Public Program Testing Organization
W e l c o m e !
Founded in 2002, the Public Program Testing Organization (PPTO) is an all-volunteer, Ohio nonprofit organization dedicated to evaluating
the effectiveness and efficiency of governmental programs and not-for-profit entities. Our initial focus was directed towards an evaluation of the United States Social Security system, and proposals for reform of that system. Several items related to Social Security can be found on this page and on the Social Security page. Other issues explored on our Web site include Medicare, income taxes, and financial regulation. The PPTO's findings are communicated via radio show presentations, newspaper commentaries, direct communications with governmental agencies and congressional leaders, and via this Web site. Although the PPTO welcomes the help it receives from volunteers, it does not accept monetary contributions.
Joe Fried, CPA, Director
Educational Differences between Self-Identified Democrats and Republicans - by Joe Fried, December 8, 2013
A chapter in my 2008 book, Democrats and Republicans - Rhetoric and Reality, is devoted to educational differences between self-identified members of the two major United States political parties. At the time it was written a massive amount of statistical evidence showed that Republicans:
When it came to post-graduate degrees, however, the Republican advantage was already slipping. Surveys by the National Election Studies (up to the year 2004) showed that Republican men were still slightly more likely to have post-graduate degrees; however, Republican and Democratic women were virtually tied. Surveys of the General Social Survey were more favorable to Democrats, showing a post-graduate tie among men and a statistically significant lead among Democratic women. Clearly, the educational gap between Democrats and Republicans was evaporating - particularly with respect to post-graduate studies.
That's where it stood, based upon the surveys available when I wrote my book. So, how do Democrats and Republicans now compare with respect to education? To answer this question I reviewed more recent surveys of the National Election Studies (NES), the General Social Survey (GSS), and others. Here is what I found. (continues on separate page)
Economist Martin Feldstein: "Obamacare's Fatal Flaw" The US healthcare plan is unraveling precisely because of the feature its supporters most praise (November 24, 2013)
Key points from this very insightful article: Many employers will find it less expensive to pay the Obamacare penalty and then give their employees extra compensation to help them buy insurance subsidized on a federal or state exchange. Many of those individuals won't buy the insurance anyway, however, because of the modest cost of the individual penalties. Private insurers will sell "emergency insurance" to cover medical costs incurred between Obamacare enrollment periods. By purchasing such insurance the individual who gets sick in the months between enrollment periods can protect himself from serious financial costs. Read the article in the December 2 edition of the "Business Standard"
Found: a young person who signed up from the Affordable Care Act (October 3, 2013)
In the Washington Examiner, Ashe Schow reports that she found a young male who has already signed up for health care. However, the premiums are not at all low. Read more.
"Glitches" are the least of our worries with respect to the Affordable Care Act (Obamacare) (September 30, 2013)
Rich Lowry (New York Post) has a good summary of the challenges facing the Affordable Care Act: "It depends on young, healthy people buying insurance even as it reduces their incentive to do so; it encourages employers to dump workers off their current insurance; it suppresses full-time work, through the employer mandate; in 10 years, the law still leaves 30 million people uninsured." Read more.
Will young people sign up for the Affordable Care Act (Obamacare)? (September 25, 2013)
James Taranto writes that Obamacare is a bad deal for young people:
Read more in the Wall Street Journal.
Some Medicaid recipients will lose out with Obamacare
Politico reports: "As millions of low-income adults gain access in just a few months to Medicaid coverage under Obamacare, those already in the program could be shut out of some of the key preventive services included in the law. And the new enrollees could have a hard time actually getting a doctor." Read more.
Privatizing Fannie and Freddie: Is it a sham?
An analysis by the AEI's Edward Pinto reaches the following conclusion: "This is privatization in name only, since the Treasury would need to give up the $20+ billion in dividends the taxpayers now receive annually, maintain the GSEs’ virtual monopoly of the conventional mortgage market for the foreseeable future, and continue the government’s guarantee of these “privatized” companies. Read more.
