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Bulls & Bears
This week, Brenda Buttner was joined by Gary B. Smith of TheChartman.com, Tobin Smith of ChangeWave Research, Eric Bolling of the FOX Business Network, and Democratic strategist Mary Ann Marsh.
New $856 Billion Health Care Bill: Tax Hikes Coming to Pay for It?
Gary B. Smith, TheChartman.com: This new bill doesn't have tax hikes -- it has tax gouges. If a person is mandated by the government to buy health insurance, they're going to effectively be handing a major chunk of their paycheck over to the government to purchase coverage. If you're a family of four for example, and take in $54,000 a year, you're going to have 18 percent of your income go to the purchase of government health insurance. This would in effect be a massive tax increase for Americans without health insurance.
Mary Ann Marsh, Democratic strategist: There is nothing in this bill to suggest the middle class is going to see any tax increases. Even if it did, what Congressional member would actually vote for a bill like that? It would be political suicide. The Congressional Budget Office says that 94 percent of legal residents will be covered in this bill will be covered and will lessen the deficit over time.
Tobin Smith, ChangeWave Research: If you get your health care through your employer, you have a very small co-pay, and you've never seen your health care bill. This bill is saying there are no more free lunches. If everybody has to participate in health coverage, everybody has to pay. Originally, the government was going to go after the top 1 percent of earners, but they looked at tax receipts and realized there was no way they'd be able to squeeze enough money out of them. So now the government has to look to lower income brackets. People are quickly going to realize how much health care reform is going to cost them.
Eric Bolling, FOX Business Network: If you look beneath the $856 billion price tag of this bill, you'll see that $507 billion of it is supposed to come through spending cuts. Of that $507 billion, $406 billion of it is going to come from cuts to Medicare. This means that seniors on Medicare right now are going to see their benefits reduced or taxed more. These cuts will have to be approved by Congress, and what Congressional member in this world is going to cut Medicare benefits to seniors?
Rob Stein, Astor Financial: There will certainly be a tax on the so-called high dollar health care plans. But I don't see this hitting the middle class. These tax increases on health care coverage will go to people who are receiving great benefits from their insurance. What we're really talking about now is how we're going to allocate the expenses of health care. We're not going to suddenly see tens of millions of people receiving health coverage -- they already get it in some form, but it's paid for by people with coverage.
63 Percent of American Say U.S. Could Go Bankrupt: What Happens If They're Right?
Tobin Smith: If you can't pay your bills, you're bankrupt. Our income is down 25 percent. We continue to add on massive amounts of debt. Inflation could easily sky rocket, with the dollar plunging. If oil goes up, along with precious metals, you'll see an ever-spiraling downward economic loop. Unfortunately, I think we're coming all too close to potentially reaching that point.
Gary B. Smith: The dollar would be worthless. A lot of countries eventually get out of bad economic cycles if they manufacture something and have something to sell in the global economy. We've evolved I think to mostly a service-based economy. While that's not necessarily a bad thing, if the country spirals downward economically, it'd be much harder to have any chance of recovering over the long term.
Mary Ann Marsh: I don't think this is going to happen. If it ever did, the country you have to watch out for is China. They can out-manufacture and out-sell us and call in our debts. If that occurred, the last year of economic turmoil we've seen would look like a walk in the park. It'd be an utter disaster for this country.
Eric Bolling: The definition of bankruptcy is being financially insolvent. What does $11.8 trillion and exploding debt sound like to you? China holds $1.5 trillion of our currency and $850 billion of treasuries. If China pulls the plug, the lights go out. China really holds the cards right now.
Rob Stein: I think we're unnecessarily scarring people with this scenario. You know who the U.S. owes the most debt to? Itself. Americans own the most of government debt, through pension and retirement funds, the social security system, etc. If the U.S. were to default on its debt, we'd default on ourselves. It would certainly be a major problem for us economically, but sometimes bankruptcy isn't a bad thing.
Bailed-Out GM Launches 60-Day Money Back Guarantee: Taxing Taxpayers for a Ride?
Eric Bolling: If the government hadn't given GM $50 billion, this idea would be laughable. GM says it's putting its money where its mouth is. But it's our money! These guys are idiots. We're never going to see a penny of this money back.
Gary B. Smith: I don't think people would have a problem with this program if this were a car company that hadn't been bailed out. I actually think this is pretty good marketing. They lose money if people return the car after 60 days. I think there's a small chance of this backfiring. Basic inertia and the complexity of buying a car are going to keep most people from taking any real advantage of the program. I applaud GM for this deal--it's new and will hopefully give incentive for people to purchase a car that they otherwise might not have.
Tobin Smith: We're in a situation now where the taxpayer isn't going to see their money back from the GM bailout. The only way a dent could be made in this debt is getting enough money from taxes on GM employee and business income and sales taxes on car purchases. This program could work, and keeping GM in business is now in the interest of the taxpayer.