May 31, 2010

The Best Economic Stimulus is for the Government to Get Out of the Way

"If one understands that socialism is not a share-the-wealth programme, but is in reality a method to consolidate and control the wealth, then the seeming paradox of super-rich men promoting socialism becomes no paradox at all. Instead, it becomes logical, even the perfect tool of power-seeking megalomaniacs. Communism or, more accurately, socialism is not a movement of the downtrodden masses, but of the economic elite." - Gary Allen, None Dare Call It Conspiracy, Concord Press, 1971

Stimulus by Spending Cuts: Lessons from 1946

By Jason E. Taylor and Richard K. Vedder, Cato Institute
May/June 2010

Many, probably most, Americans are skeptical of the vast stimulus efforts the federal government has undertaken in an effort to alleviate the economic downturn. After all, through early 2010, employment has fallen by 8.4 million jobs despite passage of two stimulus bills totaling nearly one trillion dollars in early 2008 and 2009, passage of the $700 billion Troubled Asset Relief Program (TARP), and the extraordinary expansionary monetary actions by the Federal Reserve.

But now with serious anxiety regarding the impact of the nation's unprecedented deficits and a potential surge in inflation, a second concern is arising: would any nascent recovery be thwarted if the government was to withdraw the stimulus and return to a semblance of financial normalcy? There's good news on that point. Just as history tells us that stimulus packages are ineffective in bringing about recovery, so it also tells us that "de-stimulus" — moving in the direction of monetary and fiscal contraction — likewise need not have severe adverse effects on employment, income, stock prices, and other macroeconomic variables.

The Obama administration projects a $1.6 trillion budget deficit — almost 11 percent of our GDP — for the 2010 fiscal year. This deficit is the size of total federal spending just 13 years earlier (1997). And this follows a 2009 fiscal year deficit of over $1.4 trillion. At the same time the Federal Reserve has injected another $1.5 trillion in liquidity through various lending programs since the Great Recession began in late 2007. We might call this the "Great Stimulus," but those words are terribly misleading. It hasn't been much of a stimulus, given the rise in unemployment to double digits for only the second time since the 1930s and the general lack of confidence economic agents seem to have in the future economy (the conference board's "Present Situation Index" of consumer confidence hit its lowest level in 27 years in February 2010). Nor is it all that "great": when compared to the size of the economy, the recent stimulus does not even begin to approach that of World War II.

Between 1943 and 1945 government deficits ranged between 21 and 27 percent of GDP — in comparison to the size of today's economy this would be the equivalent of annual deficits of around $3 trillion to $4 trillion. During these three years, the national debt rose from 50 percent of GDP to over 120 percent. Furthermore, the United States Bureau of the Budget estimated that at the wartime peak, 45 percent of the nation's civilian labor supply was supported by government spending on the war effort while another 12 million citizens (18 percent of the total labor force) were employed directly by the military.

Of course it is often said that World War II provides the empirical proof that a Keynesian-style government stimulus can bring an ailing economy back to full employment. During the 1930s, the argument goes, government simply did not spend enough to end the Great Depression. After Pearl Harbor, policymakers finally put the stimulus pedal to the metal with massive deficit spending and highly expansionary monetary policy — the money supply doubled between 1941 and 1945 — to finance wartime production. Unemployment fell from nearly 20 percent in the late 1930s to 3.1 percent in 1942 and 1.2 percent in 1944. John Maynard Keynes himself implied that the return to full employment in the face of massive expansionary policy validated his theory, saying that economic "good may come out of evil" if we heeded the lessons of the wartime stimulus by using the same methods to combat downturns during peacetime.

But the real economic lesson to come out of the World War II era was not that the conscription of nearly a fifth of the labor force into grueling and dangerous working conditions abroad and the imposition of a command economy at home — complete with rationing, price controls, and government allocation of many aspects of life — could bring unemployment down. Soviet-style command economies had many problems, but unemployment was not typically one of them.

Instead, the true lesson from the period can be ascertained from the events of 1945-1947 when the largest economic "stimulus" in American history was dramatically and quickly unwound, months before most people anticipated it (because the atomic bomb brought a sudden unexpected end to the war). No other episode more clearly supports the notion that the best economic stimulus is for the government to get out of the way.


Historically minded readers may be saying, "There was a Depression in 1946? I never heard about that." You never heard of it because it never happened. However, the "Depression of 1946" may be one of the most widely predicted events that never happened in American history.

As the war was winding down, leading Keynesian economists of the day argued, as Alvin Hansen did, that "the government cannot just disband the Army, close down munitions factories, stop building ships, and remove all economic controls." After all, the belief was that the only thing that finally ended the Great Depression of the 1930s was the dramatic increase in government involvement in the economy.

In fact, Hansen's advice went unheeded. Government canceled war contracts, and its spending fell from $84 billion in 1945 to under $30 billion in 1946. By 1947, the government was paying back its massive wartime debts by running a budget surplus of close to 6 percent of GDP. The military released around 10 million Americans back into civilian life. Most economic controls were lifted, and all were gone less than a year after V-J Day. In short, the economy underwent what the historian Jack Stokes Ballard refers to as the "shock of peace." From the economy's perspective, it was the "shock of de-stimulus."

If the wartime government stimulus had ended the Great Depression, its winding down would certainly lead to its return. At least that was the consensus of almost every economic forecaster, government and private. In August 1945, the Office of War Mobilization and Reconversion forecast that 8 million would be unemployed by the spring of 1946, which would have amounted to a 12 percent unemployment rate. In September 1945, Business Week predicted unemployment would peak at 9 million, or around 14 percent. And these were the optimistic predictions. Leo Cherne of the Research Institute of America and Boris Shishkin, an economist for the American Federation of Labor, forecast 19 and 20 million unemployed respectively — rates that would have been in excess of 35 percent!

What happened? Labor markets adjusted quickly and efficiently once they were finally unfettered — neither the Hoover nor the Roosevelt administration gave labor markets a chance to adjust to economic shocks during the 1930s when dramatic labor market interventions (e.g., the National Industrial Recovery Act, the National Labor Relations Act, the Fair Labor Standards Act, among others) were pursued. Most economists today acknowledge that these interventionist polices extended the length and depth of the Great Depression. After the Second World War, unemployment rates, artificially low because of wartime conscription, rose a bit, but remained under 4.5 percent in the first three postwar years — below the long-run average rate of unemployment during the 20th century. Some workers voluntarily withdrew from the labor force, choosing to go to school or return to prewar duties as housewives.

But, more importantly to the purpose here, many who lost government-supported jobs in the military or in munitions plants found employment as civilian industries expanded production — in fact civilian employment grew, on net, by over 4 million between 1945 and 1947 when so many pundits were predicting economic Armageddon.

Household consumption, business investment, and net exports all boomed as government spending receded. The postwar era provides a classic illustration of how government spending "crowds out" private sector spending and how the economy can thrive when the government's shadow is dramatically reduced.

Employment is closely related to the productivity-adjusted real wage. When the labor costs of making a widget fall, employers find it profitable to make more widgets and hire more widget-makers. Those costs fall when productivity rises (more widgets produced per hour of work), when the price of widgets rises (increasing the margin between revenues received and cost of production), or when money wages fall. In the immediate postwar era, prices and productivity were generally rising, more than offsetting modest increases in money wages.

The data today suggest that the self-correcting and healing forces of markets are beginning to work again. Worker productivity is generally increasing, and money wages are stagnant or rising less than the rate of inflation, meaning real wages are falling. In a productivity-adjusted sense, the wage decline appears to be substantial.

After a lag to be sure this trend is real and sustaining, this should lead to an upsurge in new hiring. In other words, unemployment will start falling not because of the stimulus spending, but in spite of it. And just as the stimulus money created few if any new jobs, its withdrawal will destroy few if any jobs. To be sure, some specific jobs will be lost, but others will be gained as the negative effects of government borrowing are eased somewhat. To better illustrate the crowding out effect of government spending, economists often refer to Frédéric Bastiat’s 1848, "What Is Seen and What Is Not Seen."

