Thursday, May 29, 2008

Commentary 32- The $54 Trillion Entitlement Hole

From the New Jersey Star-Ledger, 05/29/08

Politicians ignore the real bridge to nowhere
Posted by Paul Mulshine May 29, 2008 6:31AM

Want to know what I never want to hear about again? The bridge to nowhere, that's what. Throughout this primary election season, which limps to a merciful end Tuesday, I have heard politicians pontificating about how they oppose building that bridge in Alaska.

I would much prefer to hear the pols talk about the one issue that looms above all others in terms of importance. Try to guess what it is. It's not the Iraq war. It's not the price of gas. It's not abortion, guns or gay marriage.

Give up? The biggest issue facing the next president of the United States is that the country is broke. Or at least it would be if it were a business. The accumulated debt of the United States so far exceeds its revenues that if it were a corporation, the federal government would be in bankruptcy court.

You won't hear about this from politicians for one simple reason: Most of that debt is for programs promised to current and future retirees. Social Security and Medicare are too popular to cut. But they're too expensive to fund. So politicians ignore the problem.

Accountants worry about it, however. If you understand numbers, as Sheila Weinberg does, then you understand that the country is on its way to becoming a banana republic, a place where you need a knapsack just to carry currency. In Latin America years ago, I once visited such a country. I needed an inch-thick pile of bills just to buy breakfast, and breakfast cost only 75 cents in American money.

I don't want my kids to inherit such an economy. Weinberg feels the same about her kids. That's why she got involved with the Institute for Truth in Accounting, an Illinois-based group that would like to see government at all levels adopt so-called "accrual accounting" as the heart of its budget process.

In traditional government accounting, politicians can promise endless future benefits while paying only a tiny portion up front. But in accrual accounting, the pols would have to put aside enough money in a trust fund immediately to cover future promises.

If the U.S. had followed that system, the trust fund for Social Security and Medicare would need an immediate infusion of $54 trillion, says Weinberg. That's a lot of dough. And even if we had such a trust fund, another problem would arise.

"Where would you put that $54 trillion?" she asks. "The entire New York Stock Exchange is only worth $13 trillion."

We ran up this debt because pols of both parties voted for popular programs without raising taxes to cover them. A classic was that prescription drug program adopted in the first term of the Bush administration.

"When they passed the prescription drug program, they should have sent a bill for $25,000 to every American," says Weinberg. "They should have asked, 'Do you want that? Then you need to send a check for $25,000 to start funding it.'"

Instead, the pols just added another $8 trillion in unfunded liability to a Medicare system that was already in the red.

But imagine for a second that the pols faced this problem honestly and decided to raise revenue to pay for their promises. How much would taxes have to rise?

The Congressional Budget Office was recently asked that question by Rep. Paul Ryan, a Republican from Wisconsin who is one of the few politicians willing to talk about the problem. In a letter to Ryan last week, the CBO said that the income tax would have to more than double to offset entitlement expenses. That would mean the tax rate on income now in the 25 percent bracket -- where many middle-class Americans find themselves -- would rise to a staggering 63 percent. The top rate would have to rise from 35 percent to 83 percent.

To look at it another way, consider this in terms of GOP presidential contender Mike Huckabee's so-called "fair tax," a national sales tax of about 23 percent. Candidate Huckabee proposed that tax as a substitute for the income tax. But to balance the budget honestly, a President Huckabee would need to impose that big sales tax while also keeping the income tax.

Try to imagine Huckabee -- or Hillary Clinton or Barack Obama or John McCain, for that matter -- proposing such a huge tax hike. That's about as likely as any one of them proposing that we end Social Security and Medicare.

This is one area where the true spirit of bipartisanship reigns supreme. Both parties want to pass this problem to the next generation. So there's your real bridge to nowhere. And every young person in America is going to have to cross it.

Original Referenced Link

My Commentary:

The catastrophe looming over America’s future has roots reaching back 100 years. While the politicians of both parties were the superficial cause of the current crises, I would point to two primary causes.

1. The abandonment of the gold standard and free banking in the early 20th century, culminating in the seizure (looting) of private gold holdings by the FDR administration in 1933. This made possible the systematic looting by welfare state politicians that has led us to the current economic precipice. Statists understand that to advance their agenda, they must seize control of money by replacing gold-based currency with government-issued counterfeit paper whose value is determined by the whims of politicians and their central bankers. This enables the government to engage in the hidden seizure of a nation’s wealth called inflation. To fully understand the connection between the abandonment of the gold standard and the rise of welfare statism, and its link to the current crises that Mr. Mulshine lays out, I recommend Gold and Liberty
, by Richard M. Salsman.

2. Someone (de Toqueville, I believe) once said that Americans would keep their liberty until they allow themselves to be bribed by their own money. Americans willingly sacrificed the freedom (and the responsibility) to plan and control their own future by handing over a lifetime of hard-earned payroll tax money in exchange for the free lunch of government-provided retirement “security.” But their ain’t no free lunch, baby. As Mr. Mulshine’s column makes clear, a blizzard of feathers is approaching as the social security and medicare chickens come flocking home to roost. The years ahead promise to be ugly.

