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Obama said the "B" word
Old 12-17-2009, 08:46 AM   #1
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Obama said the "B" word

President Obama, in an interview with Charlie Gibson to be aired tonight, said that "America will go bankrupt if the health care bill isn't passed by Congress". Boy oh boy, this is really getting me nervous! I knew it was true but when the President of the United States starts talking like that, I get the feeling the bottom is about to fall out for real! Your thoughts?
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Old 12-17-2009, 08:52 AM   #2
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Old 12-17-2009, 08:55 AM   #3
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My thoughts are that this thread will have posts deleted due to political content and will quickly be porky pigged.

But just to clarify - was BO threatening to bankrupt the country if the healthcare bill didn't pass, or saying the impact of continuing on the status quo will bankrupt the country?

It strikes me as hyperbole. As grand a leader as BO is, I don't think he is powerful enough to actually bankrupt our country.
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Old 12-17-2009, 08:58 AM   #4
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No political agenda here at all. I'm just getting the heebie jebbies about the market given the rhetoric and spending I'm seeing/hearing from Washington. Since the market is often spooked by emotion, I can easily see where statements like this can have negative effects on stock market performance.
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Old 12-17-2009, 09:04 AM   #5
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My thoughts are that this thread will have posts deleted due to political content and will quickly be porky pigged.

But just to clarify - was BO threatening to bankrupt the country if the healthcare bill didn't pass, or saying the impact of continuing on the status quo will bankrupt the country?

It strikes me as hyperbole. As grand a leader as BO is, I don't think he is powerful enough to actually bankrupt our country.

Here's a link: President Obama: Federal Government 'Will Go Bankrupt' if Health Care Costs Are Not Reined In - The World Newser

I was surprised by how plane his quoted words were; basically just as I quoted in my original post. That said, I trust it is in context. The ABC interview link was posted on Drudge. I understand it to mean that Medicare and Medicaid are on track to bankrupt the country if they are not changed by legislation like that is currently in Congress. This is the first time I have ever heard anyone as far up the food chain as President actually state that we are on the path to bankruptcy.
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Old 12-17-2009, 09:06 AM   #6
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No political agenda here at all. I'm just getting the heebie jebbies about the market given the rhetoric and spending I'm seeing/hearing from Washington. Since the market is often spooked by emotion, I can easily see where statements like this can have negative effects on stock market performance.
I'm certainly not too worried about the impacts of this type of statement. Pardon the politics, but from a financial perspective I would consider it rhetoric intended to persuade, but I doubt market participants will give it much weight. Unless BO can lay out a concrete case for the fiscal impacts of particular health care policies. And I have yet to see a politician of any ilk lay out concrete fiscal cases.
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Old 12-17-2009, 09:29 AM   #7
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President Obama, in an interview with Charlie Gibson to be aired tonight, said that "America will go bankrupt if the health care bill isn't passed by Congress". Boy oh boy, this is really getting me nervous! I knew it was true but when the President of the United States starts talking like that, I get the feeling the bottom is about to fall out for real! Your thoughts?
Isn't medical illness already the number one cause of personal bankruptcy? To paraphrase I think "we've seen the future, and it's now." It's not Obama who makes me nervous, it's the health care system and its costs, gaps, and greed.
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Old 12-17-2009, 09:29 AM   #8
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Okay, I'm going to make somewhat of a political comment here. Not to inspire political debate, but we're pondering the economic future of the country and it's impact on us as ERs, annnnndd, since that decision is in the hands of politicians I don't know how to separate the politics out of it.

And some serious political shenanigans are taking place.

I pay attention, or at least try to, to what the latest version of the healthcare reform legislation is going to look like. As an investor and taxpayer I have some concerns over how it's going to change the investment picture (I own some healthcare related stocks) and I'm worried about tax increases. But everyday there is at least one change, if not multiple changes, in what the bill of the day is going to do. It's confusing as hell. I feel like a girl wearing a mini skirt and a loose top playing Twister with a bunch of dudes. Deciding my next move to cover my modesty depends on the next spin of the wheel. Will it be "left hand green" or "right foot red"?

I'm tired and confused and want off the merry-go-round. Yesterday I e-mailed my senators and my rep to say just that. There's zero visibility on this thing, too many flip-flops, and it all is out of control. I told my congress critters to vote no on any bill until there is an opportunity for everybody to see what's being proposed and allow for public comment and even perhaps a little reasoned debate.

The increase in the budget deficit and the national debt is just staggering and scares me. BO and company may claim this is going to save money, but how can they say that when the proposals keep changing. And the numbers we're talking here on any of these proposals are just staggering amounts of money.