The illusion that new employment results from the stimulus package is understandable because the jobs created by it are visible, whereas jobs lost due to the stimulus are much less transparent. When several hundred million dollars are spent building a 79-mile per hour railroad from Cleveland to Cincinnati, we will see workers improving railroad track, building new rail cars, and so on. In fact, we can directly count the number of jobs supported by stimulus dollars and report them on a website ( currently reports that 608,317 workers received stimulus monies in the 4th quarter of 2009). At the same time, however, the federal spending invisibly crowds out private spending.

This happens regardless of how higher federal spending is financed. Tax financing (not done in this case) reduces the after-tax return to workers and investors, leading them to reduce the resources they provide. Deficit-financing (borrowing) tends to push up interest rates and, more generally, eats up dollars that would otherwise have gone toward private lending and investment. Inflationary financing (roughly the Fed printing money — a fear in this situation) reduces investor confidence, lowers the real value of some financial assets, and leads to falling investment. Of course we do not register these "job losses" on the mainstream statistical radar because they are jobs that would have been created, absent the government spending, but never were — hence their invisibility.

There are no free lunches in the world. Stimulus efforts of modern times, perhaps most notably that of Japan during the 1990s, which actually led to reduced economic growth and long-term higher unemployment, show the futility of the Obama administration's current approach. Furthermore, a recent study by Claudia Sahm, Matthew Shapiro, and Joel Slemrod shows that the Bush stimulus policies in 2001 and 2008 ad no significant impact on the economy. Other recent work by Robert Barro and Charles Redlick examines long-term macroeconomic data and confirms the notion that government spending crowds out that of the private sector. Barro predicts that the long-term effect of the current stimulus will be negative.


Markets, by contrast, have marvelous healing properties. If unemployment is too high, declines in the productivityadjusted real wage make it attractive to hire workers again, lessening the problem. If investors are slow in borrowing, falling interest rates entice them to take on credit.

These sorts of things are happening in the American economy today, but government-imposed shocks can derail any recovery. This happened in the Great Depression as the economy finally began to recover after a major slowdown in government interference in the labor market between mid 1935 and early 1937. However, these gains were reversed by the Supreme Court's surprise ruling (which followed Roosevelt's threat to pack the Court) upholding the constitutionality of the National Labor Relations Act. Real wage rates rose sharply in the months that followed. Unemployment, which had fallen to around 13 percent on the day of the court ruling, was back above 20 percent a year later.

When market processes lead us to see light at the end of the tunnel, the government sometimes adds more tunnel. Recent examples of this phenomenon can be seen in the newly passed health care legislation and the proposal for a cap-and-trade environmental regime. The new health care legislation will enormously increase labor costs, as would cap and trade. Nervous employers, wanting to avoid the possibility of taking on sharply rising labor expenses, demur in hiring workers that they would in a more neutral policy environment.

Furthermore, the multi trillion dollar deficits to finance the stimulus as well as government bailout money from TARP have to be financed, and the possibility that the Federal Reserve would engage in inflationary financing of this new federal debt has clearly unnerved many investors. Since the November 2008 election, the price of gold has risen 50 percent because of growing inflationary fears.

Yet another example is the government's continual extension of unemployment benefits beyond the customary maximum 26 weeks (most recently at the beginning of March). While most would agree that unemployment insurance provides short term relief to those who must seek new work, many studies confirm what common sense says we should expect — the longer the time frame people are eligible for such benefits, the longer it takes for unemployment rates to fall.

In 2009 the average duration of unemployment nearly doubled, and today, well over 40 percent of those unemployed have been out of work over six months. While the poor labor market is to blame for much of this jump in duration, there can be no doubt that incentives to obtain new employment have been, and will continue to be, tempered by governmental action which has extended unemployment insurance to many through the end of 2010.

Finally, it is clear that the government stimulus has not provided any kind of positive placebo-type effect on consumer and business confidence. As mentioned earlier, survey data show that such measures of confidence continue to linger around the lowest levels seen in a generation. In fact, a simple econometric model consisting of two explanatory variables — government spending as a percent of total output and the rate of inflation, can explain the vast majority of the changes in stock market prices in modern times — and stock market valuations are a good indicator of confidence.

Stock prices fall with growing government involvement in the economy or with rising inflation. The sharp rise in the government's share of output in the last decade and the threat of greater inflation in the next one are important factors behind the 30 percent decline in the inflation-adjusted Dow Jones Industrial Average since 2000. Eye-popping deficits of the past year have lowered optimism about the future, kept stock prices depressed, and reduced key elements in new investment spending. These negative side effects of the stimulus spending are certainly slowing down the recuperative process that market forces are attempting to generate.


The conversation has begun regarding the nation's exit strategy from the unsustainable fiscal and monetary stimulus of the last two years. Our soaring national debt will not only punish future generations but is also causing concern that our creditors may bring about a day of reckoning much sooner (the Chinese have recently become a net seller of U.S. government securities). There are fears that the Fed's policy of ultra-low interest rates may bring new asset bubbles and begin the cycle of boom and bust all over again.

And unless the Fed acts to withdraw some of the monetary stimulus, many fear a return of 1970s era double-digit inflation. On the other hand, there are widespread fears that if we remove the stimulus crutch, the feeble recovery may turn back toward that "precipice" from which President Obama has said the stimulus policies rescued us. History and economic theory tell us those fears are unfounded.

More than six decades ago, policymakers and, for the most part, the economic profession as a whole, erroneously concluded that Keynes was right — fiscal stimulus works to reduce unemployment. Keynesian- style stimulus policies became a staple of the government's response to economic downturns, particularly in the 1960s and 1970s.

While Keynesianism fell out of style during the 1980s and 1990s — recall that Bill Clinton's secretary of treasury Robert Rubin turned Keynesian economics completely on its head when he claimed that surpluses, not deficits, stimulate the economy — during the recessions of 2001 and 2007-09 Keynesianism has come back with a vengeance.

Both Presidents Bush and Obama, along with the Greenspan/Bernanke Federal Reserve, have instituted Keynesian-style stimulus policies — enhanced government spending (Obama's $787 billion package), tax cuts to put money in people's hands to increase consumption (the Bush tax "rebate" checks of 2001 and 2008), and loose monetary policy (the Federal Reserve's leaving its target interest rate below 2 percent for an extended period from 2001 to 2004 and cutting to near zero during the Great Recession of 2007-09 and its aftermath).

What did all of this get us? A decade far less successful economically than the two non- Keynesian ones that preceded it, with declining output growth and falling real capital valuations. History clearly shows the government that stimulates the best, taxes, spends, and intrudes the least. In particular, the lesson from 1945-47 is that a sharp reduction in government spending frees up assets for productive use and leads to renewed growth.

May 28, 2010

The Country's in the Crapper

According to the Bureau of Labor Statistics, the national median wage was $32,390 per year in 2008 [due to the recession, that number has probably fallen 5 to 7 percent since then]. In March 2009, the average earnings for full-time Federal employees were $74,403.

12 Ways to Determine If You're Still Middle Class

August 11, 2010 - We get the occasional complaint from readers who think that our content is not pertinent for the ‘average’ American. In our defense, we don’t have a clue what average American means and if you know his or her name and address - please send it our way because we’d like to invite him over for an interview. It’s fair to assume however, that the average American is middle class.

That’s a very vague social and economic designation but it’s a label most Americans are comfortable with. We have millionaires that consider themselves Middle Class being waited on by minimum wage workers who also identify themselves as Middle Class. It’s all very confusing and the term has lost whatever meaning it was supposed to have. In the U.K. the vast majority of people that we consider Middle Class would be considered "Working Class". We're fantastic marketers in the U.S. hell bent on making everyone feel good.

Being middle class has always been a state of mind more than anything else. People are now middle class by a process of elimination. If you’re not poor or destitute and if you’re not rich, you’re supposedly middle class. So, we’ve come up with a way to determine if you’re still eligible for the middle class label. If you’re not something else, you’re Middle Class. Read these 12 points of elimination to see if you still qualify as "Middle Class".