Democrats are slow to embrace Medicare and Social Security benefit reductions
The Washington Post reports, "While Democratic leaders are offering quiet support for Obama’s renewed campaign to strike a grand bargain with Republicans that would include cuts to Social Security and Medicare, a significant number of Democratic lawmakers are digging in their heels and vowing to protest any reduction in promised benefits." Democratic opposition to entitlement cuts was most evident on Wednesday (March 13, 2013) when Senate Budget Committee Chair Patty Murray (D-Wash) proposed a budget plan that contained only minor reductions in Medicare and Medicaid. Read more in the Washington Post.
Congress should give the President authority to adjust sequestration cuts (February 2013)
If sequestration cuts will be as damaging as the President claims, he should ask Congress to give the Administration authority to transfer funds from less critical federal accounts to more critical federal accounts. According to conservative pundit Charles Krauthammer President Obama is unlikely to do this because "...he is looking for a fight, and not a solution." Read more at cnsnews.com.
Bad History, Worse Policy: How a False Narrative about the Financial Crisis
Led to the Dodd-Frank Act
Author: Peter J. Wallison
(To be released in March 2013 by the American Enterprise Institute)
Peter J. Wallison is a prolific writer and a lucid thinker on matters involving banking, insurance, and government regulation. In his latest work, Bad History, Worse Policy: How a False Narrative about the Financial Crisis Led to the Dodd-Frank Act, Wallison begins with a careful and persuasive analysis of the financial crisis of 2007/08 and its causes. He then reviews the provisions of the partially-implemented Dodd-Frank Act and the reasons this massive Act must be reformed, if not eliminated. This compilation of 30 essays, written between 2004 and 2012, is a must-read book for anyone interested in a thoughtful analysis of the causes of the financial crisis and the flawed legislation that has arisen from it. Continues on separate page.
Hillary Clinton: a very confused Secretary of State
On January 23, 2013, Secretary of State Hillary Clinton met with House and Senate legislators to discuss the September 2012 terror attack that had led to the death of Ambassador Christopher Stevens and 3 other Americans. In her testimony Ms. Clinton took "full responsibility" for security failures that led to the attack, yet, on every specific point she seemed to defend her personal actions. In other words, she took full responsibility while taking none at all. For example, she acknowledged that her office had received an "urgent" cable from Ambassador Stevens (on August 16th), asking for improved security. However, during the next 26 days (ending with the attack on September 11th) no one in Ms. Clinton's office even looked at this urgent cable. Clinton should have admitted that her office communications were not properly managed. Instead, she put forth a ridiculous defense: "1.43 million cables come to my office." Maybe so, but I doubt that a million cables come directly from Ambassadors, are marked urgent, and involve imminent threats to human life. What if that cable was describing an imminent attack on the scale of the original 911 attack? Would the Secretary offer that same lame defense?
Perhaps Clinton's most troubling testimony was her now famous exchange with Rep. Ron Johnson, Republican of Wisconsin. When he asked her about the Administration's misleading references to video protests (vs. a planned terror attack), Ms. Clinton indignantly stated: With all due respect, the fact is, we had four dead Americans. Was it because of a protest? Or was it because of guys out for a walk one night and [who] decided they would go kill some Americans? What difference at this point does it make?
In her very next breath Clinton contradicted herself by saying: It is our job to figure out what happened... Well, Madam Secretary, how do we figure out what happened if we don't first figure out why it happened? This incoherent sequence of comments should cast doubt about Clinton's fitness to hold any high office. -Joe Fried (1/28/13)
Governors, Obama, and Senate take two months to get Hurricane Sandy bill to House. Then blame GOP for delays!
Given the near universal condemnation of John Boehner and House Republicans (by Democrats, some east coast Republicans, and most "journalists"), you might think that the Grand Old Party caused a major delay in providing relief to storm victims. However, the Democratic-controlled Senate did not pass and aid bill until Friday, December 28, 2012. Just one holiday weekend later, Governor Chris Christie started venting his rage at fellow Republicans, whom he blamed (entirely) for the delay. As one might expect, the mainstream press was eager to join Christie, but it is odd that no one seemed upset with delays prior to the GOP House getting the bill from the Senate. On Friday, January 4, 2013, the House approved a partial aid package of about $9 billion, with a promise to consider an additional $51 billion in aid on January 15th. We are glad the House is taking this additional time to carefully study the bill and to make sure it is not pork-laden.
