Tidbits Quotations
To Accompany the June 9, 2011 edition of Tidbits
Bob Jensen at Trinity University

A fool's brain digests philosophy into folly, science into superstition, and art into pedantry. Hence University education.
George Bernard Shaw

the Chevy Volt ...was $43,000. The dealership also gets a tax credits of $7,500 per Volt... Will GM earn a profit on Volt sales ? ... The Volt costs $81,000 to build per unit and has sold 493 units in April for a loss of $38,000 per unit, paid for by taxpayers ...

"A New Wave of National Parks:  Our ocean frontiers are disappearing, and it is up to us to conserve the most important wild areas that remain," by Laura Bush, The Wall Street Journal, June 6, 2011 ---

Our first national park was named not after a mountain or forest but for a mighty river: Yellowstone. For centuries the world's waters have connected us. Explorers, traders, scientists and fishermen have traveled our oceans and rivers in search of new resources and a greater understanding of the world. This Wednesday, as we mark World Oceans Day, we must intensify our efforts to better understand, manage and conserve our waters and marine habitats if they are to remain a vibrant source of life for future generations.

Great progress has been made in protecting our environment over the past several decades, but too little of that progress addresses 70% of the world's surface—our oceans. Less than one-half of 1% of the world's oceans are protected in ways that will ensure they stay wild. Too often overharvesting depletes what should be a lasting bounty of fish. In some parts of the oceans today up to 90% of large fish are gone from natural ecosystems.

Our oceans are also where much of our trash and pollution end up. Plastics and other pollutants difficult to break down are killing fish, turtles and birds. Currents in the Pacific have created a plastic garbage dump twice the size of Texas. A few years ago, I visited Midway Island in the middle of the Pacific Ocean and was shocked to find debris killing birds that could not distinguish between plastic refuse and squid.

We are at risk of permanently losing vital marine resources and harming our quality of life. Overfishing and degrading our ocean waters damages the habitats needed to sustain diverse marine populations. Perhaps the most vital function our oceans serve is that of climate regulator—they produce oxygen, reduce pollution, and remove carbon dioxide. If we don't protect our oceans, we could witness the destruction of some of the world's most beautiful and important natural resources.

Fortunately, Yellowstone offers a blueprint for protecting our oceans. President Ulysses S. Grant created Yellowstone National Park in 1872 at a time when large wild areas on the frontier were at risk. The founding of Yellowstone sparked a 50-year period during which many of the national parks we enjoy today were created. Our country began to see the value of setting aside large territories that would remain wild forever. Our national parks play an outsized role in maintaining healthy and diverse wildlife populations far beyond their boundaries. Many of the elk, deer and wolves seen throughout Western states trace their lineage to populations in Yellowstone.

In the early 1970s, the U.S. established a modest program to conserve some of its most important marine areas, called the National Marine Sanctuary System. In June 2006 and again in January 2009, the U.S. expanded the concept of parkland and wilderness preserves in the sea when President Bush designated four marine national monuments in the Pacific Ocean.

The first of these, the Papahānaumokuākea Marine National Monument, encompasses a 100-mile wide area of nearly pristine habitat northwest of Honolulu, Hawaii, and was named a Unesco World Heritage site in 2010. A second area, the Marianas Trench Marine National Monument, includes the world's deepest canyon and is home to some of the oldest and most resilient forms of life on the planet. The other two monuments are the Pacific Remote Islands dispersed throughout the Pacific Ocean and the Rose Atoll in American Samoa.

These four monuments cover more than 330,000 square miles and add up to the largest fully protected marine area in the world, larger than all of our national parks and wildlife refuges combined. They support vast numbers of fish, breathtakingly beautiful coral habitat, and a remarkable abundance of sharks—often seen as markers of an ecosystem's health.

These monuments will remain open to shipping and other uses that will allow the economies and cultures of nearby American territories to prosper. But they will also remain a wild resource, a place where scientists can make new discoveries and where a variety of species can thrive. The U.S. was able to protect these areas because they fall within the Exclusive Economic Zone that surrounds our territories, and because the U.S. provides the means to manage them.

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"Tennessee Trumps Wisconsin: Kills Teacher Collective Bargaining," by Kyle Olson, Townhall, June 6, 2011 ---

To fix public schools, you have to control public schools.

And there’s little control when teachers unions, with their self-serving agendas, question every cost-cutting proposal and reform on the table.

That’s why so many state governments have taken swift action to limit the power of organized labor in public schools. Wisconsin, Ohio, Indiana, Idaho and Michigan were the first, and Tennessee added itself to the list on Wednesday.

Tennessee Gov. Bill Haslam affixed his signature on House Bill 130 and Senate Bill 113, ending collective bargaining and giving local school boards the full authority to operate their districts in the manner they choose.

That doesn't mean the unions are shut out of the discussion. The new laws create a process called “collaborative conferencing,” where the school board, administrators and union officials will be forced to sit and discuss many of the normal issues, including salary, insurance, grievance procedures and working conditions.