  1. You’re not middle class if you’re one of the 40 million Americans on food stamps. One out of five children lives below the poverty line. So, they’re not middle class either.

  2. The 7.8 million millionaires in the United States are not middle class, although most of them still walk around wearing middle class hats. Even if all your wealth is tied up in your house in San Francisco, you always have the option of selling it, moving to a cheaper locale and retiring. Not Middle Class.

  3. The ratio of the average top executive's paycheck to the average worker's paycheck is like 300 to one in large corporations. If you’re the executive, you’re not middle class. Even if you happen to screw up, you've got a golden parachute in place to ensure that you never have to enter the ranks of the Middle Class ever again.

  4. The bottom 80 percent of American households hold less than 10% of the liquid financial assets. If you’re in the top 20%, don’t call yourself middle class, unless we can get the bottom to realize that they are Working Class. And if you’re part of the bottom 50 percent of income earners in the United States, you and 150 million Americans collectively own less than 1 percent of the nation’s wealth. So you’re not Middle Class either. You might think you are middle class based on your income, but you're not. That leaves the 30% in the middle and by all accounts, that figure is shrinking faster than a bullet train.

  5. If you’re the average Federal worker, you're probably middle class because you earn 60% more than the average private sector employee and of course, you have some of the richest benefits that will ensure a nice retirement. Just remember it took thirteen trillion in deficit spending to keep you in the middle class and we can’t run 1.4 trillion annual deficits forever. Enjoy it while it lasts.

  6. More than 40% of Americans who are employed are now working in low paying service jobs. Chances are if you’re in the service industry, you’re not middle class even if you do have a middle class car payment.

  7. If you’re one of the 60% of Americans who live paycheck to paycheck, you might be living a Middle Class life style but maybe you really can’t afford it. Two out of five Americans don't contribute anything to retirement savings. They might be Middle Class now but they won’t be for long. You can’t live a Middle Class life style on just a social security check.

  8. If the stats are to be believed, 43% of Americans have less than $10,000 saved up for retirement. That’s a price of an entry model car or a jazzed up refrigerator with a built in stereo. You’ll still retire on a social security check and you won’t be Middle Class even if you keep the refrigerator.

  9. The 400 richest Americans have more wealth than 155 million Americans combined and top hedge fund managers make $900,000 an hour. They’ll never be Middle Class again and they won’t have to read this article to discover that factoid (unless they’re one of the Hunt brothers.)

  10. One out of every four American workers have postponed their planned retirement age. You want to know why? Well, it’s likely because they want to retain their middle class amenities (or the debt they accumulated maintaining it) until they decide to throw in the towel just short of their 85th birthday.

  11. Last year, 1.4 million Americans filed for personal bankruptcy. A lot of them will never be Middle Class again.

  12. If you're one of the millions of Americans that has seen wage stagnation for the last decade, you might have been Middle Class, but eventually you won't be. Unfortunately, you're not alone, if you look at a chart of labor costs over the last 10 years, it is rapidly approaching zero and trust me, the health care component is definitely positive meaning wages are increasingly negative.
The sad reality is that fewer and fewer ‘average’ Americans qualify as Middle Class. Even if they do qualify in terms of income, a vast majority don’t have the sense of security that used to come with a Middle Class paycheck because they can’t know for sure if they’ll have the same job for very long. When you break down the numbers and take into consideration the absence of job security and defined pension plans, it might be that only one in five workers really qualify as middle class.

The undeniable fact is that this generation of American workers will probably have a harder time maintaining a Middle Class standard of living and adjusting to that reality will require that they get more bang out of every dollar they earn. On that count, there is one positive indicator that says that an increasing number of Middle Class aspirants are ‘getting it.’ The savings rate is going up. . .If you really want to remain a member of the middle class, don’t depend on higher wages, watch your money and make the best of the wages you currently earn. Otherwise, you might not be Middle Class for much longer.

To the Federal Employee Debate. This just released on USA Today:

Federal workers have been awarded bigger average pay and benefit increases than private employees for nine years in a row. The compensation gap between federal and private workers has doubled in the past decade.

Federal civil servants earned average pay and benefits of $123,049 in 2009 while private workers made $61,051 in total compensation, according to the Bureau of Economic Analysis. The data are the latest available.

The federal compensation advantage has grown from $30,415 in 2000 to $61,998 last year.

Read the full article.

Seven Stressors Sapping the Middle Class (Excluding Federal Employees, Federal Contractors, Military and Public School Employees)

U.S. News & World Report
March 16, 2010

We all know about keeping up with the Joneses. Now, the Great Recession and the jobless recovery have introduced a new socioeconomic phenomenon: slip-sliding with the Smiths.

Working harder for less is the new normal—for those lucky enough to have a job. Millions of families are giving up comforts they long took for granted, such as restaurant meals, new clothes, vacations, spacious cars, home improvements, and cable television. College funds and retirement savings have taken a hit, and some families have been forced to downsize their homes or, worse, submit to foreclosure. Little wonder that record numbers of Americans tell pollsters it's getting harder to get ahead and that they worry their kids' standard of living may fall rather than rise.

The obvious culprit is a terrible job market that has left 15 million Americans out of work and millions more working less than they would like. But several economic trends have been stressing the American middle class for a decade or more, and the recession intensified those pressures as well.
  • Healthcare and college costs, for example, have been rising unabated.

  • Seniors who are living longer require more late-in-life care, with the costs often borne by their middle-aged kids.

  • A turbulent economy, meanwhile, has hammered away at incomes, job security, and net worth—and even led the White House to create a "middle-class task force" that gives the problem an official hue: "It is harder to attain a middle-class lifestyle now than it was in the recent past," declared a recent task-force report.
Politicians want to help, with dozens of proposals in Washington and state capitals to create jobs, subsidize living costs, and prove that elected officials care. But most governments are running out of money, and many of the political proposals are hollow, vote-seeking gestures.

Americans, meanwhile, are relying more on themselves by cutting spending, saving more, changing their lifestyles, and re-evaluating their careers.

As a halting economic recovery evolves, here are seven stressors that middle-class Americans need to address in order to maintain their standard of living:

  1. Falling income

    The pinch that many families feel comes from incomes that have fallen while other unavoidable costs have continued to go up. From 2000 to 2008, median household income after inflation was basically unchanged, the weakest performance since at least the end of World War II. And that was mostly before the recession. Economists estimate that once additional data are tallied, they will show that median real income fell by 5 to 7 percent during the recession.

    That's a huge drop that seems unlikely to reverse itself anytime soon, since a weak job market means that even those who have jobs are far less likely to get raises. And many people have absorbed pay cuts or taken new jobs that pay a lot less than they used to earn.

    A sudden loss of income can be devastating for those with a lot of debt and little savings, which unfortunately includes far too many Americans. Even so, people are adjusting. There's been a stutter-step increase in the savings rate, which, if it lasts, will help pad rainy-day funds. Shoppers are buying fewer extravagances and more discount merchandise. And after a 20-year borrowing binge, Americans are paying off (or defaulting on) record amounts of debt.

    If those trends continue, the typical household may eventually lower costs enough to live comfortably on less income—and enjoy a few new perks if incomes begin to rise again.

  2. Reduced savings/net worth

    When incomes fall faster than expenses, the first impulse is often to make up the difference by borrowing.But banks and credit-card issuers have clamped down on lending, leaving many Americans no choice but to raid their savings to pay the bills. This has happened at the same time that home values have plunged.

    Many homeowners now have little or no home equity, and a topsy-turvy stock market has stabilized more than 25 percent below its peak values from 2007. The result is a net loss of about $12 trillion in Americans' net worth over the past three years, according to the Federal Reserve—about $102,000 per U.S. household.

