Questions and Observations

Free Markets, Free People

Palin To Resign

The stated reason:

Palin made the announcement flanked by Parnell and all of her cabinet. She said that recent incidents brought up by national media and the spate of ethics complaints have been taking away from her mission to serve Alaska.

She felt that it would be best to step aside and let Parnell and her cabinet continue.

My guess? She’s been tired of the moonbat attacks for a while, and the final straw was the McCain bunch. She’s most likely figured that in today’s poisonous political atmosphere, national exposure and national office just aren’t worth the price. Not that I think she’d ever have been elected to national office. However I do think the obsession by the left and the attacks on both her and her family have been both unseemly and vicious, but certainly not surprising.

~McQ

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More Health Care Lies

I don’t use the “L” word very often but in this case it seems completely appropriate.

The question:

Would a government-run health plan upend the employer-based health insurance system used by 160 million Americans?

The Democrats claim the answer is ‘no’.

Here’s their rationalization:

Sens. Edward Kennedy, D-Mass., and Chris Dodd, D-Conn., say their plan would preserve employer-sponsored insurance coverage and create an affordable public option for those who need it.

“The … bill virtually eliminates the dropping of currently covered employees from employer-sponsored health plans,” Kennedy and Dodd said in a letter to members of the Health Committee, one of two Senate groups working on health reform.

The bill includes a “pay or play” provision that would require employers to provide adequate coverage for their workers or subsidize a system that will.

“Pay or play” would require companies to pay the government $750 per full-time worker per year ($375 for part-timers) if they don’t offer health coverage, or if they offer “qualified” coverage but pay less than 60% of workers’ premiums. Small businesses that employ fewer than 25 workers would be exempt.

The Congressional Budget Office, which analyzed the legislation, estimated that by 2019 the same number of workers would be covered by employer-based plans as would otherwise be the case under the current system.

“It tracks what we’re seeing in Massachusetts,” a senior Democratic aide on the Senate Health Committee said on a conference call with reporters.

I’ve put the lie in bold. Why is it a lie? Anyone out there have a $750 a year health care plan? Anyone? I don’t know of a plan for an individual that costs only $750. If there is, then there’d be no reason for any of this nonsense would there?

And Kennedy and Dodd (and the Democrats), the supposed “experts” on health care know that very well. This is pure disingenuousness on their part. This is a blatant attempt to launch a lie to get them past a very important sticking point in the public perception of the bill.

But the average – average – individual health care insurance cost in the US is almost $4,000. And then there’s the cost of administering it.

Hypothetical – you employ 100 people. Let’s say your company pays full health care coverage at the national average (for simplicity sake, assume they all have individual policies). You have two people who administer the coverage at $35,000 each. Your total cost each year to cover your employees is $470,000.

If you pay the federal government $750 per employee a year, your total cost is $75,000. But you can let the two people you’ve had administering your health care program go, saving $71,500 (includes -$1,500 for 2 less employees). Total cost of “pay or play” for you? $3,500 the first year ($73,500 vs. $470,000 every year afterward). In reality, however, it is a net savings of $466,500. You don’t have to be a very good businessman to figure out that one do you?

And remember – these figures only involve “individual” coverage. Family coverage is much more costly, but I see nothing from our two Senate experts which even addresses that. So obviously, the cost of the health care of 100 employees could be vastly more than my simplified example.

No wonder we see corporations coming out now to back this sort of a program. For the vast majority of them, $750 per employee is a huge savings not to mention getting them out of the health care provision and administration business. They’ll pay it gladly. If you like your doctor or your plan, tough beans. You’re going on the government plan. And, of course, the administration will be more than happy to blame your problem on “greedy corporations.”

When they do, just consider the lie and the incentive it provides and then lay the blame precisely where it belongs. Not that it will do you any good where it concerns your present doctor and plan.

Just another step along the road to single-payer brought to you by two lying Senators and backed by the CBO.

~McQ

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Honduras – “The Triumph Of The Rule Of Law”

Octavio Sanchez, writing in the Christian Science Monitor, takes exception to the charges that what happened with the removal of President Manuel Zelaya. was a military coup.

Instead, he says, it was a “triumph of the rule of law.” And he gives the world a little lesson in the Honduran Constitution.

