Tuesday, May 7, 2013

Sequestration. . . the Disaster That Wasn’t

Let’s catch up with sequestration, shall we? For those who don’t recall, sequestration is the thing that’s making your life miserable. It’s the reason the country has ground to a halt like the end of Atlas Shrugged and why most of you are probably dying in the streets as wolves eat your children. Yep. Sad. Oh wait. . . that didn’t happen.

One of the things you can always count on leftists to do is to the claim that the public is with them. This is essentially a form of peer pressure advertising where they hope to convince you to believe something by telling you that everyone else believes it. It is an attempt to manufacture opinion. And when it comes to sequestration, the phony line they’ve been pushing is that the public is... well, here’s a good example. Said the AP:
The move comes amid increasing public pressure to find ways to lessen the impact of sequestration.
Really? Strange that I see no evidence at all of any public pressure or any impact actually. In fact, I see no real mention of sequestration by anyone. . . left, right or center. It is a non-issue with the public. And here’s why:
● Only $80 billion in cuts will happen this year. That represents 2.1% of the current budget. Two dollars out of every $100 isn’t really going to hurt.

● Social security, Medicaid, food stamps and school lunches were all exempted. Medicare was limited to a 2% cut to health care providers.

● When an issue has arisen, such as with the FAA, the Republicans have jumped in to fund those portions to prevent the public from getting upset. Interestingly, this has angered liberals who claim they are just upset that certain programs “for the poor” have been cut, but who really are upset that the Republicans are keeping the public from noticing the budget cuts.

● Democratic/Administration lies about these cuts causing various disasters have proven to be untrue. . . imagine that. Even the AP needed to admit that, “The cuts have so far failed to live up to the dire warnings issued earlier by agencies.” In particular they noted that the FDA hasn’t had to stop inspecting food processing plants as they claimed, that there haven’t been any layoffs, and that the government hasn’t shut down. Even the Pentagon just magically found another $5 billion to keep everything running normally.

BUT, this didn’t stop the AP from still making the following claim: “But budget experts warn that the grip of sequestration will grow tighter as weeks and months pass, leading to teacher layoffs, reduced funding for infrastructure and economic development projects, and a host of other cuts across the budget.” Right, just like before. Help... wolf... wolf.
All in all, the Republicans have played this perfectly. . . those darn RINOs. They stood their ground and let the Democrats make fools of themselves by whining about doomsday scenarios which could never happen. They also listened carefully to the public, and when they saw something arise which actually upset the public, they introduced bills to fund it. That got Obama and the Democrats threatening to hold the public hostage on those issues, but they quickly learned that was a loser and they’ve caved.

The end result is that sequestration hasn’t really impacted the public. Hence, there is no public outrage no matter how much the AP may wish there was, and the left is pulling their hair out about this. They realize that the Republicans have found the perfect budget cutting strategy -- promise small “across-the-board” budget cuts to get the public on board with the fairness and the reasonableness of the plan, and then exclude the things you need to exclude to keep the majority of the public happy. This is the model of sequestration and the public is getting a taste for this because they see this as a way to cut the budget that will never affect them, and if it does, they think it’s fair because it’s “across-the-board.” This sounds like great way forward for future cuts, doesn't it?



Tennessee Jed said...

amen, Andrew!

AndrewPrice said...

Thanks Jed! I have to say that the Republicans really have impressed me in their handling of this and the Democrats have been fools. And I think there really is a great tool being developed here to cut budgets.

Patriot said...

Andrew.....What?!?! No "Grand Bargain?!" You hit it spot on with your analysis of this tom-foolery. Talk about "common-sense" cuts!

So now most Americans can see that this whole budget cutting was just a charade. If most knew that a budget cut definition in DC was a slow down in the rate of growth, they would get even more pissed off. As it is, since their taxes don't go up every year as Washington grows even larger (we borrow that money from others) then they really don't see the impact of long term gov't growth.

