The Health Care Dilemma: Part II
By Harris R. Sherline on July 3, 2009 at 10:27 am
How to pay for a national health care plan is one of the big obstacles the Obama administration must hurdle in order to reach its goal of providing health insurance coverage for every American. The question is whether it can be done at all without literally breaking the bank - especially following on the heels of the approximately $10 trillion in expenditures over the next few years that have already been approved by Congress and signed into law.
So, how do Obama and Congress plan to get this done?
First, they talk incessantly about between $1 trillion and $2 trillion in cost savings that can be achieved in the current health care system. He problem is that there is no way to measure it. Not really. It’s just talk.
A number of other ideas are also being floated to pay for universal health care coverage, and the ultimate choice will probably include some combination of the following:
Taxing the “rich”: This source couldn’t possibly cover all the proposed costs of a national health care plan. A graphic illustration can be seen in the fact that if you tax away the profits of the entire Fortune 500 list of companies, it would only bring in around $100 billion. In 2008, the number was $99 billion. This assumes that these businesses would continue to operate if everything they earned is confiscated by the government, in addition to the income taxes they already pay. As for the individual “rich” taxpayers, the result would be much the same. The combined net worth of the Forbes 400 richest Americans is about $1.2 trillion. If the government took everything they have to fund universal health care, it would only be a one-time fix, leaving nothing to tax in the future.
Taxing health care benefits that employees currently receive tax-free from their employers: No doubt this can be accomplished, but not without reducing the incentive employers have to provide health care coverage for their employees. The idea also includes tinkering around the edges of income tax deductions on individual tax returns, such as reducing the deductibility of various expenses. This can certainly generate more taxes, but hardly enough to pay for universal health care on an ongoing basis.
Cutting costs in the current health care system by improving technology, reducing unnecessary or duplicative procedures also really can’t be measured with any degree of confidence. There are simply too many moving parts, all interacting in different ways at different times and continuously changing at the same time.
Reducing payments to doctors and hospitals for Medicare and Medicaid patients: Contrary to the public perception, doctors are already being underpaid by both Medicare and Medicaid, with the result that many physicians are no longer willing to accept patients whose care is paid for by these programs. Furthermore, the government is notoriously “slow pay,” especially the state Medicaid programs. For instance, in California, MediCal is so slow and underpays for services so severely that many doctors refuse to accept their patients. An actual situation I encountered while I was running a hospital illustrate the point: a general surgeon was paid ten cents for a $50 fee that he charged for an emergency room consultation. On another occasion, a neurologist received only 17 cents for an ER consult. Such cases were not all that unusual. So, you can cut payments, but unless you are willing to conscript doctors, you can’t force them to treat patients whose bills are paid by the government.
Lowering the cost of health care insurance by creating a program that will compete with private sector insurance plans seems like a good idea on paper. But the reality is that a government funded health insurance program has unlimited financing available, which means that any losses they might experience will be funded regardless of whether the plan is profitable or not. The private sector can’t compete with this and will eventually be forced out of business, leaving the government plan as the only remaining option. It’s unfair competition, but it won’t be viewed that way by most politicos. There are laws designed to prevent this sort of predatory behavior by private citizens and businesses, but it’s generally OK when the government does it.
It never ceases to amaze me how often people in government seem to think that they are smart enough to structure programs that can control and regulate human behavior without imposing autocratic control over people. It has been repeatedly tried throughout history, and it always fails – eventually. The evidence is abundantly clear in the universal health care plans of other countries that have already adopted such programs.
© 2009 Harris R. Sherline, All Rights Reserved
The Health Care Dilemma: Part I
By Harris R. Sherline on June 26, 2009 at 4:46 pm
Leading the effort to sell his health care plan to the nation, President Obama has been appearing almost non-stop in almost any venue that will have him. There is growing opposition to his proposal, as the details come to light. But he presses on, convinced of his own infallible judgment, that he knows what’s best for the entire nation of 300 million plus people and that only his ideas can possibly solve the problem.
Economist Walter E. Williams noted, “I doubt whether there are many Americans who think Congress has either the right or competency to choose where they live, what clothes they wear or what cars they drive. Yet many Americans stand ready to allow Congress to decide what doctors they can use and what treatments they receive. We forget that once we have government-sponsored health care, it can be used to justify almost any restraint on liberty.”