    A sharp housing rebound or a fresh stock market rally would help recover those losses, but neither seems especially likely. And stock-market gains tend to benefit the wealthy much more than the middle class anyway. So the majority of Americans will have to rebuild their net worth the old-fashioned way: by saving more, spending less, and living more frugally. The savings rate has in fact ticked up over the past year, but not by as much as some economists had expected. That's one sign that it may take a long time for consumers to adjust their behavior and get used to a new financial reality.

  3. High healthcare costs

    The sob stories trotted out by advocates of healthcare reform ring true. Healthcare costs rose by 155 percent between 1990 and 2008, according to the White House's middle-class task force, while median household income rose by just 20 percent. That means medical costs take an increasing share of take-home pay for virtually every family.

    A separate study from 2009 found that 62 percent of all personal bankruptcies stemmed from medical problems that overwhelmed family finances. Even if Washington passes healthcare reform, rising medical costs seem likely to pressure the family budget for years, forcing many to simply spend less on other things.

  4. Child-care/elder-care expenses

    Many families have maintained their standard of living because both parents work. Between 1990 and 2008, for example, hours worked by both parents in a typical middle-income family increased 5 percent; in a middle-income single-parent family, hours worked spiked by 13.4 percent. That leaves less time for taking care of kids, aging parents, and anything else that needs attention—and the added costs of paying somebody else to do it.

    Data from the recession may show that child- and elder-care costs have eased as more people find themselves involuntarily stuck at home. And as Americans simplify their lives, some moms and dads may decide that it makes sense for one parent to spend more time at home instead of working to pay for a bunch of stuff the family doesn't really need.

  5. College costs

    A typical family with two kids should sock away about $4,200 per year to pay for college. That's a tall order. College costs have risen about 43 percent since 1990, nearly twice the rise in median income. And with state and federal education funds being axed, public universities are hiking tuition and fees.

    A budget crisis in California, for instance, has led to a 32 percent increase in tuition at marquee state schools like UCLA and Berkeley, with more increases likely. Private schools, meanwhile, are struggling with steep drops in their endowments thanks to the financial crisis and the housing bust, which trashed mortgage-based investments.

    The bottom line for many families is that they'll have to take out bigger college loans, with students working more to pay for their own education.

  6. Housing costs

    The cost of financing and maintaining a home soared by 56 percent between 1990 and 2008, thanks to the housing bubble that's now deflating. Many families that bought a home near the peak of the market—say, between 2005 and 2007—are stuck with property that's declining in value and in some cases worth less than the mortgage. That will continue to fuel foreclosures and the stress of making huge housing payments that the family income can barely cover.

    But the housing bust is helping bring prices back down to manageable levels for many families, one break for those who escape the recession with their household finances more or less intact.

  7. False expectations

    For the past 40 or 50 years, Americans have lived by a series of unofficial tenets: A good education guarantees a good job, hard work will bring prosperity, and 40 years of 40-hour-a-week work earns a comfortable retirement. Then, maybe; now, not so much.

    Workers who believe that somebody owes them a comfortable life just because they try hard are risking bitter disappointment in a Darwinian economy, where there are likely to be more losers and fewer winners than we're used to.

    The winners will be those who learn how to adapt, expect nobody to give them anything, and are prepared to work harder in the future than they did in the past. That's how it was in America before anybody ever heard of the middle class, and it may be that way for a while again. The real middle class—the true bedrock of the nation—will be able to handle it.

Government Takeover of Health Care is About Absolute Control Over the Population

One of the latest rumors to circulate on the internet about the Obamacare nightmare is that it will require all Americans to undergo BMI (Body Mass Index) screening by 2014. Presumably, the BMI results will be used to ration health care in some manner as finite numbers of doctors, nurses, and hospitals struggle to cope with unlimited demand for their services. A document named HIT (Health Information Technology) Standards purports to show Secretary Kathleen Sebelius’ new certification standards for electronic health records (EHRs). Further, the stimulus bill states that the National Coordinator shall “update the Federal Health IT Strategic Plan” with “utilization of an electronic health record for each person in the United States by 2014.” This constituted the basis for Sebelius’ new EHR standard. On page 61 in The Code of Federal Regulations Part 170 it states that EHRs will calculate BMIs. An additional document refers to certification criteria for EHRs and specifically shows that BMI will be part of the vital signs included in EHRs. Therefore, it appears that the rumor is true as far as the claims that Obamacare will require an EHR for all Americans and that the EHR will be required to include a calculation for BMI. - Healthcare Reform Law Mandates Biometric Screening and Electronic Health Records by 2014

U.S. Taxpayers Are Funding Their Own Enslavement

The plan to reshape America into an electronic surveillance society is being implemented through the $838 billion stimulus bill (The American Recovery and Reinvestment Act of 2009), which was signed into law on February 17, 2009, less than one month after Obama was inaugurated as the 44th president of the U.S. on January 20, 2009.

To prepare the U.S. for a cashless society where only electronic transactions will take place, the federal government is using stimulus funds to erect cellphone towers and to expand the National Broadband Plan into rural areas. I
n 2008, the Federal Communications Commission began subsidizing cell phones for low-income households.

NFC-enabled mobile phones will be used to replace everything from credit cards and loyalty cards to bus and train tickets, library cards, door keys, and even cash.

In addition, stimulus funds
also are being used as Medicare and Medicaid incentive payments to encourage early adoption by medical providers of electronic health recordslanguage in the stimulus bill calls for “the utilization of an electronic health record (EHR) for each person in the United States by 2014” [note that this initiative calling for an EHR for every American suspiciously came before any bill was sponsored in Congress to overhaul health care and mandate that every American purchase health insurance].

These electronic health records will follow each American from birth to death, and include information about each person’s race, ethnicity and medical history.

ObamaCare, signed into law on March 22, 2010, mandates that by 2014 almost every American must prove to the IRS that he or she is enrolled in a government-approved health plan, giving the federal government the authority to oversee the medical decisions made between doctors and patients and giving the feds access to patients' electronic medical records (absent of proof of government-approved insurance, the IRS will impose a "penalty" of 2.5% of income by 2016 or $695 a year, whichever is greater).

Predicting a Religious Revival in 2014

Healthcare Economist
August 12, 2011

The Healthcare Economist predicts a religious revival in 2014. Let me be more specific, in January 2014. How do I know this? Am I a religious man? Has God spoken to me?

Let’s just say I have a certain insight. In 2014, the individual mandate goes into effect. All individuals must buy health insurance or else they will pay a tax penalty to the federal government. Well…not all individuals. Certain people with religious objections would not have to get health insurance. [American Indians, illegal immigrants, or people in prison would also not have to buy insurance].

The Amish and Old Order Mennonites, for instance, do not have to buy insurance through a ‘religious conscience’ exception. Will health reform lead to an increase in the number of Amish Americans in 2014?

The Serious Tracking of Americans Begins

Economic Policy Journal
July 16, 2010

They have passed the health bill, they have passed the financial regulations bill, and they have snuck stuff into the stimulus package bills. They are going to track your money and your body. Here’s the first few things they are doing. This is step one. It will only get worse from here.

According to
…the Health Care Bill mandates, starting on January 1, 2012, federal law will require coin and bullion dealers to report to the Internal Revenue Service all gold and silver coin purchases and sales greater than $600.
No, that is not an error; they tacked the gold coin tracking regulations into the health bill. They are just tacking stuff on wherever they can.

As for your body, you will be required to have an “electronic health record” by 2014. They snuck this into one of the “stimulus” bills. The electronic record will include an obesity rating. The information will be required to be on a “national exchange” with only secure access (Hah!). Why the F does your obesity rating have to be on a national exchange? This is a tip off to how micro-managed they are going to attempt to run your life.

Keep in mind that the health bill and financial “reform” bill are thousands of pages, with much of the details left up to the new agencies to fill in. Obama is appointing major league interventionists to head these agencies. They are completely clueless as to how an economy works. Their regs will be over the top. It will stifle America in so many ways, it is difficult to imagine.

I was in East Berlin the year before the Wall came down. I saw what constant monitoring and micro-management did to people. It is not pretty. The gray, the drab, the despair was everywhere. When you can only take orders and wait for approvals and are constantly watched, it saps the life out of you.

