Category Archives: Broken in the USA

guns & gas

Letter to the Editor of our local Newspaper

Letter to the Editor of our local Newspaper

February 1, 2020

Dear Editor HDT:

I read with considerable interest your reprinting of the editorial from the Adirondack Daily Enterprise (N.Y.) in the January 19, 2020 edition of the HDT. The title of this editorial was “National debt growth is not sustainable.”

All of the statistics cited are true and alarming. However, the situation is even more dire than represented. I would title my concern: “The accelerating growth in national debt and future obligations are out of control.”

One significant measure that we should be tracking is the debt to GDP (Gross Domestic Product) ratio. In 1981 that ratio stood at 31%. Today that same ratio is approaching 107% an increase of almost 3 ½ times in less than 40 years. Our ability to pay what we owe must come from GDP. Our country’s financial condition is highly leveraged and, therefore, more at risk. The trend in increased deficit spending has been consistent, regardless of which political party has been in control.

It is important to note that there is a difference between the “official” national deficit and the “actual” deficit. Currently, the official annual projected deficit for 2020 is reported at $1.052 trillion, but the actual figure is close to $1.3 trillion. Budget elements for “classified” projects, waste, abuse, and fraud are not included in the most commonly reported number.

Where have the fiscal conservatives gone? We used to be able to count on the GOP to keep spending under control. The approved budget in 2019 has resulted in more than a $1 trillion annual deficit while the country is experiencing a decent increase in GDP, currently projected at 2.1% for 2020. We had large deficits in the past, but usually only when the economy was in recession. What is happening in 2019 is unprecedented. The economy was in ok shape before 2016, averaging a growth rate slightly over 2 %. The deficit-financed tax cut increased the growth rate to a bit over 3%, but that was merely a short-term tactic. The impact on the deficit will last for at least another ten years. The rate of growth in the economy is returning to the level of several years before 2016, and some economists are predicting a further slowdown. The growth rate for the 2nd quarter of 2019 was 2.1%, and it was 1.9% in the 3rd quarter.

Almost none of our elected representatives are willing to address this issue. We continue to approve budgets with no regard to the source of income. I am not opposed to a budget deficit. But when our National Debt exceeds our annual GDP, I think it is past time to cut spending, especially while the economy is still reasonably robust.

While the accelerating deficit is alarming, the level of unfunded liabilities is atrocious. Unfunded liabilities are “future” spending commitments that have no revenues targeted to offset these obligations. According to the Treasury Department, total U.S. unfunded liability includes Social Security (along with Medicare Parts A, B, and D), federal debt held by the public, plus federal employee and veteran benefits. This number currently exceeds $122 trillion and is also accelerating. It amounts to over $1 million per family.

What this means is that future generations are facing a bleak economic outlook. We have been approving future obligations is the short term without any concern for the longer-term consequences. It seems like our attitude is to take care of ourselves today and leave it to our descendants to take care of the debt we have created. Does this seem fair to you?

There are reasonable solutions to balancing the Federal budget, but they will impact several industry segments that are reaping significant profits from our spending habits. The amount of political funding provided by these special interest groups will be difficult to combat. I doubt that our current government representation dares to address this issue. My opinion is that we need stricter, effective and enforceable campaign spending limits and senate and congressional term limits. If career politics were replaced by service to the country then our financial condition would improve. It is important to remember that controlling the current budget is only a start. We must also begin to take responsibility for future spending commitments and ensure that there are income sources to meet these obligations.

How is our country doing, carbon footprint wise, on energy production?

How is our country doing, carbon footprint wise, on energy production?

Over the past 65 years we have made some progress, but not as much as many other countries. Even today almost 64% of our energy is based on petroleum-based products. There are now less than 25 countries that produce over 80% of their energy from renewable source while we only produce 17% via these same sources.