My dimly recalled economics classes tell me that dramatic changes will have to be made eventually to come to grips with the debt. As I recollect, the alternatives are to devalue the currency, default on the debt, reduce the interest paid (How low can that go? Will we have to pay for the privilege of holding Treasuries?), or raise taxes like crazy. All of these are worrisome for investors and/or taxpayers.

Okay, I am ready for a serious discussion on what we should do to reform healthcare in this country, but the current process is wrong, wrong, wrong. The push to move something, anything, through Congress as long as it says "Healthcare Reform" on the bill's title page stinks like old fish.
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Old 12-17-2009, 11:27 AM   #9
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None of this is political, as I prefer to look at issues themselves, rather than simply stick to a particular simple political ideology.

The reason there is such a strong push to get something done, finally, is because the health care system is actually very close to bankrupting the country. I would guess it is about 10-20 years away from doing it.

Just 40 years ago, health care made up a tiny portion of our country's GDP, something around 2%. There were very few medical related personal bankruptcies. Now? Health care costs are going above 20% of our GPD. Over 50% of personal bankruptcies are primarily due to medical costs. That is more than unsustainable growth, the country is currently hurtling right into the wall of bankruptcy. It is only in these sorts of situations that Congress will act, when it has no choice but to either increase taxes (which it hates doing) or attempt to fix things.

The current legislation, as it is now, doesn't really change anything, for better or worse, for the most part. It makes major cuts to Medicare, increases taxes at the top bracket, and allows for subsidies to be available for the poor and lower-middle class for health "insurance". The bill fills in the access problem, allowing most Americans to be covered.

What the bill does not increase or decrease, and for the most part doesn't address, are the costs of our current health care system. The two primary causes in the rise of health care costs are new life extension treatments/life saving procedures (which everyone wants), and the fact we have a 3rd party payment system, so nobody ever shops around (makes frugal choices) about the health care they are getting. We certainly aren't going to limit the development of new treatments, so what can be addressed is the 3rd party payment system.

Congress has not gotten into this, and has shown inclinations to not want to get into it, at least until the access issue is separately dealt with, since the access issue is is a lot simpler to fix. There is nothing in the current bill that really addresses this, at this point. Some attempts were made to add a public option or an extension of medicare, but these were essentially band-aid attempts to address the cost issue, as they also really didn't address the problem with the 3rd party system, which is why it was opposed, at least somewhat, on both sides for being included in the Access bill.

So what should be done for the cost issue (of health care, not the tiny bill going through Congress right now)? The issue that really matters? The 3rd party system obviously needs to be fixed. Congress so far has only attempted to go the easy route so far, to copy the single payer system of other countries, which allows the government to have more leverage and control over what is charged. However, a single payer system is not a market based system, and very poorly meshes with the current system, which is half pure market based.

I think we need we need the type of system where catastrophic costs are covered by high-deductible insurance, and people directly pay for non-catastrophic care through a HSA type system. Obviously such a system would need subsidies for the disabled and poor, but for the vast majority of the population, they should be the ones administering how they pay for their health care (they already pay for it now, it is just much more expensive having someone else doing it for you). To make an analogy, would you really want some stranger you don't know choosing how to pay for your housing or automotive costs? In such a situation, they wouldn't shop around to get decent repairs, or do the repairs themselves, they would just do what is most convenient (which is extremely expensive). Medicare/Medicaid would also continue, but would, very very slowly, be phased out or adjusted to match the changes in coverage offered by a HSA type system.

Just my thoughts after having the issues explained to me in a Health Care Law class taught by a MD/Harvard JD.
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Old 12-17-2009, 12:00 PM   #10
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Note: This is not a partisan political post. As you'll see, it could have been written by an individual from any political party.

Plex, I agree with almost all of your post except for this:

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The reason there is such a strong push to get something done, finally, is because the health care system is actually very close to bankrupting the country. I would guess it is about 10-20 years away from doing it.
No, the reason there is such a strong push to get something done now is because elections are coming. If the urgency were actually related tot he problem, then the legislation under consideration wouldn't collect taxes for 3 years before finally dispensing benefits. One group favoring the present action sees the window closing--the public disapproves of the present proposal by a large margin, and the poll numbers are only getting worse. The rationale for the "by Christmas" deadline was to get this legislation passed before legislators went home for the Christmas break to see their constituents and felt their ire. Like what happened last August when they got an earful.

