Illinois is a Fiscal Train Wreck

When Illinois voters consider their choices in the next several weeks, it is important that they decide whether to hold incumbants accountable for their financial responsibility.

Just a few days ago, the Civic Federation of Chicago disclosed that the delayed funding of the state's pension obligations will cost taxpayers $12 billion vs the $3.5 billion that was not funded in the fiscal 2011 budget (source COGFA). Earlier in September, the Civic Federation was quoted on the NPR website:
 
"The financial condition of the state of Illinois is a fiscal train wreck," says Laurence Msall, president of the Civic Federation, a Chicago-based nonpartisan, not-for-profit group[ http://www.civicfed.org/ ] that analyzes and researches state and local government budgets.
 
He says Illinois' fiscal problems are not simply the result of a bad economy.

"The state's train wreck is caused by inaction and dereliction of duty in Springfield; the failure to provide a balanced budget," Msall says, adding that Illinois' last two governors and the Democratic-controlled state Legislature haven't cut spending to match declining revenues. In fact, he says, they keep spending more.

Illinois By the Numbers; Chicago Tribune

An Opinion Piece today in the Chicago Tribune provides insight into where Illinois stands relative to other states. Several important ideas from the analysis assembled by the Tribune:

• One of the worst states for job creation and business confidence
• The WORST state for funding its employees pension obligations
• The state with the most units of government
• Not effective in providing public education
• 29th in the US out of 50 in voter turnout
• 29% of the state budget (3rd in US) spent on Medicaid (health care for the poor) which provides health services/benefits to 1 in 5 people in IL.

Most Important Election Ever

From this point forward, this blog will be focused on giving friends and followers information that leads to the conclusion that voters should "Vote Em All Out". My orientation comes from living in Central Illinois and seeing the negative turn of events in our country. From where I sit, Obama was a "bait and switch" candidate. He lead the country to believe that he would be post-politics, consensus builder, post racial and new age world leader. In fact, he is simply a socialist.

And, he has too many enablers in Congress. Not all members of Congress are socialists. Some are. But the democratic leadership and majority support too many of his policies. These policies are either socialistic, or are designed to reduce freedoms, or to nationalize the US economy. Enough is enough. The worst of these are:

• ObamaCare
• Tax and Trade (tax)
• FinReg

And Illinois is not better. Illinois is behind 5-6 months in paying its bills. Its pension obligations can never be met without taxing the state into oblivion. And if a state could be bankrupt, Illinois would be.

It is time to Vote Em All Out ("VEAO"). We would be better of with a whole new group of elected leaders in the Federal government and in Illinois. While these posts, won't duck local issues, the focus will be on national and state issues.

Critics might point out that we would be giving up either experienced leaders or effective leaders. That may be. But, the benefits of reminding all elected leaders that they can be held accountable is worth the cost. In general, a whole new group, can't be worse. In calling for VEAO, this blog does not suggest that every voter should vote out every leader. It does mean hold them all accountable.

In future posts, this blog will be a depository of what is wrong with the federal government and Illinois government and issues that voters should consider when deciding who to vote for. In many cases, the blog will link readers to articles and analysis from around the country. The focus will also be on races where readers of this blog can influence with their vote. That will mean the IL Congressional 17th District. The IL governor, the IL US Senate race, and, IL legislative races for central Illinois.

This blog will also suggest the most important issues to consider in the upcoming election and policies on those issues to measure candidates against.

ObamaCare will Fail

As I write this, many in Washington are predicting a successful vote this week in the House of Representatives. And while this may occur, nearly all democrats know that no legislation can get passed by either house without a "fix-it" bill that no one has seen and no one knows the costs of.

Am I making an amazing, and possibly wrong, prediction on the votes in Congress on health care reform? No. I am saying that even if legislation passes called "health care reform" ("ObamaCare"), it will in fact fail.

1. First, the "ObamaCare" legislation could not get passed in any conventional way. So far, we have a bill passed in by the Senate and one passed by the House that are significantly different. Neither House of Congress is willing to pass the other's bill. Even the President said he want's fixes to both. The only way "ObamaCare" gets through Congress is with political bribes, chicanery and trampling of rules that have existed for decades. Everyone agrees that this bill will have substantial affects on the health care sector of the economy. Everyone also agrees the financial impact of the proposed legislation is far reaching. The Simple Truth is that any bill that has such pervasive impacts on Americans and the US economy should not pass as a result of such trickery. And it could not pass without it.
2. Even if the legislation passes, it will result in years of litigation on multiple fronts. From issues of basic constitutionality (forced coverage) to inequal treatment of groups and states. We will never know the impact of this "ObamaCare reform" as it will be in flux for years if not decades in the courts. This too is failure.
3. Third, even if this legislation passes, it will not accomplish the goals that have been stated by its strongest advocates. It is equally likely to leave us with the same or more uninsured Americans. It is more likely to result in increased health insurance premiums and costs. And, it is likely to blow a huge hole in the side of the financial ship of America.

The Simple Truth is that this is the worst legislation ever. It deserves to fail. And if it passes... it will still fail.

The Simple Truth is that America WANTS health care reform. This legislation is not it.

CBO - "Show Me the Money"?

The new Democrat device to obscure the abysmal ObamaCare from Americans is a false premise about concerns with CBO analysis. They are insisting that Republicans are rejecting CBO analysis because they just don't like the result.

The largest problem with CBO numbers are inherent in any CBO analysis and the context of that analysis. Even the CBO would acknowledge these limitations. This problem is related to the untested assumptions and the long-term nature of the projections. They are particularly important here because the huge size of the health care sector (1/7th of the US economy) and the very long term nature of the alleged impacts.

As one commenter said about the CBO analysis of Obamacare:

"They don't pass the smell test."

Key business decision analysis rarely places reliance on projections that extend more than 5-10 years. The analytical problems include:

• The projected deficit reductions are over long periods of times and rely on many unreliable assumptions on impacts.
• The CBO estimates do not include all the provisions because the "fix bill" has not been described or analyzed. In fact, no one has even seen the fix bill or know the interaction of its provisions against the Senate Bill whatever may be included in it.
• The projected impacts presume a few years of costs in the 10 year horizon, and full 10 year taxes. Therefore analytical apples and oranges.
• The projections simply mush together service cuts (Medicare - HMO programs), tax increases (different in each bill) and alleged cost curve impacts.
• The stated deficit reduction in the first 10 years presume cuts, taxes and savings, while not comparing those to the entire health care bill for the full 10 years or the increased costs over the 10 years, both to the economy, and to the federal government.
• Many of the alleged cost curve savings make many presumptions about the impact while ignoring the small effect and limited basis for the assumption. Many of the cost curve changes are quite modest changes.
• Not discussed in the CBO savings are the full impact of the costs in insurance premiums. There is reasonable concern that insurance costs could increase substantially due to the incentive for adverse selection due to the modest penalty for choosing to be uninsured versus the benefit of "must carry".
• A very important limitation of the CBO analysis is that it seems to hide a new entitlement program that is all cost. Rarely do we discuss the specific and likely underestimated costs of the federal government subsidies of health insurance for those "in need". This cost is likely to be higher for many reasons and will not be offset by hopeful assumptions.
• The CBO analysis does not compare the costs/savings against other alternatives that might be more effective with much less analystical risk and much less cost. Any analysis has uncertainty.

The snuck out the $200 billion medicare doctor fix of the health bill and are running it through the jobs bill... so much for CBO integrity.

Did the Founders want "Redistributive Change"?

To take from one, because it is thought his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to everyone the free exercise of his industry and the fruits acquired by it.” — Thomas Jefferson