And, columnist David Harsanyi commented, “The president claims that we must pass a government-run health insurance program — possibly the most wide-ranging and intricate government undertaking in decades — yesterday or a ‘ticking time bomb’ will explode. If all this terrifying talk sounds familiar, it might be because the president applies the same fear-infused vocabulary to nearly all his hard-to-defend policy positions. You’ll remember the stimulus plan had to be passed without a second’s delay or we would see 8.7 percent unemployment. We’re almost at 10.”
If the government is so efficient and capable of running large organizations, how is it that the post office and the railroads have never been able to operate at break even, let alone make a profit? So, why would a gigantic health care system that accounts for an estimated 18 percent of the nation’s total economic output be able to do any better?
Medicare is held up as an example of a government run health care system that covers a major portion of the population (about 13 percent), yet operates efficiently, with only about three percent administrative overhead, while providing almost unlimited care to seniors at a reasonable cost. Unfortunately, the reality is not quite as advertised.
For one thing, Medicare loses money. It is one of the nation’s biggest unfunded liabilities. So, the program may be efficient, but it loses money. The Peter G. Peterson Foundation notes: “… between Medicare’s three programs (hospital insurance, outpatient, and prescription drug), current and future promised Medicare benefits amounted to $36.3 trillion.”
Another little-known fact about Medicare is that the program is able to control costs only because it can dictate the prices it pays for services. In other words, the system employs price controls to keep costs down. However, it’s a well documented historical fact, dating as far back as the early Romans (Diocetianus, 244-301 A.D.), that price controls don’t work. For example, hospital fees for both inpatient and outpatient services are determined by the government, in its sole discretion.
Furthermore, prices are set according to a system established by Medicare, which then pays only 80 percent of the fees that it determines are or should be the proper charges. Still, Medicare loses money.
Another representation of the Obama administration and others who are pushing for national health coverage is that there are 47 million Americans who do not have any health insurance, which provides the basis for their haste to adopt a plan. Once again, however, at best this is simply inaccurate, at worst, it’s a gross misrepresentation. FactCheck.org offers the following information:
“Twenty-six percent of the uninsured are eligible for some form of public coverage but do not make use of it…this is sometimes, but not always a matter of choice.”
“Twenty percent of the uninsured have family incomes of greater than $75,000 per year, according to the Census Bureau.”
“Forty percent of the uninsured are young…many young people lack insurance because it’s not available to them, and people who turn down available insurance tend to be in worse health, not better…”
Star Parker has written, “Pulling immigrants out of the equation, we’re left with an uninsured population that can’t afford insurance that is about a third the size of the widely quoted 47 million. It’s a population that is generally poor, young, uneducated, and not working…We’re already set up to deal with these folks. Either through Medicaid or covering their emergency room visits.”
As usual, statistics are being misused or misrepresented to support a position that is not necessarily valid. In this case, the need for a government run health care program for everyone.
© 2009 Harris R. Sherline, All Rights Reserved
The More Things Change, The More They Stay The Same
By Harris R. Sherline on June 22, 2009 at 10:44 am
Joseph Goebbels, the Reich Minister of Propaganda in Nazi Germany, was noted for many of his quotable statements. It’s interesting to see how some of his observations relate to the situation in America today, over 60 years later, a far different time and place.
Goebbels said: “If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.”
Observation: So, let’s see, just how much is the power of government being used by the current administration to repress dissent? How about castigating GM and Chrysler bond holders for objecting to being treated with a lower priority than unsecured creditors? Or firing CEO’s of major corporations, selecting the board members of public companies, dictating executive compensation or otherwise making dictatorial decisions that appropriate private property, contrary to the powers authorized by the U.S. Constitution?
Goebbels said: “The most brilliant propagandist technique will yield no success unless one fundamental principle is borne in mind constantly - it must confine itself to a few points and repeat them over and over”
Observation: When the Obama administration passed the stimulus bill we were told that we were faced with an emergency so dire that the financial structure of the United States would collapse if Congress did not pass the legislation the president wanted immediately. (Remember, the frequently quoted statement by Obama’s chief of staff, Rahm Emanuel: “You never let a serious crisis go to waste. And what I mean by that it’s an opportunity to do things you think you could not do before.”). Congress did Obama’s bidding, over the objections of the majority of the American public, and Obama’s message is still being used to justify his policies, such as taking control of the banking and auto industries, while repeatedly stating that he inherited the deficit from the Bush administration. (He conveniently ignores the fact that his own policies have quadrupled the deficit in just a few short months.)
Goebbels said: “Think of the press as a great keyboard on which the government can play.”