Who Really Drove the Economy into the Ditch? (December 2012)
Joe Fried's new book is out, and it is already creating a stir. The book, which is called Who Really Drove the Economy into the Ditch?, was just published by Algora Publishing, and is available from the publisher or from Amazon or Barnes and Noble.
In a conversational tone, the book provides an overview of the financial crisis of 2007/08, and the factors leading up to it. It covers many important topics that have been almost completely ignored in other analyses. These factors include Fannie Mae's and Freddie Mac's automated underwriting and valuation systems, and the detrimental impact of those systems on lending standards. It analyzes the degrading of loan standards caused by state and local downpayment "gifting" and "silent second" programs. It also reveals new cheating by Fannie and Freddie with respect to their delinquency stats.
Ed Pinto, a Former Fannie Mae executive and current Fellow at the American Enterprise Institute, stated that this book:
...materially adds to the body of research into the role of government affordable housing policy in the mortgage crisis.
Peter Wallison, Co-chair of the Financial Reform Task Force of 2009 and former counsel to President Reagan, stated:
Joe Fried tells the story in a straightforward style - so clear you will wonder why you haven't heard these facts before.
Medicare- America's big transfer-of-wealth program (December 2, 2012)
Currently, a person earning $1 million per year pays Medicare premiums of $29,000 per year, while someone earning $10,000 pays just $290 per year. Yet, these two people are entitled to the same benefit, starting at the same age - 65. To the Obama Administration this is unfair, and the millionaire needs to pay even more! Therefore, he will be subject to an additional 3.8% tax on his investment earnings. However, this is still not fair in the eyes of many politicians, so there are proposals to "means test" benefits for the rich people who don't need them. Undoubtedly, some rich people have more cars than they need. Perhaps we should take those also. Read about the new tax. Read about Senator Claire McCaskill's plan for "more aggressive means testing from higher co-pays from those people who can afford it.”
Can unemployment figures be manipulated by the Bureau of Labor statistics? (October 8, 2012)
On October 5, 2012 the Bureau of Labor statistics (BLS) released the employment statistics for September, and some critics accused the Obama Administration of manipulating the statistics to get the unemployment rate below the psychologically important 8.0 floor. I have seen no evidence whatever supporting such claims. However, it is entirely possible for employees within the BLS, on their own initiative, to skew the unemployment rate up or down. For this reason, a public airing of BLS survey and statistical methods should be made. Transparency is needed.
The BLS conducts a telephone survey of 60,000 people and, like every survey, the persistence of the questioner and the way questions are asked can greatly affect the results. Basically, the BLS puts everyone into one of 3 categories: employed, unemployed, and out-of-the-workforce. For most of the Obama presidency the BLS has been shifting people out of the unemployed catgegory and into the out-of-the-workforce category. How? If the interviewer decides that the unemployed person did not make a strong enough "specific" effort to get employed during the 4 weeks prior to the interview, that person is no longer considered unemployed. He is out-of-the-workforce. Of course, there is subjectivity with regard to the definition of "specific" effort. Is it enough to be looking in the newspaper or on the Internet for a job, or to be asking friends about job possibilities? Or is a formal job application required? And, what constitutes a formal application? It is entirely possible that an interviewer with an agenda could lead the interviewee one way or the other.
Last month (September 2012) something different happened. Many formally "unemployed" people became "employed" on the basis of part-time employment. This must have been exceedingly light part-time work because, for every one of the 114,000 jobs created 7.5 people became "employed." According to the BLS almost any amount of work during the interview week would be enough to take someone out of the unemployed category. Knowing this, an aggressive interviewer could prod someone to disclose a relatively trivial odd job such as baby sitting, loading a friend's pickup truck, or raking leaves.
We don't know the ideological leanings of BLS interviewers, middle managers, statisticians, and economists; however, several surveys have shown that most government workers are Democrats. We also know that, without the many adjustments made by BLS during the last 4 years, the unemployment rate would be 11 percent - not 7.8 percent. For this reason, an independent review of BLS methods should be undertaken.