I would certainly agree that we may be heading for “banana republic” status, but the truth may be much worse. Our current national direction may have a more ominous parallels…pre-Hitler Germany. America’s welfare state is modeled on Bismarck’s 1880s Germany, which culminated in the Weimer inflation of the 1920s, economic paralysis, and violent street battles, and which was followed by the rise of Hitler.

It’s hard to see a way out without an economic collapse, hyperinflation, or both. But America has a secret weapon that may yet save us…the unparalleled productive ability of Americans…if and when they can be liberated from the crushing burden of taxation and regulation. But we must stop kidding ourselves. Any long-term solution must include the phasing out and eventual elimination of social security, medicare, and medicaid. As dmdNJ says, “people need to start taking responsibility for themselves and their families.” Relinquishing individual responsibility for retirement income and healthcare planning and charitable giving in favor of government control is and always has been a prescription for disaster. That $54 trillion hole is my proof.

The Ominous Parallels

Gold and Liberty

Tuesday, May 20, 2008

Commentary 31- The Farm Lobby

From the New Jersey Star-Ledger, 5/20/08

Agriculture shouldn't be a sacred cow
Posted by John Farmer May 20, 2008 9:54AM

The worst of what's wrong with Washington -- its capitulation to feared special interests, its addiction to short- term interests at the expensive of the nation's long-term economic health and its penchant for pitching pennies at the poor while lavishing billions on the rich -- is on display in this year's $300 billion farm bill.

It's Washington's own very special form of corruption: buying the votes and campaign contributions of an extortionate interest group and putting the bite on ordinary, often hard-pressed taxpayers to do it -- or, worse yet, borrowing the cash abroad and paying the vigorish to foreign shylocks.

This particular farm bill, which President Bush threatens to veto, extends the usual subsidies and anti-competitive protections to the usual suspects: giant agribusinesses and individual growers, including millionaires, of wheat, corn, cotton, rice, soybeans, sugar and who knows what else. (The complexity of the legislation makes the tax code looks like "See Dick and Jane run.")

What makes this year's version so offensive -- farm bills are renewed every five years -- is that farm income is at an all-time high. You know why if you've had to eat recently. How did they do it? How did farmers, who represent a mere 1 percent of the national population, pull off a daylight heist of this magnitude?

Easy: They bundled into the bill enough dough for conservation projects, school lunch and food stamp programs to seduce urban legislators (who should know better) into voting for it. It's the old you-scratch-my-back, I'll-scratch- yours game. But it's a scam, a mug's game, as the Brits would say. For in the long run, nothing the urban suckers got will make up for the higher prices the public will pay for food on the table.

Farm interests spent more than $80 million last year lobbying, primarily for this year's mega-bill. It's big money, but even at that price it's a bargain. Farm income is expected to top $90 billion this year, and farm subsidies will hit $13 billion, according to the Agriculture Department. And that's really big money.

The farm bill is the legislative poster boy for how a once-needed program has gone bad but has been kept alive by special-interest spending and a powerful voting bloc. Farm support legislation originated in the 1930s when the Great Depression and a massive drought devastated the rural economy. It was a time when many Americans lived in rural areas and serious help was legitimately needed. But over the decades American farmers have become a welfare class of their own.

They don't like to hear that. I once said as much to a farmer in Riverside, Iowa, and got a four-letter earful in response, along with a lecture on how the farmer contributes to the national welfare and, as he saw it, the welfare client does not. But the American farmer has, in fact, benefited from a unique form of welfare.

The modern farm economy owes its health, even in some cases it existence, to the federal government -- not merely in subsidies and emergency assistance but in irrigation, water diversion programs, roads and rural electrification. But what was once meant to save the small farmer has become a big business bonanza, with vastly unintended consequences and benefici aries.

The two Cargill brothers, who own an agribusiness of the same name and were reported by Forbes magazine to be worth $2.8 billion each, benefit from farm subsidies. And the Wall Street Journal has pointed out that from 1995 to 2005, David Rockefeller supplemented his oil billions with more than $550,000 in subsidies for farm operations. Just pocket change, you understand, but nice to have on hand.

I have no beef with farmers individually. As a teenager during World War II, I spent a couple of years working on farms in Vermont and loved it. The days were long and the work very hard -- hard enough to convince me to look for something less strenuous. (I've found it, you've no doubt noticed.) But the people there were among the best I've ever known -- wel coming (once they got to know you), self-reliant, generous and notorious pranksters, especially with unsophisticated city kids. I grew very fond of them.

But I also found them deeply suspicious of the same federal government that helped them so much. It was too big, took too much in taxes, they complained, and wasted money on city slackers. But if Washington is too big, no interest group has a greater responsibility for its growth than the farm lobby.

It's no exaggeration to say that if federal spending is ever to be reined in, it will have to begin with one of its big winners. It will have to begin down on the farm -- but very likely not this year.

