Bears, Bulls, Chickens and Pigs: wOw’s Wall Street Weekly with Liz Peek (Week of 6/15) 

Editor’s Note: Liz Peek is a financial columnist and the author of wOw’s SHEconomics.

Here’s a shocker: According to a Rasmussen poll conducted last week, Americans now trust Republicans more than Democrats to manage the economy. Considering that the GOP brought the country to the brink of financial collapse just a few months ago, I would call that an amazing turnaround.

Americans are justifiably concerned about the looming budget deficits brought on by the government’s (needed) stimulus spending. They are more perturbed, I imagine, by the prospect that the myriad proposals streaming from President Obama are going to make those deficits permanent. Perhaps the biggest element of uncertainty is the effort to overhaul our healthcare system.

I don’t know about you, but I don’t fully understand the health-care proposals working their way through Congress. President Obama has spoken of the need to cut medical expenses, but for the life of me I can’t connect that ambition with the bills currently under construction. Since this is proposed legislation that will impact one sixth of our economy, and every single American, I am amazed at how vague the discussions have been. Amazed, that is, until I read the reports coming out of the nonpartisan Congressional Budget Office.

Earlier this week the CBO sent a letter to Sen. Kennedy’s committee indicating that their proposals would jack up the federal deficit by an estimated $1.0 trillion between 2010 and 2019, and would extend coverage to roughly 16 million people, leaving an estimated 37 million people uninsured by 2019, instead of 54 million.

Say what? In other words, we are going to disrupt the 150 million nonelderly Americans that are now covered by insurance programs to add just 16 million more? At a cost of $1 trillion?

The CBO also sent a letter about the health-care proposals to Kent Conrad, Chairman of the House Budget Committee. It throws the whole notion of large-scale health-care savings into question. For instance, note that the government today directs almost 60% of our country’s spending on health care. This includes Medicare, Medicaid, veteran’s health programs and so on. These outlays will total more than $1 trillion this year alone. Will it surprise you to hear that these costs are basically out of control? Federal outlays, according to the CBO, have increased from 1% of GDP in 1970 to 5% in 2009; they are projected to exceed 6% in 2019.

I ask you – since the feds have done such a miserable job reining in government outlays for health care, do we really want to hand over the rest of the country’s programs to them? Heaven help us! Maybe the government should get its own house in order before tackling the private sector. The CBO notes that any step-up in insurance coverage would “represent a permanent increase of roughly 10% in the federal” expenditure level.

Here’s one concern, which may well be misplaced. As a safe, competent and maybe lucky driver for many years, I object to “no-fault” auto insurance. I don’t like subsidizing reckless speed demons. Similarly, as someone who works out and consumes far less ice cream than I would choose, I dislike the idea that I will be subsidizing the health-insurance costs of someone who doesn’t exercise, who eats terribly, who smokes and who doesn’t get regular checkups. In short, why don’t we require Americans to take some responsibility for their health? People tend to be economic animals; if there were incentives for people to adopt healthy practices, would not at least some respond?