Observation: The conduct of the American media is a graphic illustration of this principle. The media played a major role in getting Obama elected and continues to shield him from the consequences of his actions. Instead of questioning his policies and his decisions, such as taking over the banks and the auto and insurance industries, the media have remained faithful cheerleaders, allowing the Obama administration to use them as its megaphone.
Goebbels said: “Faith moves mountains, but only knowledge moves them to the right place”
Observation: Faith in Obama and his words made it possible for a man who had no experience at running anything to get himself elected to the highest office in the land. But, within six months of his inauguration, it has also become clear that his lack of experience is leading to what may be the worst financial disaster in the nation’s history. In short, I seriously doubt that Obama has the requisite knowledge to solve the nation’s problems, economic, political, international, war time, or otherwise. The public’s faith in Obama got him elected and has enabled him to pursue his agenda, but it is not clear that he has the knowledge needed to succeed.
Goebbels said: “Whoever can conquer the street will one day conquer the state, for every form of power politics and any dictatorship-run state has its roots in the street.”
Observation: Although we may not be a dictatorship-run state (yet), many people are becoming fearful that it is happening on our watch, as Obama assumes increasing power over every aspect of daily life in America. The new “street” may be the Internet, which Obama has employed so effectively to not only get himself elected but to advance his policies and to increase his power. The stimulus bill is just one example.
Goebbels said: “If we are attacked we can only defend ourselves with guns not with butter.”
Observation: The Obama administration is reducing the defense budget. Clearly, they do not agree with Goebbels’ maxim, given the cuts in defense that are currently being made. Who’s right? You decide.
For my part, I believe we are living in a very dangerous world and should not knowingly weaken our military no matter how tempting it may be to use that money for other programs, such as health care. The situation with Iran and North Korea today should be all the evidence we need to strengthen not weaken our defenses.
© 2009 Harris R. Sherline, All Rights Reserved
Trying To Make People Like Us
By Harris R. Sherline on June 19, 2009 at 8:30 pm
In general, Americans place great store in being popular. It’s ingrained in our culture and is constantly beamed at us from every direction, by the media, commercials, our schools, entertainment, books, movies and music. So, it’s no wonder that it has become such an integral part of our personalities and psyches.
But, just how realistic is it to base public policy on the idea that being popular with other societies will enable us to conduct foreign policy that will help us achieve our economic or strategic goals or make us safer?
Unfortunately, the historical record doesn’t support the notion that being liked helps keep people safe. International policy is generally about power, not popularity. The records are replete with stories about the implacable cruelty and violence that has been directed at people for no reason other than the fact that someone wanted to conquer them. Attila the Hun (406 AD -453 AD) was notorious for his cruelty to those he vanquished, destroying entire cities and killing everyone in them for the purpose of spreading fear ahead of his advancing troops.
Before Attila, the Romans vanquished most of the known world, employing essentially the same tactics, often sacking cities and enslaving their populations.
The point is that it didn’t matter how much people were willing to lay down their arms before the advancing armies of the Huns and the Romans, pay tribute, even live in subjugation, they were still often slaughtered and enslaved by their conquerors. Being liked didn’t even enter into the equation.
Wars are generally fought for a variety of reasons: economic, religious, cultural, territorial, etc., and it really doesn’t matter whether one side is liked by anyone.
The oldest military treatise in the world, the Art of War, written by a Chinese warrior, who Wikipedia tells us was “a heroic general…(whose) victories then inspired him to write The Art of War…which historians place “in the Warring States Period (476–221 BCE)… a time of constant war among seven nations seeking to control all of China.”
The Art of War is still studied at West Point and in other military training programs as the basic treatise on warfare. Among his many cogent observations, Sun Tzu noted, “All warfare is based on deception…in order to kill the enemy, our men must be roused to anger…that there may be advantage from defeating the enemy, they must have their rewards…Peace proposals unaccompanied by a sworn covenant indicate a plot.”
There is nothing in Sun Tzu’s writings to suggest that winning a war has anything to do with being liked by anyone.
Whatever Obama chooses to call the war on terror, it will continue to be a clash between cultures, based on religious differences, as opposed to a struggle between nations over territory or economic principles. The goal of the Muslim extremists is to destroy America. Our very existence offends them. Moishe Yaalon comments in The Rules of War (AISH.com), “The difference between us and the terrorists is clear: We endanger ourselves to protect their civilians. They endanger their own civilians to protect themselves.”