In 1982, my country adopted a new Constitution that enabled our orderly return to democracy after years of military rule. After more than a dozen previous constitutions, the current Constitution, at 27 years old, has endured the longest.

It has endured because it responds and adapts to changing political conditions: Of its original 379 articles, seven have been completely or partially repealed, 18 have been interpreted, and 121 have been reformed.

It also includes seven articles that cannot be repealed or amended because they address issues that are critical for us. Those unchangeable articles include the form of government; the extent of our borders; the number of years of the presidential term; two prohibitions – one with respect to reelection of presidents, the other concerning eligibility for the presidency; and one article that penalizes the abrogation of the Constitution.

Sanchez makes the point that Honduras has gone through same sort of “trial and error” process with its constitution as has the US, France and other nations. But he then focuses on the 7 articles that cannot be repealed or amended. They form the crux of the case against Zelaya.

These are the facts: On June 26, President Zelaya issued a decree ordering all government employees to take part in the “Public Opinion Poll to convene a National Constitutional Assembly.” In doing so, Zelaya triggered a constitutional provision that automatically removed him from office.

Constitutional assemblies are convened to write new constitutions. When Zelaya published that decree to initiate an “opinion poll” about the possibility of convening a national assembly, he contravened the unchangeable articles of the Constitution that deal with the prohibition of reelecting a president and of extending his term. His actions showed intent.

Our Constitution takes such intent seriously. According to Article 239: “No citizen who has already served as head of the Executive Branch can be President or Vice-President. Whoever violates this law or proposes its reform [emphasis added], as well as those that support such violation directly or indirectly, will immediately cease in their functions and will be unable to hold any public office for a period of 10 years.”

Notice that the article speaks about intent and that it also says “immediately” – as in “instant,” as in “no trial required,” as in “no impeachment needed.”

Supreme Court Justice Rosalinda Cruz defended the ouster of Zeyala as well:

The arrest order she cited, approved unanimously by the court’s 15 justices, was released this afternoon along with documents pertaining to a secret investigation that went on for weeks under the high court’s supervision.

Others have also defended Zeyala’s removal:

David Matamoros, a member of Honduras’ Supreme Electoral Tribunal, also defended the military’s action.

He said Zelaya originally called the vote a plebiscite, then, when that was barred, shifted to describing it as a poll, creating uncertainty as to its legal standing and his intent. No government agency was willing to conduct the vote, he said. All the ballots and equipment for the illegal poll were flown in on a Venezuelan plane, he said. The court ordered the materials confiscated.

Nothing has been said about the apparent meddling by Venezuela.  Nor has there been any investigation by those so interested in immediately condemning the action taken by the authorities in Honduras as a “military coup” into the constitutional claims of the interim government.  Given Sanchez’s description of the evidence and the constitutional provisions, it appears he may be right – this was indeed a triumph of the law.

So why was Zelaya flown out of the country instead of being arrested?

The Supreme Court and the attorney general ordered Zelaya’s arrest for disobeying several court orders compelling him to obey the Constitution. He was detained and taken to Costa Rica. Why? Congress needed time to convene and remove him from office. With him inside the country that would have been impossible. This decision was taken by the 123 (of the 128) members of Congress present that day.

15 justices of the Supreme Court, 123 of 128 Congress members, the Attorney General, the Supreme Electoral Tribunal and the military all acted in concert and apparently within the law and the constitution, to remove someone who had violated the constitution and essentially impeached himself.

Says Sanchez:

Don’t believe the coup myth. The Honduran military acted entirely within the bounds of the Constitution. The military gained nothing but the respect of the nation by its actions.

I am extremely proud of my compatriots. Finally, we have decided to stand up and become a country of laws, not men. From now on, here in Honduras, no one will be above the law.

Given that explanation and assuming it is the case, it seems we should be celebrating what Honduras has done instead of condemning it.

~McQ

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Today’s Employment Situation

First of all, let’s compare the current situation with employment with what the Obama Adnministration told us would happen if we didn’t pass the stimulus package.  As has been obvious for some time now the stimulus is not–as we repeatedly predicted–substantially impacting the employment situation.

stimulus-vs-unemployment-june-dots

Unemployment: Promised v. Actual

Instead, employment has risen by more than 3%.