If the two sides agree on any number of issues, they can sign binding “memorandums of understanding,” that will serve the same purpose as collective bargaining agreements. But any issues that are left unsettled will be the sole domain of the school board, with no appellate procedure available to the unions.

School boards will also have the option of not entering into any sort of agreement with the union. In that case they would have full authority to deal with all issues in an arbitrary manner.

Nobody elected the unions

Tennessee lawmakers were careful to leave a few key items off the discussion table, including personnel and staffing decisions, how to use grant money, the evaluation process for employees and whether or not payroll deductions can be made for political purposes.

That means the end of the road for the treasured union concept of seniority, particularly when it’s applied at layoff time.

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"Spain, Scary Statistics, and Why the U.S. Dollar Remains the World's Reserve Currency," by David Champion, Harvard Business Review Blog, May 23, 2011 --- Click Here

The Spanish held some local elections yesterday and the ruling Socialist party took an expected drubbing. The item in the news commentaries that really jumped out at me, though, was the level of Spain's unemployment. This country, a large European economy, has an unemployment rate of 21.3% and, more disturbingly, a youth unemployment rate above 40%. Two out of every five young workers do not have a job. It's hardly surprising that the election was marked by large daily protests in Spain's biggest cities that might mark the beginnings of a movement.

On its own, this would be scary. But consider the unemployment rates of the three European economies that the EU and IMF have been bailing out this past year. Ireland's unemployment is around 14.6% and its youth rate about 29%. Portugal's rates are 11.1% and 23% respectively, and for Greece, 14.2% and 35.6%. I can't vouch completely for the comparability of the rates but it is hard not to conclude that that Spain is much worse off in employment terms than the three supposedly most vulnerable European states.

With a GDP of around $1.4 trillion, Spain's economy is larger than Portugal's ($236 billion), Ireland's ($186 billion), and Greece's ($342 billion) combined. The bailout packages, which may not yet be complete (the EU and IMF are looking into another one for Greece) amount to around $375 billion. With Spain's economy looking as sick as it does, it's not outside the realms of possibility that Spain will need a bailout as well. But how much longer can the EU and IMF keep on providing that kind of money?

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DNC Chair Wasserman Schultz Has No Clue That Illegal Immigration Is A Crime ---

"Dependency and Votes," by Thomas Sowell, Townhall, May 25, 2011 ---

Those who regard government "entitlement" programs as sacrosanct, and regard those who want to cut them back as calloused or cruel, picture a world very different from the world of reality.

To listen to some of the defenders of entitlement programs, which are at the heart of the present financial crisis, you might think that anything the government fails to provide is something that people will be deprived of.

In other words, if you cut spending on school lunches, children will go hungry. If you fail to subsidize housing, people will be homeless. If you fail to subsidize prescription drugs, old people will have to eat dog food in order to be able to afford their meds.

This is the vision promoted by many politicians and much of the media. But, in the world of reality, it is not even true for most people who are living below the official poverty line.

Most Americans living below the official poverty line own a car or truck-- and government entitlement programs seldom provide cars and trucks. Most people living below the official poverty line also have air conditioning, color television and a microwave oven--and these too are not usually handed out by government entitlement programs.

Cell phones and other electronic devices are by no means unheard of in low-income neighborhoods, where children would supposedly go hungry if there were no school lunch programs. In reality, low-income people are overweight even more often than other Americans.

As for housing and homelessness, housing prices are higher and homelessness a bigger problem in places where there has been massive government intervention, such as liberal bastions like New York City and San Francisco. As for the elderly, 80 percent are homeowners. whose monthly housing costs are less than $400, including property taxes, utilities, and maintenance.

The desperately poor elderly conjured up in political and media rhetoric are-- in the world of reality-- the wealthiest segment of the American population. The average wealth of older households is nearly three times the wealth of households headed by people in the 35 to 44-year-old bracket, and more than 15 times the wealth of households headed by someone under 35 years of age.

If the wealthiest segment of the population cannot pay their own medical bills, who can? The country as a whole is not any richer because the government pays our medical bills-- with money that it takes from us.

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Bob Jensen's threads on entitlements --- http://www.trinity.edu/rjensen/Entitlements.htm

"Obama and the Debt Crisis To lead us out of it, he will need to learn some new political skills.," by Peggy Noonan, The Wall Street Journal, June 2, 2011 ---

The debate in Washington is serious as a heart attack: whether the United States should raise its debt ceiling so it can borrow more money to stay afloat. The statutory ceiling on our national debt—our legal borrowing limit—is $14.3 trillion. That limit was reached, according to the Treasury Department, on May 16. Treasury says it can make do until early August, when the ceiling must be raised by $2.4 trillion.

Congressional Republicans have made their stand clear: They will agree to raise the limit only if it is accompanied by spending cuts or reforms.

The Democrats want to raise the ceiling, period.