Yaalon also observed: “The reason terrorist groups such as Hezbollah (terrorists) use human shields is elementary. They try to exploit the respect for innocent human life that is the hallmark of any civilized society to place that society in a no-win situation. If it fails to respond to terror attacks, it endangers its own citizens. If it responds, it runs the risk of killing innocents, earning world opprobrium and inviting diplomatic pressure to stand down.”
Responding to an article in Aish (26/5/2009), Muslim Bronx Bombers Strike Out, Alan Kornman commented: “The Islamist world view is very simple Dar al-Harb and Dar al-Islam - House of War and House of Islam. Every human on earth is in one camp or the other. That is the way it is dictated in the Qur’an and Sunnah by Allah himself - to be a good Muslim you must believe that the Qur”an is “God” inspired while every other religion, government, etc. is fatally flawed and corrupted by man…So when you see Islamists behaving violently - don’t be amazed, shocked, and say to your whiney self - what have I DONE to make them hate me. These are simply GOOD Muslims following what is in the Qur’an and Sunnah.”
Obama has been pushing the notion that the United States can influence the outcome of the struggle we are engaged in with terrorists by somehow getting the less radical elements of the Muslim population to “like us.” However, I submit that this is a non-starter. It simply doesn’t comport with reality.
© 2009 Harris R. Sherline, All Rights Reserved
The More Things Change, The More They Stay The Same
By Harris R. Sherline on June 15, 2009 at 2:49 pm
Joseph Goebbels, the Reich Minister of Propaganda in Nazi Germany, was noted for many of his quotable statements. It’s interesting to see how some of his observations relate to the situation in America today, over 60 years later, a far different time and place.
Goebbels said: “If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.”
Observation: So, let’s see, just how much is the power of government being used by the current administration to repress dissent? How about castigating GM and Chrysler bond holders for objecting to being treated with a lower priority than unsecured creditors? Or firing CEO’s of major corporations, selecting the board members of public companies, dictating executive compensation or otherwise making dictatorial decisions that appropriate private property, contrary to the powers authorized by the U.S. Constitution?
Goebbels said: “The most brilliant propagandist technique will yield no success unless one fundamental principle is borne in mind constantly - it must confine itself to a few points and repeat them over and over”
Observation: When the Obama administration passed the stimulus bill we were told that we were faced with an emergency so dire that the financial structure of the United States would collapse if Congress did not pass the legislation the president wanted immediately. (Remember, the frequently quoted statement by Obama’s chief of staff, Rahm Emanuel: “You never let a serious crisis go to waste. And what I mean by that it’s an opportunity to do things you think you could not do before.”). Congress did Obama’s bidding, over the objections of the majority of the American public, and Obama’s message is still being used to justify his policies, such as taking control of the banking and auto industries, while repeatedly stating that he inherited the deficit from the Bush administration. (He conveniently ignores the fact that his own policies have quadrupled the deficit in just a few short months.)
Goebbels said: “Think of the press as a great keyboard on which the government can play.”
Observation: The conduct of the American media is a graphic illustration of this principle. The media played a major role in getting Obama elected and continues to shield him from the consequences of his actions. Instead of questioning his policies and his decisions, such as taking over the banks and the auto and insurance industries, the media have remained faithful cheerleaders, allowing the Obama administration to use them as its megaphone.
Goebbels said: “Faith moves mountains, but only knowledge moves them to the right place”
Observation: Faith in Obama and his words made it possible for a man who had no experience at running anything to get himself elected to the highest office in the land. But, within six months of his inauguration, it has also become clear that his lack of experience is leading to what may be the worst financial disaster in the nation’s history. In short, I seriously doubt that Obama has the requisite knowledge to solve the nation’s problems, economic, political, international, war time, or otherwise. The public’s faith in Obama got him elected and has enabled him to pursue his agenda, but it is not clear that he has the knowledge needed to succeed.
Goebbels said: “Whoever can conquer the street will one day conquer the state, for every form of power politics and any dictatorship-run state has its roots in the street.”
Observation: Although we may not be a dictatorship-run state (yet), many people are becoming fearful that it is happening on our watch, as Obama assumes increasing power over every aspect of daily life in America. The new “street” may be the Internet, which Obama has employed so effectively to not only get himself elected but to advance his policies and to increase his power. The stimulus bill is just one example.
Goebbels said: “If we are attacked we can only defend ourselves with guns not with butter.”
Observation: The Obama administration is decreasing the defense budget. Clearly, they do not agree with Goebbels’ maxim, given the cuts in defense that are currently being made. Who’s right? You decide. For my part, I believe we are living in a very dangerous world and should not knowingly weaken our military no matter how tempting it may be to use that money for other programs, such as health care. The situation with Iran and North Korea today should be all the evidence we need to strengthen not weaken our defenses.
