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Bulls & Bears
On Saturday October 24, 2009 on "Bulls & Bears," Brenda Buttner was joined by Gary B. Smith, Tobin Smith, Eric Bolling, Par Dorsey and Mike Papantonio.
"Medicare for Everyone"; Fast Track to Bankrupt U.S.?
Eric Bolling, Fox Business Network: This is the fastest way to bankrupt America. Medicare is over $30 trillion in debt for the long term. You start talking about all the extra people who are going to go on Medicare over the coming decades, it's an even bigger hole. If you extend those benefits to everyone who's uninsured, the country goes bankrupt immediately. Not to mention, we'll probably see large numbers of people in medicine leave the profession.
Gary B. Smith, TheChartman.com: This would be like a new business saying it's going to follow the model of Pan Am Airlines, or Bethlehem Steel or Enron because they worked so well. Medicare is already ten times over what its expected budget was going to be. The Medicare trust fund is going to be bankrupt by the year 2017. This system clearly cannot work within its means. And this isn't even counting the tens of billions in Medicare fraud that goes on every year. This just can't work.
Mike Papantonio, radio talk show host: Medicare has been in business for decades, and we've heard it's going bankrupt for decades. It serves people's political purposes to say that. It works to scare the elderly by saying the Medicare system is bankrupt and they could lose their benefits. If the Republicans hadn't stripped money from Medicare to give away in tax cuts for rich people, we'd have more money to go around. We need a public option.
Tobin Smith, ChangeWave Research: In Tennessee back in 2005, the state almost had to file for bankruptcy because their Tenn-Care health plan was so financially upside down. They had to cut out 60 percent of the people on the plan to hold off bankruptcy. Massachusetts came up with a very similar plan. An overwhelming number of people enrolled in the state health plan. Premiums went way up, and many would enroll in the program after they got sick and their medical costs skyrocketed. And who's footing the bills? Taxpayers.
Pat Dorsey, Morningstar.com: When health care reform was being talked about in the mid-90s, everyone vilified the insurance companies because they weren't spending enough money on health care. Now everyone says they're blowing too much money on health care. The health insurance industry is one of the best cost-containment mechanisms we have. It keeps people on medicine so they don't have to visit the emergency room. It helps decide who's in need of medicine and who isn't. Health insurance companies have a very valuable function, and we should stop demonizing them.
More Offensive: "Excessive" Pay or "Excessive" Gov't Power?
Gary B. Smith: Excessive intrusion by the government into the financial sector is absolutely more offensive than excessive pay. The goal of giving bailout money to companies was so they would return to profitability. When you punish executives by slashing their pay, you are going to take away the best talent. Look at Bank of America--already a dozen top executives have left. The government is damaging the investments it has made on behalf of the American taxpayer. I don't think it's going to stop. Eventually we'll see these compensation restrictions by the government expand to other industries.
Tobin Smith: The problem with all this is that the government is assuming it knows what excessive pay is. I guess they know it when they see it. The banking system clearly has problems. But I think excessive pay plays a very small part in all of this, and it's impossible to accurately define. We can look at President Obama's book where he got millions in royalties. That seems excessive. But does that mean he wasn't entitled to those earnings?
Mike Papantonio: If you need guidance for excessive pay, it's when the CEO of a corporation makes 700-times what the regular worker does. The corporate heads have no reason to be complaining. They should celebrate the fact they haven't gone through "perp" walks yet considering the amount of money they stole or destroyed. I don't see how you can defend these executives right now. If we've learned anything, it's that one man with a briefcase can steal a lot more money than a man with a gun.
Eric Bolling: This is an incredibly frustrating problem. The government bailout of these companies really worked to destroy the free market system. I want all of the money used to bail out these companies back. Not 90 percent of it. But it's important to note these executives didn't sign any legal contract with the government allowing their pay to get cut, or that they could only receive a certain amount of compensation. There's no telling where the government is going to stop with these pay restrictions, and we could see them going after any bank or industry down the road.
Pat Dorsey: What is excessive? If you make a lot of money for shareholders, then by all means the executives deserve to be paid a lot of money. But this isn't the problem. The issue here is the disconnect between pay and performance. There was an entitlement culture that grew among executives demanding high pay regardless of performance, and it was abetted by company compensation committees. This is the problem we really need to solve, and this debate isn't being had right now.
Energy Star "Fraud": Preview of "Climate Change" Bill?
Eric Bolling: The self-regulation of this program is ridiculous. Get all the energy star stickers you want and put them wherever you want. It's this honor system that's fraught with corruption. No one is going in to say if certain appliances are actually saving energy and electricity costs. This really is a preview of the sort of abuse that would happen under the climate change bill. We'd be talking about massive levels of corruption.
Gary B. Smith: There's a problem with this energy star program, along with just about every other government program. There's no accountability. We just have bureaucrats hitting a check box marking off whether the job is done or not. There's not profit incentive. They don't have to report a bottom line. This is why so many government programs are wrought with waste and corruption.
Mike Papantonio: You don't throw everything out because you have a few dishonest people involved in a program. If that were the case, we'd have to close down Wall Street. We're faced with a major environmental crisis that has to be solved. We can't just focus on relatively minor incidents of energy star fraud to say we shouldn't pass meaningful climate change legislation.