As a practical matter, countries can't "go bankrupt." What actually happens is a lot worse than bankruptcy as no one wipes the slate clean at 7 years. Nope, the misery can continue indefinitely.

The cost of medical care does need to be addressed. We can do it using a system patterned on the system we use (satisfactorily) to sell every other good and service in the country.

When we look at the two major costs areas that are spiraling way ahead of inflation they are education and medical care. It's no coincidence that these are also the two types of expenditures for which a third party often directly foots the bill (at least when the servce is provided) and for which lots of money is available relatively easily.
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Old 12-17-2009, 01:05 PM   #11
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I will try not to be partisan... but I bet I fail...

The current proposals are not health care reform... all are a way to get 'everyone' insured... something the Dems have wanted to do for a long time without success...

Until there is something that actually addresses the COST side, not the payor side, the costs will continue to go up.


One of the things that bothers me is WHY is the cost so high... as an example, when my mom had kids way back when, you stayed in the hospital for a week... now, you drive by, shoot out the kid in the drive through and keep going.... about 20 years ago, my mom had foot surgury for her bunions.... was in the hospital for 3 days... this year my wife had it and she was in at 11AM and out by 6PM...

So why have the costs gone up so much This is the debate that should be going on and the changes should be made here... and one of those changes MIGHT be that grandma does not get a hip replacement just a month before she dies of cancer....
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Old 12-17-2009, 01:36 PM   #12
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Just as sure as trees don't grow to the moon, healthcare will not bankrupt the country.

The system is self correcting overtime. Still, Obama is correct that if healthcare continues on its current trajectory it will bankrupt the US (probably the same is true for defense spending).

So something has to be done. Time, and our politicians or market driven forces, will tell us what. It is, however, nothing to lose sleep over as a nation. One way or another the cost situation will be resolved... because trees don’t grow to the moon.
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Old 12-17-2009, 01:46 PM   #13
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Just as sure as trees don't grow to the moon, healthcare will not bankrupt the country.

The system is self correcting overtime. Still, Obama is correct that if healthcare continues on its current trajectory it will bankrupt the US (probably the same is true for defense spending).

So something has to be done. Time, and our politicians or market driven forces, will tell us what. It is, however, nothing to lose sleep over as a nation. One way or another the cost situation will be resolved... because trees donít grow to the moon.
I disagree 1000%. The current legislation is NOT designed to help the average American worker with their health care, it is to create the largest entitlement program in history that will have ballooning costs and issues for generations to come. Worse, there will still be 20 some million folks without coverage, so that issue is still a problem.

I think Congress should work on one thing at a time. Fixe Medicare and Medicaid first. After that's done, fix SS. Then, work on another facet of healthcare. One local reporter brought up the question as to why companies and individual persons can't shop nationally for healthcare, something the proposed bill doesn't allow and currently isn't allowed as far as I know for employers. I think legislation addressing that would drop costs because it would let the free market work.........
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Old 12-17-2009, 02:06 PM   #14
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I disagree 1000%. The current legislation is NOT designed to help the average American worker with their health care, it is to create the largest entitlement program in history that will have ballooning costs and issues for generations to come. Worse, there will still be 20 some million folks without coverage, so that issue is still a problem.

I think Congress should work on one thing at a time. Fixe Medicare and Medicaid first. After that's done, fix SS. Then, work on another facet of healthcare. One local reporter brought up the question as to why companies and individual persons can't shop nationally for healthcare, something the proposed bill doesn't allow and currently isn't allowed as far as I know for employers. I think legislation addressing that would drop costs because it would let the free market work.........

I did not comment one way or the other on the current proposals being kicked around so I do not understand what you disagree with in my statement. I addressed the OP concern... NOT what Congress may or may not do.

So I do not understand your comment unless you believe healthcare will bankrupt the country?

My point, which I standby, is that one way or another healthcare costs cannot continue to increase as a % of GDP or healthcare will bankrupt the country. I am very confident market forces will not allow that to happen.
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Old 12-17-2009, 02:20 PM   #15
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I did not comment one way or the other on the current proposals being kicked around so I do not understand what you disagree with in my statement. I addressed the OP concern... NOT what Congress may or may not do.

So I do not understand your comment unless you believe healthcare will bankrupt the country?

