What Would A Democrat Socialized Medicine Plan Cost?

Obamacare is imploding. That is no surprise to anybody who knew what the plan was intended to do. Obamacare was designed to fail. The democrat plan, however, was for failure to happen when they were in charge of the federal government.

For the sake of analysis, let’s pretend that Hillary won the election and became president, along with democrats taking back both houses of Congress. Obamacare would collapse as planned. Nothing can stop this horrendous law from failing. Hillary would go to a socialized, government bureaucrat controlled, single payer system, fulfilling the progressive democrats’ utopian dream. So, how much would it cost?

We are fortunate to have a recent example from democrats in California (Senate Bill 562) from which to answer that question.

California has an annual state budget of approximately $180B. Assuming that the politicians pushing the bill did their analysis correctly, which is a huge assumption, the recent single payer bill pushed by democrats would cost $400B/year.

According to those same politicians, Californians spend $200B/year on healthcare already, so if the government took all of that money, it would still need $220B/year to pay for the socialize medical plan, more than double their current annual budget.

California, according to the Bureau of Economic Analysis is 14.1% of the total US GDP. Using California’s GDP to scale up the plan to the United States, the full cost of such a democrat plan would equal $1.418T/year.

Yes, that’s correct, $1.418T/year, which is far greater than the entire discretionary budget of the federal government. The total was discounted like the California plan assuming that every penny spend on healthcare nationally is taken and applied toward the total cost, and so is reduced from the total annual cost of $2.836T.

These are mind-blowingly large numbers that would collapse the national economy, and bankrupt the country.

Note: We are already approaching $20T in debt, and rapidly climbing. A socialized medical plan thrown on top of the current federal budget would be like throwing a drowning man an anchor.

The bottom line: Democrat healthcare plans, like the New Deal which gave us $20T in debt, bankrupts the country.

15 Ways to Actually Balance The Federal Budget

Americans at Defund Obama Care Rally

Americans at Defund Obama Care Rally

Many Republican and conservative politicians talk about balancing the federal budget. (Democrats don’t because their party is too busy spending more to care about spending less), but very few have specific details on how to get it done. In the case of Donald Trump, the discussion centers on:

Significant tax cuts to dramatically grow the economy (well above OMBs projected 2.2% long term GDP growth rate) to outpace the cost of current government programs, and an increase to the Department of Defense.

Some people, like conservative radio host Sean Hannity, advocate the Penny Plan. The penny plan calls for reducing one penny out of every dollar that the federal government spends. Over a 5 to 6 year period the budget balances.

The devil, however, is always in the details. Specifically how do you reduce one penny out of every dollar that the federal government spends?

I spent 10 years building and balancing budgets in the Department of Defense and the details matter. The following list of ideas are the foundation of, and principles upon which, one penny out of every dollar, for example, could be found over six years in order to shrink the federal government, reduce the burden on American taxpayers, and balance the budget!

First, and a lynchpin to balancing the budget, the economy must be energized and grown beyond historic growth and current CBO projections of 2.2%. While this is well above the average for the Obama Administration, it isn’t nearly good enough.

Spur Economic Growth:

Growing the economy starts by eliminating laws and regulations that strangle small, medium, and large businesses instead of enabling their expansion and competitiveness. Minimum wage laws, Obama care, energy mandates, and oppressive tax laws, for example, should be repealed outright or dramatically simplified to unshackle America’s economy.

  • Minimum wage laws not only hurt small businesses and entry-level workers, they cost the taxpayers as well since the federal government also pays those higher wages.
  • Obama care is a well-documented job killer, massively expensive and the gateway program to institute socialized medicine.
  • Taxes must be reduced to spur business creation, expansion, and innovation. Letting the American people keep more of their own money is also a moral imperative.

