World Politics

[Alpe d'Huez]

Trillion $ wars don't help either. I don't think though that a solution to Germany's problems during down times would be to eliminate their health care system the way the Tea Party conservatives in this country think. Not that you're suggesting that. Is it even being discussed over there? I honestly don't know, maybe it is?

I don't know that much about their system, but don't think even when in the crapper they were as bad off as we are now, nor that hey had as huge of split in the classes like we do. Though I could be wrong. I'm pretty sure their debt to GDP ratio is about the same as ours.

I also believe Germany has a very high corporate tax rate, and strict capital gains taxes. Though I do not know what their deductions are like, I do believe real estate sales after something like 15 years are free from capital gains tax.

What upsets me is that health care costs and wars are huge, huge aspects of our budget and economy, and it's not even being talked about. The only discussion it seems we're having is how much of the Republican (Ryan) plan the President (Obama or if someone like Perry replaces him) implements for eliminating Medicare and Medicaid. Something I see as disastrous.

 

[Bala Verde]

They also have a more equal (although gradually widening) distribution of income, which means that a larger percentage of the population (may) consume(s) goods. The only way a similar effect could be realized in the US in the last decade was through excessive leverage, which ultimately led to families defaulting on their loans, snowballing into a housing crisis that took the economy to the brink.

The only problem in Germany today is that they do not nearly spend enough as they can, but that is still better than dreaming American and spend more than you actually have.

So instead of relying on the job creating 1% - who sock away most of their money in the stockmarket* - it would be helpful of politicians to focus a little more on 99% of the rest of the population whose consumption(participation) will have a much larger job creating effect. Underlining Alpe's comments, Germany's population also doesn't need to save excessive amounts of money for college tuition fees or health care, which, after taxes, seems to produce more 'expendable' income.

I think more income equality in the U.S. would have a tremendously positive effect on the economy as a whole.

*Most of which is being churned as we speak. With the short-selling ban in several European countries, a massive crash could be imminent in a month.

 

[Captain_Cavman]

Okay, but Germany's economy is recovering. It was in the crapper with nationalized healthcare and it is now performing well with no change in their socialized medicine. To what do you attribute Germany's growth since 2008?

As of Dec 2010, Germany Gross Domestic Product was worth 3310 billion dollars according to the World Bank, having reached an historical high of 3634.53 billion dollars in December of 2008.

Meanwhile the German Govt debt to GDP ratio has gone from 65% to 83%.

 

[RigelKent]

Okay, but Germany's economy is recovering. It was in the crapper with nationalized healthcare and it is now performing well with no change in their socialized medicine. To what do you attribute Germany's growth since 2008?

They are an export based economy that does not rely on internal consumption for prosperity. They're generally a nation of savers rather than consumers. They also produce higher end exports, which tend to hold up well in recessions, especially recently with the higher demand from China. Their government and central bank have less influence internally because of that. They can stimulate all they want but it won't make other countries buy more Mercedes and no matter how much they cut back, it won't reduce the export demand for BMWs. They control the high end of the export market with Japan, while China and SE Asia run the low end. We just increase our current account deficit by buying all of it.

 

[Cobblestones]

Okay, but Germany's economy is recovering. It was in the crapper with nationalized healthcare and it is now performing well with no change in their socialized medicine. To what do you attribute Germany's growth since 2008?

My guess is education which leads to innovation, high tech manufacturing and export. And they got lucky because the Euro doesn't appreciate as the DMark would have.

Anyway, neither of which is the point. My point is that the (relatively) higher tax rates, socialized healthcare, existence of Unions, regulations concerning environmental impact etc. doesn't inhibit economic growth and job creation.

In that light, it's pretty clear that there wouldn't be any impact on the economic recovery by letting the Bush tax cuts expire, especially for the higher and highest income brackets. That money could be used in education and infrastructure.

In the recent debt ceiling increase, there's not a single penny of additional revenue, either because of incredible lobbying or *** ideology. No wonder the US has a rating of only 'AA' since last year by the only rating agency which will matter in 5 years from now.

 

[Anonymous]

My guess is education which leads to innovation, high tech manufacturing and export. And they got lucky because the Euro doesn't appreciate as the DMark would have.

