In a speech Monday in Toledo, Ohio, Barack Obama fell back on the classic populist political formula and began promising his enthusiastic audience absolutely anything if they would vote him into office. His promises went well beyond the traditional chicken in every pot and car in every garage rhetoric of his predecessors. His philosophy seems to boil down to bailouts for everyone. Bailout upon bailout upon bailout, including subsidies, loan guarantees, direct government loans and public aid for every individual, family and small business in America from the bottom to the top, all at a cost which cannot possibly be counted at much less than a trillion dollars. He wants money for a million makework jobs, for even more loans for the failing auto industry, bailouts for small businesses, for state and for local governments.
What Obama did not go into in detail in this speech was where he was planning to find the money to responsibly pay off our already expensive bailout of homeowners and lenders, much less follow it up with even more free money from the government. There are only a few ways for the government to get money on this scale. It can raise taxes, it can cut entitlements, it can borrow the money, or it can have the federal reserve just print more of it out of thin air. Clearly Obama hasn't thought through the implications of his promises, and those who are considering voting for him have obviously not thought much about what his promises will mean for them in the long run.
Just printing more money is clearly out as a way of funding more public bailouts. That's one of the big mistakes which got us where we are today. It devalues the currency, and every devaluation of the currency multiplies the negative impact of every other negative force in the economy. It creates inflation and takes spending value directly out of the pockets of consumers. Obama can't borrow more money, because international banks and foreign governments are having problems of their own and certainly can't afford to carry more potentially worthless American paper. Cutting entitlements drastically might indeed be able to raise over a trillion dollars quickly, but I don't see a democratic socialist like Obama completely eliminating Medicaid, Medicare and Social Security. If anything, he's likely to expand those programs. Just cutting the discretionary budget couldn't provide anywhere near the money Obama's proposals would require.
Article comments
— go to most recent comments1 - Marlowe
Dave... We're already paying. We've been paying... Obama can only say so much... Look at FDR prior to being elected. He wasn't promising massive sweeping changes. He couldn't. It would have been political suicide...
However, given how utterly wretched our REAL economy is right now we're screwed for some time.
We are the world's largest debtor nation. That isn't good by any stretch of the imagination... But it's worse when you consider we are also the world's biggest IMPORTER of goods and one of the largest EXPORTERS of raw materials... We are in essence the world's largest Third World nation.
With only 12% of our workers now in manufacturing... With 22% of US "economy" generated by Wall Street, with a huge chunk of the rest found in the "service" sector... We are in much MUCH worse trouble than we were in 1930.
At that time we were one of the world's largest creditors. We were the world's largest manufacturer. We imported NO oil at that time.
No, it matters little who wins the White House. Either way it's going to be an ugly four years.
The only thing Obama may MAY bring to the table is a radical change in our present form of capitalism... But I kinda doubt it.
Marlowe
2 - Dr Dreadful
"Right now, the average insured person and/or his employer pays $7600 in premiums per year. That's a total cost of $2.3 trillion per year."
Dave, perhaps a remedial math class is in order. The only way you could have come up with that $2.3 trillion figure is by having every man, woman and child in the United States in paid employment and each having their own individual insurance.
That's quite apart from your complete mischaracterization of Obama's healthcare plan.
3 - DaveNalle
Dr. D, those figures come from the insurance industry at the NCHC. Take it up with them?
But yes, they do seem to have divided the total spent by the general population. The actual total per person should be much higher - even worse for any attempt at national healthcare.
Dave
4 - Dr Dreadful
The NCHC aren't the ones who misrepresented those figures, Dave - you are.
Their numbers are simply the total annual healthcare spending, expressed per capita. Nothing to do with insurance premiums, as you claimed.
5 - Baronius
Dave, you know exactly what's going to happen. Obama will be "surprised". Remember Clinton's promises? When he came into office, he sat down with the budget people, and was surprised to discover that things were worse than anyone ever realized. Really, honestly worse. He immediately broke all of his campaign promises, and claimed the high ground for doing so. So with Obama, the only question is, will he break the promises about new programs or the promises about taxes?
6 - DaveNalle
Quite right, Baritone. They mentioned both the premiums and the total per capita and I got the two crossed up. I've corrected it. The basic information remains correct, but good try at diverting us from the main points.
