewed as Way to Reduce Deficits, Fund Health Reform

[Diehard]

Good ideas and reasonable cautions are too often held captive or jettisoned as lies, wrong or dismissible if they come from the wrong side!! Meanwhile while we fight like children the world watches......

How true. I find myself shaking my head constantly at the Party of No's [[and the Fox talking heads') supposed rationales for their opposition to everything Obama does and asking, "how much is it really about the spending and how much is because you hate Obama?" "How much is it really about Chicago not being a good locale for the Olympics and how much is because you hate Obama?" "How much is it because you really don't want health care reform..." etc.

[Zacha341]

Yep, I agree. I've been thinking about that insanity regarding politics for the last 20 years and it's getting worse.

Additionally, we have to sort it out on all ends and perspectives. We have to ask is this a specific criticism just or compelling? Or just a witch hunt based on subjective bias against Obama as president, no matter what he does or did.

IMO we might benefit from being mindful and concerned about these latest rounds of policies and treaties proposed.

If we get caught in the middle, reflexively dismissing ALL concern because it flags the "right-winged" catagory we may get blind-sided. We need to evaluate what are told and sold as thinkers. Not party members.

We as Detroiter's should know better... LOL! Or not... But how often was Kilpatrick bitterly defended, because after all it was the "suburbanites" wanting him taken down...

And in his case sure there was raucous glee of joy from default enemies local and out of town, but in the end he was corrupt.

No!!! I AM NOT SAYING THE PRESIDENT OBAMA IS LIKE KILPATRICK... let me make that crystal clear. But NO man is beyond scrutiny!

Nor should all caution be dismissed especially as not just coming from the "other" side as it used to be.

How true. I find myself shaking my head constantly at the Party of No's [[and the Fox talking heads') supposed rationales for their opposition to everything Obama does and asking, "how much is it really about the spending and how much is because you hate Obama?" "How much is it really about Chicago not being a good locale for the Olympics and how much is because you hate Obama?" "How much is it because you really don't want health care reform..." etc.

[gibran]

maybe the backlash is beginning and we will all see the silliness of the anger of Rush, Beck, Palin, et al..and move to a place where find compromise ...this is getting out of hand...we need real republicans and conservatives working with liberals and democrats...;

not just saying no..... and maybe the sun will come out tomorrow tomorrow, I love you tomorrow.... well got to have hope for something to stop this slide into insanity...

[Big Dog]

I'm afraid, there will be blood in the streets.

[firstandten]

How true. I find myself shaking my head constantly at the Party of No's [[and the Fox talking heads') supposed rationales for their opposition to everything Obama does and asking, "how much is it really about the spending and how much is because you hate Obama?" "How much is it really about Chicago not being a good locale for the Olympics and how much is because you hate Obama?" "How much is it because you really don't want health care reform..." etc.

Great post !

Unfortunately when I hear talking points with no rationalization behind it then I think its all about Obama. When I hear "socialist" and other out the box comments where it is obivious no research was done I have no choice but to conclude that its about Obama, they don't like the black man and nothing he could do would satisfy them. The fear that I have is that the demographics aren't lining up very well for these Rush and Beck followers, and with our society moving away from a manufacturing based economy to an more tech. base economy the fear and uncertainty surrounding them not being on the top of the food chain anymore, may result in acts of domestic terrorism.

One such example comes to mind. The right wing militia, teabaggers types are afraid Obama is going to take away their right to bear arms. Obama hasn't said jack about the second amendment, hasn't even hinted of anything that you can say he's taking your guns, yet they believe it anyway. So yes, its about the black man in office and masking it with code words and deflection isn't going to fly.

[gibran]

SOME people are hiding behind the HC debate and hooding their real feelings....sorry to be so blunt...our economy is slowly recovering [[increase in retail spending to highest levels in three years, housing starts, small and modest increase in jobs, passing HC legislation, stimulus jobs are starting to increase construction, DOW has temporary recovered, agreement to limit nukes, tough LOVE towards Israel and the Palestinians, pressure on Iran, etc) and yet they brand this man in labels they don't really understand...he has a congress the is made up of sheeple and a party of no that vows to block everything put forth [[ to appear tough) when indeed they are driving our country into waters it hasn't seen in years. Why? Because they hate the fact that they lost, and that the president is who he is.