America is going to be changing and the government is going to try and watch you and monitor your vitals, as if you were a lab rat, as it does the changing.

It is not going to be pretty.

Gold Coin Sellers Angered by New Tax Law

Electronic Health Records and the $814 Billion Economic Stimulus Package

Until recently, with the American Recovery and Reinvestment Act of 2009, (ARRA) providers were expected to take the full risk of investing in healthcare IT. Notably, healthcare payers, such as the government through Medicare, also have potential for significant cost savings if providers adopt EHR systems.

The HITECH Act, part of the 2009 economic stimulus package (ARRA) passed by the US Congress, aims at inducing more physicians to adopt EHR. Title IV of the act promises maximum incentive payments for Medicaid to those who adopt and use "certified EHRs" of $63,750 over 6 years beginning in 2011. Eligible professionals must begin receiving payments by 2016 to qualify for the program. For Medicare the maximum payments are $44,000 over 5 years. Doctors who do not adopt an EHR by 2015 will be penalized 1% of Medicare payments, increasing to 3% over 3 years. In order to receive the EHR stimulus money, the HITECH act (ARRA) requires doctors to show "meaningful use" of an EHR system. As of June 2010, there are no penalty provisions for Medicaid.

Health information exchange (HIE) has emerged as a core capability for hospitals and physicians to achieve "meaningful use" and receive stimulus funding. Healthcare vendors are pushing HIE as a way to allow EHR systems to pull disparate data and function on a more interoperable level[citation needed].

Starting in 2015, hospitals and doctors will be subject to financial penalties under Medicare if they are not using electronic health records.

Healthcare Reform Law Mandates Biometric Screening and Electronic Health Records by 2014

There would be profound changes in the practice of medicine. Overall, medicine would be much more tightly controlled. All health care delivery would come under tight control. Medical care would be closely connected to work. If you don't work or can't work, you won't have access to medical care. The days of hospitals giving away free care would gradually wind down, to where it was virtually non-existent. Costs would be forced up so that people won't be able to afford to go without insurance. Your medical care would be paid for by others. Therefore, you would gratefully accept, on bended knee, what was offered to you as a privilege. Your role being responsible for your own care would be diminished. Access to hospitals would be tightly controlled and identification would be needed to get into the building. The security in and around hospitals would be established and gradually increased so that nobody without identification could get in or move around inside the building. Theft of hospital equipment would be 'allowed,' and reports of it would be exaggerated, so that this would be the excuse needed to establish the need for strict security until people got used to it. Anybody moving about the hospital would be required to wear an identification badge with a photograph and telling why he was there, employee or lab technician or visitor or whatever. This is to be brought in gradually, getting everybody used to the idea of identifying themselves - until it was just accepted. This need for ID to move about would start in small ways: hospitals, some businesses, but gradually expand to include everybody in all places! It was observed that hospitals can be used to confine people and for the treatment of criminals. This did not mean, necessarily, medical treatment. - The New Order of the Barbarians: Planning the Control Over Medicine, Dr. Lawrence Dunegan, 1988

Corporate Wellness Programs Require Biometric Screenings

Viverae Health Network Blog
October 10, 2011

Many corporate health programs are not reaching their full potential because they don't have the necessary data to measure their effectiveness. How does a company determine if their wellness program in worth the investment?

According to Mark Head, CSO at Viverae, ROI has traditionally been difficult to measure because the market continues to evolve and the biggest single driver of ROI is participation. According to Head,

"You can have the best wellness program in the world, but if it only reaches 20% of your people, you will not see an impact to your health plan costs."

Measuring Wellness ROI requires the right mix of products, incentives and program requirements:

•Understand risk with a Health Risk Assessment and
•Biometric Screening
•Provide the right incentive
•Implement an engagement-based program

True ROI in Corporate Wellness Programs requires engagement on the part of the employees in order to reduce risk and improve employee health.

For more information on Viverae's visit our information on Corporate Health and Wellness Solutions by Viverae.

Emanuel Requires City Workers Enrollment in Wellness Program or Pay Higher Premiums

September 16, 2011

Mayor Rahm Emanuel is giving city workers an important health choice: enroll in a new wellness plan, expected to be unveiled Friday, or pay a higher premium. The price if they don't enroll: $50 a month.

The program includes an initial screening that focuses on preventative care for asthma, heart disease and diabetes. City employees would then receive wellness training to achieve long-term health goals, including weight loss.

Smokers wouldn't be penalized, but they would be encouraged to quit. Advisers overseeing the program will monitor progress on a bimonthly basis, and those who reach their goals could see their health care premiums reduced.

"We will help you be a good steward for your health," Emanuel said Friday, "but if you choose not to, you'll pay that price and that is the price you'll have to pay."

The mayor believes the program will help cut the annual $500 million bill for health care for city employees.

"We are going to implement a citywide wellness plan for city employees," Emanuel confirmed at a recent press conference, "because health care costs for the city are being driven by 10 percent a year, and we're not seeing revenue grow that way."

Most city unions have signed on to the agreement, according to the Chicago Sun-Times, except the Fraternal Order of Police, which represents more than 10,000 city employees.

The FOP says its members have different health concerns and it doesn't want members to pay higher premiums if they decide not to enroll in the program.

But Emanuel says the program is a necessary step to getting healthcare costs under control.

"You can't ask the taxpayers to pay for a healthcare problem that you can manage and do a good job," Emanuel said. "You can do that with cholesterol, you can do that through diabetes, you can do that through smoking, through heart, blood pressure. Every one of those is manageable."

Can Your Company Require a Biometric Health Screening in Order to Continue Insurance Coverage?

Yahoo Answers
March 2, 2011

My spouse has worked for the same company for the past 15 years. The company seems to be forcing the issue of a biometric health screening. Under the heading of “Is this mandatory?” it says..

”For salaried employees, in order to participate in the 2010 Medical Plans you are required to go through the on-site biometric screen process, and the online Health Risk Assessment. If a salaried employee chooses not to participate in either the Biometric Screen, or the online Health Risk Assessment, they will not be eligible for 2010 Medical Insurance, and you will receive COBRA notification to your home if you were previously participating in the medical plans”
Is this crap legal? Can a company terminate your insurance for not completing this so called health assessment?

Yes. Welcome to the wonderful world of risk-based, profit-driven health coverage.

A company has no legal duty to give insurance at all, generally. In states where it does it MAY be illegal (for companies of a certain size) but I’m pretty sure you would have to take it to court, and the government wants EVERYONE’s private records online, 4th amendment or not (look at Obamacare); so I think you’d have a hard time with it. Is there an implication you won’t be covered if you have preexisting conditions? Because if that is the case, it may not satisfy legal standards IF there are legal standards. Note that there often are not, particularly for small companies.

Does Obamacare Require BMI Screening?
July 19, 2010

One of the latest rumors to circulate on the internet about the Obamacare nightmare is that it will require all Americans to undergo BMI (Body Mass Index) screening by 2014. Presumably, the BMI results will be used to ration health care in some manner as finite numbers of doctors, nurses, and hospitals struggle to cope with unlimited demand for their services.

To find the truth, I examined the full text of HR 3590, The Patient Protection and Affordable Care Act, as well as its companion bill HR 4872, the Health Care and Education Reconciliation Act. This takes some time, even scanning with the search function on a browser, since the HR 3590 contains a whopping 906 pages and HR 4872 adds an additional 55 pages. That is quite a number of dead trees for a law that is supposed to simplify and lower the cost of health care.

I conducted my examination by searching both documents for “bmi.” This resulted in a large number of hits, but only two referred to “Body Mass Index.” The majority were some form the word “submit,” which says a lot about Obamacare in itself.

  1. The first reference is in section 2703 State Option to Provide Health Homes for Enrollees with Chronic Conditions on page 203. BMI is mentioned here as one of the medical conditions that defines the term “chronic condition” (specifically a BMI over 25). There is no mention of mandatory screening for BMI.

