People Have to Understand

Responing to a question about higher taxes, Timothy Geitner said, “People have to understand that we have to bring those deficits down.” In other words taxes are going up and just not on the rich. He should have said Congress has to understand we have to get spending under control. The House had no trouble throwing around another two billion for clunker cars with no thought where the money was coming from and rationalization for billions in earmarks still prevails as does a mentality that health reform is about expanding coverage not controlling costs.

Just like making sausage

Just like making sausage

Larry Summers said that a key element to controlling the deficit is health care reform, but that needs funding from somewhere. Umm to save money starting perhaps in ten years we need to spend a trillion dollars starting in 2010. What Mr Summers really means is that the federal budget can’t handle the promises already made in terms of health care via Medicare and Medicaid and we need to find a way to move those costs somewhere.

We spend too much on health care, but isn’t that economic stimulus too. Aren’t there millions of jobs related to health care, far more than the auto industry for sure. If we cut health care spending what happens to the jobs that now support that industry? Will the next step will be cash for old x-Ray machines?


Categories: Government

3 replies »

  1. Interesting thoughts. I would make one point, the Cash for Clunkers is the one stimulus item that actually works. They ran out of money because dealers starting selling cars. That translates into more manufacturing, more supplier revenue, more dollars spent at dealers in communities. These are real jobs not like federal government jobs that have no value added production associated.


    • Not necessarily a good investment though, there is an interesting editorial on this subject in today’s WSJ. It is not clear as to whether the cash actually generated more buying than would have normally occurred or that this is not merely accelerating buying and that there may be a future drop as a result.


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