Original Referenced Link

My Commentary:

Posted by Zemack on 05/20/08 at 7:33PM
Mr. Farmer is right on in his description of the farm lobby as pulling off a "daylight heist." Substitute "farm lobby" with any other special interest group and that statement would still be true. Multiply the farm lobby by all of the other special interests, domestic and foreign, and you've got the free-for-all mess that Mr. Farmer describes in his first paragraph.

Mr. Farmer correctly laments our "addiction to short- term interests at the expense of the nation's long-term economic health." But that's exactly how the farm lobby monster got not considering "the nation's long-term economic health" when enacting "a once-needed program" in the 1930's. You can probably trace the roots of all of the "feared special interests" back to some "once-needed program" or control or tax or regulation enacted without "the nation's long-term economic health" in mind.

Mr. Farmer also hints at the nature of the game being played in the special interest world, with reference to the "conservation projects, school lunch and food stamp programs" "bundled into the [farm] bill." Imagine the magnitude of the wealth being divvied up by all of the special interest deal making at other peoples' expense, all courtesy of the redistributive tax powers of the government.

The special interests, though, are not the cause of the current maelstrom, but an effect. The cause is the government's enormous power over private economic activity, which it has accumulated over the past 100 years or so. It is to control or influence the exercise of that power, and simultaneously to defend against it, that the interest groups are drawn to Washington (or to state capitals).

Contrary to popular myth, America is not a capitalist nation. It is a mixed economy...that is, a mixture of government controls and private freedom...with the controls steadily increasing and individual freedom steadily eroding. The special interests are its by-product. Twentieth century philosopher Ayn Rand identified the exact nature of a mixed economy. She called it, aptly, a "cold civil war...[an] institutionalized civil war of special interests and lobbies, all fighting to seize a momentary control of the legislative machinery, to extort some special privilege at one another's expense by an act of government--i.e., by force." The growth of lobbies is a necessary consequence of the growing controls of a mixed economy.

The cause and effect, in my view, is clear. The growth of the lobbying industry has paralleled the growth of government. But attacking the lobbyists is attacking the symptoms. As long as the government maintains and expands its economic controls, the special interest pressure groups will continue to multiply and proliferate. Roll back the size and scope of government...i.e., the power of the political class to affect the lives of private citizens through tax and regulatory policy...and to the same extend the "feared special interests" will evaporate.

Friday, May 16, 2008

Commentary 30- On Government Zoning Powers

From the New Jersey Star Ledger, 5/14/08

Are Democrats making peace with the 'burbs?
Posted by Paul Mulshine May 14, 2008 8:00PM

The Democrats need to end the war.

The war against the suburbs, I mean. It's getting out of hand.

"We're discouraging jobs in this economy," says state Sen. Ray Lesniak. "It's dumb. Stupid, stupid, stupid."

Lesniak, who is a Democrat, was talking about the latest affordable-housing scheme. The Corzine administration recently signed off on new Council on Affordable Housing regulations that call for more than 100,000 new housing units to be shoehorned into the suburbs. Worse, the plan lists parks, schoolyards and even the Garden State Parkway right-of-way as available for development. And even worse than that, the Democrats plan to send the bill for much of this construction to anyone who wants to build a new business in the state.

That's what set Lesniak off. Though he himself is a city-dwelling Democrat - he lives in Elizabeth - Lesniak realizes that the COAH plan amounts to nothing less than a declaration of war on new business. His "stupid, stupid, stupid" comment was directed at the part of the plan that would make any new business moving into the state responsible for paying to build housing proportional to the number of new employees.

Even without the new regs, it's hard enough to get new businesses to locate in the state, says Michael McGuinness, who heads the state chapter of the National Association of Industrial and Office Properties.

"The proposed rules are real deal killers," said McGuinness. "We're not aware of similar affordable housing fees in other states, so it makes us less competitive."

That's only one reason the 1985 Fair Housing Act, which set up COAH, needs "a total overhaul," Lesniak said.

"Right now it's a very poor planning tool," he said. "It contributes to sprawl, increases infrastructure needs and increases the unaffordability of the state of New Jersey."

Indeed it does. But the Legislature may be powerless to do anything about it. The war on the suburbs originated in the state Supreme Court, not in the Legislature. Way back in the disco era, the seven justices of the court decided to straighten out suburbia by taking over both zoning and school funding. Since then, every effort by the Legislature to take back control has been rejected by the justices.

I predicted to the senator that the court would reject his reforms as well. Then what?

He's ready to take the nuclear option, that's what.

"If we adopt a plan that provides affordable housing where the jobs are and where the mass transit is and the court says that's unconstitutional, I would support a constitutional amendment," he said.

Such an amendment has long been pushed by state Sen. Gerry Cardinale, a conservative Republican from Bergen County. If the Democrats decided to put such an amendment on the ballot, said Lesniak, it "would pass overwhelmingly."

At that point, the suburbs would be free of the effects of the court's 1975 Mount Laurel ruling, the disastrous decision that started all of this. In the fuzzy memories of most liberals, the court was forced to reject Mount Laurel's zoning code because the town fathers had engaged in exclusionary zoning to keep minorities and poor people out.