President Clinton dissembles during his Obama convention speech (September 7, 2012)
On Wednesday night, President Clinton said Candidates Romney and Ryan lied when they "attacked the president for allegedly robbing Medicare of $716 billion." However, a Washington Post fact checker says that Clinton is the one who is not telling the truth. In addition, Clinton was disingenuous when he said, “I didn’t know whether to laugh or cry because that $716 billion is exactly, to the dollar, the same amount of Medicare savings that [Ryan] has in his own budget.” Well... yeah! Once something becomes the law of the land (as is the case with Obamacare) it has to be factored into budgets - by both Democrats and Republicans. However, Clinton implied that Ryan was endorsing the cuts, and that is not the case. Indeed, Mitt Romney has stated that, if elected, he will work to eliminate those cuts. See Washington Post article.
Mitt Romney's welfare ad is misleading, but the Obama Administration changes do seem to weaken the welfare work requirement (August 8, 2012)
A thoughtful article in the Daily Caller takes Romney to task for exaggerations. However, it also argues that the welfare work requirement has been weakened. This is worth reading. See Daily Caller.
A lack of jobs is a factor in the recent surge in disability claims (July 17, 2012)
There are several reasons for the recent surge in disability claims, one of which is an economy that has not produced enough jobs. Read more.
"Life of Julia" misleads on Social Security, per Washington Post
"Note how carefully the Obama campaign’s statement is worded. It says that, under Obama, Julia 'receives monthly benefits that help her retire comfortably.' It does not promise that projected benefits will not be cut, but it certainly implies that." Read more.
Bloomberg: It's Time to Fix Fannie and Freddie
"More than 90 percent of new mortgages are owned or guaranteed by Fannie, Freddie or the FHA. Private capital is almost nonexistant. As long as Fannie and Freddie have an outsized presence, plus an endless stream of taxpayer subsidies, the private sector will stay on the sidelines." Read more.
New Program: Senior Medicare Patrol (May 16, 2012)
A new program called Senior Medicare Patrol uses senior-citizen volunteers to help other seniors learn about Medicare fraud and how to detect it. Read more.
107 Charged in Medicare Fraud Busts in 7 Cities (May 2012)
Per the Associated Press, 107 doctors, nurses and social workers have been charged with defrauding Medicare of $452 million. "Patient charts were doctored to show services that were billed to Medicare but often never given, according to an indictment." Medicare fraud is estimated to cost $60 to $90 billion each year. Read more.
News is more bleak for Social Security and Disability funds (April 2012)
The Social Security Board of Trustees has stated that the combined assets of the Social Security and Disability Insurance Trust Funds will be exhausted in 2033, three years sooner than projected last year. The DI Trust Fund will be exhausted in 2016, two years earlier than last year’s estimate. Read more.
Romney has said little regarding Social Security and Medicare plans (February 2012)
So far, we don't know much about Governor Mitt Romney's plans with respect to Social Security and Medicare. However, in February 2012 the presidential candidate proposed that we raise the Social Security retirement age for younger workers, and that we index the benefits of higher earners to cost of living inflation, rather than wage inflation. He also advocated the creation of a voucher system that could provide future senior citizens with the funds needed to buy private insurance, in lieu of normal Medicare benefits. These are sensible proposals, but lacking in detail. Read more in the Detroit Free Press.
Fannie and Freddie executives hit with civil fraud charges (December 2011)
Per AP: "In a lawsuit filed in New York, the Securities and Exchange Commission brought civil fraud charges against six former executives at the two firms, including former Fannie CEO Daniel Mudd and former Freddie CEO Richard Syron." The executives concealed the extent of their subprime purchases, according to Robert Khuzami, SEC's enforcement director. Read more.
Bi-partisan Medicare reform proposal wins praise (December 2011)
The Wyden-Ryan plan is, simply put, a much better version of Ryan's previous proposal. Starting in 2022, it would give seniors subsidies that they could use to buy insurance through new regional marketplaces called exchanges, similar to the ones created by the 2010 healthcare reform law. But rather than eliminating Medicare for anyone not yet 55 years old, as Ryan proposed, Wyden-Ryan would continue to make the current Medicare program available as an option through the new exchanges. Read more.
