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Credit Cards vs. Income Taxes

Posted by revdto on Sunday, May 24, 2009 1:49:36 PM
 

Recently President Obama spoke about passing new legislation aimed at “reform” of the Credit Card laws in order to prevent the Credit Card companies from taking unfair advantage of the consumer. The president chided them about everything from the high interest rates they charge to the so-called “hidden charges” contained in the large amount of fine print in credit card agreements.


I believe that there is a need for some reform of the manner in which credit card companies operate so as to make it more fair for the average consumer. It also seems to me that no fair-minded individual could dispute that. The amount of credit card debt that many people in our land have acquired has indeed led to an alarming situation. It is certainly a contributing factor to the rise of bankruptcy in America. The large amount of credit card debt in this nation is also helping our economy further into the tank, as people pull back from spending on anything other than necessities and are having to choose between paying for groceries and paying the credit card bill.


However, I feel I must protest this protest on the president's part. Not because the idea of credit card reform is a bad idea, but because of the incredible hypocrisy and misdirection the idea represents.


The monumental hypocrisy is shown by the simple fact that the worst abuser of credit in the nation, perhaps in the known universe, is our very own federal government! It was recently revealed that for every dollar spent by our government, at least fifty cents has to be borrowed! That is as astounding admission. With our current record budget of 3.7 trillion dollars, half of that, or 1.85 trillion dollars, will have to be borrowed from somewhere. Actually, it will be many “somewheres”, because no one institution or even nation can afford to lend that amount of money without bankrupting themselves! Paying that kind of debt back is literally impossible without opening the printing presses to run off money 24/7 which would result in making the double-digit inflation of the 1970's look like the “good ol' days”!


The misdirection represented here would make any slight of hand practitioner proud. While the president shows with one hand his good intention of reforming the credit card laws, you and I are distracted from the other hand picking our pockets through an ever increasing tax burden. I would submit that of the two financial villains, it is the tax that is far more insidious and destructive.


That is certainly not to say the credit card laws do not need reforming. There are many things that could and should be done in that arena which would benefit many people. People who have become victims of greed and a lack of fiscal discipline. People who in many cases are trapped by a system, legal though it is, which is morally corrupt. A system which can suck them in with tempting offers and then increase interest rates to levels even above 20%. This virtually guarantees financial slavery for the borrower. This does make the credit card companies look like first class villains, that is certain.


However, as bad as this is, the credit card companies are mere pikers compared to the federal government and the IRS! At their very worst, the credit card companies cannot simply take your money. Even when wages are garnished to pay credit card bills, a legal procedure of some kind is necessary and even that can be circumvented by the consumer if they choose the hard route of bankruptcy. Not so with the IRS! They simply take your money directly from your paycheck. The credit card companies cannot simply seize money directly from an inheritance. The IRS can and does with the inheritance tax. The credit card companies cannot simply take money from the profit you may have made from the sale of a home. The IRS with the capitol gains tax can and does. As much profit as the credit card companies may be making from the interest they charge, at least they had to allow the consumer to have funds or the equivalent of funds before they could collect money. The IRS does not give the individual consumer any funds and just takes from money that the producer earned him or herself. With the credit card company, I must sign an agreement or contract of some sort if I want to be able to use the card. No one can force me to have any credit card or to use any credit card that I have. Until I use the card itself, nothing or very little is due to the company from me. In addition, I can pay off cards and cancel the service, even if it is very difficult to do so. There are many services nowadays that will give aid to a consumer in over his head with credit card debt. In some cases, the debt can be paid off at pennies on the dollar! Yes, there are such legal services available for people in trouble with the IRS, and that can also result in paying the tax debt at a fraction of the original amount. However, there is a substantial difference between these cases. Once the credit card debt is taken care of, the consumer no longer has to pay anymore. Not so with the IRS! Income taxes and other confiscations are still taken from the person who paid off the tax debt. He or she will never be free of the predations of the government as long as they live! Even after retirement, Social Security income and retirement account income will be taxed.


These and other reasons serve to make me believe that our nation needs tax reform, or better yet a revocation of the income tax altogether and replacement with something like the “Fair Tax”, far more than we need reform of the credit card laws. Such a bold move would truly 'stimulate' the economy and fuel the economic growth we need. Then, if this was coupled with, heaven forbid, real spending cuts, the potential for strengthening the economy of this nation would be virtually limitless, and furthermore would begin to be realized.
This is revdto and this is 4 Ur Consideration
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Universal Health Care and the Future, Part One

Posted by revdto on Wednesday, May 06, 2009 8:57:50 AM

Recently, the Senate announced an aggressive timetable to bring comprehensive health care "reform" legislation to the floor of both houses of Congress and have it passed by early fall of this year. With democratic majorities in both houses, the passage of the legislation would be assured. It would seem as though nothing can stop this leap into a socialist 'nirvana'.