As a DoD/Fed contractor, I am in the belly of the beast and am constantly amazed/pissed off at the unwillingness of these agencies to reduce headcount through the simplest of means....DO NOT REPLACE those that retire! As it stands, it's not their money, so they continue their inefficient ways with zero repercussions on their performance, careers or budget.

This sequestration has blown up in the face of the Dems just as you state. And justifiably so too.

tryanmax said...

A couple little gems tweeted out last night from my local chapter of the Democrat party:

In the absence of local/state government layoffs, the unemployment rate would be 6.1% - not 7.5%.
@NebraskaDems 7:29 PM - 6 May 2013

Austerity Has Cost The U.S. Economy 2.2 Million Jobs: Study http://huff.to/18OzyLq via @HuffPostBiz
7:28 PM - 6 May 2013 @NebraskaDems

Disingenuous drivel. Here's the portion of the HuffPo article from which the nonsense springs:

There are more than 2 million unemployed Americans who might have jobs today if not for austerity.

That's the conclusion of a new study by Michael Greenstone and Adam Looney at the Brookings Institution. In the 46 months since the Great Recession ended, state, local and federal governments have cut about 500,000 jobs. In contrast, in every other U.S. recession since 1970, the government hired approximately 1.7 million people, on average. That means the U.S. is an estimated 2.2 million jobs in the hole.

In other words, the way to respond to tough times, according to Brookings, is to pretend times aren't tough.

BevfromNYC said...

I just love the word "austerity". It evokes such scary, starvation-like images. Of course, at the same time we are getting the "we are all too fat and overfed in this country" lectures too. Maybe the austerity people and the weight loss people can get together with a "Cut The Lard With Austerity" campaign.

They really think we are stupid. It was pretty much said outloud by the Obama Administration that they were going to use the cuts to do maximum harm. Oooooh, no more WH tours. You know even the airlines could have found some way to cut without slowing down air traffic. But I see the delays as a big payback F.U. from the Air Traffic controllers to Ronald Reagan.

And the 5% "paycuts" that some Dems including the President took to their "paychecks" was just laughable. As someone pointed out, the fact that John "I am Married to Heinz Ketchup" Kerry even TAKING a salary over a $1 from the government is hypocrisy. Give me one Member of Congress who gave up 5% of his/her salary who counldn't afford it and it might have meant something.

But what this really proves, as you said, is that what I have been advocating for a long time - directed across the board cuts. Everyone takes a small hit, but with good management all it has to do is cut out the unneeded fat.

Have you heard that they cut "Cowboy Poetry" funding?? No, you haven't, have you.

Anthony said...

Yep, the sequester is the most overhyped 'disaster' since Y2K.

AndrewPrice said...

Patriot, Agreed. I'm amazed at the utter resistance of federal agencies to make cuts even in painless ways like not replacing retiring workers. They really need to modernize the government and provide an incentive for managers to find cost savings.

What I think is even more interesting here though is that I suspect this whole sequestration will give the public a taste for budget cuts. They will see the budget actually shrink and they won't have lost any of their own benefits and they will start to think, "hey, budget cuts aren't so bad after all!"

AndrewPrice said...

Anthony, Nice analogy!

AndrewPrice said...

tryanmax, The Democrats have been claiming for some time (as they always do) that the reason their stimulus spending didn't work is because there wasn't enough of it. Krugman actually thinks we should have spent a $2 trillion stimulus... which shows he can't do basic math.

They've even come up with a conspiracy theory about some Harvard economist's report using a faulty calculation which got "everyone" to buy into austerity when they shouldn't have.

Only... I don't recall any Democrats buying into austerity. Nor does austerity mean spending only 90% wildly.

rlaWTX said...

But think of the children!!!!!!!!!!!!!!!!!!!!!

AndrewPrice said...

Bev, Good point about bringing the weight-loss people and the austerity people together... although I can't imagine an austerity dinner will taste all the great. LOL!

Anyway, agreed across the board. This is all about smoke and mirrors. The idea of ultra-rich Senators taking pay cuts is laughably stupid. And I don't think anyone bought it. If they had, people would have been upset about "austerity"... but they weren't. The only people upset are the ideologues on the left who oppose any reduction in spending on principle (and they are furious at the moment about this). Everyone else pretty much shrugged their shoulders and asked why the government couldn't live within its means as well.