In fact, that "exclusionary" zoning code permitted a housing density of more than four units per acre. That's a density roughly equal to the neighborhoods in Lesniak's own Elizabeth.

And here's a memorable line from that decision: "No forests or small towns need be paved over and covered with high-rise apartments as a result of today's decision."

Countless forests have been felled since then for the condos and townhouses required by the court. And countless more will be bulldozed in the future. Once the current COAH quotas are met, the next round will call for even more housing.

All of this is being done because long ago the justices of the New Jersey Supreme Court decided that the people who pay their salaries are a bunch of narrow-minded bigots and unrepentant racists. The same is true of the court's decision in the Abbott vs. Burke school funding cases. Thanks to those decisions, the court took over school funding decisions. As a result, more than half of state aid goes to 31 heavily Democratic and heavily urban "Abbott" school districts, while the remaining 580 school districts get to split up the rest.

Lesniak won't be leading the revolt against that decision though. Most of the Abbott districts just happen to be located in his backyard. In fact, his backyard is literally in one such school district. The Elizabeth school district gets more state aid than all of the school districts in Morris County combined.

So don't hold your breath waiting for the Democrats to end that aspect of the war on suburbia. They've already declared victory.

Original Referenced Link

My Commentary:

Posted by Zemack on 05/16/08 at 9:09PM
There is no question in my mind that the Mount Laurel decision that led to the COAH was prompted by widespread exclusionary municipal zoning practices that froze out large segments of homebuyers. Rather than another COAH mandate, though, what should be questioned is the very government zoning and land-use power that is at the root of the problem. Rolling back the so-called "home rule" powers of local governments, not the shifting of those powers to the state, is the answer.

Had local government's not interfered with the economic activities relating to the housing market, there would have been much greater availability of housing at much lower prices than we currently have. (There are a number of causes for the affordable housing crisis in NJ, but restrictive zoning and planning board practices is a major one.) By imposing these restrictions on land use, property owners are effectively barred from selling their land at market prices, builders from constructing housing to meet market demand, and potential buyers are frozen out of the market by artificially inflated prices and lack of supply in many locations.

This is not to say that government doesn't have a role, but that role is rooted in the American principle that government's proper function is to protect the rights of its citizens. When local groups use municipal zoning powers to impose land-use restrictions...whether for reasons of race, income level, preserving the "quality of life" of existing residents, esthetics, or to impose their own utopian vision of what the "character" of "their" town should look like, etc...they are violating the individual rights, including property rights, of property owners, builders, and homebuyers. (Never mind the "rights" of the local groups. Rights belong to individuals, and only individuals. There is no such thing as group rights.)

This does not mean that builders and property owners can do as they please regardless of the consequences to others. The builder cannot, for example, design his project so as to allow stormwater runoff to flood adjacent properties...or install insufficient sanitary waste removal facilities that can contaminate the property of others. In these or similar instances, the government can properly step in to require corrections and the payment of restitution to the affected property owners, as determined in a court of law. But as long as the builder causes no physical harm to the property or lives of others, he has violated no one's rights and thus should be free to build according to his best market judgement.

There is a strong demand here in New Jersey for affordable housing. The answer to the housing affordability problem is to eliminate the source of the problem...government impediments. The property and housing markets should be liberated from the tyranny of local "planners" using the illegitimate and un-American zoning powers of municipal governments to create "ideal" communities at the expense of individual rights, and to the exclusion of large segments of the population. So long as no one else's rights are violated, the location, price range, and quantity of residential development should be determined by the voluntary, uncoerced judgements of landowners, homebuilders and homebuyers...i.e., by the free market...and nothing else.

Other Commentary:

Posted by hglindquist on 05/17/08 at 6:44AM
Zemack writes: Never mind the "rights" of the local groups. Rights belong to individuals, and only individuals. There is no such thing as group rights.

Apparently Zemack is unfamiliar with a whole body of law regarding "groups" like corporations.


Isn't the right to form a corporation, really a "privilege" that can be revoked at whim by the state?

The basis of treating a group of individuals who form a corporation as a single entity are the rights of the individuals who make up the corporation, i.e. the rights of the shareholders, the rights of the corporate officers, the rights of the employees (management, etc.), and the rights of all individuals who choose to trade with that corporation under the terms of the corporate agreement. The right to form a corporation is not a "privilege" as socialists allege, but is an inalienable right.

The definition of a corporation as "An artificial person or legal entity created by or under the authority of the laws of a state" (Blacks Law Dictionary) is only valid when one understands that the laws of any proper state are based on the principle of rights. The point is that the state has no authority to violate rights.

I like that: The right to form a corporation is not a "privilege" as socialists allege, but is an inalienable right.

My Commentary:

Posted by Zemack on 05/17/08 at 5:44PM
Precisely, hglindquest.