  2. The second reference to BMI was in section 4004 Education Outreach Campaign Regarding Preventive Benefits on page 428. In this section, BMI is mentioned as one of the factors that people will use to determine their disease risk on a website. Again, there is no mention of mandatory BMI screening.

The second bill, HR 4872, contained several references to “submit,” but no references to Body Mass Index.

At this point, I was ready to declare the mandatory BMI screening a hoax.

Just before I published this article, however, someone pointed me in the direction of a document called HIT (Health Information Technology) Standards 170.302. This document purports to show Secretary Kathleen Sebelius’ new certification standards for electronic health records (EHRs). Further, a CNS News report ( refers to section 3001 Office of the National Coordinator for Health Information Technology of the American Recovery and Reinvestment Act of 2009, the stimulus bill, rather than the Obamacare law itself.

Section 3001 in Part C Duties of the National Coordinator Subpart 3 paragraph (a) (ii) states that the National Coordinator shall “update the Federal Health IT Strategic Plan” with “utilization of an electronic health record for each person in the United States by 2014.” This constituted the basis for Sebelius’ new EHR standard.

On page 61 (of 228) in The Code of Federal Regulations Part 170 ( it states that EHRs will calculate BMIs. An additional document ( refers to certification criteria for EHRs and specifically shows that BMI will be part of the vital signs included in EHRs.

Therefore, it appears that the rumor is true as far as the claims that Obamacare will require an EHR for all Americans and that the EHR will be required to include a calculation for BMI. The speculative claim that the BMI will be used to ration health care is so far unsubstantiated. I will leave it up to the reader to decide whether and how much to be alarmed by the BMI requirement.

I will say that it is extremely likely that Obamacare will result in health care rationing. Massachusetts enacted what President Obama called an “essentially identical” plan in 2006 and the result has been skyrocketing costs ( Rapidly increasing demand with a static level of supply led to sharply increasing costs. To deal with these increasing costs, Governor Deval Patrick enacted price controls in the form of denying insurance companies to increase rates.

Jon Kingsdale, who directed in Massachusetts’ version of Obama’s health insurance exchanges, said recently,

"If you're going to do health-care cost containment, it has to be stealth. It has to be unsuspected by any of the key players to actually have an effect."
He further stated that:
The solution to the problem was finding a “significant systematic way of pushing back on the health-care system and saying, 'No, you have to do with less'” (
In other words, the government will have to quietly ration care.

This shows the ultimate importance of efforts to defeat Obamacare. If you value your health care, vote for candidates who will repeal and defund the new law. Also support state and local candidates who will support efforts such as the lawsuit by Georgia and several other states against the law.

Reform the reform!

Onsite Employee Health Screening and Biometric Testing
October 26, 2008

Onsite Employee Health Screening and Biometric Testing means better heath risk assessment baselines and better security

“Onsite Employee Health Screening and Biometric Testing” is a hot phrase these days, but it can help your workers with health management, too. When the pundits talk about Onsite Employee Health Screening and Biometric Testing, they’re usually referring to retinal scanners, fingerprint readers, and other high-tech security measures. However, if you trace the phrase “Onsite Employee Health Screening and Biometric Testing” back to its roots, it refers to the measurement of unique human physical and behavioral characteristics.

Corporate Health Promotion Programs are of critical importance to the modern business. As a result, Onsite Employee Health Screening and Biometric Testing should be one of the tools in the arsenal of a forward-thinking organization.

Onsite Health Screening and Biometric Testings aren’t just a “feel-good” measure for your employees. Assessments of employee health help your workers to prioritize their well-being, which results in happier, more productive employees.

Health risk assessments also build your database of employee biometric data.

Onsite Employee Health Screening and Biometric Testing, when handled worksite by our experienced professionals, is hassle-free and smoothly organized. The biometric data we collect then can be stored digitally for years or even decades, helping you and your workers build better health risk assessment baselines that you can use to analyze workers fitness and the efficacy of your corporation’s Health and Productivity Programs. Collected biometric data can even allow an employee’s doctor to assess that individual’s health over many years, helping him or her spot trends and diagnose disease.

Onsite Employee Health Screening and Biometric Testing extends to a wide variety of health risk tests, including measurements of blood pressure, blood type, body fat, substance abuse, and susceptibility to cardiovascular disease. Collecting biometric data for security purposes – like fingerprints, facial recognition imprints, or hand geometry – can be dovetailed with our health tests to minimize workflow disruption.

What Is a Biometric Screening?
March 28, 2011

A biometric screening is a short health examination that determines the risk level of a person for certain diseases and medical conditions. Many employers and universities encourage staff or students to complete this type of health screening so they can start thinking about their health and pursue treatment if needed.


  • A biometric screening is a general health check that can identify any significant cardiovascular or nervous system problems. This health check provides several biometric measures including: cholesterol levels for full lipid panel and glucose; blood pressure; blood glucose levels and also includes a measurement of height, weight and body mass index (BMI). Results are typically available within a few days after the screening, and are kept confidential.


  • The biometric screening can be one of several components of a complete health and wellness check. Most doctors and clinics perform a biometric screening as part of a wellness program that includes the completion of a health risk assessment (HRA) questionnaire, and a consultation. Results of the biometric screening can help to identify various diseases or health problems, and allow the patient to work with their physician to lower their health risks for certain conditions.


  • The typical biometric screening test can take up to 15 minutes, and is performed at a physician's clinic, or on site at an employment facility or college campus. It can consist of all or some of the following screening tests: carotid artery ultrasound screening; blood pressure check; blood draw; diabetes screening; and cholesterol screening.


  • The blood pressure screening is completed with a standard blood pressure check. The blood test is conducted by drawing a vial of blood; patients are required to fast for a short period of time before having blood drawn. The diabetes screening is performed by measuring glucose levels in the blood from the blood test. The cholesterol screening is performed with a "finger-stick" test that measures full lipid and glucose levels. The carotid artery ultrasound test determines the risk factor of having a stroke. This test measures how much plaque has accumulated in the arteries.


  • Biometric screenings allow the patient to learn about her current health status, and determine her risk for common diseases including diabetes, heart disease, asthma and other medical conditions. The physician or nurse conducting the tests can review the results of the screening with patients and follow up to do further tests, or recommend a treatment plan or wellness program based on immediate needs.

FCC Releases U.S. National Broadband Plan

Information Policy
March 20, 2010

...Federal Communications Commission (FCC) has released the executive summary for the long-awaited document, Connecting America: The National Broadband Plan, which lays out the regulator's goals in enhancing broadband availability, and the methods for achieving those goals.

The report cites benefits including improved healthcare, education and training, entrepreneurship, civic participation, and energy-efficient smart grids as driving the attempt to improve broadband access to reach the 100 million Americans without home internet services.

It also notes the still-existing need for a nationwide public safety mobile broadband network with funding of up to US$6.5 billion over the next 10 years.

The plan is positioned as being budgetary-neutral, with funds coming from spectrum auctions, improved government efficiencies, economic stimulus effects, and the reallocation of existing funds.

There are six long-term goals for the next decade, including connecting 100 million homes at 100 Mbps; 1-Gbps services to anchor institutions (schools, hospitals, government buildings), leading global mobile innovation with fast and extensive networks; access for all to affordable, robust broadband, and the means and skills to subscribe; a nationwide, interoperable public safety network; and tracking and management of real-time energy consumption...

FCC Preparing National Broadband Plan

Federal Computer Week
April 8, 2009

The Federal Communications Commission has launched a 13-month effort to develop a national broadband plan as required by the American Recovery and Reinvestment Act, the commission announced in a news release today.

The FCC must deliver the plan to Congress by Feb. 17, 2010, a schedule that overlaps with the deadlines for distributing stimulus broadband grants. Congress directed that economic stimulus funding of $7.2 billion for national broadband expansion is to be allocated starting in the current fiscal year and completed by September 2010.