The Republicans are being hard-line because of the base, and the base is hard-line for two reasons. First, we are in an unprecedented debt crisis. Second, the past 40 years have taught them that if dramatic action is not taken to stanch spending, Congress will spend more. Something is needed to shock the system.

If Republicans can get the White House to cut where the money is—Medicare—then Medicare, and all controversy over the Ryan plan, will be taken off the table as an issue in the 2012 election. This would not be good for Democrats. Democrats in turn would likely make some cuts in spending if Republicans agree to some tax increases. But that would take a great Republican issue off the table.

This week the House voted 318-97 against raising the ceiling without cutting. The president and a group of House Republicans met this week to talk about the apparent impasse. There is a chance they won't come to any agreement by August.

If no agreement is reached, what happens? Nobody knows, because it's never happened before. But economists warn: The dollar could crash, interest rates spike, equity markets melt. Foreign investors would lose confidence that America is worth risking their money and that Washington is able to face and handle a crisis.

Princeton economist Alan Blinder has noted in these pages that the bills for social Security, Medicare, Medicaid, defense and interest on the national debt amount to about two-thirds of all federal outlays. "At some point [Treasury Secretary Timothy] Geithner could wind up brooding over horrible questions like these: Do we stop issuing checks for Social Security benefits, or for soldiers' pay, or for interest payments to the Chinese government?"

All of this sounds fairly catastrophic, especially considering this week's evidence that America's economic recovery is stalled. Housing prices are down, job creation weak, manufacturing growth slowed, factory activity down. The Dow Jones Industrial Average fell 280 points on Wednesday.

So this would seem to be a bad time to be playing chicken.

Democrats think if push comes to shove and an agreement is not reached, public opinion will go against the Republicans. This may be true. Republicans think if agreement is not reached, responsibility will redound on the president. They may be true too.

But again, this isn't a good time to play Let's Find Out.

Democrats are right that the debt ceiling must be raised. Republicans are right that the decision to raise the debt ceiling must be accompanied by reforms or cuts to spending that equal or exceed the amount of the raise, $2.4 trillion. Here's why.

Default is unthinkable. We are the United States of America, and we pay our bills.

Raising the ceiling without attempting to control spending is a depressing and wearying thought. It will avert crisis, yes, but there would be no gain in it beyond that. It would demonstrate to the world that we are not capable of taking necessary steps to dig our way out of the spending mess. It would mean things just continue as they are.

But cutting and reforming—showing we can make tough decisions in a crisis—will reassure the world, and our creditors. It will increase faith in the United States, and increase an American sense of well being: "We can do this, we can make it better." It would be very good to leave the world saying, "My God, the Americans are still competent."

Washington should forget taxes for now—fight that out later. The polls are all over the place, and no feasible amount of new revenue is going to make a difference. Cutting is what matters. And the president could play it so that he doesn't lose. A crisis would have been averted—on his watch. He could claim to have been conciliatory, looking out for the national interest. The left won't like it, but the center will. And he will have shown he can work closely and in good faith with Republicans, who control the House.

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"Austerity Works In bemoaning the pain of fiscal responsibility, the Democrats show they still haven’t learned the lessons of Europe.," by Niall Ferguson, Newsweek Magazine, May 29, 2011 ---

. . .

Yet Obama’s travels could have been a timely opportunity to learn from Europe’s fiscal mistakes.

To American commentators, notably New York Times columnist Paul Krugman, the lesson is clear. “In Europe,” he wrote last week, “the pain caucus has been in control for more than a year, insisting that sound money and balanced budgets are the answer … [But] Europe’s troubled debtor nations are … suffering further economic decline thanks to those austerity programs.” Elsewhere, Krugman has repeatedly badmouthed the British government for trying to cut its deficit.

It’s certainly true that the economies of Greece, Ireland, and Portugal—the three countries committed to austerity programs as conditions for European and International Monetary Fund bailouts—have shrunk over the past year. The unemployment rate is above 10 percent in all three. Meanwhile, the U.K. economy is growing sluggishly. But to infer from this that the United States can postpone serious attempts at fiscal stabilization would be completely wrong—and deeply dangerous.

The point is that Greece & Co. are in trouble because of excessive borrowing. Between 1999 and 2010 the structural deficit of the Greek government rose from 2 percent of gross domestic product to nearly 18 percent. Ireland went from surplus to minus 11 percent. Portugal was little better. The result was a debt explosion. The net government debt of Greece, the worst offender, soared from 76 percent of GDP to 142 percent last year.

As it became clear that there was no automatic mechanism to transfer funds from the relatively frugal European core to the profligate periphery, bond investors started to fear defaults. They dumped the debt, driving up the yield on Greek 10-year bonds—and hence the interest rate on new borrowing—to 17 percent. That simply made matters worse, necessitating ever more desperate spending cuts and tax hikes to avoid national bankruptcy.