Not so fast, Marxist breath! A new obstacle has appeared on the horizon which may derail this health care gravy train. Ironically enough, it concerns the basic economic law of supply and demand asserting it's ugly little head. It seems we are becoming short on the supply of doctors in our current semi-socialist health care system, and the Medicare monster is largely to blame.

In an April 26th article appearing in the New York Times, Robert Pear writes that,

“Obama administration officials, alarmed at doctor shortages, are looking for ways to increase the supply of physicians to meet the needs of an aging population and millions of uninsured people who would gain coverage under legislation championed by the president.”

In other words, we have here an instance of a shortage of supply which is unable to meet the demand. But this is not simply a shortage of the supply of a product we are talking about here. This is a shortage of qualified people absolutely necessary to meet the demand that is anticipated should mandated universal health care become a reality.

The fact is simply this; we do not have enough primary care physicians to meet current demand let alone the inevitable large increase in demand for health care which would result in an environment of universal health care. In the same article for the Times, Pear writes that “Lawmakers from both parties say the shortage of health care professionals is already having serious consequences.”

The article goes on to cite the fact that Massachusetts, which recently expanded government health care coverage, is now experiencing a crisis in physician supply. This has meant that we have fewer doctors to take care of larger numbers of people. In fact, because of this 2006 law, the “ratio of primary care doctors to population is higher in Massachusetts than in other states.”

If this current shortage cannot be addressed, the future of health care in our land is in jeopardy, and the idea of universal health care for all Americans may well be in the Intensive Care Unit, if not terminal.

However, the omniscient, all-wise government is not blind to the problem. With apologies to Bill O'Reilly, they are “looking out for you,”. Even now there are some solutions being proposed to meet this crisis. One is to increase Medicare payments to primary care physicians. In order to find these funds, the proposal suggests lowering Medicare reimbursements to high-paid specialists, something these specialists are not likely to take lying down. Other proposals include increasing enrollment in medical schools and residency training programs, and encouraging a greater use of nurse practitioners for primary care. Expanding the National Health Service Corps, which helps get health care practitioners to rural and poor neighborhoods is another option being considered. With these solutions in place, perhaps the current shortage in supply can be brought to a place where the current demand can be reasonably met without a large increase in costs. One thing seems sure though, someone will pay a larger amount just to solve the current problem. Remember, we are dealing with a law of economics here, the law of supply and demand. According to that law, a shortage of supply or an increase in demand for any product will result in an increase in the price. In the case of health care in the U.S., we are presently experiencing both of these phenomena! If we assume that the currently proposed solutions actually work (a dubious admission at best) to increase the supply of physicians enough to better meet the current demand, we still have a large problem facing us even without a government program for universal health care. That is the problem of our aging society in which ever larger numbers of people are going to demand more primary and specialist health care. More and more people, as they live longer in our land, are going to become eligible for Medicare. The Medicare and Medicaid systems we have now are ill-equipped to deal with present day health care demands, as almost everyone attests to. Soon, many millions more retirees and elderly will come on the rolls for these services, and the demand will soar. If we add a universal health care system into the mix, the demand will become astronomical.
 
If one analyzes this situation from a logical and economic standpoint, the following facts emerge. FIRST, it is virtually impossible to increase the supply of physicians to the point where the number will be adequate to address the needed demand of a universal health care system. The supply of physicians cannot be increased in the same way a factory-made product can. We cannot simply manufacture more doctors on an assembly line until we have enough of the “product.” It might be feasible to increase doctor supply by increasing economic incentives to become a doctor. But that will mean an increase in the cost of health care. And that will at the least mean an increase in taxes to pay for these incentives. Even then, it cannot be assured that enough people will become the doctors which will be needed.

SECOND, That the demand will increase is indisputable. As has already been mentioned, this is bound to happen even without universal health care coming to pass. Besides the facts of the increasing population of the elderly, we have the increase in illegal immigrants whom we have obligated ourselves to care for. This includes giving most health care for little or no cost to them. But as with all things, somebody pays, and if you guessed it was the average Joe taxpayer, give yourself a gold star! This is helping drive our health care dilemma to new heights even now. Imagine what a nightmare this will become under universal health care!

THIRD, the Obama administration will not allow anything to stand in the way of bringing about a universal health care system in the United States. It is far more than a political maneuver on the part of President Obama. He is an ideologue especially concerning this particular idea. He is a “true believer” in socialism, no matter what he or others might choose to call it. His record as a politician before he came to the presidency, and more so since, amply demonstrates this.
 
To sum up, ONE the supply of physicians cannot meet current demand and certainly will not be able to meet the future demand of a universal health care system. TWO, the demand for health care will increase to almost unimaginable levels under a universal health care system. THREE, a universal heath care system in the United States will almost certainly come to pass. However, this would seem to describe an impossible situation. All three of these conditions cannot exist as they are. The tension will become unbearable between supply and demand. The structure will not hold and the entire health care system will collapse under it's own weight. It would appear that there is no way to avoid this predicament. 
 
However, such is not the case, as we will see in the next post.
 
4YC  revdto
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