U.S. electricity generation by source, amount, and share of total in 2018 Energy

US Energy Information Administration (Source)

Total – all sources  100%

Fossil fuels (total)63.6%

Natural  35.2%       Coal  27.5%        Petroleum (total)  .6%   (Petroleum liquids.4%   Petroleum coke  .2%)                         Other gases   .3%

Nuclear  19.4%

Renewables (total)  16.9%

Hydropower  7%           Wind  6.5%           Biomass (total)  1.4%  (Wood  1.0%   Landfill gas  .3%                                                Municipal solid waste (biogenic)  .2%   Other biomass waste <0.1%)           Solar  1.5%   (Photovoltaic  1.4%                            Solar thermal  .1%)      Geothermal  .4%      Pumped storage hydropower3  .1%   Other sources   .3%

Healthcare Revisited – Summary of Preceding Several Weeks’ Posts

Healthcare Revisited – Summary of Preceding Several Weeks’ Posts

Medicare for all is an interesting idea, but I’m not certain it will be as effective overall when compared to some of the other “proven” systems. It will almost immediately reduce some administrative and “profit” factors, but this will only have a small impact on costs. Baselining is the idea of not re-inventing the wheel and makes common sense. By evaluating several effective systems, it allows us to choose the very best aspects of each. In addition to evaluating the systems “process” it will be important to understand how savings can be achieved within each individual component that contributes to costs.

Regardless of which system is chosen (or designed), we will improve our quality of care.

Currently, we have several “special” interests that are making big money from our current system. They will not go along with any system that threatens their activity and profits. They are Insurance companies, drug companies, the legal profession, physicians, and hospitals. Achieving pricing equity even close to the five baseline countries will negatively impact significant industries. For this reason, any new system should include a “phase-in” period which would allow these industries to adjust.

Why do I say that this topic is by far the most important issue facing us today?

“As of 2019, the per capita cost of healthcare in the US has exceeded $11,000 for every adult, child & infant. Our per capita cost is almost three times the average of the EU Countries and more than what is required for a family to provide for other essentials. Nationwide we are spending almost $3.5 trillion a year on healthcare.

If a family of four had to pay their share of this cost, they would be facing almost $44,000. Allowing for reasonable funds to provide for basic housing, food, transportation, clothing, repairs & maintenance, insurance & a modest contingency fund it is evident that anything less than a family income of $75,000 per annum will require some form of subsidy just to cover the basics.

Currently, about 1/3 of the cost is being funded by the government in the form of Medicare & Medicaid. Another 1/3 (or slightly more) is funded through company healthcare plans, and the remainder is paid by citizens in the form of premiums, deductibles, and co-pays. From a company point of view, this high cost to them reduces the funds available for wage compensation.”

Our healthcare system and special interest involvement imposes a heavy tax on the public in 2 ways. First, it causes Government funding for both Medicare and Medicaid to be at least $500 billion more than it should. Next, it results in insurance premiums, both for employers and private payers, to be at least 1 trillion dollars higher than they could be. Of the $3.5 trillion that is paid out annually at least $1.5 trillion of it goes into the coffers of special interests.

“Families on private health plans pay an average annual premium of $4,968 or $414 per month. The average deductible and co-pays for these plans is $ $3,879”.  Source: https://brandongaille.com/average-cost-private-health-insurance-per-month/

Between the premiums, the deductibles and copays the average family will pay almost $9, 000 per year for health insurance, and this does not include the amounts that are being provided by companies or being subsidized by the government. This regressive healthcare tax is a heavy burden on the middle class. Employers are also facing the decision to pay higher wages or continue to fund escalating insurance prices. In many cases, employers are forced to hold increases on wage levels and increase employee funding participation in insurance plans.

Assuming that we can change our system and eliminate the current $1.5 trillion in tax, the next question is how to distribute the savings. $500 billion will occur through a reduction in the current level of Medicare and Medicaid spending. The remaining $1 trillion should provide employers and private pay individuals with a reduction or elimination of premiums. That amount would add an average of $6,300 to every wage worker annually if distributed equally.

This one issue has the potential to reduce the national budget deficit to an acceptable level and at the same time, increase the average wage for the middle class.

One final comment. While the actual amount of medically related bankruptcies is in dispute, there is no doubt that it comprises a significant portion of all bankruptcy events.