Now, today’s surprise was not that there were a net 467,000 jobs lost last month, but that the employment rate went up by only 0.1%.  The answer to that mystery is found in the employment data from the BLS, which shows that the civilian labor force declined by 358,000 people last month.

The Bureau of labor Statistics uses a neat bit of sleight-of-hand when calculating the unemployment rate.  If you are not in the workforce, you aren’t counted as unemployed.  You disappear from the numbers.

There are a number of ways to leave the labor force.  You can retire.  You can become injured or disabled.  Or, you can simply become so discouraged that you stop looking for a job.

For the latter category, that means you may still not have enough money to house and clothe your family.  and you might still really want to work.  But there are no jobs for you, and if you stop actively looking for work, then you drop out of the labor force.

Granted, there’s no other way to really count the labor force, but this does help explain why the employment rate remained much more restrained vis a vis the actual number of net job losses.  The number of people not in the labor force increased from 80,371,000 in May to 80,729,000 in June.  That nearly equals the number of job losses, so the unemployment rate comes out nearly even.

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Know Thy Enemy – And Loath Him

And after reading this, it won’t be hard to do:

Pakistan’s top Taliban leader, Baitullah Mehsud, is buying children as young as 7 to serve as suicide bombers in the growing spate of attacks against Pakistani, Afghan and U.S. targets, U.S. Defense Department and Pakistani officials say.

A Pakistani official, who spoke on the condition that he not be named because of the sensitive nature of the topic, said the going price for child bombers was $7,000 to $14,000 – huge sums in Pakistan, where per-capita income is about $2,600 a year.

“[Mehsud] has turned suicide bombing into a production output, not unlike [the way] Toyota outputs cars,” a U.S. Defense Department official told reporters recently. He spoke on the condition that he not be named because of ongoing intelligence efforts to catch Mehsud, a prime target for a U.S. and Pakistani anti-Taliban campaign.

People like Mehsud claim to represent a religion of peace and act on its behalf. Yet no religion of peace would ever sanction or condone actions such as this. Perhaps it is time we quit accepting their stated claims that they’re Islamic warriors and call them what they deserve to be called – animals barely worth the price of a bullet.

Rarely will you find me using the term “exterminate”. But when I read things like this, I truly believe that the Taliban are more than deserving of complete and utter extermination. This is a “seed” which needs to germinate no further.

God speed to the 4,000 Marines who’ve just launched Operation Khanjar. May their aim be true enough to bring down this miserable swine somewhere along the line.

~McQ

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Government Run Health Care – “Anecdotal” or Indicators of a Systemic Problem?

A couple of quick examples of real world problems with government run health care. South Africa:

KwaZulu-Natal health MEC Dr Sibongiseni Dhlomo has issued an ultimatum to striking doctors, calling on them to return to work on Friday or face the music.

Addressing the media in Durban on Friday, Dhlomo said notices had been sent to all hospitals calling on all striking doctors, dentists and pharmacists to resume their duties no later than 08:00.

The department was also preparing a court interdict to force the striking health professionals to end the strike, he said.

“We as the department of health are designated as an essential service provider and therefore find the action of these health professionals [is] disrupting service delivery and compromising patients’ lives,” said Dhlomo.

He said the department had been more than reasonable in dealing with the unprotected strike.

“This situation is untenable, we cannot continue to put the lives of our people in danger and the government will act,” he said.

Dhlomo said people had died due to the unavailability of doctors, although he was unable give the number of people who died as a result of the strike.

A recent example you’re probably more familiar with from Canada:

A critically ill premature baby is moved to a U.S hospital to get the treatment she couldn’t get in the system we’re told we should emulate. Cost-effective care? In Canada, as elsewhere, you get what you pay for.

Ava Isabella Stinson was born last Thursday at St. Joseph’s hospital in Hamilton, Ontario. Weighing only two pounds, she was born 13 weeks premature and needed some very special care. Unfortunately, there were no open neonatal intensive care beds for her at St. Joseph’s — or anywhere else in the entire province of Ontario, it seems.

Canada’s perfectly planned and cost-effective system had no room at the inn for Ava, who of necessity had to be sent across the border to a Buffalo, N.Y., hospital to suffer under our chaotic and costly system. She had no time to be put on a Canadian waiting list. She got the care she needed at an American hospital under a system President Obama has labeled “unsustainable.”