The party of No is now turning to the tea party and the likes [[people who celebrate April as if it is the declaration of independence month, when in reality it is the anniversary of a horrible bombing and a tragedy for all Americans who pay their taxes and don't stockpile weapons and children in a small Texas towns)....these teabaggeres hate government [[yet they carry flags), don't want taxes [[but want government services), want to protect their interests [[at the expense of others), would repeal any social service we have fought so hard to get [[until they need it for his or her self) and claim to be moral [[yet the KKK in some regions fully endorses them)....they go to church on Sunday and hate minorities and immigrants on Monday [[while eating fruit picked by them and living under the roofs fixed by them)....these people are about to coop real conservatives [[with compassionate hearts) and destroy the Republican party; and they continue to have people like Sarah Palin and Rick Perry [[who are one step away from causing cession actions) develop their agenda...they show up a meetings and yell and scream...when they don't even know the real stor behind the laws...

is this who we want representing America in the world stage? with Sarah's finger on the button, protecting our interests...do we want bomb bomb bomb Iran in charge of our foriegn policies [[even though he is in a fight for his life against an angry talk show host now)...a person who wears a foreign flag pin on her lapel running our government and whose own Pentecostal church had a guy praying and hugging her in church that incited stonings and witch hunts in Africa...look into the mirror folks and say is this the new republican party you want ? or is there another alternative....

we need real people that are willing to put ALL of their feeling behind what is best for our country ....humanity and compassion for all Americans EQUA:LLY with justice for all....

[oladub]

Well sorta...

Supporting the feel good idea that the economy is really getting back on it's feet is an article from MSNBC Economy is perking up, Ford sales are way up, and domestic rail traffic is up.

If we can overlook
-this year's federal debt being 10% of GDP. Even Bernanke, who contributed to this, says that anything above and beyond 4-7% is unsustainable. "Cutting the deficit ultimately will mean choosing between cutting those entitlements, which will soar as baby boomers retire, raising taxes, or other spending cuts." link
-Paul Volker says he thinks that the OMB's projections for the health care plan are incorrect and that if he is right, the result will be 'disaster'. He is advocating a VAT as are some Democrats.
-businesses as well as state and local governments have been hit with new health care expenses to make magical health care numbers work.
-unemployment, which we were told would not exceed 8% if Porkulus was passed, is still at 9.7%. It takes 300,000 new jobs a month to just keep up with population growth. That hasn't happened.
-" In the U.S. mortgage market, one-in-10 householders are at least one payment behind [[Q3 2009), up from one-in-14 [[Q3 2008). If foreclosures [[now at 4.47 % up from 2.97% one year ago) are included, then one-in-seven mortgagors are in some form of housing distress. " link
-33 states have exhausted their unemployment compensation kittys as the federal government has stopped providing extentions.
-California's state pension fund is $500M in the hole and it's general budget deficit is $20B.
-Social Security is now drawing from the federal budget instead of contributing to it. This happened 10 years before expected.
-although the housing market hasn't turned around despite $8,000 incentives, interests rates are starting to edge upward.
-commercial real estate is about to collapse.
-we are still involved in expensive wars.
-China will allow it's currency to rise which will raise the costs of its products, make imported oil and other commodities more expensive, and make China less willing to buy US Treasuries. If we lose our treasury customers, interests rates will rise here, making recovery more difficult.
- the recent Treasury auction was already anemic indicating higher interest rates.
-oil prices are already climbing.
-and all the numbers at http://www.usdebtclock.org/ .

What we are seeing is the effect of the printing press. If I had a printing press in my basement, I could have a new car in my driveway and the neighbors would think I was doing better too. Keeping in mind that $1T equals $6,000 per US taxpayer, under Bush/Obama the banks have recieved $14T from combined Congressional, Treasury, and Federal Reserve sources [[source Mother Jones), and $7T of new money has been issued. "The nonpartisan Congressional Budget Office [[CBO) says that President Obama’s budget and deficit projections are too low. The president’s budget will incur $9.3 trillion in federal deficits between 2010 and 2019 --$2.3 trillion higher than Obama had originally claimed." link There is overlap in those figures but whatever slight uptick or levelling off of the economy might be related to those numbers which only postpone, and make worse, the inevitable.