Anyway, neither of which is the point. My point is that the (relatively) higher tax rates, socialized healthcare, existence of Unions, regulations concerning environmental impact etc. doesn't inhibit economic growth and job creation.

In that light, it's pretty clear that there wouldn't be any impact on the economic recovery by letting the Bush tax cuts expire, especially for the higher and highest income brackets. That money could be used in education and infrastructure.

In the recent debt ceiling increase, there's not a single penny of additional revenue, either because of incredible lobbying or *** ideology. No wonder the US has a rating of only 'AA' since last year by the only rating agency which will matter in 5 years from now.

In that light, it's pretty clear that there wouldn't be any impact on the economic recovery by letting the Bush tax cuts expire, especially for the higher and highest income brackets. That money could be used in education and infrastructure.

Great. Do it. And if the data showed you that by taxing high earners at a higher rate you actually reduce income to the Treasury, then what?

 

[fatandfast]

Okay, but Germany's economy is recovering. It was in the crapper with nationalized healthcare and it is now performing well with no change in their socialized medicine. To what do you attribute Germany's growth since 2008?

They absorbed a communist state in 1989, everything from the schools, roads, TUV, politics, moving the capital..I would say they got out of the crapper pretty fast..and they still have health care

 

[Anonymous]

They are an export based economy that does not rely on internal consumption for prosperity. They're generally a nation of savers rather than consumers. They also produce higher end exports, which tend to hold up well in recessions, especially recently with the higher demand from China. Their government and central bank have less influence internally because of that. They can stimulate all they want but it won't make other countries buy more Mercedes and no matter how much they cut back, it won't reduce the export demand for BMWs. They control the high end of the export market with Japan, while China and SE Asia run the low end. We just increase our current account deficit by buying all of it.

They're generally a nation of savers rather than consumers.

One big problems we have is business' saving their money and drastically paying down their debt. Combine that with a large amount of uncertainty in the future cost of doing business and regulatory world and we have a nation of business's saving and cost cutting and not hiring.

Alpe is of the opinion (as am I) that small to very small business is our way out of this mess and lending to these entrepreneurs would make all the sense in the world, even though those risks would be high. Do we do this? No. We have Dodd-Frank and it's 2700 pages of regulatory hurdles that will likely finish all lending to those small time business owners.

Main Street Bank lends most of its money to small businesses and is earning decent profits. But the Kingwood, Texas, bank is about to get out of the banking business. In an extreme example of the frustration felt by many bankers as regulators toughen their oversight of the nation's financial institutions, Main Street's chairman, Thomas Depping, is expected to announce Wednesday that the 27-year-old bank will surrender its banking charter and sell its four branches to a nearby bank.

"The No. 1 complaint that we hear from community bankers is that they feel that regulators have gone one step too far and are choking off lending," says Paul Merski, chief economist at the Independent Community Bankers of America, a trade group that represents small banks.

Mr. Depping says that Main Street's focus on small-business lending has sheltered the bank from much of the devastation that has swept the industry, including 385 bank failures since the start of 2008.

Main Street had profits of $1 million in the second quarter and wrote off 1.25% of its loans as uncollectible. That is below the industry's charge-off rate of 1.82% in the FDIC's data for the first quarter, the latest available. The bank has earned nearly $11 million in the past year.

In July 2010, the FDIC slapped Main Street with a 25-page order to boost its capital, strengthen its controls and bring in a new top executive. Regulators also said the bank was putting too many eggs in one basket. Mr. Depping says regulators wanted the bank to shrink its small-business lending to about 25% of the total loan portfolio, down from about 90%.

Mr. Depping says he explained to regulators that Main Street has focused on small-business lending since he bought the bank in 2004 with a group of investors. He says the bank makes credit decisions based on a combination of the borrower's personal-credit and business-credit histories, among other factors.

"We felt that servicing small business is something the country needs and that we're really good at it. I thought the model was working just fine," Mr. Depping says.

Main Street also was required to increase its capital cushion and prohibited from substantially expanding its balance sheet.

http://online.wsj.com/article/SB10001424053111904480904576498442951766826.html


I'm not arguing for zero regulations, but why can't we do better than this?

