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IN FOCUS: TIME TO GET RID OF MEDICAID TO GET RID OF AMERICA'S DEBT?
DAVID ASMAN: Get rid of Medicaid, right now. Some say that's what should top the president's debt commission's list when they reveal their final recommendations next week. The plan is gaining so much traction, some states are already moving on it. Is that what will get America out of debt?
NEIL WEINBERG: Medicaid is a turkey. It's going to bankrupt the whole country. If you look at the projections from the federal government, it literally will along with Medicare. What we need to do is get rid of this system, fortunately in a crisis is when people are willing to think alternatives, and what we really need is for states and governors to start experimenting, coming up with systems that are better, offer some coverage to poor people, but also won't bankrupt the states or bankrupt the federal government.
STEVE FORBES: There is a lot of fraud and waste, but I don't know what Neil has against Tiny Tim. There are ways to get Tiny Tim real care and that is not to end Medicaid, but to mend Medicaid. And that is, allow patients in Medicaid to use vouchers or the equivalent of food stamps, right now the system doesn't pay enough to doctors, doesn't pay enough to hospitals. So patients are getting shafted, hospitals and doctors are not getting what they need. We have to reform this system, allow patients to be in charge, give them the wherewithal and you'll start to get free markets, that means more health care at less cost, it works everywhere else.
ELIZABETH MACDONALD: Mend it. Look we all want to help the poor, but the problem is that Medicaid is cramping out other state programs. The budgets are about the size of Fortune 500 companies. We all still want to help the poor. But again, fix it, it's a fee heavy bureaucratic system and the way you do that is get rid of the fee based system and do what Tennessee did. Tennessee went to a model that relied more on nurse practitioners. Leave it up to states to figure out on their own what works best for Medicaid.
STEPHANE FITCH: Well Medicaid could be a lot stronger and some of the fixes you guys are talking about make sense. But fixing the debt on the backs of the poor and the needy doesn't make any sense. The thing we have to be doing here is growing this economy, that will solve a lot of debt problems. We got to make the playing field more inviting for entrepreneurs, including maybe in medicine. That's how we fix this debt problem, we got to stop trying to balance this on the backs of the needy.
RICH KARLGAARD: Well the first thing you do is you freeze the sucker or take it back to say 2006 or 2007, and just stop it from going up. Then you introduce consumer choice as Steve talks about. And then I find myself in unusual agreement with Stephane, you've got to bring in innovation. I had lunch last week with the co-inventor of packet switching, which is the foundation of the Internet, he's in his eighties. He's still inventing and he invented a diagnostic device that reduces radically the costs of seniors going to home to home health care. Technology can solve a lot of problems.
VICTORIA BARRET: We're all for getting rid of fraud and waste. But what these states seem to be doing is saying is "let's try to push this to the federal government." Our states can't afford it, we're in trouble, let's push it to Washington. And for a taxpayer, you're going to pay no matter what. And the reality is that Medicaid pays for a lot of vital services. In some states, nearly half of all childbirths are paid by Medicaid. You've got lots of people in nursing homes thanks to Medicaid. That cost is what it is. You can push it around and push it off your table and onto someone else's, but the taxpayers are going to pay for it.
WOULD CUTTING PUBLIC EDUCATION ADMINISTRATORS' PAY HELP FIX AMERICA'S SCHOOL SYSTEM?
DAVID ASMAN: Where's the protest over this? Randi Weingarten, the head of the American Federation of Teachers, is demanding tax hikes on rich Americans. She says they need to make sacrifices. But she forgot to say she's reportedly taking home nearly half a million bucks this year. And no rallies against public school administrators also making six-figure salaries.
MIKE OZANIAN: The teaching bureaucrats need a massive pay cut so more money can actually go to teaching kids. In my town, Glen Rock, New Jersey, the school superintendent makes $225,000 a year, that's his first year salary. That's $60,000 more than the median income of people who live in my town. You know what his great idea is? When he first came in last year, was that kids that go on field trips in one elementary school, kids in another elementary school should go on the same field trip so they have a common experience. We pay him $225,000 a year to come up with that idea.