We must enact an all the above energy policy and repeal penalties instituted by the Obama administration and the EPA upon nonrenewable sources like coal. Democrat policies drive the costs of energy up, and the federal government uses a lot of it. Cheaper energy means cheaper government. Reducing energy costs results in a net savings not just to the federal government but also to Americans and businesses. With reduced cost comes greater competitiveness, profitability and prosperity both at home and abroad. The United States has enough energy to lead the world for 100+ years. We will need it to balance our budget, pay back our national debt, and posture America for another hundred years of prosperity.

Growing the economy is critical, butwe must cut the budget.

Macro Level Reductions.

  1. Freeze hiring on all civilians within the federal government. There could be exceptions made in areas that are considered strategically important, such as the Department of Defense or Customs and Border Patrol, but on the whole the effort would be a freeze to further hiring across the federal government. A slightly less contentious option would be to institute something like a 3 to 1 hiring policy. In this case for every three people who naturally leave the federal government, such as to retire, one civilian hire would be allowed to replace them.
  1. This policy would reduce manpower in agencies across the federal government. There are duplication of missions and programs throughout our government. As personnel decline those duplicative organizations, agencies and programs should be collapsed into one another. As the organizations are collapsed into one another, the management overhead should be trimmed as well, effectively cut in half and taken as additional savings.
  1. Another benefit of smaller and simpler government is that the oversight and management of government itself becomes less complex, and more effective. The potential for savings and reductions in watchdog organizations like OMB (which oversee the federal government’s budget and budget building process) could be further reduced.
  1. The federal government, including the Department of Defense, owns or leases over 361,000 buildings, office spaces, and warehouses, with an annual operating cost of over $33 Billion.

Much of this infrastructure is excess to need, and should be sold or disposed of now. As the federal government is reduced through manpower reductions, even more excess office space and facilities will be exposed. Those facilities need to be returned to state and local governments or sold outright to businesses and the American people freeing taxpayers from the burden of maintaining them, paying utilities such as water, electricity, etc.

There is significant excess infrastructure and basing across the DOD. The Air Force, for example, constantly states that it has 30% access infrastructure and desperately needs a BRAC in order to cut excess bases down to the proper size to support the diminished Air Force. Done properly, a BRAC could save the Department of Defense billions every year without any adverse impact to our nations military capabilities.

Micro Level Reductions:

  1. There is waste in the Department of Defense when it comes to the military’s energy spending. The Obama administration turned the Department of Defense into a research and development arm of the renewable energy industry.

Untold billions of dollars, hidden within the Service budgets, are being spent every year by the Department of Defense on windmills, solar farms, development of renewable biofuels, and testing of biofuels on military equipment from aircraft to ships. Unfortunately biofuels are far more expensive than the fuels they’re replacing. They’ve also proven to be corrosive, contain less energy per pound of fuel than what the replacing, and effectively reduce the range and capabilities of the equipment in which they are used. They increase the cost of maintenance, wear and tear on assets, and decrease the longevity of jet engines and other components such as seals that are exposed to the more corrosive biofuels. All of this R&D should be stopped and the Department of Defense should no longer be used as an experimental arm for the progressive anti-global warming movement.

  1. Agencies and programs across the federal government need to be eliminated or drastically reduced. The list includes the EPA, the Education Department, Health and Human Services, the IRS, the Public Broadcasting System, and support for the Federal Reserve as a good start.
  1. Tax laws need to be simplified so that businesses can free themselves from the wasted cost of dealing with a tax code that’s become so burdensome no single person can possibly understand it.
  1. Reductions of the types listed above would shrink the federal government to the point where Congress could once again manage it. After all, Congress’s prime responsibility is to pass laws including those funding the federal government. They failed year after year to pass budgets because its become far too big and far too complex. With the reduced size comes an increased ability to manage. When Congress is able to properly manage agencies and their budgets further waste, duplication and costs can be found.
  1. We commonly hear the term too big to fail. In the case of government it’s failing because its too big.

The federal government needs to prioritize its constitutionally mandated responsibilities first. All other missions are secondary and subject to reduction.

