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On Saturday October 17, 2009 on "Bulls & Bears," Brenda Buttner was joined by Gary B. Smith, Eric Bolling, Bob Froehlich, Rob Stein and Julian Epstein.
Senate Majority Leader Harry Reid Prices Health Care Bill at $2 Trillion: Will Tax Hikes Double?
Gary B. Smith: Absolutely this means higher taxes, probably $700-800 billion more. That's assuming this reform comes in on budget. Estimates suggest reform will lead to more than a 10 percent tax increase per household. With higher taxes, the government still gets the same amount of revenue -- and it kills the economy.
Eric Bolling: Harry Reid had a 'Joe Biden Moment' and let slip out what really goes on behind closed doors. It won't be $856 billion, it won't be $2 trillion, but more like $4 trillion. Individual plans were going to be taxed at $8,000 but now it's going to go up to $21,000, while family plans were going to be taxed at $21,000 but now it's going to go up to $49,000. Bottom line: this is going to be a very expensive health care plan and very harmful to the economy.
Julian Epstein: Harry Reid was not saying that the current plan will cost $2 trillion, but that the public and private health care enterprise costs that much. The context was the savings you would get as a result of tort reform, which would be about $50 billion. Critics have said we should listen to the CBO, and they are saying $800 billion. This is a deficit neutral plan for universal health care.
Bob Froehlich: This is going to be the largest tax increase in the history of our country, although we won't realize it because it will be sliced and diced a million different ways; it won't feel as bad as it actually is. You can't have a plan that costs $2 trillion without raising taxes and fees on everyone. When you raise taxes on hospitals and pharmaceutical companies, they pass these costs onto consumers. The individual on Main Street has no idea what is about to happen to him.
Rob Stein: We don't need to raise taxes at $2 trillion, all we have to do is quadruple everyone's salary, quadruple corporate profits, and quadruple GDP. Obviously we are going to have to spend more—but higher taxes aren't always a bad thing.
"Fat Tax" Not Working; Time For Gov't To Butt Out?
Eric Bolling: How about some personal responsibility? Parents should stop giving their kids soda and sweets, but they don't need to be taxed for doing it. We have kids dying in the fields for our freedom to choose what we eat.
Bob Froehlich: Why does every answer have to be higher taxes? This is your life, you have to take responsibility for it. Why does the government have to tell you what you can and cannot eat?
Julian Epstein: Anyone who is familiar with the tax code knows it is based on creating incentives and disincentives for economically productive activity. There is an enormous amount of data showing that taxes on things like soda (and particularly tobacco) has a significant market impact. Price Waterhouse Coopers did a study that showed $500 billion a year is attributable to the health care system because of unhealthy living. We have an obesity crisis in this country.
Gary B. Smith: Yes, the tax code can create incentives and disincentives, but is it the government's job to move us in certain directions? There are just as many studies that show that preventative health care doesn't amount to any cost savings. Since 2003, the government has spent $9 billion on the War on Drugs, while adolescent drug use has gone up during that time.
Rob Stein: I agree that taxes are a great way to 'incentivize' behavior. It's clearly a place where you can increase revenue, and if it isn't hurting consumption of the product, why not tax it? Behavior that hurts the total should result in some sort of consequence. Preventative health care is a good thing in the long run.
Fire Minimum Wage Laws to Create Better-Paying Jobs?
Bob Froehlich: The minimum wage kills jobs—get rid of it forever. All it does is ties the hands of businesses. When businesses are flexible, they make more money and hire more people. You cannot be for jobs, while being against those who make the jobs by forcing them to pay a minimum wage.
Eric Bolling: Getting rid of the minimum wage could certainly help hire more people. In rough economic times, business fear having to lay off workers if there is an increase in the minimum wage.
Julian Epstein: We're talking mostly about service industry jobs here, as well as a minimum wage that will barely allow you to stay above the poverty line. During the last 8 years, we saw the average working family lose $2,000 per year in income. However, during the Clinton administration, we saw the incomes of the bottom 20 percent increase at a faster rate than the incomes of the top 20 percent. Getting rid of the minimum wage is going to increase the poverty rates and income inequality. Overall, that's bad for capitalism and bad for the market.
Gary B. Smith: The New York Times said in 1996 that an increase in the minimum wage would lead to a decrease in 100,000 jobs. The Federal Reserve has come to the conclusion that mainly the unskilled and young workers lose jobs. Since 2007, over 600,000 teens have lost jobs because of the increase in the minimum wage.
