Random thoughts from a warped and fevered mind...
While much attention has been focused on what is going on in Washington with our federal legislature, many of the more ferocious tax and spend battles will be fought at the state level. Most states are waking up to the fact that overly generous pension plans for state and municipal workers will ultimately decimate state coffers. The typical reaction of most states has been to raise taxes and demand more from property owners and businesses within their borders. This is not without consequence. Chief Executive magazine recently ranked California as the worst state in the U.S. in which to do business for this very reason. The editors went so far as to call California "the Venezuela of the United States (ouch!). The top three states, based on a ranking of 12 factors that included tax rates, crime statistics and quality of life, among others, were: Texas, North Carolina, and Tennessee. Each of these states has a low tax environment and they are pro-business. Government at all levels is faced with tightening their belt and re-thinking what services they deliver and how they deliver them. These battles at the state houses around the country will be interesting to watch. In the meantime, look for more companies to relocate to states that have a favorable tax environment.
I was going to work on my roof this weekend, but I got shingles.
Have you heard of the Independent Payment Advisory Board? No? You will. Tucked quietly away in the healthcare socialization bill is a provision establishing the IPAB. And who are they? According to the terms of the healthcare bill, the IPAB will be an advisory board appointed by the President that will consist of 15 members that will serve 6 year terms. And what will they be doing? They have one core function- to decrease healthcare costs that the government incurs. How will they do this? By determining where to cut Medicaid services and procedures. Simply put, this group will determine who will receive services based on a cost benefit analysis. Too old for that heart procedure? If the IPAB decides that you are, there will be no appeal. To override a decision by the IPAB will require the vote of 60 Senators. Should the Senate choose to override an IPAB mandate, the President has the right to veto their decision. So expect to see some rather draconian rulings from the IPAB regarding the delivery of healthcare services to the populace that needs them most- the elderly and those that are very sick. This is the only way to achieve the cuts in Medicare that have been promised to make socialized medicine work. The insinuation of this group into the doctor/patient relationship portends a very scary future for the ability for each of us to determine our medical outcomes.
Do you think that mountaineers rope themselves together to keep the sensible ones from going home?
Perspective is important when looking at the current fiscal situation in the United States. Let me give you a little perspective. In 2001, the total cost of our federal government was 18.2% of our GDP. As late as 2007, the federal government cost us 19.6% of our GDP. By cost, I mean the taxes the government took as a percentage of the total value of the goods and services we produce in this country. If our federal spending continues at the pace at which it is now going, the federal government will spend 18% of GDP just on Medicare, Medicaid, Social Security, and interest on the national debt by 2028. This is not including the cost of national defense and other government programs. The exponential growth of our entitlement programs, which represent a massive transfer of wealth, threatens to swamp our federal budget. Our current debt and the funding of entitlement programs leaves a $56.4 TRILLION dollar deficit with our taxes at their current level, according to the non-partisan Peter Peterson Foundation. That means every man, woman, and child in this country is on the hook for $184,000. Want to guess where your tax rates are going? Unless we re-think our spending priorities, our country is heading toward unprecedented tax increases.
My bank called me about suspicious activity on my debit card. They couldn't believe I bought a gym membership.
And that, my friends, is my view.