  1. The border must be sealed! Illegal immigrants who are committing murders, rapes, robberies, dealing drugs, involved in human trafficking, to gang warfare must be caught, jailed or sent back to their home countries for jailing. Penalties must be stepped up as an effective deterrent to these brutal thugs ever returning to the United States.
  1. The wall must be built and America’s border controlled. We must significantly reduce the number of illegal aliens, and know who enters and stays within our borders. You wouldn’t let strangers into your house, and we should not let them into our country. Fewer illegal aliens will reduce burdens on local, state and federal governments. The costs to America’s schools and law enforcement alone would be a significant savings.
  1. Energy subsidies must be stopped. Let companies and technologies compete on an equal footing. The strong will survive and the inefficient will not.
  1. Waste, fraud and abuse of government welfare programs must stop. Welfare should be tied to work for the able minded and able bodied. The goal is to use the social safety net as a temporary support system, not a way of life.
  1. Finally, we must reform programs like social security, in order to ensure they exist for the long term. Without reform, costs will continue to eat the budget, and our children will see nothing but the bills.
  1. Balancing the budget is a national imperative, and should be codified as a Constitutional Amendment. It wont be easy, and will require courageous politicians with the insight to see, analyze and solve Americas spending problems. No such leadership exists in the Democrat Party. It’s GOP or Bust…literally.

What Are A Dozen CBO Projections for 2016-2026?

Federal Spending Under Obama's 2016 Budget Show Ever Increasing/Unsustainable Annual Deficits

Federal Spending Under Obama’s 2016 Budget Show Ever Increasing/Unsustainable Annual Deficits

The following excerpts from the non-partisan Congressional Budget Office (CBO) analysis of the Federal Budget show a dozen projections looming over America’s economic future.

The quotes are taken from: CBO’s 19 Jan 2016 “Summary of The Budget and Economic Outlook: 2016 to 2026”

 

  • CBO expects federal revenues to rise by 4 percent in 2016 to $3.4 trillion, or 18.3 percent of GDP.
    • Individual income taxes are projected to rise by 5 percent
  • Beyond the 10-year period, if current laws remained in place, the pressures that had contributed to rising deficits would accelerate and push debt up even more sharply.
    • Such high and rising debt would have serious negative consequences for the budget and the nation:
      • The likelihood of a fiscal crisis in the United States would increase.
      • Federal spending on interest payments would rise substantially.
      • Interest rates rise from their currently low levels.
  • Mandatory outlays will be $168 billion higher in 2016 than they were last year.
    • Major health care programs accounts for more than 60 percent of the projected growth…
  • In 2016, the federal budget deficit will increase, in relation to the size of the economy, for the first time since 2009
    • The 2016 deficit will be $544 billion, $105 billion more than the deficit recorded last year and is $130 billion higher than the one that the agency (CBO) projected in August 2015.
  • The economy will expand solidly this year and next.
    • Also push up inflation and interest rates.
  • Federal outlays are projected to rise by 6 percent this year to $3.9 trillion, or 21.2 percent of GDP. The result of
    • A nearly 7 percent rise in mandatory spending
    • 3 percent increase in discretionary outlays
    • 14 percent jump in net interest spending (factors: Interest rates are beginning to rise, and federal debt is growing.)
  • Discretionary outlays for national defense in their first increase in five years will edge up slightly this year
  • The budget deficit increases modestly through 2018 but then rises more sharply, reaching $1.4 trillion in 2026.NOTE: This is equal to President Obamas worst annual deficit in 2009. He and the Congress put America back on a path that can’t be sustained.
    • The projected cumulative deficit between 2017 and 2026 is $9.4 trillion.
  • Growth in outlays would outstrip growth in the economy, and outlays would rise to 23 percent of GDP by 2026.
    • payments, offset somewhat by a decline (in relation to the size of the economy) in discretionary spending. NOTE: The things that the Federal Government is supposed to do per the Constitution become second tier and are crushed by Mandatory Spending. “A Government That Tries To Do Everything, Will Do Everything…POORLY!”
    • Almost half of the projected $2.5 trillion increase in total outlays from 2016 to 2026 is for Social Security and Medicare.
  • CBO now projects a cumulative deficit that is $1.5 trillion larger than the $7.0 trillion that the agency projected in August 2015. NOTE: In one year the deficit picture worsened by $1.5 Trillion.
  • The fiscal policies embodied in CBOs baseline would dampen GDP growth in 2017 and 2018. In addition, some aspects of fiscal policy under current law, particularly the Affordable Care Act and real bracket creep, are projected to dampen the supply of labor and therefore the growth of output through 2020. NOTE: As stated by Obama care opponents, the ACA is unaffordable, and driving up health care costs.
  • Potential GDP will expand at an annual average rate of 2.0 percent, a significant slowdown from the average growth of potential output that was observed during the 1980s, 1990s, and early 2000s. NOTE: Marxist/Progressive/Socialist policies of massive government spending don’t work, except to impoverish the nation.