 

[Anonymous]

They absorbed a communist state in 1989, everything from the schools, roads, TUV, politics, moving the capital..I would say they got out of the crapper pretty fast..and they still have health care

Agreed. I'm impressed. How did they do it?

 

[Anonymous]

What upsets me is that health care costs and wars are huge, huge aspects of our budget and economy, and it's not even being talked about. The only discussion it seems we're having is how much of the Republican (Ryan) plan the President (Obama or if someone like Perry replaces him) implements for eliminating Medicare and Medicaid. Something I see as disastrous.

Medicare/Medicaid are not going away. But we can't keep spending 7-9% increase year-over-year either.

Means testing and reducing a physician's defensive medicine practices by eliminating some covered procedures will likely be coming very soon.

 

[Cobblestones]

Great. Do it. And if the data showed you that by taxing high earners at a higher rate you actually reduce income to the Treasury, then what?

I think we should take this chance.

Germany introduced the 'welfare state' with Bismarck. More than 100 years and two lost world wars later, it is still solvent and has survived hyperinflation, several collapses of the currency, imperialism, the Weimar Republic, the Nazi regime, occupation by four foreign powers, a split into two countries with diverging political and economic systems, the reunification and whatnot. Why can't the US welfare system survive in our relative stability. Medicare, Social Security etc. does not need to be gutted.

ETA: are you going to watch the Repub debate on Fox later today? I just hope they ask what the candidates think about evolution. It's going to be a hoot.

 

[usedtobefast]

if you can stand it, the republican debate is on fox a 6pm west coast time. could be be kind of funny in an InsaneClownPosse way

 

[ChrisE]

ETA: are you going to watch the Repub debate on Fox later today? I just hope they ask what the candidates think about evolution. It's going to be a hoot.

I don't really find it amusing that this discussion is taking place today.

 

[RigelKent]

Alpe is of the opinion (as am I) that small to very small business is our way out of this mess and lending to these entrepreneurs would make all the sense in the world, even though those risks would be high. Do we do this? No. We have Dodd-Frank and it's 2700 pages of regulatory hurdles that will likely finish all lending to those small time business owners.

I absolutely agree on small business. The history of the last 50 years in the US is small business creating jobs while large businesses cut or farm them out. But citing the number of pages in Dodd-Frank is a red herring when it comes to small business unless it's those small businesses that are too big to fail, are hedge funds, engage in predatory lending or got money from TARP.
As an aside, trash the meme of 2700 pages. In actuality it's 848--still too long.
http://www.sec.gov/about/laws/wallstreetreform-cpa.pdf

 

[RigelKent]

Medicare/Medicaid are not going away. But we can't keep spending 7-9% increase year-over-year either.

Means testing and reducing a physician's defensive medicine practices by eliminating some covered procedures will likely be coming very soon.

Would help if the first order of care was to get the patient's fat posterior on a bike and lose some weight. We have a system where we expect, and the industry encourages us to expect, that it's our right as Americans to live however we want and somebody has to fix us up when we break.
FWIW, I've worked 22 years in pharma and medical device. Just wanted to clarify that I'm biting the hand that feeds me here.

 

[Cobblestones]

if you can stand it, the republican debate is on fox a 6pm west coast time. could be be kind of funny in an InsaneClownPosse way

All candidates say they would walk away from a 10:1 deal.

 

[Anonymous]

I absolutely agree on small business. The history of the last 50 years in the US is small business creating jobs while large businesses cut or farm them out. But citing the number of pages in Dodd-Frank is a red herring when it comes to small business unless it's those small businesses that are too big to fail, are hedge funds, engage in predatory lending or got money from TARP.
As an aside, trash the meme of 2700 pages. In actuality it's 848--still too long.
http://www.sec.gov/about/laws/wallstreetreform-cpa.pdf

Dodd-Frank's capital restrictions for Banks are just stupid. Big banks can do whatever, small banks are screwed... which makes sense politically. I mean, who is going to put money in a re-election effort... a small banker? Nope.

Small business gets no help, only harm, from Dodd-Frank, end of.