But at least one policy expert believes the timing should not be a major concern because the FCC has recently upgraded its data for assessing the current status of broadband deployment throughout the nation, a critical factor which will help target the broadband grant funding to where it is most needed and avoid haphazard planning.
“The new data is a dramatic improvement,” said Chris Riley, policy counsel for Free Press, a nonprofit organization advocating national broadband. “Now they have information on how many subscribers there are to each speed of broadband in each census tract.”
The new data will help the Agriculture and Commerce departments distributing the grants maintain up-to-date information and avoid waste and mistargeted funding, he said.
“They can be effective in distributing the broadband grants to the rural, undeserved areas,” Riley said.
The National Telecommunications and Information Administration and the USDA’s Rural Utilities Service are preparing to make broadband grant applications available. They held a series of public meetings in March to collect opinions on how to structure the broadband grant programs.

2009 Economic Stimulus Package and Electronic Health Records (EHR)

The Obama administration’s signing of the American Recovery and Reinvestment Act (ARRA), with its $19 billion in stimulus funds for healthcare IT, is the most expansive effort to date. It includes a menu of grants to states, Medicare and Medicaid incentives for hospitals and physician practices, and a timetable for imposing penalties for non-adopters of EHR after 2015. - Healthcare Electronic Records Technology and Government Funding: Improving Patient Care?, OmniMD

Stimulus Marketing

The Department of Health and Human Services has been given $19 billion in incentives to move the healthcare community toward full utilization of electronic health records. The goal for this stimulus funding is to help 90% of doctors and 70% of hospitals adopt EHR within 10 years.

When will the money be available?

In the early years, hospitals and physicians offices that are early adopters of the technology will receive annual bonuses through Medicaid. Beginning in 2015, providers who have not adopted the technology will see reduced Medicare payments. After 2015, the amount of reduced Medicare payments will increase annually. The same type of incentives will be available to Medicaid providers.

Funding will be determined by formula with each qualifying hospital getting a base amount of $2 million. Hospitals will have up to 4 years to become “meaningful” users of EHR.

This segment of funding also includes $2 billion to create a medical record database for the entire country. These funds will be provided to the states on a grant basis and can include training grants to hospitals, doctors and other providers, university health education programs, public health departments, community health centers, and any other entity that provides healthcare to underserved citizens.

Who will decide what to purchase?

Hospitals will likely have an EHR team comprised of the Chief Information Officer, IT Director, HIPAA Compliance Director, and Medical Records Director. The office manager is a key contact at physicians’ offices because they act as a hub for the exchange of information.

The $2 billion designated to create a national database will likely involve Public Health Directors and Primary Care Directors as decision makers

Health IT & Electronic Health Records

The two major areas of new health IT funding include:
  • Office of the National Coordinator (ONC) to "jump start" electronic health record (EHR) adoption and spur the development of the national health information infrastructure

  • Incentives through the Medicare and Medicaid reimbursement systems to assist providers and organizations in adopting certified EHR technology
Electronic Health Records:

The Department of Health and Human Services has been given $19 billion in incentives to move the healthcare community toward full utilization of electronic health records. The goal for this stimulus funding is to help 90% of doctors and 70% of hospitals adopt EHR within 10 years.

When will the money be available?

In the early years, hospitals and physicians offices that are early adopters of the technology will receive annual bonuses through Medicaid. Beginning in 2015, providers who have not adopted the technology will see reduced Medicare payments. After 2015, the amount of reduced Medicare payments will increase annually. The same type of incentives will be available to Medicaid providers.

Funding will be determined by formula with each qualifying hospital getting a base amount of $2 million. Hospitals will have up to 4 years to become “meaningful” users of EHR.

This segment of funding also includes $2 billion to create a medical record database for the entire country. These funds will be provided to the states on a grant basis and can include training grants to hospitals, doctors and other providers, university health education programs, public health departments, community health centers, and any other entity that provides healthcare to underserved citizens.

Who will decide what to purchase?

Hospitals will likely have an EHR team comprised of the Chief Information Officer, IT Director, HIPAA Compliance Director, and Medical Records Director. The office manager is a key contact at physicians’ offices because they act as a hub for the exchange of information.

The $2 billion designated to create a national database will likely involve Public Health Directors and Primary Care Directors as decision makers.

Government Funding, Technological Advances Transform Healthcare

“To improve the quality of our health care while lowering its cost, we will make immediate investments necessary to ensure that within five years, all of America’s medical records are computerized.” – President Barack Obama, January 2009

By Barbara DePompa, Federal Computer Week
May 26, 2010

As the nation’s leaders grapple with the extent of healthcare reform measures, one thing has become increasingly clear — no matter how far reform measures go, it’s unlikely the U.S. will see a transformation in healthcare without the successful implementation of advanced technologies to reduce costs and improve the provision of healthcare services.

As David Blumenthal, M.D. and National Coordinator for Health Information Technology at the Department of Health & Human Services said in a recent speech at a conference of the National Committee on Quality Assurance, making healthcare IT part of the accepted culture for providing healthcare isn’t far off.
“Medical students today are not likely to accept paper records as the standard for use in their profession, when electronic means of information exchange and recordkeeping already pervade the rest of their lives,” he explained.
Clearly, leveraging technology will improve decision making and make it quicker and easier for doctors and patients to send/receive records and speed the diagnosis, treatment of illnesses and accuracy of healthcare practices in the coming years.
“An evolution is taking place as we move from paper records to electronic ones in parallel with networking the information, or making it ‘interoperable,’” said Dr. Robert Wah, Vice President, CSC Government Health Services and Chief Medical Officer NPS — Civil and Health Services Group. Eventually, he continued, “we will be able to use the digital information for population analytics and personalized care.”
While the American Recovery and Reinvestment Act (ARRA) is credited with making the key downpayment on healthcare IT’s advancement, Wah said, there are many contributing elements to the current growth wave. Health IT will grow at a combined annual growth rate of 11 percent through 2013, according to consulting firm Scientia Advisors. The firm projects health IT will be the fastest growing segment of the $1 trillion global healthcare market, expanding from $35 billion in 2008 to more than $60 billion by 2013.

Transformational Elements

Key technological tools and/or services that will aid the government’s healthcare transformation include:
  • Electronic Health Records (EHRs) — the conversion from paper to electronic medical records is seen as the crucial first step. Despite the pain involved in adapting EHR into the current workflows of physicians and other healthcare providers, recent surveys indicate 90 percent of doctors who adopted EHR were satisfied. Providers cite the avoidance of adverse drug events and duplicate tests among the key reasons they favor the use of EHRs.

  • Health Information Exchanges (HIE) — the crucial networks that must develop across the country to aid in the exchange of all kinds of medical information, including EHRs. The federal Office of the National Coordinator (ONC) to Health Information Technology has already rolled out funding for every state in increments from $4 million to $40 million, to plan for and implement statewide HIEs.

  • Healthcare analytics tools — once information is digitized and networks established, healthcare providers will be able to analyze health data across an array of various populations to facilitate faster diagnosis and treatment. One example of this is in the Centers for Disease Control and Prevention (CDC) National Electronic Disease Surveillance System (NEDSS). CSC helped the CDC integrate data from more than 100 federal, state and local entities. Now the system is used to quickly identify and track infectious diseases and potential bioterrorism attacks. NEDSS also plays a vital role in the investigation of outbreaks and the monitoring of disease trends.
Each of the key healthcare IT elements produce enormous benefits, from improving individual patient care to reducing medical costs through the elimination of redundant tests. Providers gain the ability to securely exchange patient information, and can collect reminders of services due to facilitate e-prescribing, to speed prescription fulfillment and further reduce errors. Other important components of the ongoing healthcare transformation include the development of key industry standards for electronic records and the secure exchange of information online. (See related standards article, on page s4 of this special report.)

In the coming year, state and local governments are considered pivotal players.
“The states are tasked with playing a key role in securing and coordinating ONC funds, presenting a tremendous opportunity for visibly enhancing health IT and ultimately, patient care,” Wah said.
Over the past 12 years, CSC has been involved in numerous projects to understand and harmonize local, state and federal regulations and policies. With a health information policy framework used as the starting point for CSC’s HIE planning, the company helps government organizations focus on strong local accountability, as well as clear accounting for all disclosures of health information, which can be adapted to support each state’s requirements.