Update:

More Frightening CBO Forecasts from THE BUDGET AND ECONOMIC OUTLOOK: 2015 TO 2025

rp_Slide1-300x225.jpgThe following quotes were taken from the CBO’s Jan 15 report, found here. They continue warning America that if our country doesn’t change the fiscal course that it’s on under excessive tax and spend policies, our country is headed for a disaster. We need to stand up, get vocal, vote out the spenders and force our elected officials to balance the federal budget, before the mounting $ trillions that we owe dooms us!

CBO:

  • Beyond 2017, real (inflation-adjusted) gross domestic product (GDP) will grow at a rate that is notably less than the average growth during the 1980s and 1990s.
  • Cumulative deficits over the 20162025 period are projected to total $7.6 trillion.
  • Outlays rise-to more than 22 percent in; Four key factors underlie that increase:
    • The retirement of the baby-boom generation
    • The expansion of federal subsidies for health insurance
    • Increasing health care costs per beneficiary
    • Rising interest rates on federal debt
  • CBO projected under current law, debt would exceed 100 percent of GDP 25 years from now and would continue on an upward trajectory thereafter;a trend that could not be sustained.
  • Such large and growing federal debt would have serious negative consequences, and are unsistainable.
  • Interest rates on Treasury securities, which have been exceptionally low since the recession, will rise considerably in the next few years.
  • Outlays for the federal government’s major health care programs will increase by $82 billion (or nearly 10 percent) this year
  • Net interest payments increase from $227 billion, or 1.3 percent of GDP, in 2015 to $827 billion, or 3.0 percent of GDP, in 2025.
  • Gross federal debt is projected to rise by $9.5 trillion over that period and to total $27.3 trillion at the end of 2025.
  • The Long-Term Budget Outlook: Beyond the coming decade, the fiscal outlook is significantly more worrisome,public debt would exceed 100% of GDP by 2039.

The following 3 charts were pulled from CBO’s supporting analysis, and show the Federal Budget’s, and America’s future if significant changes aren’t made to control mandatory spending.

Chart 1

Chart 1

Chart 2

Chart 2

Chart 3

Chart 3

What are The Federal Budget Giants?

What are the giant programs in the US Federal Budget? As promised in my last Blog, I break down OMB’s budget Functions within the Human Resources Superfunction in this Blog. The largest Function is clearly Social Security, exceeding $1T/year starting in 2017. By Comparison, the National Defense Superfunction is only $578B in 2017.

US Federal Budget - Social Security dwarfs the rest of the Functions including National Defense!

US Federal Budget – Social Security dwarfs the rest of the Functions including National Defense!

Note the distinct drop in spending in some of the Functions in (Income Security, Health, Education, Training, Employment and Social Services) after 2010. These Functions are within the Discretionary portions of the Federal Budget and were curtailed as a result of the GOP taking the House in the 2010 midterms. Social Security is within the Non-Discretionary part of the budget and was untouched.

