Joe Lieberman Says Not So Fast

News reports show that Senator Joe Lieberman has some strong thoughts about certain aspects of the omnibus health care bill now being considered by the Congress.  
    

There’s a section of the proposed bill called the Class Act, which is a federal insurance program for long term care insurance.  According in my understanding, it would allow people to purchase LTC at higher than private insurance rates—but they couldn’t use any of its benefits for the first five years!
     

 Let me see if I understand this.  The government is going to sell me something, for which I pay higher than current market rates, and I won’t be able to use it for 5 years.  If I go into a car dealer to buy a new car, and he says it will cost me more than the sticker price, and, by the way, we won’t be able to deliver it to me until 5 years down the road, but I have to begin payments right away, and if I happen to die before the 5 year period is up, I still don’t get my money back—hey, sounds like a deal to me!  This Class Act sounds like a governmental-Madoff Ponzi scheme to me.
   

This Class Act is part of the Community Living Assistance Services and Support Act, one of the late Ted Kennedy’s projects.  It lingers on long after his death and there will be great pressure on Senator Lieberman and others to include if in the health reform bill, in an effort to give credence to Senator Kennedy’s efforts over the years.
    

Another aspect of this bill for your consideration is that there is a proposed Medicare buy-in at age 55. What this means is that US citizens would be able to purchase Medicare insurance 10 years earlier than they can at present.  Now, we all know that the current Medicare program has unfunded liabilities for which no one has a reasonable plan to pay for.  Yet the “wise” people in Congress do not seem to even think about where the money will come for to pay for the current Medicare set-up—much less this extension down to age 55!  It’s like that old Appalachian, blue-grass song line, “Company’s coming, so put more water in the soup—there’s better times a ‘coming.”  Of course, Congress’ way of diluting the soup is to print more money. 
    

Let’s talk about the means of financing all this and other government programs in general, and how they relate to the current way we do things in America.  Ever since America went off the gold standard to back and support our printed money, and began to mint coins made from metals other than silver, all of our currency—which in and of itself—is not worth much, we have relied on the strength and solidity of our American culture itself as the backing and the guarantor of all our money.  As long as America was solid and a world leader, trusted by the rest of the world to remain solid and sound, then everyone trusted all the currency we issued.  It was much like a respected farmer, who owned good land, had a good work ethic, was well established in his community, but who needed to borrow money to finance the purchase of seed, fertilizer and other needs to grow the next year’s crop.  So he troops on down to his local bank and secures the loan, and plants his crop.  And when the crop comes in, he harvests its, sells it, and repays his loan to the bank.  And the significant part of all this is that he re-pays the loan. And that is the way the business of America is set up to operate.
    

But someone forgot to tell the US Congress and our current and most of our past Presidents.  They seem to believe that this financial scenario I’ve outlined doesn’t seem to matter.  They keep proposing expensive programs ( some supportive of the common good, some not) that confiscate your money thru onerous taxes, which are never enough to pay for these programs, forcing them to borrow money from countries such as China to finance the resulting debt every year—which they have no intention of ever paying off!  Or so it seems to me.  Thus we are forced to pay these loaning countries huge amounts every year to finance this debt.  I recall when Jimmy Carter went to Washington, he vowed that he would try to get the Congress to balance their budget every year by not spending more than they took in.  He failed miserably in that attempt.
    

I’m sitting here in Atlanta, Georgia, in my 72nd year, trying to figure out how our country has gotten so fouled up economically.  While many precipitating causes occur to me and others, my thinking at the present time runs as follows:
   

Coming out of the late 1800’s and the Gay Nineties, America was a robust country in many ways, with continued Westward expansion and greatly enhanced industrialization.  Small town life was in vigorous development, as well as the big cities. Our agricultural expansion was the envy of the world.  Capitalism was moving the country forward at a fast pace.  Immigration from European countries brought in laborers with strong work ethics.
    

There were problems, of course, which began to be addressed by non-profit and governmental entities.  The new sciences of psychology and sociology began to develop theories as to some of the causes of poverty, crime, mental illness, war, etc.  Some theories and solutions were good, but many weren’t.
    

Then came World War I, “the war to end all wars.” After considerable debate, America entered the war in Europe, and we prevailed.  Germany was defeated and was given impossible reparations to pay back to her adversaries.  The money was not there to meet those debts, so more money was printed, causing devastating inflation and the corruption of German society.  This despair soon gave rise to the Nazi party and the rise of Hitler, a paranoid personality if there ever was one.  Hitler developed  a perverted ideology, acting out his distortions and transforming them into corrupt political action, finally leading into WorldWar II.
    

In America, deficiencies in our banking systems, labor problems, devastating droughts and other factors plunged us into a devastating depression.  And here’s where a great part of the American mind-set developed in those people who lived and were born in the depression.  Unemployment was 20+%, there was little money for loans, the drought in the Midwest drove farmers from the land; all this forced the majority of our citizens into a hunker-down-survival  mind-set.  The US Government borrowed money and set up survival work programs, which kept some from starving, but did little else.  People squeezed every penny, because a penny was worth something. Children born in the depression were somewhat traumatized by all this, because they didn’t have much, didn’t expect much and had to work hard to help the family survive.  The thirties in America were truly an austere time for the majority of Americans.
    