Notice that the definitions you reference validate my contention that the group...the corporation, in this instance...possesses no rights, separate and apart from the individuals that comprise it. An individual neither forfeits his rights, nor acquires new rights, by joining a corporation. Each individual maintains his rights, which are inalienable. The corporation, as such, has no rights. It merely acts according to the authority delegated to it by the individual members, who themselves act together by mutual consent to mutual advantage. The concept of inalienable rights...rights possessed by all individuals, equally, and at all times...remains inviolate.

This is not so, in regards to municipal corporations under current law, though. And that's the problem. This relates to the crucial difference between private and governmental entities. Municipalities are governmental entities, and as such possess what no private corporation or group possesses...the power of legalized force and compulsion. Municipal zoning and land use authority conveys on certain individuals the extraordinary power to violate the rights of other residents, thus rendering the concept of inalienable individual rights inoperative. This state of affairs is more consistent with medieval feudalism than American principles.

My argument is not to say that municipalities do not possess these powers, but that they should not possess them. As is quoted in your reference, "The point is that the state has no authority to violate rights."
But that is precisely what local governments do! The NJ Supreme Court was right to address this issue, but their solution was worse than the disease. Rather than grant to the state the power to impose housing mandates on local communities, they should instead have rolled back the "home rule" authority of towns to arbitrarily block the construction of the low and moderate income housing that the market demands.

Post Reference 28- NJ Familycare

Dec-19-07 Governor Corzine Expands Access to NJ Familycare Program
Governor Jon S. Corzine
December 19, 2007
Press Office


Children in Families Above Current Guidelines Can Enroll For Monthly Premium

WOODBRIDGE - Governor Jon S. Corzine today announced a new initiative that provides universal, affordable access to health insurance for New Jersey children. Through the existing FamilyCare program, children whose family income currently exceeds eligibility guidelines will now be able to enroll in the program for a monthly fee, in early 2008. It is estimated that as many as 15,000 uninsured children may qualify to enroll in this program.

"Ensuring that children have access to quality medical care is a top priority of my administration," said Governor Corzine. "We have enrolled more than 100,000 children in the NJ FamilyCare program since I took office and today we are expanding access to this critical and successful health insurance program with a new 'buy-in' program that will provide every family in New Jersey with an affordable health care option for their children. Healthier children will mean a healthier New Jersey."

Under the new "buy-in" provision of the NJ FamilyCare program, children in families whose annual family income exceeds current eligibility limits - $72, 275 annual income for a family of four (350 percent of the federal poverty guidelines) can enroll in the program. These children will receive the same services available to NJ FamilyCare recipients, such as coverage for doctor visits, prescription drugs, and hospitalization.

The program is budget neutral for the state and is not dependent upon the State Children's Health Insurance Program (SCHIP) funding. Families must pay the following monthly premiums: $137 for a family with one child; $274 for a family with two children, and $411 for a family with three or more children. Thanks to the state's purchasing power with insurers, the costs are significantly lower than private health insurance premiums.

There are few restrictions to the buy-in program: families with more than one child must enroll all children and families must demonstrate that their children did not have health care coverage for the previous six months. This is to prevent individuals who currently have insurance from dropping their coverage to enroll in the program.

"There are simply too many children in New Jersey without health care insurance," said Department of Human Services Commissioner Jennifer Velez. "Today, thanks to the leadership of Governor Corzine and the Legislature we have one more way to enroll them."

"When I wrote the law creating this new program, I believed then, as I do now, that affordable universal healthcare access for all children is a fundamental right, and an example of how as a state we can move toward a similar program for our 700,000 uninsured adults," said Senator Joseph F. Vitale (D-Woodbridge), the prime sponsor of the legislation.

"Horizon Blue Cross Blue Shield of New Jersey is delighted to play a part in covering additional uninsured children through the expansion of New Jersey FamilyCare, a program the company has participated in since its inception," said Karen Clark, President and Chief Operating Officer of Horizon NJ Health, a Horizon Blue Cross Blue Shield of New Jersey company.

Beginning January 2008, Horizon Health Care of New Jersey will begin offering the buy-in program.

"I want to commend Horizon for its admirable display of citizenship and civic responsibility demonstrated by its willingness to be the provider for this new program," said Banking and Insurance Commissioner Steven M. Goldman. "This is an important additional step in reducing the ranks of New Jersey's uninsured children. We hope this is the first of many such steps moving toward the reduction of New Jersey's uninsured."

For more information on the NJ FamilyCare program, visit or call 1-800-701-0710.

Original Referenced Link

From the New Jersey Star Ledger, 12/21/07

Senator works to insure kids first
Posted by Tom Moran December 21, 2007 1:30AM

Just in time for Christmas, we have a winner of the coveted Legislator of the Year Award. It's a new honor, conceived just now. And the selection process was untainted by input from anyone other than this columnist.

The 2007 award goes to Sen. Joe Vitale, the owner of a small family business, and the man who is driving health care policy in the state.

Vitale clinched the win by finding a way to help middle-class families get health care for their children at about one-third the normal price - without costing taxpayers a dime.

These days, that is the trick. The state is caught in a never-ending budget nightmare, so we have to find clever ways to meet our needs on the cheap. And that is Vitale's game.