"The real economy remains fragile. Government actions, such as fiscal stimulus and special industry support schemes [[cash for clunkers; investment incentives, trade credit subsidies), have boosted demand and industrial activity in the short term. As Wells Fargo CEO John Stumpf told The Wall Street Journal on September 19, 2009: “If it’s not a government program, it’s basically not getting done.� Private demand remains somnolent. The problem remains as government incentives encourage current consumption and investment but ultimately “steal� from future demand." link

[Jimaz]

Business Week: Why the Obama Plan Is Working

The Standard & Poor's 500-stock index is up more than 74% from its recessionary low in March 2009. Corporate bonds have been rallying for a year. Commodity prices have surged. International currency markets have been bullish on the dollar for months, raising it by almost 10% since Nov. 25 against a basket of six major currencies. Housing prices have stabilized. Mortgage rates are low. "We've had a phenomenal run in asset classes across the board," says Dan Greenhaus, chief economic strategist for Miller Tabak + Co., an institutional trading firm in New York. "If Obama was a Republican, we would hear a never-ending drumbeat of news stories about markets voting in favor of the President."

Little more than a year ago, financial markets were in turmoil, major auto companies were on the verge of collapse and economists such as Paul Krugman were worried about the U.S. slumbering through a Japan-like Lost Decade. While no one would claim that all the pain is past or the danger gone, the economy is growing again, jumping to a 5.6% annualized growth rate in the fourth quarter of 2009 as businesses finally restocked their inventories. The consensus view now calls for 3% growth this year, significantly higher than the 2.1 % estimate for 2010 that economists surveyed by Bloomberg News saw coming when Obama first moved into the Oval Office. The U.S. manufacturing sector has expanded for eight straight months, the Business Roundtable's measure of CEO optimism reached its highest level since early 2006, and in March the economy added 162,000 jobs—more than it had during any month in the past three years. "There is more business confidence out there," says Boeing CEO Jim McNerney. "This Administration deserves significant credit."...

I recommend reading the entire article.

[gibran]

no kidding ola....where would we be if Palin/Mcain won..in the same status qou that got us here...if not worse...it takes money to develop a way out of this playground...see past the obvious and recognize that things are stabilizing [[yes and still fragile: they will be as long as we are in a wartime econonmy)....see what has been acomplished ..don't fool yourself into hating anothers success...because it will take longer than a week to getus out o fthis...if we have a sustainable recovery and stop the bleeding [[in more ways than one)...we will getout of this in less years than predicted...but if we let those who screwed this up regain control..we will robbing our childrens children...cutting programs that are social in nature rotts the foundation of our socities morals and econonmy...sorry...poor people turned into middle-class spend ...and spending real income will help...

[oladub]

Gibran, You should mortgage your house and spend all the money on stock if you believe in all the smoke and mirror gimmickry. Read the MSNBC feel good article a few time first to gain resolve.The Federal Reserve owned banks have been investing some of their Federal Reserve printed dollars in the stock market. If it works for them, it should also work for you. Federal Reserve and Treasury policies have squashed the interest payments that savers, especially the elderly, depend on so they too have moved money into the stock market. Both policies have helped stock prices which are again at high P/E ratios.

Roosevelt also stabilized the economy using much the same tactics. Unfortunately, he wasn't able to get the unemployment down to normal either and he had to devalue the dollar by 40%. "The problem remains [[then as now) as government incentives encourage current consumption and investment but ultimately “steal� from future demand." I would call that a false read like taking one's termperature after taking asperin but if this is all over, you should be spending like crazy.

I doubt that the economy would be much worse had McCain become President. After all, he would have been guided by the Goldman-Sachs crowd just like Bush and Obama. Senator Obama, is after all, one of those who, as you put it, 'screwed this up' by voting for the Wall Street bailout, funding every extention of the war, and siding with the Federal Reserve every time Bush and the bankers asked him to.

I'm curious why you think that we will 'we will get out of this in less years than predicted'. Is it because the same people who told us unemployment wouldn't exceed 8% with Porkulus told you so?

We are robbing our children with every dollar of deficit borrowed. Prior to the 1930s, the total public and private debt in the U.S. was between 150% and 160% of GDP. Now it's close to 350% of GDP. If and when our economy stabilizes, we will be servicing a huge debt and be trying to compete with China which has a surplus to invest.

http://www.usdebtclock.org/

[gibran]

agree in principle to much [[generally do) with what you are saying ...however, we differ on how increasing social capital and jobs will stimulate the recovery..and if Our President didn't do something we would have been in worse shape...we need a better plan...but again what we got was a band-aid with real reform hopefully to follow..what I don't get is why we can't see it would have been worse immediately if something hadn't been enacted to slow this economic freefall...we are in trouble..but more of the same would have made it even worse and we have blimps on the screen that indicated we have something happening ...it will take a while to get this on track...but something to think about where will the jobs be when our brave men and women come home....