© 2009 Harris R. Sherline, All Rights Reserved
Apologist-in-Chief
By Harris R. Sherline on June 8, 2009 at 7:19 am
Who asked Barack Obama to run around the world apologizing for America and, by implication, all Americans? Certainly not the American people. Nor have we seen any polls or news stories reporting that Americans want the President to apologize to anyone on their behalf.
I, for one, am deeply offended by our President using the occasion of his trips outside the U.S. to apologize for our policies, actions and past transgressions, as he may see them. Bill Clinton did the same thing on a trip to Africa in1998, when he said, “going back to the time before we were a nation, European-Americans received the fruits of the slave trade. And we were wrong in that.”
What is it about the mindset of people like Bill Clinton and Barack Obama that makes them think apologies can change the attitudes of people who hate America and want to destroy us? Do they truly believe this will make them our friends or supporters?
We have bowed and scraped to the heads of Arab states for generations to keep their oil flowing in our direction – and continue to do so. The latest occasion was Obama’s visit to Saudi Arabia on his way to Egypt, where he delivered a major speech to the Muslim world.
However, the President and his State Department agreed to highly restrictive conditions for the reporters who travel with him while in Saudi Arabia: That they all be confined to the hotel where they stayed, that they were not allowed to independently report on Obama’s meetings with the Saudi King, that they would only be allowed to use the official press releases of the Saudi government and finally that they not interview any Saudis, under penalty of imprisonment.
We may need their oil, but they are ingrates. We have provided the Saudis with military cover when they were threatened by their own neighbor, Saddam Hussein, who invaded Kuwait, which induced us to initiate the Gulf War to expel them. On his way out of their country, Saddam set the Kuwaiti oil fields ablaze and destroyed as much property as he possibly could, killing and torturing people as his forces were being driven out. So, should we also be apologizing for rescuing Kuwait and restoring their monarchy? Or, should we apologize to the Saudis for sending our military and planes to their country to shield them from a similar fate?
In the June 3rd issue of Morning Bell, “President Obama’s Top Ten Apologies,” the Heritage Foundation noted that the President has apologized for Guantanamo (in France and D.C.), the mistakes of the CIA, America’s policy toward the Americas, for slavery and segregation (before the Turkish Parliament), the War on Terror (as if we started it), for attempting to dictate the terms of our relationship with other nations (at the Summit of the Americas), to the Muslim world in general, saying “We sometimes make mistakes. We have not been perfect,” and to France and Europe for the “times where America has shown arrogance and been dismissive, even derisive.”
However, as he travels around the world apologizing to anyone who will listen, Obama fails to also note that we have saved many of the same people to whom he is apologizing, that they owe the very existence of their nations to the United States. Most of Europe would have been enslaved by Germany or the Soviet Union if it were not for the United States in World War II, South Korea from the North Koreans and the Chinese in the 50s and some 50 million people from Saddam Hussein, al Qaida and the Taliban in Iraq and Afghanistan since 9/11.
The oft quoted adage, “Be careful what you wish for, you may get it,” applies to America haters everywhere. If they believe we are so terrible, they might think about the kind of world they would be living in if we were no longer available or able to protect or help them in times of need.
Is Obama also prepared to apologize to the American people when his policies prove to be the cause of the financial disaster that is now being widely predicted: a dramatic increase in inflation, along with a significant drop in the value of the dollar and driving up interest rates?
It’s time we stopped apologizing for our way of life, for helping to free other people from tyranny, poverty and disease, and for the economic success that has made us the object of envy in most of the world.
The one thing we absolutely do not need is an official Apologist-in-Chief as our head of state.
© 2009 Harris R. Sherline, All Rights Reserved
How Much More Health Care Can We Afford?
By Harris R. Sherline on June 3, 2009 at 4:30 pm
We can argue about universal health care until we’re blue in the face, but nothing is going to change the inevitable. At this point, Liberals control all the levers of government: the Presidency, both houses of Congress and the bureaucracy, and I believe they will pass legislation to establish some form of universal health care coverage.
We are in the midst of a health care financial crisis of gigantic proportions, which is the result of escalating costs, unlimited demand and government intervention. The addition of prescription coverage for seniors has created an unfunded liability of $18 trillion, which is already far greater than the unfunded liability for Social Security of some $11 trillion.