 Contrary to all this was a fairly large segment of the population who were more financially secure. They had jobs, homes, didn’t have to grow their own food, could afford a few extras, but they still had to work hard to keep what they had.  And I think it’s fair to say that the “haves” during these days were somewhat resented by the “have nots.”  Overall, it was a rough time for America, probably the worse time since the earliest settlers landed on the shores of America at Jamestown and Plymouth, when survival was everything.
   

Then along came World War II, which we were forced into to survive.  Though the nation was still in desperate financial straits, the war forced us into a nationwide attitude of doing without certain things, rationing, and focusing on the enemies of Germany, Japan, and Italy.  The nation mobilized into those actually fighting the war and those back home that were at full employment producing the goods and weapons of war.  In essence, everyone that wanted a job had one.  There was a national consensus that we Americans would do without the finer things of life to support the war effort.   And because we were “toughened” by the Great Depression, this self denial was easily accepted.
    

With our victory in the war, coupled with the years of the depression, there was a great national sigh of relief.  The belief was that we had finally emerged from the 15 year storm and nothing but good times were ahead.  Despite our World War II national debt, the economy took off, and the baby boom began. Returning GIs and the rest of the people saw a better world ahead than the hard times they had just survived.  A home building boom blossomed, fueled by GI Bill home loans to returning vets. 
    

We need to pause here to look at the GI home loans.  Many people today use this federally-backed loan program, and its success with millions of GIs, as a rationale to support federal home loans for other classes of Americans, especially poorer folks. But this comparison doesn’t equate in my view. First, the banking system was more selective in those days, with more rigorous standards, and they would not make loans to deadbeat GIs, even with government insurance.  Second, the average returning GI, had a more serious, realistic, and grateful demeanor than many people today, based on his having survived the depression,  receiving military training, being more disciplined, grateful to being alive, and surviving the war.  Thus, there was no way such a person was going to default on a home loan.  In contrast, many people today have an entitlement attitude, whereby the world—and their government—owes them a home, a good living, a job, happiness—in short an easy life without too much effort.
    

The question now becomes where such an attitude comes from.  Surely not from hard survival days like the depression and war.  My theory is that when America emerged from these hard times, the thinking in most people’s mind was that never again did we want to go thru such times.  It was so miserable for most that we especially did not want our newborns (the baby boomers) to have to go thru such misery.  We temporarily forgot that this adversity had in its own crazy way, strengthened us.  Thus we lavished too many material goods on our children, partly to make up for what we had missed.  We gave them more attention than ever, had grander expectations for their education, jobs, marriage, social success.  Basically, these hard times had instilled in us an a priori dictum that to go thru suffering  is bad, and should be avoided at all costs.  We did not recognize that going thru suffering and surviving it, makes a person stronger.  Conversely, avoiding suffering at all costs, does little to increase our internal resolve, so that when we latter face suffering that must be dealt with, we are not very good at it—except how to go about our lives avoiding it, which makes us whining, avoiding, dependent beings who are forced to get others—and government—to do it for us! 
    

We were temporarily set back by the Cold War with Russia, the Korean War, and Viet Nam, whereby we were reminded of our past hard times.  But a strange thing happened!  Many in the country chose to ignore the past lessons of the depression and WWII and cling to the suffering-avoidance mentality that had become prevalent in the baby boomers, and went into the fantasies for which the 1960’s were to become famous.  The drug culture, escapism and avoidance of reality became the order of many.  The parents of this generation floundered, not knowing what was happening, or what to do.  Their children mocked their experiences with suffering and continued the pursuit of the good life, up until this day.
    

Many of the baby boomers are today still looking for the quick fix.  They want their politicians to solve these fundamental problems that prevail today.  Some even seem to believe that government can provide heaven on earth.  Environmentalism seems to have become a religion for many, or at least a substitute for the recent failures of socialism when compared to the relative successes of capitalism.  A great lesson for today is China.  Communistic-socialism  rescued great masses of Chinese people from abject poverty and raised them up to a subsistence level of living, but it has been with the adoption of capitalistic  methods that has raised the entire nation to approach America’s standards of living.  And with adoption of more socialistic programs, America is being dragged down so that we will need China’s new capitalistic financing for our proposed socialistic, national health care system.

Whether is government run health care, Medicare, Medicaid, Post Office, Fannie and Freddie or Kennedy's CLASS ACT government run long term care, the government has a proven track record to running programs like this into the ground.  This credit card buy now and pay later mentality is simply not sustainable.  (side thought I'd love to see the credit score of every member in Congress who votes for this.  Think the ones that do vote for this bill carry a bunch of credit card debt themselves?) I admire people like Joe Lieberman who is leading by conviction, not polls.  Today's blog was a bit off the beaten path from plain long term care insurance but it's important to look back on history so we don't repeat it.  Thanks for reading and if you'd like quotes on NON-government private long term care insurance please fill in the form below.