We the People need to budget.

Just as a ordinary citizens review the household expenses and income weekly or monthly as part of personal budgeting, we the people ought perhaps to review our republic's budgeting. After all, whose republic is it? And, if it is ours, do we trust our elected representatives to do it? Here goes:

GROSS DOMESTIC PRODUCT: SECOND QUARTER 2009 (SECOND ESTIMATE)
CORPORATE PROFITS: SECOND QUARTER 2009 (PRELIMINARY ESTIMATE)

(Please skim this part fast, get to the highlighted paragraph.)

Real gross domestic product -- the output of goods and services produced by labor and property
located in the United States -- decreased at an annual rate of 1.0 percent in the second quarter of 2009,
(that is, from the first quarter to the second quarter), according to the "second" estimate released by the
Bureau of Economic Analysis. In the first quarter, real GDP decreased 6.4 percent.

The GDP estimate released today is based on more complete source data than were available for
the "advance" estimate issued last month. In the advance estimate, the decrease in real GDP was also
1.0 percent (see "Revisions" on page 3).

The decrease in real GDP in the second quarter primarily reflected negative contributions from
private inventory investment, nonresidential fixed investment, personal consumption expenditures
(PCE), residential fixed investment, and exports that were partly offset by positive contributions from
federal government spending and state and local government spending. Imports, which are a subtraction
in the calculation of GDP, decreased.

The much smaller decrease in real GDP in the second quarter than in the first primarily reflected
much smaller decreases in nonresidential fixed investment and in exports, an upturn in federal
government spending, smaller decreases in private inventory investment and residential fixed
investment, and an upturn in state and local government spending that were partly offset by a much
smaller decrease in imports and a downturn in PCE.

Motor vehicle output added 0.20 percentage point to the second-quarter change in real GDP after
subtracting 1.69 percentage points from the first-quarter change. Final sales of computers subtracted
0.05 percentage point from the second-quarter change in real GDP after adding 0.06 percentage point to
the first-quarter change.

________________________
FOOTNOTE.--Quarterly estimates are expressed at seasonally adjusted annual rates, unless otherwise
specified. Quarter-to-quarter dollar changes are differences between these published estimates.
Percent changes are calculated from unrounded data and are annualized. “Real” estimates are in
chained (2005) dollars. Price indexes are chain-type measures.

This news release is available on BEA’s Web site along with the Technical Note and Highlights related
to this release.
________________________

The price index for gross domestic purchases, which measures prices paid by U.S. residents,
increased 0.5 percent in the second quarter, 0.2 percentage point less than in the advance estimate; this
index decreased 1.4 percent in the first quarter. Excluding food and energy prices, the price index for
gross domestic purchases increased 0.8 percent in the second quarter, compared with an increase of 0.2
percent in the first.

Real personal consumption expenditures decreased 1.0 percent in the second quarter, in contrast
to an increase of 0.6 percent in the first. Real nonresidential fixed investment decreased 10.9 percent,
compared with a decrease of 39.2 percent. Nonresidential structures decreased 15.1 percent, compared
with a decrease of 43.6 percent. Equipment and software decreased 8.4 percent, compared with a
decrease of 36.4 percent. Real residential fixed investment decreased 22.8 percent, compared with a
decrease of 38.2 percent.

Real exports of goods and services decreased 5.0 percent in the second quarter, compared with a
decrease of 29.9 percent in the first. Real imports of goods and services decreased 15.1 percent,
compared with a decrease of 36.4 percent.

Real federal government consumption expenditures and gross investment increased 11.0 percent
in the second quarter, in contrast to a decrease of 4.3 percent in the first. National defense increased
13.3 percent, in contrast to a decrease of 5.1 percent. Non defense increased 6.2 percent, in contrast to a
decrease of 2.5 percent. Real state and local government consumption expenditures and gross
investment increased 3.6 percent, in contrast to a decrease of 1.5 percent.

The change in real private inventories subtracted 1.39 percentage points from the second-quarter
change in real GDP, after subtracting 2.36 percentage points from the first-quarter change. Private
businesses decreased inventories $159.2 billion in the second quarter, following decreases of $113.9
billion in the first and $37.4 billion in the fourth.

Real final sales of domestic product -- GDP less change in private inventories -- increased 0.4
percent in the second quarter, in contrast to a decrease of 4.1 percent in the first.


Gross domestic purchases

Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever
produced -- decreased 2.5 percent in the second quarter, compared with a decrease of 8.6 percent in the
first.


Gross national product

Real gross national product -- the goods and services produced by the labor and property
supplied by U.S. residents -- decreased 0.8 percent in the second quarter, compared with a decrease of
6.6 percent in the first. GNP includes, and GDP excludes, net receipts of income from the rest of the
world, which increased $6.4 billion in the second quarter after decreasing $6.1 billion in the first; in the
second quarter, receipts decreased $16.8 billion, and payments decreased $23.2 billion.


(You have arrived:)

Current-dollar GDP:

Current-dollar GDP -- the market value of the nation's output of goods and services -- decreased
1.0 percent, or $34.7 billion, in the second quarter to a level of $14,143.3 billion. In the first quarter,
current-dollar GDP decreased 4.6 percent, or $169.3 billion.


America is a rich country with a huge GDP. But let's look at costs, obligations present and future, and ways to return to fiscal balance. Let's start with Medicare, and Medicaid, costs of which are are projected to grow robustly at the very same time as our economy is projected to grow slowly.

