Beyond the Cusp

March 30, 2014

Obama Care’s Obama Scare

Obama Care is, as the Democrats love to remind its opposition, now the law of the land. In the ramp-up to the release of this Obama Scare Monster the public was fed a steady stream of reassuring deceptions accented with exaggerated descriptions of attractive features. What was excluded from their sales pitch was the huge appetite this Monster would have for the United States tax dollars. The basic theme was to hide the voracious appetite and the long claws and drooling maw filled with sharp shredding teeth and accentuate the pretty outfit they had dressed up the Monster to place the public at ease. It was the classic case of selling one item and delivering another which would result in prosecution for consumer fraud if you or I used a similar sales technique. The one valid central truth which the public was told was that for Obama Care to work it would require near full enrolment by the youthful and healthy members of American society to enroll in order for care to be affordable for the healthcare industry to provide for the older and less healthy members of the population. This would be the main element which would transform Obama Care into the Obama Scare Monster terrifying and feeding on those most needing healthcare by denying them the necessary care for them to lead a comfortable and productive life.

 

Then came the fateful day when the cage was opened and the Obama Scare Monster was released on an anxious and waiting American public. The entrance was less than spectacular as the Obama Scare Monster timidly crept from its cage half way before scurrying back into its protective cave refusing to interact with the anxiously awaiting American public. All attempts to coax the Obama Scare Monster to come out and interact with the awaiting American public fell on deaf ears. Something was not operative in the interface, or so we were informed but that given a few tweaks and adjustments and the promised delivery would be a wonderful and spectacular as had been promised. Unfortunately for the administration, the Obama Scare Monster continued to be more timid than scary. It remained lethargic and uncommunicative taking long months before it even began to interact with the American public. And then came the worst of all possible news, the enrollment numbers were lagging dreadfully behind what had been projected and necessary. The people were not taking to the Obama Scare Monster. Apparently the people were not as enthralled and this meant that expectations would need to be lowered.

 

This began the manipulations of the Obama Scare Monster to lessen its threats and allow only the comely adornments to be presented to the public. First they gave exemptions to the loyal segments to offer them immunity and protection from the worst threats from the Obama Scare Monster. Next came the pushing off for a year the employer mandate which clipped back the mighty claws of the Obama Scare Monster. Even this was not sufficient and the Obama Scare Monster was beginning to turn on its handlers and snap at them repeatedly. Next came the delaying of the individual mandate placing a muzzle over the Obama Scare Monster’s razor sharp teeth muffling its bark and neutering its fearsome bite. Still the Obama Scare Monster was not readily accepted, especially by the healthy youth so necessary for its wellbeing. Soon all that could be neutralized through postponing the most fearsome attributed of the Obama Scare Monster leaving only the pretty dressings viewable by the public but still the people were wary of accepting what the administration was selling.

 

What will be the future of Obama Care? Will the Obama Care be a successful system or will it really become a fearsome Obama Scare Monster eating up trillions of dollars and bankrupting the American budgets? Will all the postponed features ever be enacted or will the Obama Scare Monster die before it is fully revealed? Perhaps the Obama Scare Monster was never really something which was supposed to be loosed as it never had any real teeth or claws but was simply a sweet pet disguised as a monster in order to scare the public into demanding the government save them and instead of the Obama Scare Monster to give them the sweet and purring healthcare system like the Europeans and Canadians have already implemented. That may be the real secret of Obama Care, that it was presented as a terrifying plan that posed to destroy the American healthcare industry while bankrupting the nation thus forcing the transformation of the greatest healthcare system the world had known into another identical single payer government healthcare system that lurches forward with increasing delays and slowed advancement of medical research and developments. Perhaps the entire idea was to scare the American public into accepting mediocrity in the guise of saving them from an even worse disaster which the Obama administration was threatening to release. The final question is will the American people acquiesce to this devilish plan or demand that government do whatever is required to restore the healthcare industry to its former glorious and proven level by undoing every bit of damage they have wielded. Time will tell but it is hoped that the Americans will demand exceptionalism even if their President refuses to recognize such himself.