The British story is different. Starting in a very similar fiscal hole—the structural deficit was 8 percent of GDP in 2009 and the debt–GDP ratio had doubled in seven years—the new Tory-led government acted preemptively, announcing deep budget cuts before the financial markets freaked out. As a result, Britain’s borrowing costs have actually come down.

Members of the Deficits Forever club are intellectually lazy when they assert that the U.K. economy is growing slowly because austerity doesn’t work, implying that things would be better had the spending binge continued. Maybe. But maybe not. A responsible politician wouldn’t take the gamble because the costs of being wrong are too high. Just ask the Greeks.

The real lessons for the United States are clear. Those who run up debt in good times can borrow only so much more when a recession strikes. And heavily indebted governments postpone fiscal stabilization at their peril. If you wait to reform until the bond market calls time, you are—to use a technical term from economics—screwed.

The best option is, of course, to be Switzerland, a country strangely ignored by Krugman. The Swiss have run a prudent fiscal policy throughout the economic crisis. They have had a structural surplus in each of the past five years. Their net debt is actually lower today than it was in 2005. And guess what? In 2009 their economy suffered the smallest contraction in Europe, with unemployment today below 4 percent. As for sound money, the Swiss franc is up 95 percent against the dollar since 2000.

Too bad American presidents never visit Switzerland. But I guess they can’t afford to.

Bob Jensen's threads on the entitlements crisis are at

"Liberal Washington State Tries to Kiss Medicaid Goodbye:  The governor and the legislature unanimously back a block-grant model similar to welfare reform," by Nansen Malin, The Wall Street Journal, June 4, 2011 ---

Medicaid has plunged Washington state into fiscal crisis. This fact was recognized by legislators from both sides of the aisle during a contentious special session that concluded last week. The result was Senate Bill 5596, a Medicaid block-grant bill.

The block-grant concept was remarkably nonpartisan: The bill, requiring the state to apply to the federal Department of Health and Human Services (HHS) for a waiver that would replace its current Medicaid program with a block grant, passed with unanimous support. On Tuesday, Gov. Christine Gregoire, previously an opponent of block grants, signed the bill. Now the waiver request will go to HHS Secretary Kathleen Sebelius.

A block grant would free state and local officials from being de facto appendages of the faraway federal government. Just the latest in the long line of unnecessary federal strings are the costly "maintenance of effort" requirements imposed by the federal stimulus bill and ObamaCare. This requirement will add an estimated 176,000 people to our state's Medicaid rolls by 2013 and prohibit the state from modifying eligibility rules without risking a loss of all Medicaid funding.

In contrast, SB 5596's authors explain that the block grant would "allow the state to operate as a laboratory of innovation for bending the cost curve, preserving the safety net, and improving the management of care for low-income populations." Rhode Island has had success under a similar waiver granted in 2009, saving $100 million within the first 18 months. With a block grant, state legislators will have the ability to alter eligibility and benefits to best serve the unique needs of their constituents without having to opt out of Medicaid entirely.

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Bob Jensen's threads on health care reform are at

"No, You Can't Keep Your Health Insurance:  A new study by McKinsey suggests that as many as 78 million Americans could lose employer health coverage," by Grace-Marie Turner, The Wall Street Journal, June 7, 2011 ---

ObamaCare will lead to a dramatic decline in employer-provided health insurance—with as many as 78 million Americans forced to find other sources of coverage.

This disturbing finding is based on my calculations from a survey by McKinsey & Company. The survey, published this week in the McKinsey Quarterly, found that up to 50% of employers say they will definitely or probably pursue alternatives to their current health-insurance plan in the years after the Patient Protection and Affordable Care Act takes effect in 2014. An estimated 156 million non-elderly Americans get their coverage at work, according to the Employee Benefit Research Institute.

Before the health law passed, the Congressional Budget Office estimated that only nine million to 10 million people, or about 7% of employees who currently get health insurance at work, would switch to government-subsidized insurance. But the McKinsey survey of 1,300 employers across industries, geographies and employer sizes found "that reform will provoke a much greater response" and concludes that the health overhaul law will lead to a "radical restructuring" of job-based health coverage.

Another McKinsey analyst, Alissa Meade, told a meeting of health-insurance executives last November that "something in the range of 80 million to 100 million individuals are going to change coverage categories in the two years" after the insurance mandates take effect in 2014.

Many employees who will need to seek another source of coverage will take advantage of the health-insurance subsidies for families making as much as $88,000 a year. This will drive up the cost of ObamaCare.

In a study last year, Douglas Holtz-Eakin, a former director of the Congressional Budget Office, estimated that an additional 35 million workers would be moved out of employer plans and into subsidized coverage, and that this would add about $1 trillion to the total cost of the president's health law over the next decade. McKinsey's survey implies that the cost to taxpayers could be significantly more.

The McKinsey study, "How US health care reform will affect employee benefits," predicts that employers will either drop coverage altogether, offer defined contributions for insurance, or offer coverage only to certain employees. The study concludes that 30% of employers overall will definitely or probably stop offering health insurance to their workers. However, among employers with a high awareness of the health-reform law, this proportion increases to more than 50%.