Thoughtful, skilled, and sober experts predict that our unemployment will remain high and inflation will return with vigor at the same time that entitlement spending balloons. The bright light at the end of our (present) tunnel is not daylight. One does not need a degree in economics to see that our country is on a collision course.

Promises have been made to citizens and money has been collected from them, so there is Mandatory Spending. Accurate estimations of these costs can be made into the future. Actuarial science and standard accounting principles leave little room for error here.

Large deficits loom over the entitlements. Was the money never put aside? Did the Great Society #1 raid the lock box? Is it right to have called it a "lock box?" What will Great Society #2 do with the money citizens give back to their government, in good faith, for their health and comfort in old age? Is money being transferred from one segment of the society to another? Will "means testing" eventually disenfranchise the very segment of the society that put the money into Medicare, Medicaid, and Social Security? "From each according to his ability, to each according to his need." Except that in this new Obama marxism, if you both put in and need, you will not receive. This goes beyond communism and will be the gift that keeps on giving.



President Obama stated in May 2009: "But we know that our families, our economy, and our nation itself will not succeed in the 21st century if we continue to be held down by the weight of rapidly rising health care costs and a broken health care system...Our businesses will not be able to compete; our families will not be able to save or spend; our budgets will remain unsustainable unless we get health care costs under control."

The present value of unfunded obligations under all parts of Medicare during FY 2007 is approximately $34.1 trillion. In other words, this amount would have to be set aside today such that the principal and interest would cover the shortfall over the next 75 years.[15]

We have an unfunded obligation of 34.1 T, as above, but our annual federal government intake is as below:

This does not look workable. We need to stop our dreaming. Obama needs to do the job we elected him for--put our house in order after the ruination of George W. Bush's terms. (No, he did not have to spend our money on "regime change" and "nation building" in the Middle East.) We the people elected Obama to change the system, true enough. But change it to fiscally responsible, not from free enterprise capitalism (to Social Democrat Labor Unionist). Get on with the job, Mr. President. Balance our budget. Spread the pain and suffering, not spread the wealth. We're all out of wealth right now.

For starters, a budget for Health Care in America:

Inasmuch as our economy is 14 T/year and we are said to spend 15% on health care, we might say that we spend 2.1 T/year for our health care. Let's try an overly simplistic budget for Health Care using these numbers:

1.0 T/year for Medicare

1.0 T/year for Medicaid

Everyone who is older goes into Medicare.

All others go into Medicaid.

Now, we need to make Medicaid more appealing, so we put everyone not in Medicare in Medicaid. Everyone from our president on down is in Medicaid or Medicare. No special deal for unionists, legislators, members of the federal judiciary, members of the executive branch past or present, veterans, Indians, retired railroad workers, big CEO's, fat cats and skinny cats. Even visiting foreigners are in one or the other. I know this would spiff up tired, dowdy, unresponsive, under providing and under performing Medicaid overnight. Do you think Michelle Obama would accept Medicaid in its present form as insurance for her family? Few good doctors will accept Medicaid patients. (And fewer and fewer good doctors and clinics take Medicare patients.)

And we will need to make Health Care more efficient and cost effective across the board. I suggest we employ a version of the methodology used in the French health care system, where government writes the check but hospitals, clinics, doctors, and various other providers of proven beneficial health care compete for the privilege of caring for the citizens. Pay for curative interventions and important palliative maneuvers. Let the people pay for unproved nostrums out of their own pocket. Do not expect better preventive care to save money--it won't. But if it can be proven to be effective, employ it anyway. Improve the methodology of Evidence Based Medicine, and mounting large scale randomized and prospective studies to resolve clinical questions so we have more answers than questions in medicine. Quality, efficacy, efficiency should be the standard. Eliminate the foolish waste of defensive medicine by reworking the system of medical malpractice while still keeping our ancient law of torts.

Health Care is not the only budget buster to be addressed. I believe we need to do some other things, too. We need to stop dreaming of Great Society #2--no money for that right now. We should repeal some of the promises made in Great Society #1 while we are at it--same reason. We must scale back overseas imperial adventures. (Great Britain ceased to be Great because of the Boer War, which was her Iraq, and WWI, which some say she started.) We must scale back our military presence overseas, even though this will leave Japan, Germany, and South Korea unprotected. (Unprotected from whom? Let them buy military paraphernalia from our manufacturers so they defend themselves.) We have to curtail spending on military items no longer of any use--or redirect the money to items likely to serve our purposes better now and in the future. We need to implement the same changes in education and state and federal government that were made by companies in the private sector, and by the same means: eliminate layers and layers of managerial workforce by fully utilizing the power of the computer. We need to modernize or tax code and the methodology of tax collection.

America balanced its budget under President Clinton. Let's ask him to select a commission to balance the federal budget. I think he is likely to be fair and not balance our budget on the backs of those who do not vote blue. Nor would he unfairly disenfranchise the old, the poor, or the sick. We are a rich country with a huge Gross Domestic Product. We can balance our budget. We will need to grow up politically, and heed St. Paul's advice in 31 Corinthians 13: 11 "When I was a child, I spake as a child, I understood as a child, I thought as a child: but when I became a man, I put away childish things." King James Version, my italics. Amen.

President Obama, get on with the job for which you were chosen. Put us back on the road to fiscal responsibility. Insist on the single payer system but add some of the French essence. Use your supremely skillful oratory to get us back to where we were under President Clinton. Spread the pain and suffering not the wealth. If you want your head on Mount Rushmore, you will need to lead (the people) not follow (your misguided, misinformed, and misplaced) advisers.

Thanks to www sources including the Government Accounting Office and Wikipedia for data displayed.