"He's very sophisticated in his thinking about these issues," says Joel Cantor, head of the Rutgers Center for State Health Policy. "These things are enormously complex, and he's a master."

Understand that it's beyond unusual for academics to talk about legislators like that. Normally, the policy wonks wonder how these part-time politicians can be so thick-headed.

For Vitale, a Democrat from Woodbridge, the ultimate goal is universal coverage in New Jersey. His plan shares a lot with one in Massachusetts signed by then-Gov. Mitt Romney in the days when he was acting the part of a liberal.

The basic idea is to require that everyone buy health insurance, and to provide subsidies to those who can't afford it on their own.

New Jersey can't make that leap now because the subsidies would be too expensive. So Vitale is tacking toward his goal, one move at a time.

This week, he joined the governor at a mall in Woodbridge to announce the middle-class discounts. The target is families who earn too much to qualify for existing government programs, but not enough to buy coverage on their own.

This group is getting killed on the open market, where family plans cost roughly $12,000. So Vitale basically used the state's bargaining power on their behalf, winning a group discount just as a large employer might.

The beauty of this is that the state is not on the hook for any costs. Horizon Blue Cross Blue Shield will arrange the care, and the middle-class families will pay the premiums. Vitale expects 20,000 children to get coverage, one more step toward his goal.

"This makes great sense," says Sen. Diane Allen, a Burlington County Republican who sits on the health committee. "Joe has the respect of all the Republicans on the committee. We don't always agree. But we know that we've been heard."

Pretty soon, it'll get tougher. Because Vitale wants to press the case for universal coverage in 2008. He wants his committee to consider a mandate requiring parents to get coverage for their children. And he wants to offer new coverage to adults earning up to twice the poverty level.

The cost would be small, he says, because the state's bill for covering the uninsured in hospitals, now more than $700 million a year, will drop.

"That money is just wasted," Vitale says.

The man is on a mission. He views health care as a basic right, like education, a view that crystallized for him nearly 20 years ago when he was traveling in the Dominican Republic with a church group. They saw a woman in a small town run from her home with a child burned by boiling water. She was putting Vaseline on the burns.

"That's exactly the wrong thing to do," Vitale says. "They had no doctors, no nurses. They had children with all kinds of illnesses. And access to care was at best an hour away."

His church group wound up establishing a small hospital in the town, staffed mostly by volunteers, and supplied mostly by charity. The church group, with the help of the locals, found a practical solution.

For Vitale, it's become a habit. So this prestigious award goes to him.

Original Referenced Link

Commentary on these articles

Monday, May 12, 2008

Commentary 29- The Wreck of EMTALA


The wreck of the good ship, EMTALA
Published May 8th, 2008 in Uncategorized.

EMTALA, the Emergency Medical Treatment and Active Labor Act, was passed in 1986. For those who aren’t familiar with yet another acronym, EMTALA is a federal law that was enacted to keep poor, uninsured patients from being ‘dumped’ on indigent-care hospitals, or any other facility, for financial reasons. Although it was a good idea, it soon grew fangs, tentacles, claws, rose up to several hundred stories in height and developed a surly attitude and bad breath. It is, in fact, one of the largest unfunded mandates the US legislative branch has ever gifted on its subjects.
For those of us who practice emergency medicine, and by now any medicine in a hospital that accepts Medicare payments, no one can be turned away for financial reasons. On the surface, this seems fair. Certainly, the potential exists for gross harm and injustice if we refuse to care for the most needy in our populations because we aren’t getting paid. ‘Your child is having non-stop seizures, eh? Well, pony up $400 we’ll see what we can do!’ It makes sense to have a provision of protection.

However, because this law basically forbids hospitals and physicians from saying ‘no,’ (without a complex, time consuming, legally perilous screening exam that is rarely worth the effort), we see all those who come through the door. And because the ‘cat is out of the bag’ and has been for a while, many of our patients know this. So, we have these conversations.

Doctor: ‘I see you have a toothache. Have you seen your dentist?’

Patient: ‘No, I owe him money.’


Doctor: ‘You know, you’ve been here every week for the last six months for chest pain, and you’ve had every test we can do. It isn’t anything dangerous, yet you keep asking for pain medication, you refuse to follow up with anyone, and now owe our group $7000.’

Patient: ‘Right, interesting. So, today it goes around my back, to my ear, down my arm and into my testicle. What do you think it is?’

It isn’t that we don’t take people seriously, because we do. It isn’t that we don’t want to help, because we do. But medicine being our business, money is often part of the transaction after the smoke has cleared.

Equally problematic, surgeons, neurologists, cardiologists, otolaryngologists and just about every other ‘ist’ is burdened with the same issue. The people they see in the ER, admit to the floor, or take to surgery or the cardiac cath lab will frequently be unable to pay anything, but then still be able to sue for millions of dollars. It’s hard for specialists to run practices when large numbers of patients pay nothing for their care. I understand their issues here. I don’t blame them a bit for being angry.