In addition, the federal budget for the next fiscal year is projected to be a deficit of $1.8 trillion, and another $10 trillion has already been committed over the next seven or eight years.
So, given the economic outlook and the fiscal constraints that are the result of Obama’s policies, it’s hard to see how the nation’s health care system can be expanded to cover another 40 to 50 million people. The Patriot Post (February 19, 2007) noted, “Health care is now deemed a right – to be guaranteed and delivered by government.”
Lawrence Kudlow made the following observations in a May 14, 2009 article titled, “Obama’s ‘Public’ Health Plan Will Bankrupt The Nation”:
“Does anybody really believe that adding 50 million people to the public health-care rolls will not cost the government more money? About $1.5 trillion to $2 trillion more? At least.”
“So let’s be serious when evaluating President Obama’s goal of universal health care, and the idea that it’s a cost-cutter. Can’t happen. Won’t happen. Costs are going to explode.”
“Think of it: Can anyone name a federal program that ever cut costs for anything? Let’s not forget that the existing Medicare system is roughly $80 trillion in the hole.”
Economics professor and columnist Walter Williams also commented, “Problems with our health care system are leading some to fall prey to proposals calling for a nationalized single-payer health care system like Canada’s or Britain’s… Some of our politicians hold up the Canadian and British nationalized health care systems as models for us. You can bet that should we ever have such a system, they would exempt themselves from what the rest of us would have to endure. There’s a cure for our health care problems. That cure is not to demand more government but less government. I challenge anyone to identify a problem with health care in America that is not caused or aggravated by federal, state and local governments.”
As the former CEO of a hospital, I can attest to the effects of the overpowering presence of the hand of government in every aspect of hospital operations. It stifles initiative and increases costs by unnecessarily complicating administration, all presumably in the interest of providing the best possible care for patients. Unfortunately, much if not most of the regulation has little or nothing to do with providing quality care.
Furthermore, adding another 40 or 50 million people to the nation’s health care system will not be free. Like it or not, cost will be a major factor in creating what amounts to nationalized health care in this country. We are already being told that Medicare will run out of money in the near future, and the cost of the prescription drug plan for seniors is far in excess of original estimates. As P.J. O’Rourke noted, “If you think health care is expensive now, wait until you see what it costs when it’s free!”
One of the more astounding aspects of the drive by the President and the Congress to pass health care legislation is that they expect to do it in a matter of weeks, apparently without hearings and, chances are, without allowing any input from the other side, the Republicans, that is. And, I might add, without really knowing where the money will come from. Increasing taxes on the “rich” certainly can’t produce enough revenue to support a new multi-trillion dollar program. And, the idea that the health care industry can find enough savings in future expenditures, to the tune of about two trillion dollars, is laughable. Who’s to know if proposed savings in projected budgets would be real?
So, as we march forward into the abyss of spending more trillions of dollars we don’t have, are we all going to wake up at some point and realize that once again we have been out faked by slippery politicians?
© 2009 Harris R. Sherline, All Rights Reserved
The California Lottery
By Harris R. Sherline on May 31, 2009 at 5:20 pm
I was recently asked if I knew how much of the California Lottery’s revenue is actually used for education and what happens to the rest of the money. I didn’t, so I turned to the trusty Google search engine on my computer for the answer. What I found was not at all what I expected, namely that the amount of money that goes to schools is a very small, one might say a tiny percentage of the state’s total education budget.
However, looking at the California Lottery from different perspectives can be misleading. For example, in the 2006 fiscal year 34.6 percent of the Lottery’s revenue was allocated to public education. And, although the dollar amount was a big number, over $1.2 billion, it was only about 1.6 percent of the state’s education budget.
The California Lottery Act (Proposition 37) was sold to the public in 1985 on the premise that a third of the revenue would be used to support education - and, as promised, it has. And, although the Lottery revenue that goes to education accounts for only a small percentage of the state’s total education budget, the dollar amounts are significant. For example, in 2006, the Lottery’s contribution to the state’s education budget, at 34.6% of its total revenue, was allocated as follows: $780 million (65%) was spent on educators’ salaries and benefits; $228 million (19%) was used to buy instructional materials for the classroom, including textbooks, supplies, computers and software, library books and lab equipment; and $192 million (16%) provided support for other programs and services.
In FY 2005-06, in addition to the money that went to the schools, 53.6 percent or $1.7 billion of the Lottery revenue was paid out for the prizes that were awarded to winners, $223 million paid for retailer bonuses and commissions, $90 million was used for operating expenses, and $51 million paid game costs.