 

Beyond the Cusp

 

March 9, 2014

The Coming Inflation and Its Hidden Damage

Inflation has effects beyond the obvious of making the item we buy, especially the necessities which we cannot live without, more expensive eating away at what little money we have after the various levels of government take their overtly large share. What has not been discussed much are some of the many hidden side effects caused by inflation and what are some of the driving causes of inflation. One of the surest causes of inflation comes when the money supply is increased no matter the reason. When the government prints or electronically invents money in order to finance government spending, especially deficit spending, then eventually this gets represented by rising prices. The United States since sometime during the second term of President George W. Bush began printing money electronically. This was used in order to fund the original “bailout” of two-thirds of the American auto industry, kudos to Ford who actually turned down any bailout monies as they had taken a precaution and downsized two years earlier in anticipation to trends they predicted that the other two major companies, General Motors and Chrysler, had ignored. Of course, once the Federal Government found that it could boost a lagging economy by injecting more and more monies an addiction set in and every problem became just an opportunity to throw good money after bad. When it also turned out that throwing more money into the economy also had the effect of pushing the stock market higher and higher, well, what’s not to love?

 

The problem is these increases in the value of the stock market were nothing more than inflationary effects caused by the increased money supply. What basically resulted in the increases was that each stock is actually a value of a percentage of the total money supply which is presumably driven by GDP and production. When the government simply pushes more money into the supply and there has been no increase in actual goods, services and other tangible assets, then it is reflected in higher prices, inflation, as the price of commodities and even stocks are what their worth is in the total of production times the total money supply. If produced goods have not increased and there are additional monies in circulation, then everything rises in price to restore its value in percent of the available money proportional to its actual percentage of the total value of goods. The goods and services have not changed in their actual value, but instead are now revalued to equal a larger money supply. Much, if not all, of the higher prices in stocks is not representative of increased worth but reflects cheaper money as the total money has been increased through Quantitative Easing, a fancy pair of words that actually mean printing money except they can now make money simply by pressing the appropriate keys on a computer keyboard and presto, increased money supply leading to higher stock market gains and eventually inflation which will eat up an equivalent percentage of everybody’s wealth as inflation will eventually even everything back to represent the ratio of total goods and services against the total amount of monies in circulation whether it is in higher stock prices or bundles of dollars at the Federal Reserve or individual banks and corporations who received bailouts.

 

So, what could be the most damaging effect of inflation? There is the obvious effect of increasing prices at the grocery store, the service station and everywhere else but that would theoretically work itself out as salaries would also rise to reflect the inflation, though somehow the salaries never quite keep pace with inflation, or at least that has been my experience. But the effects of inflation within any nation’s borders according to economic theory pretty much equal a zero sum game where everything rises proportionally. The real difficulties come when we look at trade between nations. As inflation forces prices up on goods and on the processes that manufacture the goods, the price on the international market rises and remains higher until the balance of currencies eventually works itself out in the exchange rates. The rebalancing of the currencies is always a lagging indicator and thus inflation has an initial effect of damaging trade of the nation under its effects. Inflation also will eventually cause all imported goods to increase in price, though this is a lagging indicator that represents the changing balance of currencies. So, when inflation first strikes it takes its toll on exports but eventually takes a permanent hit on imports.

 

As noted earlier, inflation is directly proportional to increased money supply that exceeds the increase in total goods and services within the national economy, it is a ratio. Thus, there is only one solution to prevent inflation from heating up, which is to remove the excess monies from the total supply. The reason the United States has not experienced excessive inflation from the large amounts of monies pushed into the total money supply starting with President George W. Bush and continued by President Obama is because the vast amount of the monies is being sat on and kept from circulating as the banks have been woe to put it in circulation through making loans. Another reason has been that a fair share of the cash has been invested in European banks and institutions in order to prop up numerous European economies which were in varied amounts of distress. The effect this has had is to allow banks to keep the interest rates low and inflation in check, but such a game cannot last forever. Eventually the economies will begin to recover and the banks will begin to make more loans as the interest rates increase. As the interest rates increase, so will the required payments on national debt increase even if all that is being paid is the interest payment and no principle is paid off, exactly what the United States has practiced for a very long time. As the interest rates increase thus pushing debt payments higher then taxes will also be increased in order to pay off the debt and still finance the government including any inflation. As rough and difficult as such may be, this distressed situation actually will have an eventual benefit, it will remove a portion of the excess monies in circulation. Eventually an equilibrium point will be attained and inflation will slow or even virtually stop and the interest rates will stabilize and possibly lower for a while. Unfortunately, do not expect the government to lower anybody’s taxes when this occurs as the government is very adept at finding ways to waste inordinate amounts of money thus never cutting its ability to take more from the people and the engines of production. Actually, the one eternal hidden cause of inflation is government spending and government largess simply makes for higher inflation as government spending seldom adds to the total amount of goods and services provided in the national total production. An interesting ride is in the makings as the economies of the world adjust to the policies of the past decade and there may not be very many winners.