Also note that the Health Function rapidly grew again despite initial reductions. This was due to paying for Obamacare, which was wrongly named the “Affordable Care Act”.

Marshmallows and Government Waste


The US Forestry Service recently created, and published instructions for how Americans should roast marshmallows. They also spent time telling us how to make s’mores. It’s rather insulting, that after all this country has done in its history, we’ve devolved to the point where we need government assistance to figure out how to melt a marshmallow? We used to instinctively know things like this, but now the all intrusive nanny state saved us from ourselves giving us step by step roasting instructions.

I have some instructions for the Forestry Service. Find out which office in your department wasted taxpayer money to hire a contractor or pay a government employee to make these instructions up, and cut that funding from your budget. If you have this kind of money just sitting around, you have too much, and after trimming your topline, the American taxpayer would appreciate better use of what’s left!

Behind the Curtain – Total US National Debt

Projected US National Debt Based Upon Current Rates Of Spending

Projected US National Debt Based Upon Current Rates Of Spending

This graph tells a very scary story, and complements my last blog, “Global Warming vs the National Debt”, which compares the hoax of Man Made Global Warming with the stark reality of America’s National Debt. The data was derived from the White House’s own data (OMB supporting tables) from the “2013 Long Range Budget Outlook“.

The first critical element of this chart, which shows constant year 2013 dollars, provides a look at TOTAL US Debt, not oneobscured by debt to GDP ratios. As bad as the gap between the two lines looks, it is most likely optimistic. OMB data assumes a constant 3% interest rate on America’s debt, basically forever. The more that America borrows, however, the greater the risk that our credit rating will get downgraded again, and force those rates up. Just a small increase would be devastating. America also faces the real risk that it becomes a bad credit risk. Nobody knows when that will happen, but every year that we stay on this clearly unsustainable path, increases the odds that America hits the borrowing cliff.

The chart’s second critical element is the decreasing number of years needed to add $10 Trillion blocks to the debt. Each $10 Trillion takes considerably less time to accumulate and is proof of how dire America’s fiscal situation is. Spread the word, pass this chart around, elect fiscal conservatives to Congress, and hound your representatives to balance the budget. Time is running out!

 

Global Warming vs The National Debt

Weatherman Al Roker interviewed President Obama on Tuesday in response to the recently released National Climate Assessment Report. During the interview Obama said

“But the truth of the matter is that if we don’t do more, we’re going to have bigger problems, more risk of … extreme weather events that can result in people losing their lives or losing their properties or businesses. And we’ve got to have the public understand this is an issue that is going to impact our kids and our grandkids unless we do something about it.”

It’s a real tragedy that he is so fixated on global warming when he should make precisely the same warning about our national debt. Let’s look at the reality of the mounting debt, as opposed to the invented 100 year global warming crisis.

1. “If we don’t do more, we’re going to have bigger problems.”

Yes Mr. President, you got that right. In a few short years at your current rate of dangerous spending, debt interest payments alone will exceed a Trillion dollars each year. That’s far greater than the defense budget, and billions of that interest will go to China, so that they can build up their military as we dismantle ours.

2. “Events that can result in people losing their lives or losing their properties or businesses.”

Right again Mr. President. The massive debt will result in rapidly rising interest rates, and is unsustainable according to the Congressional Budget Office. Businesses will go under, and Americans will lose their jobs, properties and homes when they can’t pay their mortgages due runaway interest rates and rampant inflation bound to come. Long before the ocean swallows New York City, our debt will swallow America.

3. “And we’ve got to have the public understand this is an issue that is going to impact our kids and our grandkids unless we do something about it.”

Mr. President, no more accurate statement could be made than that we are foisting an impossible debt burden upon our kids and our grandkids. Their future America will be crippled by the excessive spending you, your administration and reckless Democrats and Republicans created. You will go down in history as the greatest debt creator in all of human history.