Choosing a Medicare prescription drug plan can be confusing. (November 2011)
The more you know, the easier it will be to find one that makes the most sense for you. This article in the Milwaukee-Wisconsin Journal Sentinel has some valuable tips.
The long-term health care problem (October 24, 2011)
AP: The Obama Administration has pulled the plug on its Community Living Assistance Services and Supports program (CLASS), leaving the long-term health needs of Americans in doubt. Read more.
Kansas City Star: Hey, Occupiers! What about protesting Fannie
and Freddie? (October 2011)
Christian Science Monitor: Not true that no one went to jail for lending illegalities (October 11, 2011)
Actually, there were a couple. But, in most cases illegality was not shown. "While the distinction between hubris/stupidity and illegality may not satisfy many, it’s a key component to the financial crisis." Read More
Associated Press: Obama's Deficit Plan Tightens Squeeze on Medicare (September 2011)
AP reports that the President's plan would do some heavy cost cutting or shifting. "Drug companies, hospitals, nursing homes and state health care programs assessed the damage Tuesday from the president's latest deficit-reduction proposal to Congress. While Medicare and Medicaid would be spared radical reengineering, the plan spreads plenty of pain. Future retirees would be on the hook for a greater share of their Medicare costs." It is estimated that payments to the pharmaceutical industry would be cut by $135 billion over 10 years, leading some to wonder if drug research would be affected. Read more.
Heritage Organization: Obama’s Medicare Plan is an Open Secret (July 2011)
Robert Moffitt claims that President Obama's health care proposals will "end Medicare as we know it" by slashing payments to providers. This will result in fewer health care providers. Says Moffit: "If the president’s Medicare payment cuts continue, the number of Medicare providers who find themselves in the red will jump to 25 percent by 2030, when the Medicare rolls reach an esti�mated 80 million beneficiaries." Read more.
Trustees: "The financial conditions of the Social Security and Medicare programs remain challenging." (May 2011)
In their annual report the Trustees report: "Social Security expenditures exceeded the program’s non-interest income in 2010 for the first time since 1983." Regarding Medicare they report: "The projected 75-year actuarial deficit in the HI Trust Fund is 0.79 percent of taxable payroll, up from 0.66 percent projected in last year’s report." Their overal conclusion: "Projected long-run program costs for both Medicare and Social Security are not sustainable..." Read more.
The Ryan Plan - What's good about it, and what is not (April 7, 2011)
Congressman Paul Ryan's plan for Medicare is "by far the most significant - and revolutionary - proposal" in his budget. While it is far from perfect, the plan represents a serious effort and reining in costs by promoting competition among health care providers. We hope it will be debated seriously, without demagoguery. Read an evaluation by Shawn Tully, senior editor-at-large of CNNMoney. Click here.
Washington Post: Republican Rep. Ryan's Social Security plan would cut benefits for high earners (October 2010)Lori Montgomery writes: Republican Rep. Paul Ryan's plan "would reduce benefits by gradually raising the retirement age and gradually trimming benefits for the top 70 percent of earners." Read more.
Finally: Feds approve Louisiana sand berms to fight oil slick (June 2, 2010)
After weeks of apparent procrastination, "U.S. Coast Guard Admiral Thad Allen told BP to pay for the five berms approved by the White House, in addition to one he and the Army Corps of Engineers approved last week." These berms will be artifical sand reefs designed to keep the oil slick away from fragile Louisiana wetlands and wildlife. Read more in Reuters.
National Debt over $13 trillion for first time (June 2, 2010)
The Treasury Department reports that the National Debt exceeded $13 trillion as of June 1st, 2010. This amount equals nearly 90 percent of the nation's Gross Domestic Product, which is the total market value of all goods and services produced by the U.S. in a year. President Obama blamed his predecessor for the huge deficits. Read more.
