Big Government

More Obamacare News

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The CMS has a new contractor for Obamacare, not just the web site. The previous contractor, CGI Federal, has been replaced rather suddenly.

“Accenture, one of the world’s largest consulting firms, has extensive experience with computer systems on the state level and built California’s large new health-insurance exchange. But it has not done substantial work on any Health and Human Services Department program.
“The administration’s decision to end the contract with CGI reflects lingering unease over the performance of HealthCare.gov even as officials have touted recent improvements and the rising numbers of Americans who have used the marketplace to sign up for health coverage that took effect Jan. 1.”

CGI Federal is the company connected with Michelle Obama through her classmate, a fellow Princeton alumna.

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Is the Preferance Cascade Beginning?

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All during late November and December of last year, I began seeing internet discussions of the looming disaster that is Obamacare and yes, I will hang that name on the so-called Affordable Care Act, also known as the un-Affordable Care Act. The man behind the desk in the Oval Office pursued this as his singular achievement; his legislative allies rammed it through over protest, and his media allies have viciously abused those who advised caution. So it is only fitting and fair that his name get attached to it at every opportunity, especially if it brings down his whole political machine in a spectacular fashion, rather like a slow-motion Hindenberg collapsing.

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ZIRP Embodied

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ZIRP or “Zero Interest Rate Policy” has been in effect in the USA since late 2008. From that point forward, the effective interest received on money from CD’s, banks, and non-risk bearing debt is very low, especially when taxation is taken into consideration.

Recently I was standing at an ATM when I saw this receipt casually left on the ground. It showed over $300,000 left in a low or non interest bearing account. To me, this embodies how ZIRP has turned the world on its head.

When I was growing up, inflation was high and interest rates were high, too. I distinctly remember my grandfather having an argument with someone else when he said that interest rates would never go below 10% again (they were nearly 20% at the time). If you had any money, you had to put it to work to get the benefit of “compounding interest” which is basically interest earned on interest, which would make your assets grow quickly. In parallel, of course, inflation was making everything cost more, so you were probably treading water, but that is a different issue entirely.

In the age of ZIRP, there is no point instructing anyone about the advantages of compounding interest, because the effects are too small to be believed. In the portfolios I run for my nieces and nephews, they receive ZERO CENTS most months on the cash held in their account, and the cumulative year end totals are too small to receive an interest 1099 from the IRS. The SEC fee, which amounts to a few pennies per trade, actually is a larger cost, so I am just likely to ignore both elements.

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Obamacare, the Scrooging

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People signing up for Obamacare are being robbed by the government. This time it’s not metaphorically, like when your perfectly satisfactory insurance plan is made illegal and all the compliant plans are more expensive and have worse terms but literally. People are having their accounts debited improperly during the Christmas season. And because it is being done by the government, there is little recourse to sue due to sovereign immunity and, of course, those most injured haven’t the money to hire representation anyway. I think Pope Francis calls it ‘despoliation of the poor’.

Double debits, wrong day debits, wrong amount debits, these are all standard hazards with any sort of Electronic Funds Transfer (ETF) system. There’s nothing particularly new about these issues. It’s all part of the back end errors that those dastardly Republicans have been hyperventilating about and Democrats have been pooh poohing for weeks now.

You never know when Tuttle will turn into Buttle in one of these systems. But what’s in a name?

Merry Christmas

Cross posted: Flit-TM

“Occupy Pennsylvania Avenue”

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New from Kevin Villani: Occupy Pennsylvania Avenue: How Politicians Caused the Financial Crisis and Why their Reforms Failed, and the Kindle version: Occupy Pennsylvania Avenue

(Kevin has shared on this blog a couple of prior works on the same subject. You can find those essays, and reader comments in response, here.)