I generally agree with fiscal conservative measures ..with one exception...when it cuts funding to people with disabilities and the poor....

[Zacha341]

Interesting comments, Gibran... I wish Sarah Palin would just go away... LOL! Every time she speaks her comments illegitimize even the reasoned conservative thought lumping them all in to the great dispensable Palin-Bush-Beck-Foxnews, Who-Hah-hah Fruit-Roll-Up!! To be discard in full.

Of course if one does NOT believe there's any reasoned or useful conservative thought then it's moot to point out the option of it being deemed illegitimate! I get that.

Back to the Palin, her latest is to state that president Obama has no experience in nuclear matters as only junior senator with a background a "community organizer" blah, blah... That can be debated, and will be on both sides of the isle, but she does NOT have any experience at that level either!! And reading notes written on her hand...? Argh. Just give it up!!!...Hah! I don't share in the visceral HATRED that some have for her, but she could not even finish out her governorship!

So long as she's one of the spokespersons for the er-uh-hmm right wing [[thus, conveniently repping all conservative thought) she functions to render such useless for investigation.... or consideration.

SOME people are hiding behind the HC debate and hooding their real feelings....sorry to be so blunt...our economy is slowly recovering [[increase in retail spending to highest levels in three years, housing starts, small and modest increase in jobs, passing HC legislation, stimulus jobs are starting to increase construction, DOW has temporary recovered, agreement to limit nukes, tough LOVE towards Israel and the Palestinians, pressure on Iran, etc) and yet they brand this man in labels they don't really understand...he has a congress the is made up of sheeple and a party of no that vows to block everything put forth [[ to appear tough) when indeed they are driving our country into waters it hasn't seen in years. Why? Because they hate the fact that they lost, and that the president is who he is.

The party of No is now turning to the tea party and the likes [[people who celebrate April as if it is the declaration of independence month, when in reality it is the anniversary of a horrible bombing and a tragedy for all Americans who pay their taxes and don't stockpile weapons and children in a small Texas towns)....these teabaggeres hate government [[yet they carry flags), don't want taxes [[but want government services), want to protect their interests [[at the expense of others), would repeal any social service we have fought so hard to get [[until they need it for his or her self) and claim to be moral [[yet the KKK in some regions fully endorses them)....they go to church on Sunday and hate minorities and immigrants on Monday [[while eating fruit picked by them and living under the roofs fixed by them)....these people are about to coop real conservatives [[with compassionate hearts) and destroy the Republican party; and they continue to have people like Sarah Palin and Rick Perry [[who are one step away from causing cession actions) develop their agenda...they show up a meetings and yell and scream...when they don't even know the real story behind the laws...

Is this who we want representing America in the world stage? with Sarah's finger on the button, protecting our interests...do we want bomb bomb bomb Iran in charge of our foriegn policies [[even though he is in a fight for his life against an angry talk show host now)...a person who wears a foreign flag pin on her lapel running our government and whose own Pentecostal church had a guy praying and hugging her in church that incited stonings and witch hunts in Africa...look into the mirror folks and say is this the new republican party you want ? or is there another alternative....

we need real people that are willing to put ALL of their feeling behind what is best for our country ....humanity and compassion for all Americans EQUA:LLY with justice for all....

[Jimaz]

I'm curious why Palin's popularity hasn't been denounced as a "liberal media" conspiracy plot more than it has. She's cheapened the Republican brand—clearly intended to dredge the more numerous if more ignorant votes from the herd. Why have the Republicans not yet blamed their own Palin cheapening on the "liberal media"?

Are they slacking off or am I merely anticipating future false accusations?

[oladub]

I generally agree with fiscal conservative measures ..with one exception...when it cuts funding to people with disabilities and the poor....

Gibran, Ron Paul would like to slash federal spending in half but offers some thoughts on how to do it without hurting the poor. I suspect that most other fiscal conservatives would not consider the needs of the poor. Paul, instead, would first go after corporate welfare and illegal wars. Such efforts would create huge battles with the powers that be which wouldn't be won overnight. He recognizes that the federal government has made people dependant upon social welfare programs such as Social Security. Even if such programs could eventually be phased out, people who have paid into them in good faith would be rewarded to fulfill social contracts. In theory, people would have more of their own money still in their own pockets. That would reduce the number of needy so that government would have fewer needy people to assist. State governments would pick up the slack if there was a demand for assistance programs. Massachusetts already has its own health care system for instance.