USAToday: "Is oil spill becoming Obama's Katrina?" (May 27, 2010)Louisiana residents "want to know why the federal government didn't act faster to stop the oil from reaching shore, why BP hasn't been forced to skim more oil from the surface and why their request hasn't been approved to build new barrier islands to help keep the oil at bay." Read more.
NYT: Obama administration slow to act on BP oil spill (April 30, 2010)
"We now face a huge disaster whose consequences might have been minimized with swifter action." Read editorial.
CBO: U.S. debt to soar under Obama Administration's budget (March 5, 2010)
The Congressional Budget Office (CBO) announced that the Obama Administration's proposed budget would add more than $9.7 trillion to the national debt over the next decade, and this is without adding any possible impact from the Administration's health care initiatives. In addition, "Interest payments on the debt would also skyrocket by $800 billion over the same period." Read report in Washington Post.
Mayo Clinic, a role-model for health care, drops Medicare patients (January 1, 2010)
Although cited by President Obama as a model provider of good health care, the Mayo Clinic has decided to stop accepting Medicare patients at one of its primary-care clinics in Arizona. The decision, which will take effect immediately, is due to U.S. government reimbursement rates, which Mayo says are inadequate. The two-year pilot program will not affect patients in other states. Read More>>
Is Medicare really a model for health insurance reform? (December 5, 2009)
During the recent health insurance debate more than one politician or pundit has made note of the contentment most senior citizens have with regard to Medicare benefits. That may be true, but before we get too happy about it we should remember that Medicare is bankrupting the country. This is no exaggeration. It is estimated that a single woman who earns $20,000 dollars per year will get a net benefit of a quarter million dollars. That is, she will get medical benefits that cost Medicare $250,000 more than the total of payroll taxes she paid during her entire working career. If that same woman (or man) is married and has a stay-at-home spouse, her (his) net benefit will be one-half million dollars ($500,000). Since there are millions of such people who are in Medicare, or soon will be, common sense tells us that such an imbalance cannot be sustained (no matter how much we try to "tax the rich"). The truth is, Medicare is a mismanaged mess, and should not be expanded or replicated. Evidence of the waste in Medicare is found in the "60 Minutes" story found a little further down on this page.
The chart, below shows net Medicare benefits for various people at different income levels and with different familial status. It is reproduced (with permission) from Democrats and Republicans - Rhetoric and Reality, by Joseph Fried. Fried obtained the benefit estimates from tables created by Economists C. Eugene Steuerle and Adam Carasso. Notice that, no matter what the income level, everyone gets a net benefit (ranging from a low of $142,000 to a high of $525,000). If everyone is a Medicare "winner," who is going to pay the tab?
The old "Miami Vice" TV show focused on the Florida cocaine trade:
It should have focused on Medicare.
Medicare is the government insurance program that
provides health care to 46 million elderly and disabled Americans but it also
provides criminals with a steady stream of illicit income. In fact,
Medicare fraud, estimated to be about
$60 billion per year, may now be one of
the most profitable crimes in America.
Democrats resist President Obama on Social Security (2/22/09)
The New York Times reports that Democrats are resisting President Obama's call for a bipartisan panel to study Social Security reform. Some liberal Democrats say they will resist plans to cut benefits, and that Obama's "political capital" would be better spent on health care and other issues.
Who earns what? Who pays the taxes? (11/11/08)
According to recently-released IRS data, the highest earning 1% of of Americans made about 22% of all 2006 income (reported on tax returns) and paid about 40% of all 2006 federal income tax. Americans with earnings in the lower 50% made about 12.5% of all reportable income and paid about 3% of federal income taxes. Keep in mind that welfare distributions (including food stamps and the Earned Income Tax Credit) were not counted in this analysis, and would substantially increase the percentage of income for people with earnings in the "lower 50%." Read in Kiplinger's>>
Who is responsible for the crisis on Wall Street? (10/2/08)
We all know that Wall Street "greed" is responsible for the recent credit crisis. But, the federal government is also culpable. Specifically:
An excellent overview of the crisis and its causes has been published on reasononline. See "The Roots of the Crisis," by Michael Flynn, Director of Government Affairs for the Reason Foundation.
Fake janitors skim $2.2 billion from SS trust fund?!
Other Important Issues
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