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Is it Un-American to Warn About Another Fannie Mae Debacle in the Making?

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Posted on August 11 2009 5:51 am
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The health care debate continues, with Nancy Pelosi calling those who dare to express their opposition “un-American.” And all this time, I thought that telling your Congressmen what you think of a vital issue in face-to-face meetings was as American as apple pie.

The Fox News cable show hosts,  like Glenn Beck, Sean Hannity and Bill O’Reilly, are supposedly stirring up these  “mobs” according to the Democratic Party and its supporters on the far Left.

So what did I just receive  from the hypocrites calling themselves “Organizing For America” (OFA), a project of the Democratic National Committee that is staffed by Obama campaign workers who have denounced the organizers of the opposition?   I received an urgent e-mail, calling on me to join others in bombarding Congressional offices with personal visits and “customized” flyers that express how much health care reform “matters to you.” The good folks at OFA were even so kind as to  give me a link to sign up for an office visit and receive de-briefing materials. Here’s what that link said:

All throughout August, our members of Congress are back in town. Insurance companies and partisan attack groups are stirring up fear with false rumors about the President’s plan, and it’s extremely important that folks like you speak up now.
According to our records, you live near Sen. Chuck Schumer’s office in New York, NY.

So we’ve cooked up an easy, powerful way for you to make a big impression: Office Visits for Health Reform.

You can have a quick conversation with the local staff, tell your personal story, or even just drop off a customized flyer and say that reform matters to you.

We’ll provide everything you need: the address, phone number, and open hours for the office, information about how the health care crisis affects your state for you to drop off (with the option of adding your personal story), and a step-by-step guide for your visit.

Senator Schumer wants to bring back the Fairness Doctrine to silence conservative talk-radio hosts, whom he has equated with purveyers of pornography.  Similarly, he is a committed ideologue onthe issue of health care; he is not interested in the truth. 

For example, he knows but does not care  that the non-partisan Congressional Budget Office — which has already criticized the hurriedly-enacted Obama stimulus package — questions the fiscal soundness of the  health care legislation wending its way through Congress.   

Schumer knows, but does not care, that there will be huge cuts of at least $200 billion in the Medicare program  in order to pay for Obamacare.  This will seriously curtail benefits to the nation’s elderly, which will  swell with the retirement of baby boomers in the coming years.

We are told by President Obama himself that the savings will derive from increased efficiencies.   All I can say to that flat-out lie is to ask why these so-called efficiencies have not already been implemented anyway, in order to save Medicare itself from going bankrupt.  Instead, we are to get an inefficient government-run health care program for all, on the same model as Medicare, funded in part by cuts to Medicare.

Finally, Schumer and his fellow Democrats are knowingly creating the potential for the kind of meltdown that already has struck the quasi-governmental Freddie Mac and Fannie Mae entities to repeat itself in the plan for a government-run health insurance option.  This requires some detailed explanation, so bear with me.

Although the idea of the private-public combination is to set up competition between a new government-sponsored insurance plan and private insurance programs, this creation of government will not be a product of the free market.   With government backing, the premiums paid by the insured in the government-sponsored plan will likely be significantly less than those of private insurance plans.   There will undoubtedly be a larger pool to spread risks than would be the case with the typical private insurance plan, and there will be exemptions from the state regulations that private plans must contend with.  At the same time, the government plan will be pushed by politicians to take over the coverage of all those at the greatest medical risk who are likely to file the largest claims — precisely what helped bring about the sub-prime mortgage debacle courtesy of Congressman Barney Frank and company.

As the government healthcare plan balloons in size with more and more plan participants, particularly those with greater health risks, the private insurance firms that will try to compete against the government’s lower insurance premiums will have to cherry-pick those with the lowest risk of filing large claims in order to survive — assuming that they are even allowed to do so.

Meanwhile, the government insurance plan — needing to raise more money to cover the increasing amount of insurance risk that it is taking on (and that will not be covered by insurance premiums alone) – will have essentially two financing alternatives.

The first alternative is to convert into a tax-revenue-funded single-payer government program – no doubt the ultimate goal of those central planners like President Obama who had been willing to take the more gradualist private-public combination approach to begin with.

The second alternative is to tap the financial markets with securities backed by asset pools of premium receivables on the Fannie Mae-Freddie Mac model, knowing that it too will receive an immense taxpayer bail-out if it runs into dire financial straits.  Either way, American taxpayers will pick up virtually the entire tab.  The central planners’ dream of government control of a key sector of the American economy will be realized.

So rather than try to visit Senator Schumer’s office and speak to a bunch of twenty-something staffers, I invite the Senator and the rest of Congress to read the legislation that they will be voting on, to seriously consider the costs as outlined by the Congressional Budget Office, to consider the tragic implications for our nation’s seniors in funding Obamacare out of huge cuts in Medicare payments to service providers who are already bowing out of the Medicare program, and to consider the Fannie Mae-Freddie Mac debacle which will inevitably await the mixed public-private model being proposed for health care.

If Congress did its job, the “mobs” would not have to bother telling its Members how to do so.

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