Rob Stein: Let businesses decide the right wages—the market will figure it out. Wages might even go up if businesses become more productive and more profitable. The market will take care of it, so you do not need to create a minimum.
Gary B: Fergie scores for Dolphins & Florida! "LUV" takes off 20 percent by year end
Bob: Forget 10K; Dow 13K is on the way! "DIA" soars 30 percent by end of 2010
Rob: Health care lives! "IHF" jumps 30 percent in 1 year
Eric: Up, up & away! "GRMN" finds 30 percent in 1 year
Neil Cavuto was joined by Charles Payne of Wall Street Strategies; Dagen McDowell, Fox Business Network host; Adam Lashinsky, Fortune magazine; Gary Kaltbaum of Kaltbaum & Associates.
Dems' Health Care Plan: Pay Up Now, Get Benefits Years Later?
Charles Payne: I don't pay for anything in a store if I can't walk out with it that day. But what this plan does in give the government cover to accumulate some money to help pay for health care. It reminds me of Social Security – collect some money now before we have to pay it out, and it should work.
Dagen McDowell: This works out to around 10 years worth of taxes and fees to cover roughly six years of spending. Congress is also going to have to cut costs in order for the additional revenues to actually work. This price tag is going to get bigger and bigger down the road.
Gary Kaltbaum: I think a couple things are at work here. One you have major elections in 2012, so having the benefits kick in around 2013 is good for getting votes. Also, I see a major power grab and redistribution of American wealth with this plan.
Adam Lashinsky: All big government programs require the revenue from taxes to come in first, then the government can start to build the program with those revenues. And not all the fees and taxes kick in immediately (the employer mandate fees don't start right away).
White House $250 Payouts to Seniors: Health Care Hush Money?
The president wants to give every senior in this country a $250 check to up for the cost of living increase social security recipients won't be getting next year. Good plan or something else going on behind the scenes?
Dagen McDowell: Look – consumer prices are falling right now. So the fact that Social Security payments are not going up next year is not a big deal. And the cost of living increase for this year are going to be a record, so yes – I think there is more to this than just a bonus for seniors.
Charles Payne: As is the case with any program expansion – the money has to come from somewhere. And this is $13 billion worth. So it isn't a small amount.
Gary Kaltbaum: Even President Obama has said he isn't sure where the money will come from. In cases like that the government will just print more money which is never good.
Stocks to Give You a Pay Raise
Charles Payne: CA, INC. (CA)
Gary Kaltbaum: Starbucks (SBUX)
Adam Lashinsky: Natural Resources (NRP)
Forbes on Fox
On Saturday, October 17, David Asman was joined by Bill Baldwin, Neil Weinberg, Mike Ozanian, Quentin Hardy, Victoria Barret, Jack Gage, Kai Falkenberg, Mike Maiello, and Evelyn Rusli.
In Focus: Should Older Americans Pay More for Health Insurance?
David Asman: It pays to be young especially when it comes to pricey health insurance premiums. If you're over 50, you know what I'm talking about. But President Obama and Democratic lawmakers want to change that and make people under 50 pay more for their youth and health. Is that fair?
Victoria Barret: What the administration is proposing we do is essentially put a cap on how much insurers can charge people over 50 and that sounds harmless enough; but it has this sort of negative effect of making costs rise for everyone else. Younger people will pay more for insurance and this doesn't make sense when younger people typically have lower incomes and they're the very people that sort of started this whole debate on health care. We went in saying we've got all these uninsured Americans and by some estimates half of them are young. So now we're going to make them pay more for insurance. This is cockamamie. It doesn't make sense.
Mike Maiello: Victoria Barret is back and insightful as ever! Wrong, but not entirely wrong. She is right that young people do have a complaint here and it's a legitimate one. However, if you're trying to make insurance policy for the country, you don't want to add rising costs to people who are headed into retirement living on fixed incomes. That doesn't make a lot of sense either. Young people become old people. So if you do have to pay a little more now, and I'm not convinced that you will, but if you do it does pay off a little later. Right? It's an investment.
Evelyn Rusli: Mike, you're a part of the young and should be agreeing with me here. It's about keeping the system fair. Now, the older population pays significantly more than the younger population. Just look at the numbers - around $4,900 per year for people who are 45-65. Compare that to people who are younger - roughly $1,400 a year. That's a significant disparity. We shouldn't have they younger population disproportionately shouldering the cost of health care.