The employer incentives to alter or cease coverage under the health-reform law are strong. According to the study, at least 30% of employers would gain economically from dropping coverage, even if they completely compensated employees for the change through other benefit offerings or higher salaries. That's because they no longer would be tethered to health-insurance costs that consistently rise faster than inflation.

Employers should think twice if they believe the fine for not offering coverage will stay unchanged at $2,000 per worker. "If many companies drop health insurance coverage, the government could increase the employer penalty or raise taxes," according to the new study, authored by McKinsey consultants Shubham Singhal, Jeris Stueland and Drew Ungerman.

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"Professors to Koch Brothers: Take Your Green (Money) Back No one ever questions George Soros money, but apparently this $1.5 million gift violates academic freedom," by Donald D. Luskin, The Wall Street Journal, May 26, 2011 ---

Times are tough for state-funded colleges like Florida State University. After four years of budget trimming, FSU now faces an additional $19 million in cuts and a $40 million deficit. So it's an inopportune moment to raise a stink over private donations of $1.5 million made three years ago.

But that's just what two FSU professors—Ray Bellamy of the College of Medicine and Kent Miller, professor emeritus of psychology—did earlier this month in an op-ed in the Tallahassee Democrat, arguing that the donations are "seriously damaging to academic freedom." The piece set off a firestorm of warring newspaper editorials, blog posts and online petitions.

What's the beef? Like many large private gifts, the $1.5 million to FSU was given to endow programs in a designated subject specified by the donors. The professors' problem in this case is the subject, the strings attached, and, most important, who the donors are.

The subject being endowed, as described by the two protesting professors, is the "political ideology of free markets and diminished government regulation." That's an inflammatory way to describe a program which, according to its founding documents, is to study "the foundations of prosperity, social progress, and human well-being." Such a program would seem to fit right into its home at FSU's Stavros Center for the Advancement of Free Enterprise and Economic Education, which was founded in 1988.

Then there's the donors. One of the donors, according to the two professors, is known for his "efforts to influence public policy, elections, taxes, environmental issues, unions, regulations, etc."

Whom might they be referring to? Certainly not George Soros—there's never an objection to that billionaire's donations, which always tend toward the political left. No, it's Charles and David Koch, owners of Koch Industries. With revenue estimated at about $100 billion, the energy and chemicals conglomerate is America's second-largest privately held company. The Koch brothers tend to give to right-leaning and libertarian causes. Koch money was instrumental, for example, in founding the Cato Institute and the Libertarian Party.

As for the strings attached, there's really only one of any substance. An advisory board, selected by the Koch brothers' charitable foundation in consultation with the FSU economics department, reviews and approves professors chosen for the program before funding is released.

A story two weeks ago in the St. Petersburg Times claimed that "Koch rejected nearly 60 percent of the faculty's suggestions" in the first round of hiring in 2009. But according to FSU President Eric Barron in a subsequent op-ed for the same newspaper, what really happened was that the board—two of whose three members are themselves FSU faculty—approved for further interviews 16 out of 50 faculty suggestions, which had been culled by faculty from 500 applicants. Neither of the two professors ultimately hired was from among the 16, and the board was fine with that.

But the left won't be satisfied as long as the Kochs are involved. An editorial in last weeks' St. Petersburg Times called FSU "For Sale University." Progress Florida, a leftist online organizing group opposing the Koch-funded program, is pushing a petition claiming that FSU has agreed to "sell off the hiring decisions of the university's economics department to a radical ideologue." The ultimate aim, according to Progress Florida? To turn it into an "incubator for extremist propaganda."

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Jensen Comment
George Soros has given a lot of money to liberal causes, including those in universities. However, I don't know that he's ever attached strings to the extent that the Koch Brothers wrapped up this proposed gift to the Economics Department of Florida State University. Soros really doesn't have to since he can be assured that a liberal faculty will carry out his bidding without being asked to do so with ribbons and bows.

FSU will do the right thing if it turns down this Koch gift. But principles have their limits. This gift just is not big enough for a sell out.

Since this is a relatively small amount of endowment it seems to me to be a no-brainer --- tell Koch "Thanks but no thanks."

It seems to me that it would be a tougher decision if this $1.5 million strings-attached gift was accompanied by a $1 billion cash gift to the FSU general scholarship fund with no strings attached to the $1 billion. Think of the amount of good FSU could do with $1 billion added to the general scholarship fund. Heck, I'd even let Glenn Beck teach a couple courses for $1 billion dedicated poor and middle income family scholarships as long as we don't force students to take Beck's courses. Than again . . . a billion is a Billion is a BILLION! Maybe we could at least give the student applicants a choice about having to take Beck's two courses along with getting a totally free undergraduate and/or graduate degree..

My point is that most of us have our price, and $1.5 million is not enough for buying academic freedom. However, for an added $1 billion some compromises might be considered.