And of course, hospitals are providing care that isn’t reimbursed to patients who can’t, or intend never to pay them. Nurses and other staff are cut. Rooms aren’t available, needed additions aren’t built, new technologies are hard to afford, other specialists can’t be recruited, and before you can blink a hospital is closing or reducing it’s capacity. And to top it off, we can’t even get the Smucker’s peanut butter cups we all used to scarf from the patient supply cabinet while seeing sick people! Woe is me!
Across America, small and medium sized emergency departments and hospitals are closing. Trauma centers and teaching hospitals are struggling and overwhelmed. And specialists are simply leaving hospital care in order to avoid being on call, and the attendant EMTALA responsibilities that call entails. They’re working in surgery/outpatient centers. They’re leaving the setting where they are compelled to give care away, and where they are constantly overwhelmed by more and more demand, less and less payment.

Our own group sees increased volume every time we increase staffing. The numbers, the lack of control, the degree of genuine illness, and the degree of ridiculous visits for life crises, narcotic abuse, work excuses or just ‘because I was here with my friend anyway,’ keep rising. Can we say no? Not much, not often.

You see, the federal government thought EMTALA seemed like a nice, friendly, warm-hearted way to help America’s indigent populations. It also thought it seemed like a cheap way to do it, since EMTALA didn’t come with any money for providers or hospitals to do this epic work of securing the ‘health-care safety net.’ Like so many government programs it consists of untold numbers of legislators and government functionaries patting themselves on the back for helping the poor by having someone else pay for it and do the work; that is, America’s hospitals and physicians.

But here’s the final irony. EMTALA has created the very conditions it sought to avoid. Now, with specialists unavailable, hospitals full, transfers always difficult and no lack of genuinely sick and dying patients, there’s often 1) no one to care for them and 2) no place to put or send them. EMTALA, the federal mandate to save the poor from sickness has begun to crumble at its foundations, and leave untold numbers of patients, poor and paying, without care.

This isn’t meant to be a tirade about payment, though non-medical readers may see it that way. What I’m getting at is that our system, our government mandated system, is a failure.

You might make the argument that nationalized health-care can fix this with money, but as we see in so many problems, money doesn’t do much. Money in the school system still leaves us with staggering drop-out rates and high-school illiteracy. Money, in the hands of an irresistible, un-yielding, entitlement crazy, grandiosity-leaning government system will probably result in an even greater disaster than EMTALA.

My suggestion? Get the government out of it all. If you do, the poor will likely get better care, since we’ll be able to screen out and turn away those who abuse their privilege. And doctors, that pesky, generally unimportant part of the medical equation, will actually return to hospitals and be available; out of a sense of duty, professionalism, entrepreneurial spirit and genuine compassion without federal compulsion.

It’s unlikely to happen, but a doctor can dream. ‘And then I saw a scarecrow and some flying monkeys and a witch, and a hospital where I was in charge and could always do what I thought was right, oh Auntie Em, it was wonderful!’



Original Referenced Link

My Commentary:

Mike Zemack
May 13th, 2008 at 1:51 am
The “silent protest” by doctors and specialists walking away from hospital practice is certainly appropriate and moral. And I agree fully that we should “Get the government out of it all.” But it doesn’t have to be just a dream.

The real power in the health care arena is the doctor, and he should use it. Fleeing the hospitals for surgery/outpatient centers or some other means of practice is only a short-term fix. The politicians will eventually go after them wherever they go.

The best, and likely the only, way to turn the tide toward a full-fledged government-run health care dictatorship is for the doctors to stand up en masse for their rights. Doctors are “that pesky, generally unimportant part of the medical equation” only so long as they allow this to be the case. An uncompromising and principled stand against the state would stop socialized medicine dead in its tracks.

That is my dream.

Wednesday, May 7, 2008

Commentary 28- Fran Wood on Jon Shure's "Investments"

From the New Jersey Star Ledger

A case for investing our way out of fiscal problems
Posted by Fran Wood May 07, 2008 6:21AM
Categories: Policy Watch
Question: What is the most reliable way to solve New Jersey's fiscal problems?

A. Cut waste, fraud and abuse.

B. Invest in programs that benefit the state.

No doubt you answered A. You've been hearing that mantra for years, after all, so it must be the right answer.

Who would choose B in any event? Investing means spending, doesn't it? What justification is there for spending in a state as deeply in debt as New Jersey? Isn't that how our problems began?

Actually, no, says Jon Shure, president of New Jersey Policy Perspective, an organization that researches and analyzes state issues from the progressive side.

Our really serious current problem began, he says, with "the repeal of a sales tax increase in the early 1990s, then cutting the in come tax."

To make up for the lost revenue, he said, the state used money ticketed for the pension fund and retiree health benefits. This launched a "shell game" in which new programs were created with money from existing programs, all topped off by "excessive borrowing ... to cover it all up."

The result: "New Jerseyans are looking down the barrel of a budget that cuts services and threatens the state's quality of life."

Gov. Jon Corzine, in his 2008 budget speech, acknowledged the problems, then presented his own diagnosis: "New Jersey is addicted to spending."

So Corzine's proposed budget cuts spending, sometimes dramatically, in areas like parks, hospitals, human services, agriculture, scholarships and so on.