Also, the FDIC is essentially bankrupt, having to borrow private capital in 2008-2009 to continue the charade of solvency... you realize Dodd-Frank now guarantees deposits up to $250k. Stupid. Effing stupid. Now we are going to take an insolvent Governmental entity and guarantee 2.5 times the amount as before. Little banks have an enormous disadvantage to the big banks as their FDIC premiums have tripled.... and we have the added benefit of continuing to dumb-down the American public because they will, without doubt, rely on the FDIC to guranatee their deposits instead of understanding how to read and understand a P&L and Balance Sheet of thier local bank before depositing their hard earned cash.

It's just more of the "you-are-not-smart-enough-to-understand-these-complex-issues-so-we-the-government-will-step-in-and-relieve-you-of-this-responsibility-so-you-will-continue-to-be-dependent-upon-us-and-of-course-vote-for-us-forevermore". Brilliant.

 

[Spare Tyre]

if you can stand it, the republican debate is on fox a 6pm west coast time. could be be kind of funny in an InsaneClownPosse way

I suspect it'd leave me profoundly, overwhelmingly depressed.

 

[Alpe d'Huez]

Alpe is of the opinion (as am I) that small to very small business is our way out of this mess and lending to these entrepreneurs would make all the sense in the world, even though those risks would be high. Do we do this? No.

Just to reiterate, what I support is SBA Prime and SBA Microloans to individual and very small businesses. I use the visual example of a hot dog vendor, a landscaper, or a corner bike shop with a couple employees. SBA loans of this type are between $8k and $75k, and the average is something like $13k. In theory these loans are heavily backed by the feds. But it's completely screwed up because banks have no incentive to help people with them no matter how much they are backed, and the government doesn't compel them, or even push them (both parties).

This isn't entirely my plan by the way. I heard most of it from a financial expert who works as an adviser and capital investor for people with fairly large amounts of money. I just worded it and molded it some with what I could dig up on the SBA and SEA. Thus "my" plan would call for covering these loans up to something like 95%, and with the Prime program taking people who are out of work but qualify for SEA unemployment (self-employment assistance) which something like 15 states already have. If you qualify for that, you should also qualify for a Prime loan. With that you can take your $13k (average loan) and start your own hot dog stand, landscaping business, or darned near anything. My rationale is that there are so few jobs people can get, it's better to do this and have these people be productive members of society than sit around hopelessly looking for jobs that aren't going to appear. Plus, even if they fail at business, they will stimulate the economy, and learn something.

I think I've preached this about ten times on here, and about 100x on other message boards, and to so many people I lost track. Everyone says "that's a good idea". I don't know the current status, but last I heard the Prime, Microloan and regular SBA loans (up to I believe $250k) are all being trimmed or eliminated, with both parties and Obama agreeing to do so.

Insanity.

 

[Amsterhammer]

Appeals court strikes down health care law's insurance requirement

A federal appeals court panel on Friday struck down the requirement in President Barack Obama's health care overhaul package that virtually all Americans must carry health insurance or face penalties.
.
The divided three-judge panel of the 11th Circuit Court of Appeals struck down the so-called individual mandate, siding with 26 states that had sued to block the law. But the panel didn't go as far as a lower court that had invalidated the entire overhaul as unconstitutional.

The states and other critics argued the law violates people's rights, while the Justice Department countered that the legislative branch was exercising a "quintessential" power.

The decision, penned by Chief Judge Joel Dubina and Circuit Judge Frank Hull, found that "the individual mandate contained in the Act exceeds Congress's enumerated commerce power."

(more)

http://www.nola.com/crime/index.ssf/2011/08/appeals_court_strikes_down_hea.html

Just one more reason why this sadly anachronistic constitution desperately needs to be either fundamentally revised, re-written, or replaced, with something that more realistically reflects 21st century life.

Every citizen of every country in western Europe (and some others too) accepts as a fundamental given of existence, that the state will either provide 'free' healthcare, or require him to take out health insurance at an 'affordable' price, either directly through the state, or via an established health insurance provider. Moreover, no European country accepts the idea that public hospitals, drug companies, doctors, and insurance companies, all have any god given right to make inflated profits, as is the norm in the US. Of course, half the US would shout, 'socialism' at the very idea of such an approach, and that would be the end of that....

 

[Cobblestones]

Appeals court strikes down health care law's insurance requirement

A federal appeals court panel on Friday struck down the requirement in President Barack Obama's health care overhaul package that virtually all Americans must carry health insurance or face penalties.
.
The divided three-judge panel of the 11th Circuit Court of Appeals struck down the so-called individual mandate, siding with 26 states that had sued to block the law. But the panel didn't go as far as a lower court that had invalidated the entire overhaul as unconstitutional.