The growth of HIEs at the state/local level will likely be among the big stories of 2010. A wave of stimulus funding will kick in later in 2010, providing incentives for physician practices and hospitals able to demonstrate the ‘meaningful use’ of EHRs. Starting in October 2010, physicians will be able to apply for $44,000 from Medicare or $60,000 from Medicaid when they convert from paper to EHR systems.

“Healthcare improves when the people making decisions on care — physicians and other healthcare providers, as well as patients and their families — have good information.” – Dr. Robert Wah, Vice President, CSC Government Health Services

Also important will be the advancement of health insurance exchanges. CSC worked with the Commonwealth Health Insurance Connector Authority to establish the nation’s first health insurance exchange after Massachusetts enacted its universal coverage law. The authority, governed by an independent board and working closely with commercial payers in the state, worked with CSC to establish a brand separate from state government to help Massachusetts residents shop for coverage under the law. CSC created a separate web portal in less than six months. Several health reform proposals in Congress were based on the Massachusetts Connector model, calling for federal funding of states that create ‘gateways’ similar to the Massachusetts model.
Integrating health insurance providers into the mix will play an increasingly critical role in ongoing reform over the coming years, Wah said.
On the downside, sources said current stimulus spending may spread funds too thinly across numerous small projects, when it would likely be best to concentrate investments on a few larger implementations that are more likely to gain the traction/visibility that will build momentum to advance healthcare IT nationwide.

It’s increasingly clear, however that in the not too distant future, healthcare providers will want to invest in healthcare IT on their own, and electronic health records will become part of daily operational practice.

One day soon, “providers won’t expect federal subsidies for healthcare IT,” Blumenthal said.
Once medical information is migrated from paper to electronic medical records on an interoperable network, digitized information becomes a powerful thing. Healthcare organizations will be able to conduct population analyses and provide more personalized medical care.
“There will be an explosion in targeted information for treating patients,” Wah explained.
And that kind of information will drive costs down, while simultaneously improving the quality of patient care.

Health Bill a Transfer of Power, Kills the Constitution

A retired Constitutional lawyer has read the entire proposed 'healthcare bill.' Read his staggering conclusions.

The Truth About The Health Care Bills
By Michael Connelly
Retired Constitutional Attorney
March 24, 2010

Well, I have done it!

I have read the entire text of proposed House Bill 3200: The Affordable Health Care Choices Act of 2009.

I studied it with particular emphasis from my area of expertise, constitutional law. I was frankly concerned that parts of the proposed law that were being discussed might be unconstitutional. What I found was far worse than what I had heard or expected.

To begin with, much of what has been said about the law and its implications is in fact true, despite what the Democrats and the media are saying, the law does provide for:

  • rationing of health care, particularly where senior citizens and other classes of citizens are involved,
  • free health care for illegal immigrants,
  • free abortion services, and probably forced participation in abortions by members of the medical profession.
The Bill will also eventually force private insurance companies out of business, and put everyone into a government run system. All decisions about personal health care will ultimately be made by federal bureaucrats, and most of them will not be health care professionals. Hospital admissions, payments to physicians, and allocations of necessary medical devices will be strictly controlled by the government.

However, as scary as all of that is, it just scratches the surface. In fact, I have concluded that this legislation really has no intention of providing affordable health care choices. Instead it is a convenient cover for the most massive transfer of power to the Executive Branch of government that has ever occurred, or even been contemplated. If this law or a similar one is adopted, major portions of the Constitution of the United States will effectively have been destroyed.

The first thing to go will be the masterfully crafted balance of power between the Executive, Legislative, and Judicial branches of the U.S. Government. The Congress will be transferring to the Obama Administration authority in a number of different areas over the lives of the American people and the businesses they own. (New World Order??)

The irony is that the Congress doesn't have any authority to legislate in most of those areas to begin with! I defy anyone to read the text of the U.S. Constitution and find any authority granted to the members of Congress to regulate health care.

This legislation also provides for access, by the appointees of the Obama administration, of all of your personal healthcare, direct violation of the specific provisions of the 4th Amendment to the Constitution information, your personal financial information, and the information of your employer, physician, and hospital. All of this is a protection against unreasonable searches and seizures. You can also forget about the right to privacy. That will have been legislated into oblivion regardless of what the 3rd and 4th Amendments may provide.

If you decide not to have healthcare insurance, or if you have private insurance that is not 'deemed acceptable' to the Health Choices Administrator appointed by Obama, there will be 'tax' imposed on you. It is called a tax instead of a fine because of the intent to avoid application of the due process clause of the 5th Amendment. However, that doesn't work because since there is nothing in the law that allows you to contest or appeal the imposition of the tax, it is definitely depriving someone of property without the due process of law.

So, there are three of those pesky amendments that the far left hate so much, out of the original 10 in the Bill of Rights, that are effectively nullified by this law. It doesn't stop there though.
The 9th Amendment that provides: The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people;

The 10th Amendment states: The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are preserved to the States respectively, or to the people. Under the provisions of this piece of Congressional handiwork, neither the people nor the states are going to have any rights or powers at all in many areas that once were theirs to control.
I could write many more pages about this legislation, but I think you get the idea. This is not about health care; it is about seizing power and limiting rights. Article 6 of the Constitution requires the members of both houses of Congress to "be bound by oath or affirmation to support the Constitution." If I was a member of Congress, I would not be able to vote for this legislation or anything like it, without feeling I was violating that sacred oath or affirmation. If I voted for it anyway, I would hope the American people would hold me accountable.

For those who might doubt the nature of this threat, I suggest they consult the source, the U.S. Constitution, and the Bill of Rights.

There you can see exactly what we are about to have taken from us.

Mobile Phones Could Store Electronic Health Records, Boost Personal Health Monitoring
Medical Records on Your Cell Phone
Doctors, Hospitals to Exchange Electronic Medical Data with Middlemen without Patient's Consent
HHS to Make Grants for Prescription Monitoring Systems
HHS Awards $267M for Health IT Regional Centers
Recent Graduates Eye Health IT Jobs as Top Employment Option
Leveraging the Stimulus Funding to Accelerate EHR Adoption
Federal Government on the Fast Track to Implement Electronic Health Records
In Search of ... Health Information Exchange
Personal Health Records May Not Be So Personal
Personal Health Record Use on the Rise in U.S., Survey Finds
Most Hospital CIOs See EHR Adoption as a Top Priority, Survey Finds
Report: Health IT to Play Key Role in Health System Transformation
White House Cybersecurity Plan Will Aim to Protect Health Data
NHS 'Scaring Patients into Accepting Electronic Records Database'
Electronic Health Record Vendors Step Up Game in Preparation for Federal Stimulus Funding
Wisconsin Passes Law to Establish Statewide EHR Exchange System
Arizona County to Buy $10M EHR System to Boost Inmate Care
Biden, Sebelius Award $220M in Federal Stimulus Funds for Testing the Adoption of Health IT
How Smartphones Are Changing Health Care for Consumers and Providers
Health IT Policy Panel Approves Certification Recommendations
Growing Urgency in Developing Healthcare IT Standards
Tracking Pandemics - A Closer Look at Healthcare Analytics
The 2010 Vision for Health Information Exchange
Government as the Health IT Security Standard
TeleHealth is Here, and It’s Growing
FCC, FDA, HHS also working on telehealth
VA sets the telehealth table
National Broadband Plan Promotes Health IT, Telemedicine
‘Death panels’ were an overblown claim — until now
USDA Provides $1.2B in Funds for Rural Broadband Internet Efforts
Effort to Widen U.S. Internet Access Sets Up Battle
New Health Care Law Dramatically Increases Premiums
Bill Gates Death Panels Tip of Iceberg
Major insurers to drop child policies ahead of coverage mandate
Double-digit Hikes for Some Medicare Drug Plans

Updated 9/25/10 (Newest Additions at End of List)

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