The fate of that budget is still undecided. Shure, for one, hopes major parts of it don't pass.

"It takes New Jersey in the wrong direction," Shure says, down a road that will worsen, not solve, our problems. And the only way to avoid that course, he says, is to "change the discussion."

Enter his Better Choices Budget Campaign, launched last month and now on a statewide road trip with an upcoming stop near you. His goal, he says, is to ex plain the long-term impact of the actions we take today.

Cutting "vital services" may get the budget balanced by the due date, he says, but such cuts "will weaken our communities, continue the relentless increase in property taxes, undermine the future for our families and hurt our children, our seniors and our most vulnerable residents."

As it stands, he says, the proposed budget "will make it impossible to provide the good education, health care and basic services our families expect and deserve."

If we're not going to spend less money, of course, we will need to raise more money, which leads to, yes, the dreaded T-word.

Shure admits any plan that includes more tax money is, to say the least, a tough sell. But he stresses that any talk of taxes should not imply an unfair burden on those least able to pay. He's for a "broadly shared" revenue burden, he says, including "ending tax breaks and subsidies to corporations that still lay people off or leave New Jersey when some other place gives them a higher offer."

Moreover, says Shure, our own legislators need to be reminded that voters have not always reacted negatively to taxes.

"They forget Gov. Byrne got re- elected after he got the income tax passed," he says. "Gov. Kean got re-elected in a landslide after he raised the income tax. And Gov. Florio lost (his re-election bid after raising taxes) by only 1 percent of the vote."

"You have to break through the psychology in New Jersey," he says. "We have the highest percentage of millionaires of all 50 states, yet we drastically underfund our state."

That's where he's trying to shift people's focus.

"If the governor and legislators think the only voices in New Jersey are the ones saying 'cut,' we're here to tell them there are others saying 'invest.'"

Those others (all listed at include at least two dozen organizations that understand, says Shure, the devil's in the details of Cor zine's proposed budget.

Its cuts to municipal aid, he says, will result in higher property taxes.

Its cuts in higher education aid will result in higher tuition at state colleges and universities.

Its cuts in medical subsidies will lead to higher costs for medical services.

"You can't make shortsighted cuts and end up with a good future and better quality of life for New Jerseyans," says Shure. Investment is "a more honest and, in the long run, profitable way for the state to deal with its problems."

Original Referenced Link

My Commentary:

Posted by Zemack on 05/07/08 at 9:41PM
Mr. Shure wants to benefit "the state" by making "investments" in education and healthcare, in order to "provide [what] our families expect and deserve" be paid for, of course, by those very same "families" courtesy of the taxing power of the state.

This is the classic arrogance of the tax-and-spend mentality, dressed up in brand new "investment" garb, that has gotten New Jersey into the economic death spiral it is now in.

Rather than benefit the state by raising taxes and dependence on government, how about "investing" in actual human beings by simply getting the state out of their way.

Here are two proposals along those lines:

1. Institute full tax credits for education, equal to the amount paid by individuals in local school property taxes, as well as the portion of sales and income taxes dedicated to state "aid" to local school districts. Extend the credits to all taxpayers, so everyone can direct their education tax dollars according to their own judgement, whether to the education of a child, grandchild or other family member, or even to a scholarship fund for private schooling for gifted, poor, or special needs children lacking adequate tax credits, or back to the public schools.

This would liberate education from the suffocating government-run monopoly and lead to an explosion of private alternatives to the public schools.

2. Liberate the health insurance market by repealing all coercive state mandates, including benefit coverage, community rating, and guaranteed issue health insurance mandates. These government-imposed directives violate the rights of individuals and insurance companies by forbidding them from entering into voluntary contractual agreements to mutual advantage. In addition, these mandates are a magnet for special interests seeking to impose coverage for specific ailments or medical procedures that force people to pay for insurance services that they do not want and wouldn't otherwise buy. This is a prime reason for skyrocketing health insurance costs.

Another reason for exploding costs is the lack of competition. In this regard, anyone actually interested in better healthcare for New Jersey residents should support passage of Morris County assemblyman Jay Webber's New Jersey Healthcare Choice Act. This act would remove the legal restrictions on the purchase by state residents of health insurance policies available in other states, thus opening the New Jersey market to national competition.

Together, these proposals would dramatically lower the cost of health insurance while greatly expanding the available choices by restoring the rights of individual NJ residents and families to tailor policies according to their own needs, affordability, and judgements, rather than the arbitrary whims of Trenton politicians and busybody do-gooders.

Jon Shure and his "progressive" ilk would never go for these truly progressive ideas, of course. They instead dream of all of the "investments" they could make, and the "prestige" they can acquire, with other peoples' tax money. The idea of people "investing"...i.e., acting on their own judgement...with their own earnings horrifies the "progressives", who see only helpless, parasitical incompetents waiting for government to "provide" for them.

But the "progressives" have it wrong. The best investment that can be made in healthcare and education is to liberate those fields from state interference, recognizing the individual rights of New Jersey's residents to manage their own affairs.