Friday, April 1, 2011

My View

Random ruminations from your resident curmudgeon...

Did you ever wonder why the American Association of Retired Persons (AARP) lobbied so diligently for the passage of Obamacare? The socialized healthcare plan was built on $500 billion in cuts to Medicare, which benefits the seniors that AARP is supposed to be representing. Well, regular readers of this blog know that I always say follow the money, so let's do that, shall we? According to a report released Thursday by the House Ways and Means Committee, AARP stands to gain an extra $1 billion dollars in profit from Obamacare. How so? AARP makes money by licensing their name to insurance companies to brand the insurance companies product that is sold to seniors, such as Medicare Advantage. It isn't actually AARP offering the policy, but a private insurer that has paid a licensing fee to use the AARP name. In 2009, AARP received almost $700 million in licensing fees. One of the main lciensing fees comes from Medicare Advantage policies, which allow the policy holder to use private insurance instead of Medicare. Medicare Advantage now covers about 25% of all seniors. Approximately half of the funding for Obamacare will come from cuts to Medicare Advantage, which will mean nearly 7 million seniors will lose that coverage. These seniors will be forced into Medicare or Medi-Gap insurance. Guess who sells Medi-Gap insurance? AARP. And guess what they get for selling it? 4.95% of all premiums. The licensing fees for Medicare Advantage are set for years, so there is no loss in revenue to AARP regardless of the shrinkage in the program. And AARP is set to reap some mighty big profits from more seniors being forced to purchase Medi-Gap insurance. The icing on the cake? You have to join AARP to purchase Medi-Gap insurance. So you have a lobbying group that ostensibly serves the interests of its members making a ton of money off of the socialized healthcare program enacted by Congress. And they did this at the expense of their members. Always, ALWAYS, follow the money.

Standing in line at an ATM the other day, an elderly lady asked me for help to check her balance. I gave her a hard shove. Her balance wasn't very good.

Think that people or companies don't respond to economic incentives? Government at all levels does not, but Caterpillar CEO Doug Oberhelman begs to differ. He warned Illinois Governor Pat Quinn in a letter that the recent tax increases that his company is considering relocating out of the state because the tax burden has become onerous. His letter to Governor Quinn stated in part,

"I want to stay here. But as the leader of this business, I have to do what is right for Caterpillar when making decisions about where to invest. The direction that this state is headed is not favorable to business, and I would like to work with you to change that."

Quinn's response?

"Caterpillar is not leaving Illinois. I don't think we should panic at all."

The fact is that the tax hikes recently enacted and signed into law by Quinn make Illinois one of the highest tax states for businesses in the U.S. The tax increase that businesses in Illinois face is 49%, from 7.3% of revenue to 10.9%. This means that Caterpillar can chose to move to a number of states and slash their tax rate significantly. Moving Caterpillar out of Peoria would mean that 23,000 workers would be displaced. Think that wont have an impact on that city? And the state?Caterpillar has already started to respond. They have said that the company will make no more investment in Illinois, and in fact is constructing a new $120 million plant in Victoria, TX. It is high time for politicians to realize their tax policies have consequences, and an unfavorable environment for businesses and individuals will force a response.

Someone actually complimented me on my driving today. They left a note on my windshield that said "Parking Fine".

Candidate Barack Obama campaigned on "Change". How have things changed? I'm glad you asked. Here are some key measurements of change since Obama took office:

                           2009     Today    % Change

Crude Oil            $38.74  $91.38    135.9

Unemployed          7.6%      9.4%     23.7

Corn                     $3.56    $6.33      78.1

Sugar                    $13.77  $35.39  164.7

Income                  $50112 $49777     -.7

I don't know about you, but I'm not sure I take much more of this "change".

Turns out the random drug test at work didn't mean I get to test them.

And that, my friends, is my view.

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