Dave
7 - DaveNalle
Baronius, he's going to back off on all of his promises from taxes to medical care. He won't have a choice. But unlike Clinton, since we already know so much about the economic problems he won't be able to claim ignorance effectively.
Obama is not going to be able to meet any of his promises and he's going to raise taxes on everyone earning $50K or more just to meet existing obligations. And that's a BEST case scenario. That's what he'll do if he's responsible and can put need ahead of ideology. Worst case scenario he'll actually try to implement some of his socialistic nonsense, worsen the economic situation and end up really pleasing his masters with unprecedented levels of nationalization and seizure of assets.
Dave
8 - Jordan Richardson
Can you also tell me the winning lottery numbers, Dave?
9 - DaveNalle
No, Jordan. They are ALL losing numbers.
Dave
10 - Baronius
Jordan, since the numbers don't add up, it's not a crazy guess that Obama's going to break his promises. The only questions are which of them, and how soon. I'm guessing that he'll take a page from Clinton's playbook, and say "gosh, the problems are so much worse than any of us imagined" before Inauguration Day. It's been done before.
Listen, if Obama finds a way to fund his soci-, um, postpartisan paradise, I'll admit I was wrong. But accountability goes both ways. People on this site have been predicting Bush coup scenarios, with the president refusing to leave office. If they're right, hats off to them. If they're wrong, I expect them to wolf down a nice helping of humble pie.
11 - Baritone
Dave,
I don't believe I have entered this conversation prior to now.
"Worst case scenario he'll actually try to implement some of his socialistic nonsense, worsen the economic situation and end up really pleasing his masters with unprecedented levels of nationalization and seizure of assets."
And just who would "his masters" be? Is Obama someone's slave? Oh, lawdy, lawdy!
Nice touch.
B
12 - Dr Dreadful
The basic information remains correct, but good try at diverting us from the main points.
I'm not diverting, Dave, I'm just that irritating hand up at the back of the class.
You corrected the numbers only, and only because you got caught massaging them. (Perhaps the new president should give you a job in his PR office.) Your argument continues to hinge on the notion that Obama, to fulfill his healthcare promise, will have to find all of that money from public funds. That was never the deal: Obama's plan, should you bother to read it (a large majority of his critics evidently haven't, as they continue to claim that he doesn't even have a plan), specifically states that employees' premiums will be reduced - not disappear completely.
13 - Ruvy
Marlowe says it all in his comment here. The leader of a debtor nation like the United States cannot deliver on empty promises - and it does not matter which leader it is. All he can do is seek out the foreign butt that is easiest to kiss, and the folds in the foreign but easiest to lick clean.
We already see that the butt that Obama will kiss is Arab butt, and very possibly Russian butt as well. Whose butt will McCain kiss? Chinese?
Who knows? But, unless the United States decides to end its debtor status by threatening other nations with destruction, its leaders will have to wipe the feces off their lips for quite some time. Life will get very bitter in the States because of this. "Rich" people will flee with their riches, leaving the poor to deal with what will become very painful poverty after a time.
I'm so glad I'm not in America right now....
14 - Dr Dreadful
And actually, Dave, your numbers are still misleading. The $4400 you quote is not the average cost per family member under a group policy, as you claim, but the cost for single-person coverage.
For a family of four it's $12,100, or a little over $3000 per person.
15 - DaveNalle
Dr. D. I corrected the explanation of one of the numbers bcause I misread it. It doesn't change anything about the overall cost of providing healthcare to the nation.
But you did catch one real problem with the article. It turns out that Obama's plan is substantially different from the healthcare plan which Democrats in Congress have been promoting. It's much more conservative and would be substantially less expensive, perhaps limited to no more than a cost of about $500 billion a year. Still another half trillion which he can't possibly fund, of course.
Dave
16 - Dr Dreadful
What charming imagery you employ, Ruvy...
17 - Dan(Miller)
Dave,
But then, it's only numbers and funny money and besides . . . .According to the Tax Policy Center, the proposals offered by Senator Obama would
I do disagree with one of your points. In Comment #7, you claim (possibly with a straight face; I don't know) that Senator Obama won't be able to claim ignorance effectively. He has done a pretty good job so far, e.g., the Reverend Mr. Wright et al. Why should the economy be different?
Dan(Miller)
18 - Ruvy
What charming imagery you employ, Ruvy...
It's accurate imagery, DD - and all of the language is clean and pure, as white as the driven snow....