The states and other critics argued the law violates people's rights, while the Justice Department countered that the legislative branch was exercising a "quintessential" power.

The decision, penned by Chief Judge Joel Dubina and Circuit Judge Frank Hull, found that "the individual mandate contained in the Act exceeds Congress's enumerated commerce power."

(more)

http://www.nola.com/crime/index.ssf/2011/08/appeals_court_strikes_down_hea.html

Just one more reason why this sadly anachronistic constitution desperately needs to be either fundamentally revised, re-written, or replaced, with something that more realistically reflects 21st century life.

Every citizen of every country in western Europe (and some others too) accepts as a fundamental given of existence, that the state will either provide 'free' healthcare, or require him to take out health insurance at an 'affordable' price, either directly through the state, or via an established health insurance provider. Moreover, no European country accepts the idea that public hospitals, drug companies, doctors, and insurance companies, all have any god given right to make inflated profits, as is the norm in the US. Of course, half the US would shout, 'socialism' at the very idea of such an approach, and that would be the end of that....

A 'medicare for all' or 'public option' system would avoid the 'individual mandate' problem, because it would be considered a tax, not the required purchase of a good. And taxes are constitutional.

Anyway, it doesn't matter since eventually it's going to be decided by the supreme court. We've gone through this in this thread a few times, I believe.

 

[Amsterhammer]

We've gone through this in this thread a few times, I believe.

Sorry, first time I have mentioned this subject since I stuck my nose in here. It seemed to me that this decision was of enough importance to merit commenting on.

 

[Alpe d'Huez]

It's really not though and I think Cobblestones is right. At some point we're going to have to have some sort of rationed care for everyone. I mean, we already cover everyone; just that about a fifth of the country uses the emergency room for health care.

As to this ruling, I honestly don't think it does that much. The sad part is that we need more action sooner rather than later, and the so-called Obamacare has hardly been implemented other than creating another layer of bureaucracy and more rules people have to fight through just to comprehend; patients and businesses. Even if it were fully implemented it would do only a small amount and take some 20 years or so until we really are able to evaluate it's effectiveness. By then who knows how many people will be on the "ER" plan.

 

[ChrisE]

....
Every citizen of every country in western Europe (and some others too) accepts as a fundamental given of existence, that the state will either provide 'free' healthcare, or require him to take out health insurance at an 'affordable' price, either directly through the state, or via an established health insurance provider. Moreover, no European country accepts the idea that public hospitals, drug companies, doctors, and insurance companies, all have any god given right to make inflated profits, as is the norm in the US. Of course, half the US would shout, 'socialism' at the very idea of such an approach, and that would be the end of that....

So what?

I don't buy the mess Scott is shovelling about this being the economic dragdown on the US, but some of us are fundamentally opposed to the government requiring its citizens to buy health insurance. There are options for people that do not have insurance if they are sick, etc.

I admit this is an example where I am erratic in my way of thinking, and why I don't identify with either party any longer.

 

[Alpe d'Huez]

It makes me wonder at what point the Tea Party is going to push for calling unconstitutional the law that says hospitals and ERs cannot turn away patients due to lack of insurance. I mean, if we are a capitalist, free nation with laws and regulations that are crippling the economy, isn't this just another way that the evil government gets in the way?

As I see it, this is a logical path of the Tea Party. If you get sick or injured and don't have any insurance, it's your own damned fault for being lazy or stupid. So no health care for you. If hospitals and care centers were able to turn away these social leeches who cannot prove they can pay for coverage, it would in theory dramatically reduce costs for the rest of us, and motivate these people to wise up. Plus with that cost reduction it would mean more profits for health care providers and insurers, which equals more jobs. Right?

The sad part is that watching the debate the other night, every candidate up there was basically a Tea Party Republican. They were racing to out do each other in that regard. Even Romney, Pawlenty and Huntsman, who were all once considered moderates. And with Rick Perry joining the race today, he'll be running on an Evangelical/Tea Party platform.

Someone should challenge these TP candidates on this health coverage law.