Given his statement on saving American’s future, however wrong global warming is, it’s clear that President Obama can think strategically, with an eye on the future. Why, why, why then can’t he use the same foresight to address our debt? Why aren’t there democrats screaming with a global warming-like fervor to stop the destruction of our economy? Why indeed?

It’s No Fantasy – Spending Is The Problem

Small Snail FantasyThe federal government and the American people are 17 1/2 trillion dollars in debt, and climbing. This fact is behind Congressman Paul Ryan’s effort to balance the budget over 10 years and avert a inevitable disaster that will fall on America if the budget mess isn’t solved. Much controversy exists over whether he’s balancing the budget the correct way. Progressive democrats always argue for more taxes, which they call “revenue”. Conservatives contend that the government doesn’t have a taxation problem it suffers from a gross overspending problem. A few common examples prove that the conservative position is precisely right.

Most Americans live with a modest income; as of June 2013 the median household income in the US was $52,000 a year. Somehow they balance their budgets on that salary. There are many examples however of highly successful people making far more money and yet they end up bankrupt. A short list includes: Sir Elton John, Warren Sapp, Willie Nelson, Gary Busey, MC Hammer, and Mike Tyson. How is it possible that these people who each earned millions of dollars in some cases hundreds of millions of dollars could end up penniless?

One has only to look at Americans who live happy and blessed lives on modest incomes to realize it’s not how much they earn that’s the problem. They quite simply spent more money than they earned. If you earn $50 million per year, but spend $70 million a year, you will go under. That same spending mentality would exist if that same person raised their income to $70 million a year, because they would also increase their spending and would likely spend $90 million a year. The United States behaves the same way. We still have a massive deficit this year despite the record tax revenues the IRS is raking in.

We have a federal government, and politicians who run it that would overspend any amount of money that they get their hands on. We do not have “revenue” problems anymore than Elton John or Mike Tyson had revenue problems. Our country is bankrupt, and they declared bankruptcy, because of gross over spending. It’s that simple!

Making Mountains out of Mole Hills and Mole Hills out of Mountains

One of the key progressive tactics is to create straw men issues out of tiny or non-existent issues, fabricating “mountains out of mole hills”, while at the same time downplaying real crises and ignoring them, in effect turning real mountains into mole hills. In many cases, the left completely makes up the mountain out of whole cloth, Republican “War on Women?” Please! What better way to show this strategy than to list some examples, all to the detriment of our country, by the way.

Mountains out of Mole Hills:

  • Republicans out to kill the elderly, indigent, women and children (yet death panels and abortions are democrat’s designs)
  • Class warfare (self-fulfilling prophecy) – The wealthy are rich because the steal from the poor. The Poor have no wealth because the rich keep it all. Income inequality.
  • Coconut oil is bad for you –We no longer use it to make popcorn, but contrary to claims it has been proven to have many positive effects such as reducing the impacts of Alzheimers .
  • Salt will kill you –Latest studies say this is way over blown.
  • Debt reduction/Balanced Budget- Any movement in this direction destroys the country, evil Republicans, “women and minorities hardest hit”.
  • Voter ID laws exist to disenfranchise the minority vote In fact they are essential to keep our elections honest, no dead people need show up to vote.
  • Comprehensive Immigration Reform Only 3% of Americans think this is a top priority.
  • White Privilege Itself a racist screed, taught across the progressive educational spectrum. Do progressives feel guilty because the Democrat Party has such a racist history?
  • The Population Bomb, we’ll soon be forced to eat the bodies of our dead!

The above list is just a drop in the bucket, but hopefully makes the point. Be on the lookout for this tactic from the left! I’d be interested to hear what other examples you can list to further the cataloging of progressives crying wolf and making mountains out of mole hills to create national, and often global, panic in order to advance their agenda.

Mole Hills out of Mountains:

These two lists are in no way meant to be comprehensive. Sadly, there are far more examples that pop up every week.