As the saying goes:(paraphrased from a George Bernard Shaw quotation)
"Now that we've settled the principle of the thing, let's negotiate a price."

If you want to debate principle, suppose that the $1 billion has only one string attached --- it must be spent of Seminole Football. Smart folks would begin to figure how many thousands of student grounds keepers could be kept busy in and around the Bobby Bowden Stadium if they were on full-ride academic assistantships. They could pluck the Japanese beetles off a million climbing roses daily on the stadium walls.

As the saying goes: (paraphrased from a George Bernard Shaw quotation)
"Now that we've established what you are, let's negotiate the price."

"Mediscare: The Surprising Truth Republicans are being portrayed as Medicare Grinches, but ObamaCare already has seniors' health care slated for draconian cuts," by Thomas Saving and John C. Goodman, The Wall Street Journal, May 28, 2011 ---

The Obama administration has repeatedly claimed that the health-reform bill it passed last year improved Medicare's finances. Although you'd never know it from the current state of the Medicare debate—with the Republicans being portrayed as the Medicare Grinches—the claim is true only because ObamaCare explicitly commits to cutting health-care spending for the elderly and the disabled in future years.

Yet almost no one familiar with the numbers thinks that the planned brute-force cuts in Medicare spending are politically feasible. Last August, the Office of the Medicare Actuary predicted that Medicare will be paying doctors less than what Medicaid pays by the end of this decade and, by then, one in seven hospitals will have to leave the Medicare system.

But suppose the law is implemented just as it's written. In that case, according to the Medicare Trustees, Medicare's long-term unfunded liability fell by $53 trillion on the day ObamaCare was signed.

But at what cost to the elderly? Consider people reaching the age of 65 this year. Under the new law, the average amount spent on these enrollees over the remainder of their lives will fall by about $36,000 at today's prices. That sum of money is equivalent to about three years of benefits. For 55-year-olds, the spending decrease is about $62,000—or the equivalent of six years of benefits. For 45-year-olds, the loss is more than $105,000, or nine years of benefits.

In terms of the sheer dollars involved, the law's reduction in future Medicare payments is the equivalent of raising the eligibility age for Medicare to age 68 for today's 65-year-olds, to age 71 for 55-year-olds and to age 74 for 45-year-olds. But rather than keep the system as is and raise the age of eligibility, the reform law instead tries to achieve equivalent savings by paying less to the providers of care.

What does this mean in terms of access to health care? No one knows for sure, but it almost certainly means that seniors will have difficulty finding doctors who will see them and hospitals who will admit them. Once admitted, they will enjoy fewer amenities such as private rooms and probably a lower quality of care as well.

Are there better ways of solving the problem? The graph nearby shows three proposals, including the new law, and compares them to the current system. For the past 40 years, real Medicare spending per capita has been growing about two percentage points faster than real gross domestic product (GDP) per capita. Since real GDP per capita grows at just about 2%, that means Medicare is growing at twice the rate of our economy—and is clearly unsustainable. If nothing is done, we'll see a doubling of the Medicare tax burden in less than 20 years.

There are currently an array of proposals to slow Medicare spending to a rate of GDP growth plus 1%. These include a proposal by President Obama's debt commission, chaired by Bill Clinton's former chief of staff, Erskine Bowles, and former Sen. Alan Simpson; one by former Clinton budget director Alice Rivlin and Rep. Paul Ryan (R., Wis.); and another by former Sen. Pete Domenici and Ms. Rivlin. Unlike the Medicare Trustees, the Congressional Budget Office (CBO) also scores ObamaCare at GDP plus 1%.

Of greater political interest is the House Republican budget proposal, sponsored by Mr. Ryan. This proposal largely matches the new law's Medicare cuts for the next 10 years and then provides new enrollees with a sum of money to apply to private insurance (premium support). Even though the CBO assumed premium support would increase with consumer prices (price indexing), the resolution that House Republicans actually voted for contains no specific escalation formula. A natural alternative is letting premium support payments grow at the annual rate of increase in per-capita GDP (GDP indexing).

In light of the heated rhetoric of recent days, it is worth noting that for everyone over the age of 55, there is no difference between the amount of money the House Republicans voted to spend on Medicare and the amount that the Democrats who support the health-reform law voted to spend. Even for younger people, the amounts are virtually identical with GDP indexing.

The law's spending path depends on making providers pay for all the future Medicare shortfalls. But since no one can force health-care providers to show up for work, short of a health-care provider draft this reform ultimately cannot succeed. The House Republican path, on the other hand, would make a sum of money available to each senior to choose among competing private plans—much the way Medicare Advantage provides insurance today for about one out of every four Medicare beneficiaries.

That's a good starting point. But we believe that a truly successful overhaul of Medicare will require at least three additional elements.