19 - Dr Dreadful
It doesn't change anything about the overall cost of providing healthcare to the nation.
Well, so far we've got the cost whittled down to about half what you initially claimed it would be. And that's without taking into account the employee's premium, which of course doesn't come out of public funds.
Setting healthcare aside, I can't help but wonder what we'll find if we take a closer look at the rest of your numbers...
20 - bliffle
Welcome to the world of Bush voodoo economics, Dave. A world that you have enthusiastically embraced as it came upon us 7 years ago.
In spite of your constant wriggling and squirming the disaster that has characterized the Bush administration has put us in terrible straits. Not a government agency established in 1933 that has been instrumental in helping millions of American families have their own homes. Not an act from 1979 that has expanded home ownership for decades under responsible administration.
No, the mess that we have is from the "deficits don't matter" attitude of this administration.
The catastrophe is due to a conscious attempt by radical neo-republicans to drain the US treasury for the ignoble purpose of impoverishing the government so that it could not help citizens with any kind of social programs. That was made apparent by the hands-off attitude of BushCo in the face of Katrina, and by denying improvements in childrens healthcare.
21 - DaveNalle
Bliffle, you can keep on trying to spin it any way you like, but the facts remain the facts and it's quite clear that the Bush administration tried to address the problem and were stymied by the democrats who have fed off of Fannie and Freddie for years.
Dave
22 - handyguy
...you can keep on trying to spin it any way you like, but the facts remain the facts and it's quite clear that the Bush administration tried to address the problem and were stymied by the democrats who have fed off of Fannie and Freddie for years.
And you can keep repeating this distorted half-truth as many times as you want, but it will never be true.
For someone who pays so much lip service to "facts," you are extraordinarily loose in your use and and interpretation of them.
23 - Cannonshop
Dave, it's pointless. Here's why:
Obama Voters are the people who blame McDonalds and Burger King because they got fat, they blame Marlboro for their emphysema, Budweiser for their Liver cirrhosis, the Realtor for their house payments, Hersheys for their bad teeth, and car companies for their bad driving.
This has become the MAJORITY of Americans-the only freedom they desire is freedom from risk, freedom from responsibility, freedom from consequences. Their game is to find someone with deep pockets to blame for their problems, then use Government to go after that someone.
The only 'sacrifice' they're willing to make is sacrifice of ethics, sacrifice of morality, sacrifice of liberty-these they sacrifice gladly for the sake of 'Teh Win' for their chosen masters. There is nothing they will not forgive or ignore for the sake of the party that promises them safety from the consequences of their own actions, plus a little bit of crumbs and the satisfaction of punishing those who dare disagree, or those who have the misfortune of being slightly better off.
Crabs in the bucket, Dave, intent on dragging anyone who tries to climb out back down among them on the way to the cooking pot.
24 - Clavos
Crabs in the bucket, Dave, intent on dragging anyone who tries to climb out back down among them on the way to the cooking pot.
Nice analogy, Cannon. Crabs left too long in the bucket or trap wind up cannibalizing each other until only one big fat crab is left...
25 - Dave Nalle
Handy, I'm going to try this one more time.
Answer these yes or no questions.
Did Johnson privatize Fannie and Freddie in 1968?
Did the CRA make low and non-qualifying loans available to those who would normally not qualify for them?
Was the CRA signed by Jimmy Carter?
Did the FHA gain the power to coerce banks into giving non-qualifying loans by withholding loan guarantees during the Clinton administration?
Did the Bush administration propose reforms for Fannie and Freddie in 2003?
Were those reforms blocked in committee primarily because of Democrat opposition?
Were hearings held in 2005 to consider possible problems with Fannie and Freddie?
Did leading democrats at those hearings deny that there were problems and suggest that the regulators should be investigated instead of Fannie and Freddie?
Did Republicans propose legislation in 2005 to reform Fannie and Freddie?
Were Chris Dodd and Barack Obama the top two recipients of campaign contributions from Fannie and Freddie?
Did Chris Dodd take a 'VIP' loan from Countrywide at a sub-prime interest rate?
Did Chris Dodd sponsor a $300 billion bailout bill to compensate Bank of America for taking over failing Countrywide?
Did Dodd support a bill to ease credit card lending restrictions promoted by Countrywide?
Did Franklin Raines and Jim Johnson advise Obama at some point in his campaign?
The list could go on, but you should get the point by now. Remember, yes or no answers.
Dave