Stubborn Republicans

Dad,

You talk about yanking the stimulus bill, but I have to assume that’s just rhetoric. It’s easy to preach small government, but when you are running the show, and monetary policy is maxed out with 0% interest rates, the country is hurting with 10% unemployment, and everyone with a PhD in economics is telling you that you need fiscal stimulus to avoid a double-dip recession, you are really going to take this opportunity to give trickle-down-economics another shot? I don’t think so.

Take a look at the IMF report. They are cautious about budget deficits, but the greater risk is prolonging the Bush-Cheney recession. “Due to the still-fragile nature of the recovery, fiscal policies need to remain supportive of economic activity in the near term. The fiscal stimulus planned for 2010 should be fully implemented.”

You’ve always said that Obama’s income tax increase on those earning over $250k was going to hurt small businesses. This never quite made sense to me. You and I are both business owners (mine albeit smaller than yours) and we both find ways of taking money out of the company before it gets taxed by the IRS as income at the company level. What kind of small business hasn’t figured out how to avoid double taxation? Finally it all made sense when I read this:

http://www.rushlimbaugh.com/home/daily/site_101308/content/01125108.html.LogIn.html

I thought you weren’t going to quote this guy? Will someone please explain to Rush the difference between revenue and income? “If you're making $50,000 a year at a small business and there are five of you, that's $250,000 right there.” Um…no, Rush. That’s $250k in tax deductable salary expenses. Expenses are subtracted from revenue to get income which is then taxed with the “income tax”. You think the name “income tax” would make it clear, but apparently not. He then continues to talk about “the maximum average annual receipts” of businesses and compares it to the $250k “income tax” threshold. This guy is about as smart as my shoe.

As far as health care goes, forget about the public option. It’s dead. It’s not in the Senate bill, and it’s not in Obama’s. Move on. You also talk about allowing insurance companies to compete across state lines. Are you sure you understand the type of competition you are fostering there? It’s not competition between the relative efficiency and innovation of different insurance companies; it’s competition between state regulatory environments. It’s “let the least regulation win”.

Alabama has the least regulation…how’s that been working out for them?
http://www.americashealthrankings.org/StateRanking.aspx

Not too well, eh? I wonder why that is? Maybe it’s because people have a natural tendency to under-insure themselves, and we need regulation to enforce adequate insurance levels just like with automotive insurance. Maybe it’s because what passes for insurance these days is just companies trying to pick off healthy individuals and deny those with real health problems due to “pre-existing conditions”. Let’s face it. Health insurers want guys like me, who are healthy, young, and don’t spend much on health care. They avoid people like you, Dad. You are older, and more likely to have significant health care costs. When all the guys like me leave for some insurer in Alabama that provides dirt cheap health insurance with no frills, guys like you end up paying more for health insurance and some of you can’t afford it. We know what happens in this scenario, because it’s exactly what’s been driving up the costs of health care all these years -- people who are under-insured or without any health insurance drive up costs for everyone else.

Health care is one of those issues where the invisible hand leads us to our destruction. We need to stand together with regulation and bigger-than-you-are-comfortable-with-government to have any hope of creating a system of fair, ubiquitous, and efficient health care.

The one good argument you Republicans have on health care is tort reform. I know this and Obama knows this. It’s pretty clear that the fear of being sued is driving many bad health care decisions. Why aren’t Democrats taking this issue on then you ask? Probably because trial lawyers are major contributors to the Democratic party. But the issue has been put on a silver platter and if Republicans would get off of their asses, they could incorporate this into the health care bill that is going to pass one way or the other. If the bill doesn’t have tort reform, there is no one to blame but stubborn Republicans.

--Son