STEPHANE FITCH: This idea is nonsense. The problem is not that we're paying these guys too much, it's that we're not demanding enough. These principals and administrators, these guys are our agents of change at the school. We got to pay these guys three times as much and demand three times as much hard work.
ELIZABETH MACDONALD: I think this is the free market at work. Randi Weingarten is fighting for the unions, the union is paying her what it thinks she deserves. Is she worth $500,000? That's the issue. And by the way, she will pay the higher taxes she's advocating. I'm not for tax hikes at all, what I'm against is these college presidents of them, 30 of them, getting a million dollars or more per year. In 2004, there were zero. And what I'm for is if they fall down on the job, if their grades are not up to snuff, and if the tuition costs are very high, do tuition clawbacks on behalf of students, give them a break and clawback that money that those college presidents are making. Fat cat academics have got to go.
NEIL WEINBERG: I think this is a bunch of right wing Republican grandstanding. Look at what the supervisor's salaries cost, it is a rounding error compared to all of the other goodies that teachers and administrators get. When you look at their pensions, when you look at the salaries of the teachers themselves, when you look at health care benefits they generally do not pay for, this is just something that a lot of senior Republicans are just grandstanding.
RICH KARLGAARD: Randi Weingarten should not have a job at all. The idea that public employees get to form unions that was an idea opposed by liberal stalwarts like FDR and George Meany. So this is really the cancer in the whole system.
STEVE FORBES: If you're going to allow public sector unions, then how about real free choice? Breakup this semi-government monopoly, allow the parents to direct the money to schools they want, send the kids to schools they want, get real accountability. That way administrator's pay, you pay them if they perform, if not they pursue new opportunities.
SHOP NOW OR FOREVER HOLD YOUR PEACE?
DAVID ASMAN: 'Tis the season for shopping! Whether you braved the Black Friday frenzy, or are holding out for Cyber Monday, some at Forbes warn you better get shopping now because you're about to pay a whole lot more later. And you can blame it all on the folks at the Federal Reserve.
STEVE FORBES: Because the Federal Reserve is printing too much money, which means prices are going up. So if you find a bargain, take it. And why you're at it buy a lump of coal for Ben Bernanke and hope it he gets a pink slip at the New Year because he's trashing the dollar. Which means your dollar is going to have less value, buy the stuff now before Ben ruins it. He's the real scrooge at Christmas.
VICTORIA BARRET: And we might see a creep up in inflation in a year or two. But I think the greater force, if you're a bargain shopper, is the Internet. I mean, here's why it used to be you could go shop online, comparison shop in the comfort of your home, or, sorry Steve, in your office. You can go into the store with your mobile device, the guy in the store says "this is the best deal around." You go, I'm going to fact check that. This is a really powerful force that is driving prices down.
STEPHANE FITCH: You know what though? Everybody talks about inflation and they're always talking about 15 percent inflation. You know, my family and I gathered up on Thanksgiving and we all held hands and we prayed for 2.5 - 4 percent inflation over the next three or four years. I'll tell you one thing that's been missing around our table, the sound of grandpa complaining about the rising cost of a can of tomatoes. I want to bring that back, that's an American institution, a little bit of inflation would be a good thing for America. I shopped like crazy yesterday, I hope everyone did.
KAI FALKENBERG: Well I think the prices of things that people really want are going down. I don't what Stephane's family gives each other for the holidays, but in my family they want gadgets and they want gizmos. My husband a few years ago bought me an Amazon kindle for over $300, you can now get a better version for less than half that. So the prices of the stuff people really want is going down.
MIKE OZANIAN: And inflation wasn't part of the American economy until we went off the gold standard, which we should have never done. That's when we got the big swings in the economy. But unfortunately, I can't wait much longer to buy a Christmas gift because my wife will kill me if I do. Otherwise, I'd wait until a little bit after Christmas because I think there are going to be a lot of sales.
INFORMER: BEST HOLIDAY BUY
DAVID ASMAN: Our informers have three stocks they say are the best buys you could make this holiday season.
NEIL WEINBERG: Goldman Sachs (GS)
STEPHANE FITCH: Post Properties (PPS)
ELIZABETH MACDONALD: Cosan (CZZ)