Quentin Hardy: Well David, you do need a lot of variation inside a risk pool to actually smooth out the risk. Let's pretend that I'm a little older than Victoria, but I've been in good health this year while she's given birth in the past year and run up a big hospital bill. In that case she cost more than I did but I'll bare the burden of that. She's going to get older some day and I'm going to be dead. She wins.
Jack Gage: I think this plan sounds like "to each according to their need from each according to their ability." We should have a system where we follow market rates where as a young lad like yourself (David) may not he a high risk for health problems. There are people ranging from 50 to 65 when health problems start to wear in. That's something that has to be priced into the risk pool as Quentin said.
Mike Ozanian: Listen David, health care costs should be based on what type of plan you want. If you want a plan with everything in it, then you have to pay more and look at what type of health you are in. Look at me. I'm over 50. I'm buff and I don't need Viagra.
Bailed-Out AIG Paying Cooks and Mail Clerks Big Bonuses: Proof Bailouts Don't Work?
David Asman: $7,700 to the kitchen assistant, $7,000 to the mail room clerk, and $700 to the file keeper. All bonuses paid to AIG workers and they all have you, the American taxpayer, to thank! Kai Falkenberg says this is insane and proves bailouts are bad news.
Kai Falkenberg: It's funny David, I don't know about you, but I've never met a kitchen worker who knows how to unwind a very complicated credit default swap. Isn't that what these retention bonuses were for?? To pay highly-specialized people so they could unwind these assets so that we could preserve taxpayer value? At least these kitchen workers stayed with the company. There were 11 people who had million dollar bonuses who ditched the company.
Mike Ozanian: This is such a small amount of money. I don't know what Kai is all upset about. This is peanuts and I happen to think the person who brings the mail at Forbes is extremely important. Where would my morning be if I didn't have the Wall Street Journal? These are important people. Taxpayers shouldn't have paid for anything. You've got to put it in proportion to what the top guys are getting.
Mike Maiello: Of course it's not much. But what's maddening to me about this is you have the AIG executives getting multi-million dollar bonuses and then they're authorizing these small table scrap bonuses for working people as political cover for their own greed. That's what's angering to me.
Neil Weinberg: The government, in all its wisdom David, decided that we should bail this company out. If we're going to bail them out, we take over their obligations. Part of their obligations is obligations they made to their kitchen staff and to other people. You can't shirk some people and in Kai's case she'd rather see it all to go the masters of the universe on Wall Street.
Victoria Barret: The whole problem with these bailouts is we give these banks money and the problem isn't fixed. We still have institutions that are too big to fail and we still have these multi million dollar bonuses. Why didn't we give these people stock options? The excuse back then was the stocks were so cheap. I though that you bought low and sold high? They were going to get a deal and if they were able to turn these companies around, they could profit handsomely. Instead we just gave them cash. It's doesn't makes sense to me and it's a shame. It's taxpayer money. It isn't free money.
Bill Baldwin: The $180 billion bailout may have been a big mistake, but I refuse to condemn it on the faces of how they work out their compensation. What's wrong with a bonus? The baseball player can get a signing bonus. Why can't a banker get a signing bonus? What's wrong with variable pay? It's a good thing. You know why it's a good thing? If you have variable pay where the bonus is contingent on economic results or the circumstances of the company then when we get into a recession you can keep people. There is nothing wrong with that.
Flipside: Giving All Homebuyers a Tax Credit Will Make Housing Market Worse!
David Asman: Right now Washington, D.C., is gearing up to extend and expand an $8,000 home tax credit. It's an expensive plan that's about $9 billion over budget. Now some lawmakers want "all" homebuyers to get the tax credit, not just "new" buyers. Neil says that would be money well spent?
Neil Weinberg: David you could argue whether we should be having the government stimulate the economy or not, but the fact of the matter is if you look at the so-called multiplier – how much actually gets into the economy for each dollar that's spent - housing is very good.
Jack Gage: What we're talking about here is $8,000. Like that's done anything so far!! We're talking about continuing a failed program. This hasn't done anything to stem the tide of housing foreclosures and it's a waste of money. If we want something serious, we should cut property taxes. My home state of New Jersey has incredibly high property taxes. If you cut that, you create competition of where homebuyers will go; they will seek out the lowest level.