And ultimately, I do think this has shown a great way to handle budget cuts because it makes it impossible for lobbyists to kill the whole budget because everyone feels like they've been hit equally. It really is a solid bit of psychology that I hope our side learns to exploit it.

AndrewPrice said...

rlaWTX, Yes, think of the poor children who didn't get to tour the White House or who were delayed at airports for up to an hour... those poor, poor children. :(

tryanmax said...

Paul Krugman has as much business being an economist as Stephen Hawking has driving NASCAR.

BevfromNYC said...

But Tryanmax, are you crazy? Krugman won a Nobel Prize!!! We all know that winning a Nobel Prize means you must know what you are talkin' about! I mean, really, Carter and Gore won one! Silly you...

AndrewPrice said...

tryanmax, Isn't that the truth. I'm amazed at how bizarrely wrong Krugman is. It's like they've mistaken pure idiocy for genius or something. The guy doesn't even understand basic economics.

AndrewPrice said...

Bev, That's true... he did win the Nobel Prize for Being A Leftist. And in fairness, he did have to do something to get his, unlike Obama, who got his for anticipatory greatness. If I remember correctly, Krugman balanced a plate on his head while he clapped his hands together.

Patriot said...

Andrew said ... " It really is a solid bit of psychology that I hope our side learns to exploit it."

Stop...please...I'm ROTFL!!! We wish!

BevfromNYC said...

Oops, I dun plum forgot Obama wun one of them Nobel Prizes 'causin' he wuz so darn smart too.

BevfromNYC said...

But Patriot, once you stop laughing...at least they have become bold enough to outright call Obama's bluff for real. The panic in Obama was palpable when he realized they WERE calling his bluff and weren't going to stop the sequester.

AndrewPrice said...

Patriot, It seems unlikely. Although, keep in mind that the same Republicans everyone wants to skewer right now did pull this off so far.

AndrewPrice said...

Bev, LOL! Yeah, he won the Nobel Prize for Smartiness. :)

AndrewPrice said...

Bev, I have paid a lot of attention to this lately and I have to say in all honesty that Boehner deserves a lot of credit for a lot of things he'd done in the past several years. Unfortunately, I don't think people want to listen.

BevfromNYC said...

Andrew - I agree! I don't know why everyone gives Boehner such a hard time. He has held the line and isn't given any credit for it.

AndrewPrice said...

Bev, I've had issues with Boehner at times, but in truth, he's really done a great job given the problems he's faced -- no ability to get anything through the Senate or White House and a base that wants to hate him.

Patriot said...

Bev and Andrew.....I think it's obvious why "everyone gives Boehner a hard time!"
He can't articulate the Repub positions.

(What...you thought it was something else?!)

AndrewPrice said...

Patriot, Neither can anyone else.

In all honesty though, Boehner is being scapegoated right now and a lot of the people who are doing it are distorting his record to do the scapegoating. If you look at the people at HotAir, for example, they've basically accused him of supporting Obama's entire agenda and failing to use magic to get "genuine conservative" principles forced into law... principle they can't even define. And even when they are confronted with the evidence, they switch to, "well, you know he wants to sell us out."

That's not rational.

AndrewPrice said...

P.S. LOL! Nice... uh, pun?

BevfromNYC said...

Just in case anyone is watching the SC special election, so far Sanford is leading in the returns.

BevfromNYC said...

Update: Sanford won.

AndrewPrice said...

Bev, I'm honestly a little conflicted. On the one hand, it's stunning to me that he would run again and that the Republicans would let him. On the other hand, I can't stand the Democrats.

BevfromNYC said...

Andrew - You know, I am not conflicted, but I understand. He's an experienced legislator and frankly, I am tired of caring about people who have affairs. I would be more concerned if he stole money from the taxpayers (just wait until my NY update on the new arrests!)