 

Beyond the Cusp

 

February 25, 2014

Synagogue Firebombed in Ukraine

The place is Zaporizhia, southeast of Kiev, where the community’s Giymat Rosa Synagogue was firebombed by unknown assailants on the night of February 23, causing minor damages. The building showed the scars from traces of a fire on the facade of the balcony. The fortunate news is that there were no casualties and the authorities have promised to take precautions and to do whatever was necessary to arrest those responsible. The neck of a glass bottle was found near the area damaged by the fire affirming that a Molotov cocktail was the cause of the fire which also confirmed the suspicions this was the result of an intentional act. There have been other threats by forces from both the now deposed government including some threats made by government police and other threats came from elements from among the opposition protesters. The Ukrainian police claimed the Jews were behind the opposition to the government while those from the opposition were blaming the Jews for supporting President Yanukovych and his cronies and as such responsible for the deaths of opposition demonstrators shot by the government police. This is not a new situation for Jews living in a nation going through internal turmoil such as civil wars and other uprisings.

 

Even the United States had a major incident where Jews were victimized being held responsible for working against the government of the United States. This event came immediately after the end of the United States Civil War (War Between the States) when General Ulysses S. Grant as the military governor of the Kentucky Territory (governing the areas including Kentucky, Tennessee, Alabama and Mississippi) ordered all properties, homes, cattle, horse and other assets confiscated from the Jewish residents and for them to be removed from the areas under his charge. Despite this situation being countermanded immediately as reports reached the White House, such while commemorative was too late to avoid much of the damage as the reversal of Grant’s orders took over a week before the new orders reached the area. Communications were quite a bit slower and the confusion quotient was fairly high, but there was no excuse for the order to have been given in the first place. If it could happen that Jews were singled out for scorn and blame without any proof of actions and chosen as others of equal or greater responsibility were not so treated is an anathema to any civilized society. Let us hope that nothing similar occur anywhere throughout the Ukraine which thus far appears unlikely.

 

Still, the Jewish communities in Kiev particularly and throughout the Ukraine have beefed up their security in response to the increased tensions. Reports from within the communities throughout the Ukraine tell of them putting their activities on hold out of safety concerns. There have also been arrest warrants issued for President Yanukovych and various members of his Administration over the violence perpetrated by security and police forces during the months of the demonstrations. Meanwhile, President Yanukovych was reportedly seen to be in a southern port in the company of Russian Marines. The area he was reportedly currently hiding is an area that is among those aligned with Russia as the majority of the citizens are Russians who were imported into the Ukraine during the reign of the Soviet Union in order to serve as a cause for Soviet forces to be injected and the rest of the Ukrainian population pacified. If there will be any shove back from Russia, it will be in response to petition from these Ukrainians as many may prefer to remain aligned and even ruled by the Russians. There have already been reports of demonstrations against the new government and calls from those demonstrating for the return of President Yanukovych as the duly elected President of the Ukraine. The struggle for the heart and soul of the Ukraine is not yet a settled disagreement and the potential for additional violence is still high enough to cause serious concerns until the new government has been elected hopefully as scheduled for May 25. A prayer for the people of the Ukraine and for calm to be the rule and not the exception and for the nation to heal and come together once a new government has been elected. Let us call for patience and for all anticipation be for changes through the ballot box and not the baseball bat.

 

Beyond the Cusp

 

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