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"How Medicare Was Saved What a future us will say about the Great Entitlement Fight of 2011m" by Holman Jenkins Jr. The Wall Street Journal, May 27, 2011 ---

News item dated May 28, 2041 at BataviaOnlineNow!, a news site devoted to Western New York: As they have for the past 30 years, the Democratic faithful in the 26th congressional district turned last night's Jefferson-Jackson Dinner into an opportunity also to commemorate Medicare-As-We-Knew-It Salvation Day. Last night's celebration was extra special, thanks to the presence of Barack Obama. "I just came for the wings," quipped the former president. (Nearby Buffalo, N.Y., of course, is the birthplace of the chicken wing.) On a serious note, Mr. Obama, 79, recalled the watershed Democratic special election victory of 2011 as a turning ...


Bob Jensen's threads on health care are at

"Wind farms: Britain is 'running out of wind':  Despite the freak gales that battered parts of the country last week, climate experts are warning that many of Britain’s wind farms may soon run out of puff," by Tim Ross, May 30, 2011 ---

According to government figures, 13 of the past 16 months have been calmer than normal - while 2010 was the “stillest” year of the past decade.

Meteorologists believe that changes to the Atlantic jet stream could alter the pattern of winds over the next 40 years and leave much of the nation’s growing army of power-generating turbines becalmed.

The Coalition has drawn up plans to open more wind farms in an effort to meet Britain’s European Union target of providing 15 per cent of its energy from renewable sources by 2020.More than 3,600 turbines are expected to be installed in offshore wind farms over the next nine years.

But statistics suggest that the winds that sweep across the British Isles may be weakening. Last year, wind speeds over the UK averaged 7.8 knots (8.9mph), a fall of 20 per cent on 2008, and well below the mean for this century, which stands at 9.1 knots (10.5mph).

Usually Britain has warm, wet and windy winters, thanks to Caribbean air carried here by the Atlantic jet stream, a fast-flowing current of air.

Usually Britain has warm, wet and windy winters, thanks to Caribbean air carried here by the Atlantic jet stream, a fast-flowing current of air. But the last two winters have featured exceptionally low temperatures and were remarkably still when they should have been the windiest seasons of all, as high pressure diverted the jet stream from its normal position.

Meteorologists have found that the position of the jet stream has been influenced by the lower levels of activity on the Sun. This decline in sun-spot activity is expected to continue for the next 40 years, with potentially serious consequences for the viability of wind farms.

Professor Mike Lockwood, from Reading University, said: “Changes in the jet stream will change the pattern of winds that we get in the UK. That, of course, is a problem for wind power.

“You have to site your wind farms in the right place and if you site your wind farm in the wrong place then that will be a problem.”

Dr David Brayshaw, also from Reading’s Department of Meteorology, added: “If wind speed lowers, we can expect to generate less electricity from turbines - that's a no-brainer.”

The gales that swept Scotland last week, with gusts of over 80mph, were the worst in the month of May for almost 50 years. The power to almost 30,000 homes was temporarily cut and two people died.

Continued in article

Related articles:
Wind turbines 'less efficient than claimed' 02 Jan 2011
Wind farms, hot air and spin 14 Sep 2008

"The Manual of Ideas: The Superinvestor Issue," Simoleon Sense, June 2, 2011 ---

Jensen Comment
Even though Miguel is appealing for a small referral fee for those who subscribe to the Manual of Ideas, I've such great respect for his Website over the years I'd never be suspicious that he refers links for money. This is a rare instance at his Website, and I'm certain that he's never link to a site he did not personally admire.

"The Myths About Legal Gambling," by Steve Chapman, Townhall, June 5, 2011 ---

Illinois is on the verge of a major gambling expansion, and citizens are being pelted with competing claims. The advocates envision a gusher of jobs and tax revenues. The opponents brace for an epidemic of bankruptcies, crime, divorce and suicide. Which side to believe? Neither.

Democratic Gov. Pat Quinn is now considering whether to sign or amend a measure authorizing five new casinos, including one in Chicago, and slot machines at racetracks as well as Chicago airports. The capacity of gambling establishments in Illinois would more than triple.

The motive for this sudden interest is economic. Chicago Mayor Rahm Emanuel expects up to 10,000 new jobs from opening a casino that will be owned by the city. Legislators eagerly anticipate a windfall of tax payments and licensing fees, which they can use to ease the state's painful budget crunch.

But all that glitters is not gold. More gambling opportunities may not mean more gambling proceeds, since the public appetite is on the wane. Illinois casinos have seen their revenue fall by a third over the past three years. Increasing the number of outlets could mean just dividing the take into smaller piles.

Is Chicago likely to reap big economic gains? Not in this lifetime. A new casino may attract more visitors and create new jobs serving drinks and dealing cards. But money lost at the blackjack table can't be spent on other types of recreation and entertainment. Jobs that spring up in gambling-related businesses may be lost in other sectors.

Casinos have been useful in reviving depressed areas, according to the 1999 National Gambling Impact Study Commission Report. That may have little relevance to Chicago, which is not exactly a declining Rust Belt relic.