And this one:

In 2007, a Canadian woman gave birth to extremely rare identical quadruplets — Autumn, Brooke, Calissa and Dahlia Jepps. They were born in the United States to Canadian parents because there was again no space available at any Canadian neonatal care unit. All they had was a wing and a prayer.

The Jepps, a nurse and a respiratory technician flew from Calgary, a city of a million people, 325 miles to Benefit Hospital in Great Falls, Mont., a city of 56,000.

Great Falls was better equipped to handle their case than was Calgary? People like to dismiss these as “anecdotal”, but they continue to describe a system in which decisions have been made that end up endangering the lives of children. It is inevitable when the primary focus of “reform” is “lowering cost”.

Doctor’s strikes. Limited if not completely unavailable neo-natal care. The refusal of the system, based on cost concerns only, to provide certain care that places the lives of those on the margin in jeopardy.

Is that what we have to look forward too?

~McQ

[HT: Micaela S]

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Busting Medicare’s “Low Overhead Advantage” Myth

One of the favorite arguments of the government health care crowd is the supposed Medicare low overhead argument – i.e. Medicare is more efficient than private insurance because its overhead is so much lower than private administrative costs.

It goes like this:

But the administration of Medicare is a miracle of low overhead and a model, despite all the fraud and abuse, of what government can do right. Three percent of Medicare’s premiums go for administrative costs. By contrast, 10 to 20 percent of private-insurance premiums go for administrative costs. Roll that figure around on your tongue. When you swallow and digest it, you’ll understand that any hope of significantly reducing health-care costs depends on a public option.

Right now, the Medicare average is 3% and private insurance averages 12%. But Tom Bevan points out, some of that difference is an apples and oranges comparison:

But here’s the catch: because Medicare is devoted to serving a population that is elderly, and therefore in need of greater levels of medical care, it generates significantly higher expenditures than private insurance plans, thus making administrative costs smaller as a percentage of total costs. This creates the appearance that Medicare is a model of administrative efficiency. What Jon Alter sees as a “miracle” is really just a statistical sleight of hand.

Furthermore, Book notes that private insurers have a number of additional expenditures which fall into the category of “administrative costs” (like state health insurance premium taxes of 2-4%, marketing costs, etc) that Medicare does not have, further inflating the apparent differences in cost.

However, when you make an apples to apples comparison, Medicare comes out much worse than private insurance:

But, as you might expect, when you compare administrative costs on a per-person basis, Medicare is dramatically less efficient than private insurance plans. As you can see here, between 2001-2005, Medicare’s administrative costs on a per-person basis were 24.8% higher, on average, than private insurers.

So, contrary to claims of Alter, Krugman, and President Obama, moving tens of millions of Americans into a government run health care option won’t generate any costs savings through lower administrative costs. Just the opposite.

Make sure you click through and check out the real Medicare administrative costs as compared to private industry.

Then there’s waste fraud and abuse. Did you happen to catch that little hand wave at “fraud and abuse” in the first quote touting Medicare’s efficiency? What, pray tell, is one of the primary jobs of an administive system? Would you imagine it to be the elimination of fraud and abuse – or said another way, to ensure that the company pays legitimate claims and avoids fraudulent and unnecessary payments?

How efficient is a system which is awash in both fraud and abuse? And, without profit, what incentive do they have to eliminate it?

John Stossel takes that part of the “Medicare efficiency” myth apart:

But there’s a bigger point – the connection between “low” administrative costs and staggeringly HIGH levels of fraud and waste. As Michael Cannon at the Cato Institute and Regina Herzlinger at Harvard Business School have pointed out, much of the 10 to 20 percent of private insurance administrative costs goes to preventing fraud. Private insurers, you see, care about whether or not they lose money. Medicare, with its unlimited claim on the public purse, does not. It’s only taxpayer money, after all.

The results are predictable, but breathtaking nonetheless: an estimated $68 billion (with a B) in outright Medicare fraud every year (About $3 billion in Miami-Dade county ALONE.) On top of that, according to well-respected Dartmouth researchers, roughly a third of Medicare’s total $400 billion annual spending goes to procedures which were medically unnecessary.

That’s, on average, 68 billion every year. Imagine a private insurance company surviving with loss figures like that. But as Stossel points out, without an incentive to eliminate fraud and abuse, it continues year after year after year, with politicians and Medicare administrators tut-tutting but never really doing anything about it.