The California Lottery website, “Lottery Funds at Work,” notes that FY 2007-08 Lottery revenues generated $132.20 per pupil for the schools “in addition to the $9,488 per pupil or $59 billion provided by California’s general fund.”
The website also states, “Lottery funds don’t just go to K-12 schools; they support students in all areas of public education. Community Colleges, the University of California, the California State University system, Adult Education, Charter Schools and even the schools at the Department of Corrections and Rehabilitation – Division of Juvenile Justice receive Lottery funds.”
Just how important is this source of income to the schools? At around 1.5 percent of the education budget, it hardly seems like a major factor. Like most people, I suppose, whenever I thought about it, which was rarely, my understanding of the Lottery’s contribution to education was based on a vague recollection that a third of the money goes to the schools. It never occurred to me to see just what percentage of the education budget that might be.
Given that it is such a small percentage, I wonder if the schools could get along without the Lottery’s contribution? It’s interesting to note that almost two-thirds of the money that goes to education is used for salaries and benefits, and I’m curious to know why and who made that decision. Why not more for books and instructional materials? Or for after school activities, such as sports, band, theater arts and other enrichment programs?
Thinking back to the time when the Lottery was put before the voters, I recall that it was strongly opposed by many people on the grounds that it is really a form of regressive taxation on those who are considered “low income,” especially seniors. Some voters opposed the lottery on the basis of religious or moral belief.
Considering that over the years there have been a number of complaints about the Lottery being poorly managed, that it is a form of regressive taxation, and that I don’t agree with the way the money is used by the state’s education establishment, I’m not at all convinced it should be continued.
I also wonder why the state is in the gambling (gaming) business or if it should be? How about horse racing, card clubs and casinos? If the Lottery can generate such large sums for schools, how much money could the government bring in by expanding its role in gambling in the state?
All of which puts me in mind of Mark Twain’s oft quoted observation, “Figures don’t lie, but liars figure.” Something about this whole Lottery business strikes me as being not right.
© 2009 Harris R. Sherline, All Rights Reserved
Giving Back
By Harris R. Sherline on May 27, 2009 at 11:48 am
One of Obama’s recurring themes throughout his quest for the presidency of the United States was his admonition to young people to “give back” by pursuing careers in public service or charitable work. In May 2008, he urged Wesleyan graduates to “make us believe again” by dedicating themselves to public service, saying, “We may disagree as Americans on certain issues and positions, but I believe we can be unified in service to a greater good. I intend to make it a cause of my presidency, and I believe with all my heart that this generation is ready and eager and up to the challenge.”
Since becoming President, both he and his wife have continued exhorting young people to “give back.” Michelle Obama, speaking at the University of California, Merced, commencement said, “Remember that you are blessed. Remember that in exchange for those blessings, you must give something back. You must reach back and pull someone up. You must bend down and let someone else stand on your shoulders so that they can see a brighter future.”
Sounds good, right? After all, we do want our young people to grow up with a sense of responsibility to others and the greater good of society, don’t we?
However, economist Walter Williams commented, “In our society, there are people who should give back. These are the thieves and social parasites who live forcibly at the expense of others. They prey on their fellow man. Some do it privately through theft, fraud and robbery. Others use the political mechanism whereby Congress enriches them at the expense of others. If giving back means anything, it should apply to thieves and social parasites, not those who became wealthy by serving us.”
Furthermore, I submit that Obama is not only wrong but that he and Michelle have hardly personally followed the model they so ardently espouse for others, taking advantage of every opportunity to enrich themselves on their way to the top.
For example, Michelle was employed in a public relations position for a large hospital in Chicago, for which she was paid a salary in excess of $300,000 a year. However, when she left after her husband won the presidential election the position was not filled by anyone else, which raises the question of whether the job was ever necessary or simply amounted to financial support for her husband and his political ambitions. That’s hardly what I would consider “giving back.”
I believe that America’s youth should not go to work for the government or charities when they first enter the workforce. Here are some of my reasons:
- Armed with a college degree and no experience in the real world, they lack the background and experience to make a significant contribution, other than some entry level position.
- Working for the government is not “public service” – it’s a career.
- We already have too many people working for government at every level, federal, state, county and municipal. It has gone beyond the point of diminishing return and is breaking the bank.
- As with all preceding generations, young people should first gain experience and contribute to society by working and producing the goods and services that support the economy.