Steve Colbert didn't help - people are getting weary with Hollywood interventions in politics. And it really didn't help that the Chairman of the SC Dems ranted that Nikki Haley should go back from where she came from. Kind of racist for a Southerner even for a Democrat. Of course he backtracked as fast as he could to say what he meant was that she should go back to being an accountant. Of course last year he compared her to Eva Braun.

AndrewPrice said...

Bev, My conflict isn't that he had an affair. I honestly have stopped caring about that. What bothers me is the arrogance factor and the selfishness factor.

The guy was a bad liar and a hypocrite with horrible judgment and he imploded. He turned himself into a really bad risk and he should have moved on. BUT he decided that HE was so indispensable to us that he would run again. Or, said more cynically, he decided he would risk a seat that should have been safe for us in the hopes of staying on the gravy train.

That's what bothers me.

As for being racist to Haley, you forget (1) she's a conservative so she's fair game for racism, sexism and pure hate, and (2) she's a Indian and they aren't protected in the PC world.

(I look forward to reading the latest police blotters from your legislature... unbelievable stuff.)

BevfromNYC said...

Name one politician who doesn't think they are indispensable or some kind of hypocrite in some way including our Founding Fathers. One can't be a politician without a monumental ego.

AndrewPrice said...

I know. It just bugs me that this guy thinks his "comeback" attempt is worth risking a seat that is valuable to a party he supposedly supports. If he wants to take risks, he should do it with his own property... not ours.

Koshcat said...

Late to the party but we are seeing a direct effect of the sequestration. Medicare, in all its wisdom and against the advice from the CBO, decided to make most of its cut right out of chemotherapy reimbursement. It isn't a 2% cut; it is a 28% cut. Many of the drugs where many times barely profitable and some were underwater; now it is worse. It is estimated that if this continues up to 40% of community oncologist will leave; either retire or join hosptials. Oncology services through the hospital are much more expensive than through community oncology. Therefore, Medicare's "cut" will actually lead to an increase in payments.

AndrewPrice said...

Koshcat, I thought about that when I read about the 2% cut limit. I wonder how they got around that? Unless they counted drugs differently than "health care providers."

Did you get enough signatures on your petition?

Koshcat said...

Here is what they did:

We get paid the average sales price of a drug (which is determine by average all of the sales across the country) plus 6%. The 6% is to cover storage, transportation, mixing, and waste. They do pay to infuse the drug but generally it is less than what most audits have found that it actually costs. If you think about it, this is about the dumbest approach in that I get more if I give the most expensive drug rather than a less expensive but that is for another day.

Say you have a drug where the ASP is $100. ASP+6% is $106. Medicare will pay 80% or $84.80. The other $21.20 we have to get out of the patient (or usually their secondary insurance). Medicare cut their reimbursement by 2%, so instead of $84.80 the will only send you $83.10. Even better, you are not allowed to go after the patient or his secondary for the missing $1.70. $106 - $1.70 is $104.30 or ASP + 4.3%. Since our cost of the drug is the same and the ASP is the same, this in essence is a 28% cut to us.

This is a relatively small number to Medicare but a huge number to us. There are only two reasons to do this: irritate a lot of people or destroy community oncology. Personally, I suspect that latter. They are either devious or incompetent.

AndrewPrice said...

Koshcat, That is the problem with the way the government thinks. I've worked with a lot of government contractors for a long time now and it's fascinating to see the mindset in the government compared to the private sector. When you make something in the private sector, you price it according to what people will pay for it. It's that simple. If they won't buy at your price, then you lower your price or you get out of the business.

The government doesn't work that way. They still think in terms of "cost". They want you to charge them what it costs plus some level of profit. Only, they try to dictate the cost too. In fact, to decide what it costs, they created this whole elaborate system with direct and indirect costs and they tell you what you can or cannot include in those. What's more, they will arbitrarily tell you what your costs should be based on their view of what is normal.

The end result is chaos. The government pays far too much for some things and far too little for others. And you can find yourself in trouble even for good business practices like offering a discount. It's insane. So I'm not at all surprised that they would reimburse you less than cost on something.

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