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Bulls & Bears
On Sunday, February 28, Brenda Buttner was joined by Gary B. Smith, Tobin Smith, Pat Dorsey, Eric Bolling and Julia Piscitelli.
Democrats Claiming Health Care Plan Will Create 4 Million Jobs; Will It?
Eric Bolling, Fox Business Network: This plan will not create jobs—it's a jobs killer. There are a lot of reasons this just can't work. 75 percent of small businesses use the tax code as individuals. In other words, they make whatever money they do as individuals. So small businesses are going to get pushed into what amounts to a 45 percent federal tax rate. It's a rate that doesn't compete with any other country in the free world. Not to mention these businesses will get taxed now, even though many benefits won't kick in until 2014. This will have a devastating impact on jobs.
Julia Piscitelli, Democratic strategist: Health care reform will create jobs. It's going to insure 30 million people who weren't covered before. This is going to require doctors, nurses, clerical workers, technicians, etc. We're going to see a shift in patient care to more appropriate outpatient care. Conservative estimates say reform could create anywhere from 250,000 to 400,000 jobs per year.
Tobin Smith, NBT Media: Health care reform will be great for job creation—government job creation. The Senate's bill creates 118 new bureaucracies. Agencies designed to manage or monitor other agencies. So this whole new layer of bureaucracy is going to require a huge number of jobs. Then, with all the new taxes planned to hit small businesses and individuals in 2010 and 2011, you're talking about a net disaster.
Gary B. Smith, TheChartman.com: I think we really need to look at this 400,000 job number. The key question here is what kind of effect this will have on net jobs. Yes, we'll see many jobs shifted into the health care industry. But these jobs are getting paid for via taxes—money that could be used to create other jobs in the private sector. This is akin to saying a military draft creates jobs—no it doesn't. I just don't see any net jobs being created by reform.
Pat Dorsey, Morningstar.com: When you provide more health care to more people, you're going to need more providers. What kind do you need? Likely not the lower-paid areas of health care. Probably jobs along the lines of pharmacy tech, nurses, etc. If margins across the health care sector come down, that will reduce the incentive for a lot of research and development, with a reduction in the higher payer jobs that drive innovation. High profit margins really help create jobs in health care, and a reduction in those margins will likely have a negative effect.
White House Mulling Plan to Ban Foreclosures; Will You Pay?
Gary B. Smith: This plan would help no one and hurt everyone. Freddie Mac says that 40 percent of people who've had their homes foreclosed upon were speculators. Why do we want to save a person who's speculating on a home in Las Vegas? The vast majority of homes foreclosed on had very little equity in the house to begin with, so if they home gets foreclosed on, the person picks up and moves into an apartment. Most of the people foreclosed on should be foreclosed on. This plan would do nothing but put in a false bottom on the housing market.
Julia Piscitelli: This plan would help out regular and people and families who have hit tough times—not speculators. The government may put a hold on some foreclosures, others will go through. President Obama really wants to make sure the banks are doing everything they can to help them, and obviously they're not doing that. This plan is meant to put pressure on the banks to help out those who really need to be helped. It's for people who have temporarily hit tough times—it won't be used to just assist people who truly can't ever hope to afford the home they're in.
Eric Bolling: The government is the only entity dumb enough to encourage mortgage failures. That's essentially what they're saying here—if you want to speculate in the housing market, go ahead, we'll bail you out. Free markets are designed to make it not only okay to fail, but necessary. Failure spawns innovation, and innovation breeds success. Many people are in homes they couldn't and won't be able to afford. This has to be done to get people back into housing within their means. If the government doesn't let this happen, then the housing market will never really recover.
Pat Dorsey: This is a silly idea at its root because excess inventory is the biggest thing currently preventing the housing market from clearing. This is what's necessary for real estate to recover. Until the market clears, you won't get recovery. This plan being considered by the administration won't help this happen in the slightest.
Tobin Smith: This is just another example of the government trying to do well for people, but actually hurting folks in the end. When people normally take over a home, they spend thousands of dollars on buying new stuff. But if they're in a home that is potentially about to be foreclosed on, or they're still in it only because of government help, they're not going to spend anything on improving the property. Keeping people in homes who can't afford to be this is anti-capitalist and even anti-American, and incredibly bad economics. This will stall any economic recovery given the huge size of the housing market.
Blizzards Putting Green Agenda on Ice: Good for Economy?
Tobin Smith: Right now, the economy is jumping up and down saying "thank you!" Even Democrats are finally coming to a conclusion that all these ideas for the regulation of emissions out there are basically horrible for the economy and fraught with major flaws. People are starting to do the math on this stuff, and realize basically any of these plans will kill the economy.
Julia Piscitelli: Ultimately cap and trade legislation is going to help businesses in the long run. It may not be the best thing for the short-term, and time the implementation of any legislation correctly. Lawmakers are probably doing what I think a lot of people want them to do by taking a step back and really looking at the issue. Long-term though, cap and trade legislation would be a very good thing. We'll shift over to green jobs creating many new businesses and industry which will be much better for our economy long-term, not to mention more efficient.
Gary B. Smith: This is just another way for Democrats to shape the economy and give money to causes they believe to be right. This is really a tax plan that will cost the average family of four $4,500 per year. Not to mention, it'll kill off about 2 million jobs over the next 20 years. Any way you cut it, strict regulation of emissions by either the EPA or Congress would have a devastating economic impact. So the fact these plans seem to be stalling is great news.