Drawing on my personal experience, I devoted about 15 years of my adult life to charitable work, beginning in my late 30s. Having served on about six non-profit boards at various times, including over four years as the president of a major health agency and chairman of a hospital board for another six, I can attest to the value of community service. However, I didn’t become involved until I had completed my education and was working full time in the private sector.
My specialized education and training were assets that could be employed to help the organizations I served, and I “gave back” by “donating” time, effort, energy and expertise to help them.
Over the years, I have known many outstanding business and professional people who did the same. They all “gave back” while working productively at a job or profession or running a business and, I might add, paying taxes and also giving financial support to their particular causes.
I just don’t think non-profit organizations are the right place for young people to launch their working lives. A college education is only the beginning of a young person’s career, not the end. The process continues with on-the-job training and real world experience that never ends. The best time to “give back” is when you have the background, expertise and skills to make a difference.
© 2009 Harris R. Sherline, All Rights Reserved
Musings, Mine and Others
By Harris R. Sherline on May 24, 2009 at 12:48 pm
The media not only reports but often hypes statistics about unemployment and other matters without troubling to put the information into context. For example, a recent unemployment number of over 600,000 who lost their jobs in one month was reported to be the worst in over 40 years. No one seemed to put this into any sort of perspective by comparing it to the increase in population or the size of the labor force since the 1960s. In 1960, total U.S. population was about 189 million, the labor force was around 69 million and the unemployment rate was 5.54 percent. In 2008, the unemployment rate was 5.76 percent but the population had increased over 60 percent to approximately 303 million. This translates to an increase of over five million in the number of unemployed although there was not much increase in the percentage of unemployed. So, without “context” and at least a modicum of analysis, the notion that the unemployment numbers in any given month are the worst in over 40 years, is a meaningless observation.
Obama’s naïve overture to Russia, offering to give up the proposed missile defense shield in Eastern Europe as a tradeoff for their helping to keep Iran from building a nuclear weapon, can only serve to signal his weakness in foreign affairs. He also didn’t help that perception by bowing from the waist to the King of Saudi Arabia at the G-20 Summit in London, which was described as a violation of protocol that was not appropriate for the president of the United States.
TV programs like “The Bachelor” illustrate the juvenile nature of many Americans, who seem to love watching immature people who don’t know one another court and propose marriage in just a few weeks. Does anyone really believe these relationships are real or sincere or can last after the cameras stop rolling?
Joe Armendariz, Executive Director of the Santa Barbara County Taxpayers Association, recently observed: “How much did it cost taxpayers for Das Williams to fly over 4,000 miles (round trip) to meet with Lois Capps? Doesn’t Lois have an office right here in Santa Barbara? And as for him meeting with the other Rep. from “Northern California”, why does an elected official from Southern California need to fly to Washington DC to meet with a Congressman from Northern California? Is California’s congressional delegation (north and south) that weak and ineffective that now we need to spend taxpayer money we don’t have to send part time city council members on junkets to Washington DC so they can lobby our own representatives for their areas share of the government cheese???”
The hypocrisy of our politicians continues to be breathtaking. In what parallel universe can President Obama say that he will not accept any “earmark” expenditures in the federal budget, then sign a bill with some 8,500 earmarks?
Randy Alcorn, writing in the Santa Barbara Independent, commented: “But if (Mike) Brown (Santa Barbara County CEO) is truly ineffective or incompetent, then replace him. His severance pay is relatively modest. Do not, however, dismantle a sound management structure, as some county supervisors are now proposing, in order to undermine one man…With an annual budget of over $750 million, county government is a huge operation. It employs more than 4,000 people, scattered throughout two dozen departments that provide services ranging from public safety and infrastructure, to justice and social welfare. Eventually, all county residents rely on the services of county government…Whether in the public or private sector, organizations that fail to adhere to a coherent chain of command suffer diminished efficiency, lowered morale and disunity of purpose.” Amen to that!
Obama’s budget provides an insight into the goals and objectives of his administration, which are clearly intended to increase the size and power of government. His leadership to date raises the specter of fascism, which is defined by ThirdWorldTraveler.com as “A totalitarian philosophy of government that glorifies the state and nation and assigns to the state control over every aspect of national life.” Sheldon Richman, editor of The Freeman, describes fascism as government domination of nominally private owners of the means of production. We don’t have to look much beyond the Obama administration’s takeover of the banks, including refusing to accept repayment from those institutions that don’t want or need TARP money, and taking over General Motors, to see where Obama is taking our society. I’m not at all convinced that those who voted for Obama would agree that this is where they want the country to go.
© 2009 Harris R. Sherline, All Rights Reserved
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