My point, which I standby, is that one way or another healthcare costs cannot continue to increase as a % of GDP or healthcare will bankrupt the country. I am very confident market forces will not allow that to happen.
The country is already bankrupt....health care bill would just be piling on.......we have the largest deficit in history and it grows every day........
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Old 12-17-2009, 02:27 PM   #16
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My point, which I standby, is that one way or another healthcare costs cannot continue to increase as a % of GDP or healthcare will bankrupt the country. I am very confident market forces will not allow that to happen.
One of the biggies here is that we in the US pay what percentage of drug R&D? We subsidize the entire worlds costs. Does that really seem right? We can't import drugs legally and pay as much as 4 times the other industrialized nations. Why is that the way? As it has been written about, the USA has higher per-capita income. Soooooo what
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Old 12-17-2009, 05:23 PM   #17
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My point, which I standby, is that one way or another healthcare costs cannot continue to increase as a % of GDP or healthcare will bankrupt the country. I am very confident market forces will not allow that to happen.
But, if the decision about how much health care we will buy is a government one, can you provide a hint of the mechanism that will allow the level of this spending to respond to market forces? The money is taken from taxpayers, they don't get a choice. Is it the "market" of the ballot box? That's a very slow and imprecise tool. After all if 51% of Americans are having their health care paid for by the "wealthiest" 49% of Americans, there won't be any reason for the 51% to reduce spending on health care at all, or vote for those who would want to scale that spending back.
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Old 12-17-2009, 05:41 PM   #18
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But, if the decision about how much health care we will buy is a government one, can you provide a hint of the mechanism that will allow the level of this spending to respond to market forces? The money is taken from taxpayers, they don't get a choice. Is it the "market" of the ballot box? That's a very slow and imprecise tool. After all if 51% of Americans are having all their health care paid for by the "wealthiest" 49% of Americans, there won't be any reason for the 51% to reduce spending on health care at all.
In the "near term", the market is the currency/debt markets as relates to your question. If the government takes on the burden of increased healthcare spending and deficits continue to increase as far as the eye can see, the dollar will depreciate and interest rates will increase: all of which will put pressure on the system to correct spending.

As to taxes, if the costs of healthcare keep increasing at the historic rates it will not matter how high taxes go there will not be enough income to cover the expense and so once again spending will have to adjust. Not to mention the impact on the economy, and its growth prospects, of siphoning/diverting ever increasing amounts of $ for healthcare.

There is no way for healthcare to continue to grow as a percent of GDP unchecked (which is the concern Obama is playing on to achieve reform). At some point it swamps the system, irrespective of whether there is healthcare reform or not.

That having been said, I personally am for a sane reform of the system. There is no doubt tremendous waste and inequites in the current system.
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Old 12-17-2009, 07:13 PM   #19
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I just took a quick spin around news sites to see what is being said about the latest permutations. Important figures in both parties are having the same problem I have with the things going on to push something that claims to be healthcare reform to passage.

Here are two different statements made today, one by a democratic leader and the other by a republican. Saying just about the same thing. There's not much difference between either (of course there were parts of each statement that were clearly partisan, but these statements seem to summarize their grievances with the proposed legislation):

Quote:
"And here’s the most outrageous part: at the end of this rush, they want us to vote on a bill that no one outside the Majority Leader’s conference room has even seen. That’s right. The final bill we’ll vote on isn’t even the one we’ve had on the floor."
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Yet Washington has decided, once again, that the American people cannot be trusted to choose for themselves...I know health reform when I see it, and there isn't much left in the Senate bill. I reluctantly conclude that, as it stands, this bill would do more harm than good to the future of America.
At least I'm apparently not the only one who is confused by and mistrusting of all of this.
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Old 12-17-2009, 08:31 PM   #20
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Isn't medical illness already the number one cause of personal bankruptcy?
No, I don't think so. I recall hearing an interview with the authors of that study and they said their data was taken out of context and then repeated ad infinitum in the media. Here's one of the first links I came across:

Health-Care Myths Debunked - Brett Skinner — THE MARK
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In 2006, Dranove and Millenson published a critique of this argument in the journal Health Affairs showing that uninsured medical expenses were cited in only 17 per cent of bankruptcy filings. Further, they found that medical expenses were only one of several reasons for bankruptcy cited in these cases. In fact, medical expenses accounted for only 12 to 13 per cent of unsecured debts among the small percentage of bankruptcy filers who cited medical expenses as one of several other reasons for their bankruptcy claim.
IIRC, *any* medical debt in the original study ended up being cited as the "cause" of the bankruptcy. I can imagine how this plays out - a guy blows his money and gets deep in debt, and then his wife gets sick, and of course he points to the medical bills as the "cause", not the $$$ he spent at the track and at the bar.

Of course there are legitimate sad cases out there - I just don't think that half can be attributed directly to medical bills.

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