The best hope is that the city will draw players who now venture to northwest Indiana, which has made itself a local gambling destination. But any gain here would come at the expense of the people in and around Gary, if that counts for anything.

Continued in article

How to always come out a winner in Las Vegas
Fat Man at a Buffet --- http://www.stumbleupon.com/su/1B4AZI
The casinos will pay you $1,000 to leave the premises.

Message forwarded by Don Edwards

An old Social Security card with the "NOT FOR IDENTIFICATION" message.
Our Social Security 

Franklin Roosevelt, a Democrat, introduced the Social Security (FICA) Program. He promised: 
1.) That participation in the Program would be Completely voluntary,
No longer Voluntary 

2.) That the participants would only have to pay 1% of the first $1,400 of their annual Incomes into the Program,
Now 7.65% on the first $90,000 
3.) That the money the participants elected to put into the Program would be deductible from their income for tax purposes each year,
No longer tax deductible 

4.) That the money the participants put into the independent 'Trust Fund' rather than into the general operating fund, and therefore, would 
only be used to fund the Social Security Retirement Program, and no other Government program, and,
Under Johnson the money was moved to The General Fund and Spent 

5.) That the annuity payments to the retirees would never be taxed as income.

Under Clinton & Gore
- Up to 85% of your Social Security can be Taxed 

Since many of us have paid into FICA for years and are now receiving a Social Security check every month -- 

and then finding that we are getting taxed on 85% of the money we 
paid to the Federal government to 'put away' -- you may be interested in the following: 
------------ --------- --------- --------- --------- --------- ---- 
Q: Which Political Party took Social Security from the independent 'Trust Fund' and put it into the general fund so that Congress could spend it? 
A: It was Lyndon Johnson and the democratically controlled House and Senate. 
------------ --------- --------- --------- --------- --------- --------- -- 
Q: Which Political Party eliminated the income tax deduction for Social Security (FICA) withholding? 
A: The Democratic Party. 
------------ --------- --------- --------- --------- --------- --------- ----- 
Q: Which Political Party started taxing Social Security annuities? 
A: The Democratic Party, with Al Gore casting the 'tie-breaking' deciding vote as President of the Senate, while he was Vice President of the  US 
------------ --------- --------- --------- --------- --------- --------- - 
Q: Which Political Party decided to start giving annuity payments to immigrants? 


A: That's right!

Jimmy Carter
 and the Democratic Party. 
Immigrants moved into this country, 
and at age 65, began to receive Social Security payments!  TheDemocratic Party gave these payments to them, even though they never paid a dime into it! 
------------ -- ------------ --------- ----- ------------ --------- --------- 

Why is it that liberal men can do no wrong in the eyes of liberal feminists?
"You know, I look kind of stupid," Salon's Joan Walsh said last night on MSNBC's "The Ed Show," owning up to her mistake last week in defending Anthony Weiner the Turgid Tweeter. She then proceeded to defend him again: "This is private business," Walsh said. "You can't accuse him of hypocrisy, he's not a family values moralizer. You can't accuse him yet of breaking the law." . . . Taranto asserts: One suspects this is merely an attempt to rationalize away the bad behavior of their political allies while reserving the right to condemn similar misbehavior in their foes.
James Taranto, "Can't Feminists Be Hypocrites? The left defends Anthony Weiner by pretending not to stand for anything, by James Taranto, Best of the Web, The Wall Street Journal, June 8, 2011.

Jensen Comment
Let's face it. Liberal men are allowed to pull boners in the eyes of liberal feminists, but this is not so for conservative men.

Bob Jensen's universal health care messaging --- http://www.trinity.edu/rjensen/Health.htm

Return to the Tidbits Archives ---


Shielding Against Validity Challenges in Plato's Cave ---

·     With a Rejoinder from the 2010 Senior Editor of The Accounting Review (TAR), Steven J. Kachelmeier

·     With Replies in Appendix 4 to Professor Kachemeier by Professors Jagdish Gangolly and Paul Williams

·     With Added Conjectures in Appendix 1 as to Why the Profession of Accountancy Ignores TAR

·     With Suggestions in Appendix 2 for Incorporating Accounting Research into Undergraduate Accounting Courses

Shielding Against Validity Challenges in Plato's Cave  --- http://www.trinity.edu/rjensen/TheoryTAR.htm
By Bob Jensen

What went wrong in accounting/accountics research?  ---

The Sad State of Accountancy Doctoral Programs That Do Not Appeal to Most Accountants ---


Bob Jensen's threads on accounting theory ---

Tom Lehrer on Mathematical Models and Statistics ---

Systemic problems of accountancy (especially the vegetable nutrition paradox) that probably will never be solved ---

Bob Jensen's economic crisis messaging http://www.trinity.edu/rjensen/2008Bailout.htm

Bob Jensen's threads --- http://www.trinity.edu/rjensen/threads.htm

Some of Bob Jensen's Pictures and Stories

Bob Jensen's Home Page --- http://www.trinity.edu/rjensen/