That is the reality of Medicare’s efficiency. It is also the probable model any future health care insurance run by the government. Efficiency is an illusion brought about by a statistical sleight of hand and ignoring the systemic waste, fraud and abuse of Medicare.

~McQ

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Climate Change Update – Falling Dominoes

For the American taxpayer, under the shadow of the recently passed House cap-and-trade (Waxman-Markey) bill, the news continues to be grim. However for the traitorous “deniers”, aka skeptics, who believe the whole climate change hysteria to be an economy killing farce, things are looking better.

For instance India has announced it will not participate in the Western world’s attempts to kill their own economies:

India said it will reject any new treaty to limit global warming that makes the country reduce greenhouse-gas emissions because that will undermine its energy consumption, transportation and food security.

Cutting back on climate-warming gases is a measure that instead must be taken by industrialized countries, and India is mobilizing developing nations to push that case, Environment Minister Jairam Ramesh told the media today in New Delhi.

“India will not accept any emission-reduction target — period,” Ramesh said. “This is a non-negotiable stand.”

Heh … fairly blunt and straight foward wouldn’t you say? Of course, China took the same stand a couple of weeks ago. I call that good news because it is another country which has decided to put its economy first and this nonsense second. When two countries which are or expected to be very soon the two leading emitters of CO2 say “no”, it makes it rather ridiculous for the rest of the world to say “yes” given the consequences vs. payoff, doesn’t it?

And the US cap-and-trade legislation? Well India sees that as a “no-go” as well:

But last week, the US House of Representatives backed a “border adjustment tax” to equalise carbon emissions charges between domestic production and imports from states that do not cap emissions. The legislation is likely to face tough opposition in the Senate.

Mr Ramesh denounced as “pernicious” US efforts to impose “trade penalties” on countries that do not match its carbon reduction moves.

Meanwhile in the EU:

The European Union risks driving industry out of the region if it continues to push for deeper cuts in carbon dioxide emissions than other economies, according to the chief executive of Eon, one of the world’s biggest renewable energy companies.

Wulf Bernotat, Eon’s chief executive, told the Financial Times that the EU was imposing higher energy costs on its industry than competing regions, and criticised the US for doing “basically nothing” to cut its carbon dioxide emissions.

He added that if there were no international deal to cut emissions agreed at the Copenhagen meeting at the end of the year, the EU would have to rethink its plans to take a lead in fighting the threat of climate change.

“It is a European political issue whether the European Union can continue to lead the policy process if the rest of the world is not joining in,” he said.

“We are adding additional costs to our industries, and if other countries don’t follow, then those industries will move to lower-cost regions.”

Yeah, like India or China … or Mexico. That’s the irony of this nonsense. We have a president and Congress who’ve made a cottage industry of demonizing corporations who “outsource” jobs while they pass legislation that encourages corporations to outsource jobs.

And for those who worship at the feet of Al Gore, another inconvenient truth is to be found in a recently published paper from the Journal of Atmospheric and Solar-Terrestrial Physics:

The Abstract states:

Daily temperature and pressure series from 55 European meteorological stations covering the 20th century are analyzed. The overall temperature mean displays a sharp minimum near 1940 and a step-like jump near 1987. We evaluate the evolution of disturbances of these series using mean squared inter-annual variations and “lifetimes”. The decadal to secular evolutions of solar activity and temperature disturbances display similar signatures over the 20th century. Because of heterogeneity of the climate system response to solar forcing, regional and seasonal approaches are key to successful identification of these signatures. Most of the solar response is governed by the winter months, as best seen near the Atlantic Ocean. Intensities of disturbances vary by factors in excess of 2, underlining a role for the Sun as a significant forcing factor of European atmospheric variations. We speculate about the possible origin of these solar signatures. The last figure of the paper exemplifies its main results.

The paper concludes:

In concluding, we find increasingly strong evidence of a clear solar signature in a number of climatic indicators in Europe, strengthening the earlier conclusions of a study that included stations from the United States (Le Mouël et al., 2008). With the recent downturn of both solar activity and global temperatures, the debated correlations we suggested in Le Mouël et al. (2005), which appeared to stop in the 1980s, actually might extend to the present. The role of the Sun in global and regional climate change should be re-assessed and reasonable physical mechanisms are in sight.