Evelyn Rusli: I don't think it's a complete failure. First of all, I think no matter how you slice it, this tax credit added 350,000 "unexpected" new sales this year. Now that's cutting down inventory which is a huge threat to obviously home prices. That helps the market - no matter what.
Quentin Hardy: "Cash for Clunkers" actually worked. It worked in terms of moving a lot of inventory. This doesn't. Eighty-five percent of people say they would have bought the house anyway. If you want a multiplier effect, Neil - make it loans to small businesses. That would actually make a difference and the banks and private sector aren't showing up there. We need to take inventory off the market, but this isn't helping particularly.
Bill Baldwin: I want to know which economists are advising these politicians that if you increase the price of existing assets, you're making America wealthier. That's utterly absurd. When you raise the price of a house artificially, you increase the wealth of the seller and lower the wealth of the buyer and in this case the taxpayer. There is no net gain. This is utterly absurd.
Informer: Stocks That Will Ride Market to New All-Time High!
David Asman: Lots of cheering this week for the Dow breaking back above the 10,000 barrier. But, those cheers ain't nothin' compared to the cheers you'll be yelling. The Informers have stocks ready to hit new all-time highs.
Mike Ozanian: Panera Bread (PNRA)
Neil Weinberg: Carnival Cruise (CCL)
Evelyn Rusli: EMC Corp (EMC)
Bill Baldwin: Constellation Brands (STZ)
Forcing Coverage for Pre-Existing Conditions: Plan To Put Insurance Companies Out Of Business?
Todd Wilemon, NYSE EuroNext: She's fueling more deadbeats. It is a nice idea. You want to help people but this really is a bad idea when you look at it. First off, it is going to increase the cost of family plans of health insurance for all families. Remember, young people, insurance for them is very inexpensive. They can pay for it themselves for the same as a cell phone a month. Remember, you are incentivizing them to not cut the apron strings to not become self-sufficient and they're going to be more amenable to become wards of the state. That's not what you want to happen.
Tracy Byrnes, Fox Business Network: I'm speaking from the parents' side now. If my kid gets a job and he is only making 30 grand, he is going to not want to pay for health care. God forbid something happens, I foot the bill. It is better for the family as a whole if the kid is still on my man until he gets off his feet. Kids these days don't even have jobs, so what are they doing? They're still home. They might as well be insured. Many when they come out, they're in startups, low man on the totem pole. They don't even get benefits half the time when they start at these new jobs. I don't think we're creating deadbeats. I think we're saving the family nuclear money at the end of the day.
Jonathan Hoenig, CapitalistPig Asset Management: Next week it is old people, minorities. She makes up rights on the fly as she goes along. You're creating deadbeats and wards of state. Whether it is linked to housing, healthcare or insurance, you are teaching people, in this case young people, to get something, to achieve a value, you don't need to earn it. You just need to need it if you need, it then society is obligated to provide it to you. You are creating a generation of leeches.
Jonas Max Ferris, MaxFunds.com: It is your parents, not society. By the way it would go on society if parents don't pick it up. Parents will pay the bill. That is the definition of not being a deadbeat. We need more young people on paid insurance. It is true forcing cheaper insurance on younger people is only going to make insurance when you are 2 or 8 more expensive that. Is the negative effect of this. In general, we want more people on private healthcare paying for it, whether their parents pay for it or they pay for it. It is not the best way to do it but a way to do it.
Wayne Rogers, Wayne Rogers & Co: Is not up to the government to dictate this. I mean, if parents want to put their kids on the healthcare plan, why not let them do it? I mean, it's up to them if they have a choice. Let them do it. What difference does it make? It is not up to the government to dictate that. If a kid wants to do it and says to his parents.
Plan to Have Kids Stay on Parent's Health Plan Until Age 26: Is Nanny State Creating Nation of Deadbeats?
Wayne Rogers: I want you to tell this to the 58 million people denied an adjustment in their social security benefits this week. Tell them about the dogs, you know. I happen to have a couple of dogs. I love them. I think they're great, but I also have a set of golf clubs and I don't get a tax deduction for that, do I? I got a car, do I get a tax deduction for that?
Jonathan Hoenig: Wayne's right, dogs are wonderful, but they're property. I mean, they are like luggage. They are like jeans or a bowl of soup, but to incentivize one particular purchase, and it's forget cash for clunkers. This is cash for canines and it's asinine.
