hoosiereconomist's Diary

BREAKING: CBO scores Senate Bill

Fox News is reporting that the Congressional Budget Office has scored the Senate Health Care bill at a cost of $849 billion. The CBO also estimated it would cut the federal deficit by $127 billion over the first 10 years and as much as $650 billion over the next 10 years – while reducing the number of uninsured by 31 million over the decade (foxnews.com, 2009).

Here is the link to the source. Debate the merits of the report if you will, but do not underestimate its headline value when parroted by the MSM. The American public can be duped when it is told to like something endlessly. It may be time to double opposition efforts.

http://www.foxnews.com/politics/2009/11/18/reid-moves-starting-debate-senate-health-care

10.2% Unemployment Rate is Just the Beginning

The simplistic way to approach today’s Unemployment Report would be to simply point the finger. Certainly, that would be the logical reaction to what this president and his congress have done to the American economy.

10.2% unemployment is bad enough for the country and its workers. However, a deeper investigation into the Department of Labor’s reports this week uncovers a more disturbing trend that spells disaster for the economy moving forward if it is not corrected.

Aside from perhaps the GDP, employment numbers are the single most prominent market-moving indicators on the board. They provide comprehensive reports as to the state of the economy i.e. how many people are looking for jobs, how many people have jobs, what workers are getting paid and how many hours they are working.

Given those variables, many people have asked me how GDP can increase while unemployment continues to surge. The answer rests with the anti-business policies of the executive and legislative branches, as well as the outstanding performances of those still contributing to the economic progress of the economy.

According to the Department of Labor, the American worker increased productivity by a whopping 9.5% during the 3rd Quarter. This figure far surpassed the consensus expectation of 6.3%. At the same time, unit labor costs decreased by an equally-whopping (-)5.2%, also exceeding the market consensus of (-)3.9%. In other words, the American worker is exceeding expectations to keep this economy afloat, while employers’ abilities to add to the workforce and lift this country out of recession is being equally hamstrung.

This brings the discussion to the federal government’s role in this process. From the time they took office, this congress and president wasted money on a so-called “stimulus” to expand the size of government in lieu of implementing policies to stimulate private-sector growth and allow businesses of all sizes to capitalize on the strength and productivity of the American worker.

Now, they debate the passage of a nearly $2 trillion government program that will ensure the destruction of the Insurance Industry and the hundreds of thousands of workers’ jobs that accompany it. Once what amounts to a national health care system is passed and signed, the time it will take for investors to withdraw their support from the insurance industry will be able to be clocked with an egg timer.

This is not a partisan issue. This is an economic issue. Members of all parties rely on private-sector employment to feed their families and pay their bills. The American worker cannot continue to carry this economy without help. They need new investment on the part of the businesses that employ them – and those businesses can’t expand their workforces when they are paying new taxes for government health care programs, Cap and Trade taxes, and any other government-mandated drain on their resources.

If there is an issue that RedState readers need to be reinforcing, it is the disastrous results of the assault on this nation’s economy and its businesses. Leave the code words (communism, socialism, etc.) in the vault for now. Many people dismiss this as hyperbole and rhetoric. You will make them understand the gravity of Democrat policies when you show them precisely how those policies are destroying their economic futures. When that happens, you will have the environment you need for a conservative realignment and true change the country can believe in.

Circa 2009: 440,800 (and counting) Added to the Unemployment Lines

The federal government is a wasteful web of deceit. Never before in the history of modern civilization has such an inherently irresponsible representative republic been allowed to damage so many salient economic facets of the lives of its citizenry.

That any significant portion of the electorate would support handing such a significant sector of the American economy to the same bureaucracy that has systematically corrupted every financial institution it has dared to regulate or take over is a testament to the general public’s apathy and/or lack of education regarding the consequences of handing power to the most irresponsible caretakers imaginable.

Even with those considerations to ponder, there is a more drastic and immediate consequence for America’s economy should the Democrat-controlled coalition of government have its way and ram through what will amount to a public takeover of the health care industry – and it’s a consequence that may wake up the sleeping giant (i.e. the American public) to stop this train wreck once and for all:

What is to become of the 440,800 (BLS, 2008) Direct Health & Medical Insurance Carrier employees who earn their living in the private sector?

Unemployment is more than the lagging economic indicator. It is the true measure of an economy’s macro stability. The staggering cost of the health care bill that will likely emerge from congress will add to yearly deficits and the national debt. But the damage it will do to the insurance industry and the workers employed by its companies will not wait until the program kicks in and will permeate every other industry that stands to be damaged by public intervention into free markets. Once it becomes clear that existing private companies will not be able to compete with a public option underwritten by a government that simply prints new money when it overspends, it will only be a matter of months before private insurance businesses will necessarily begin to pare down employee roles – or worse, close down shop for good.

The nation’s economic future depends on the implementation of public policies that augment existing workforces, not trim them. Intended or unintended, this consequence must be trumpeted by opponents of current proposed health care reform measures if such measures are to be prevented from becoming laws. If there is one thing that can cripple a damaging agenda in Washington, it is a public policy that stands to send hundreds of thousands of working class Americans to unemployment offices. This is the reality that bears repeating on a regular basis if the Democratic Party’s transfer of health care from the private sector to the public is to be stopped.

References

Bureau of Labor Statistics. (2009). Retrieved from: http://www.plunkettresearch.com/Industries/Insurance/InsuranceStatistics/tabid/238/Default.aspx