Shorter conclusion?

“It’s the sun, stupid”.

~McQ

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CBO, Entitlments, Health Care Reform and the Deficit

One more time into the breach. The CBO has issued a warning to Congress about entitlement spending. Again. Here’s a key paragraph:

Almost all of the projected growth in federal spending other than interest payments on the debt comes from growth in spending on the three largest entitlement programs–Medicare, Medicaid, and Social Security.

Most of you know that Medicare and Medicaid have an unfunded future liability of 36 trillion dollars. That’s about 3 times the annual total GDP of the US economy. And they are the very same type of “public option” program – i.e. government insurance – that the left says is so very necessary and crucial to real “health care reform”.

In other words, the left’s argument is that adding at least 47 million (presently uninsured), plus the possibility of adding 119 million who are shifted to the public option from private insurance (private insurance, btw, doesn’t have any effect on the deficit whatsoever since we, the private sector, are paying for it) will somehow make the deficit picture better?

I’m obviously missing something here.

With the public option, we’re adding a new entitlement (47 million who presently supposedly can’t afford insurance, meaning taxpayers will subsidize theirs). Assuming it is set up originally to be paid for by premiums, at some point, like Medicare and Medicaid, and every other government entitlement program I can think of, it will pay out more than it takes in. How can it not? It is a stated “non-profit” program and it will include subsidies. At some point, another revenue stream is going to be necessary as it burns through the premiums with its payouts.

Well, say the proponents of government involvement in your health care, we’re going to save money by doing preventive health care. Yes, preventive care is the key to lower costs because a healthier population is one which visits the doctor less. While that may seem to be at least partially true (you’d think a healthier population would, logically, visit the doctor less) the part that is apparently missed when touting this popular panacea is the cost of making the population healthier (and the fact that the assumption of less visits isn’t necessarily true) doesn’t cost less – it costs more:

If health care providers can prevent or delay conditions like heart disease and diabetes, the logic goes, the nation won’t have to pay for so many expensive hospital procedures.

The problem, as lawmakers are discovering to their frustration, is that the logic is wrong. Preventive care — at least the sort delivered by doctors — doesn’t save money, experts say. It costs money.

That’s old news to the analysts at the Congressional Budget Office, who have told senators on the Health, Education, Labor and Pensions Committee that it cannot score most preventive-care proposals as saving money.

So with that myth blown to hell, we’re now looking at a government plan which will add cost to the deficit by subsidizing the insurance of 47 million and (most likely) many more, plus a plan to use a more costly form of medicine as its primary means of giving care.

But, back to the entitlement report – or warning. The CBO says that unless entitlements are drastically reformed (that means Medicare, Medicaid and to a lesser extent, Social Security) we’re in deep deficit doodoo:

The most frightening findings in this report are the deficit and debt projections. In this year and next year, the yearly budget shortfall, or deficit, will be the largest post-war deficits on record–exceeding 11 percent of the economy or gross domestic product (GDP)–and by 2080 it will reach 17.8 percent of GDP.

The national debt, which is the sum of all past deficits, will escalate even faster. Since 1962, debt has averaged 36 percent of GDP, but it will reach 60 percent, nearly double the average, by next year and will exceed 100 percent of the economy by 2042. Put another way, in about 30 years, for every $1 each American citizen and business earns or produces, the government will be an equivalent $1 in debt. By 2083, debt figures will surpass an astounding 306 percent of GDP.

The report also finds high overall growth in the government as a share of the economy and of taxpayers’ wallets that provides an additional area of concern. While total government spending has hovered around 20 percent of the economy since the 1960s, it has jumped by a quarter to 25 percent in 2009 alone and will exceed 32 percent by 2083. Taxes, which have averaged at 18.3 percent of GDP, will reach unprecedented levels of 26 percent by 2083. Never in American history have spending and tax levels been that high.

Here’s the important point to be made – these projections do not include cap-and-trade or health care reform.

Got that? We’re looking at the “highest spending and tax levels” in our history without either of those huge tax and spend programs now being considered included in the numbers above. Total government spending, as a percent of GDP is now at an unprecedented 25%. And they’re trying to add more while this president, who is right in the middle of it, tells us we can’t keep this deficit spending up forever.

Fair warning.

~McQ

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