Jonas Max Ferris: I will say that I have as much right to a tax deduction with Ramone as someone with children. If you have a child care deduction and child care credit, and there is like 15 child deductions, why? Why do those exist? Why do you have a right to a tax break when you have child costs but not dog care costs? They're both equal equally good or dumb. I deserve one because I don't get the child care deduction.
Tracy Byrnes: I don't get the child care deduction either because of this stupid income limitations. I get nothing! You end up with more of a deduction than me and I got three criminals at home I have to pay for, so you will get $3,500 for your dog that will crap by my car and my kids will become well respected citizens of the United States and I get nothing.
Todd Wilemon: Well, see, that's an oxymoron fiscal responsibility in Washington. I have never seen that in my lifetime. Jonathan, you have gone to the dogs. I can't believe this. I would rather have -- I'm not going to argue against fluffy the dog or the dogs. They're cuter than you, Jonathan, no offense, but as long as we're doing it for dogs, and cats, let's do it for humans and have a tax credit to buy health insurance. How about do it that way? And that will solve our health care crisis.
Pre-Existing Health Care Mandate: Plot to Revive Gov't Run Health Care?
Tracy Byrnes; Fox Business Network: They are going against their original philosophy. This goes against preventive medicine. Get them when they're still healthy and take care of them. I might as well wait until I have a disease and then I will get health insurance. At that point it's too late and very expensive and clobbers the insurance companies. If you got people on earlier, you can take care of me, but this, why should I bother when I know you're not going to deny me so I'm going to wait until I'm at my worst and then ask you to pay for it.
Jonas Max Ferris; Maxfunds.com: Just go to the emergency room. You don't have to pay for that either. All the states have the preexisting rules. This is to consolidate it and make it more severe. It doesn't address a key issue, which is when you do this, you're basically raising the cost for everybody else. That's all you accomplish for doing this. The bottom line is when you have a preexisting condition, no one is going to pay that bill and it's not you. You are not going to be ability to pay that $200,000 cancer bill if you don't have insurance. It will be paid for by other subscribers or government taxpayers.
Jonathan Hoenig; Capitalistpig Asset Management: I'm glad you pointed out that every state already has rules about what insurance companies must cover and what they can't cover and need to cover. The government pretends this is a free market really, when it is anything but. To suggest that you can have an insurance company or insurance partner where everyone pays the same rate or everyone with a preexisting condition will not be denied coverage, that is an entitlement program. When they talk about promoting insurance, they talk about putting private companies out of business and on the government plan. Every word the Democrats say about an insurance company -- last year, it was oil companies -- is so contemptuous. This is almost like they want them to go away altogether.
Todd Wilemon: NYSE Euronext: Well, yes, I think it would be better. You always want people to have health insurance to cover their medical expenses, but the problem is the incentive. If there is not the incentive to buy health insurance when you're well, then you're going to buy it when you're sick and that's going to ruin all private health insurance companies. Senator Bernie Sanders on "Your World" with Neil Cavuto on July 5 said "I want private insurance companies to go out of business. I want them to be scared." They're out there and hurting the American people, when they're not. You know, what they want is they want the power and they want the control, in Washington, D.C.
Wayne Rogers; Wayne Rogers & Co.: If you're under an open enrollment group plan, once a year anybody can get into that plan if they have a preexisting condition, they can do it. It doesn't cost the insurance companies anything. It costs the other people. It is a cost-sharing. It is not the insurance companies that will pay for it. It is everybody else that is in the plan, they are going to pay for it because their rates will go up.
What I Need to Know for Next Week
Tracy Byrnes: Senators are taking $2.6 Billion out of the defense fund being used for ammunition, fuel, all the things that our soldiers need overseas and putting it into pet projects like an educational center for the former senator Ted Kennedy. Come on now! Our soldiers need that money. Stop it!
Jonas Max Ferris: If you want to sign the gold bubbles over, Harrod's is selling gold bars now. Short Gold. Buy (DZZ)... an ETF that does just that.
Jonathan Hoenig: Jamie Oliver, the naked chef is raising $22 million to open restaurants in Asia. My thought is buy an American restaurant company that has outlived Asia and all over the world, YUM brands.(YUM) If the consume stays strong, the stocks will as well.
Wayne Rogers: You got to get a health plan. You may not like it. Congress is not going to be the subjected to it. They will take care of themselves as they usually do. Not only that, there will be no tort reform.