By now, everyone should be aware that the health care reform fiasco bill was voted for by the Senate and can now go forward for a full Senate debate.  Of course, it will be a better bill or the Senators wouldn’t have voted for it to go forward!

We also know that there is a stipulation in the health care bill for states to carry more of the burden of Medicaid, with the exception of states that were declared an emergency disaster area.

That would seem to indicate that Cedar Rapids, and almost of all the second district of eastern Iowa, having been declared a presidential disaster area last year, would fall into this category.

But wait, our Senator Harkin was fully on board with health care reform that will cost all of us more, and ultimately give us less and didn’t even hold out his vote to help his state.

Understand that the emergency disaster flooded area had to be declared 7 years ago!  How interesting that Louisiana fits this stipulation.  Senator Landrieu held her vote close to the vest, and then went all in.  $300 million all in that is!

To be clear, this is exactly what we as a country should not be doing!  It is this type of quid-quo-pro that has led to trillion dollar deficits.  We cannot afford this pay off to Louisiana, and most importantly this health care reform.

New Orleans has raked in millions of dollars in gambling receipts and could have paid for its own flood protection and levy modification.  Although we expect our elected officials to advocate for their state, this has gone too far.

Once elected, they swear an allegiance to the constitution and the United States. Therefore, the most important vote, would have been NO!  We cannot afford this plan and it is unconstitutional.

This is true for those spending increases during the Bush administration, but even more so today.  Our urgent priority is fiscal reform, simplified flat taxation and job growth to increase revenue to the treasury.

Pare down some federal agencies and redundancies.  Cut the fraud and abuse in Medicare and Medicaid before altering the current system.  By all means, quit spending.  We cannot afford to pay off friends or special interests.

So it is tongue in cheek that Senator Harkin should have demanded more for his vote.  The floods of last year pale in comparison to the flood of money flowing out of Washington.

Very soon we will have to close the gates on the dam because this flood of easy money will lead to an erosion of our credit status, further declines in the dollar, loss of its’ reserve currency status, rising interest rates and a banana republic.

Flooded?  The tide has only begun to rise.

No, it is not yet winter in Iowa, nor is it a tenth year level economics course.  But it would be helpful if some in the current administration and congress had passed an economics course.

10.2 is the percentage of unemployment and it will be increasing. Having no crystal ball, how can a mere mortal decry what learned and honored experts deny. Have you not noticed that we are in a recovery?

In the Bush years (yes the Bush that got us into this financial mess according to the administration), creating, not saving, 2 million jobs a year was reported as a jobless recovery.

Remember the unemployment rate dropping to 4.6%, the lowest level in 26 years?  The derision that 2 million jobs per year could be created after the profound physical, emotional and financial impact of 911?

We have yet to spend all of the stimulus already appropriated by Congress and they have gone forward with stealth stimulus.  The recent extension of homebuyers $8000 “credit” is but one mere example.

Were you also aware that the credit is extended to existing homeowners?  No? Well not to worry, it is only a mere $6500. And again the government is pushing for relaxation of lending standards and no down payment.

Meanwhile, back in the private sector where jobs are created, nothing is happening.  The recent bankruptcy of CIT went largely unnoticed by the traditional press.

CIT is the lending organization for small businesses.  Presently the lending climate remains frigid and new or existing small businesses are having difficulty obtaining credit if they wish to stay afloat or expand.

It is so much more important that the executives at Goldman Sachs and JP Morgan Chase get bonuses because of their political ties, then it is to support small businesses.

Because the housing credit has prevented the floor in housing prices to be realized, the bet on an economic turnaround to forego that pain, may create greater hardship.

Add to this the likelihood of commercial real estate debacle in 2010 and the future does not look as rosy.  The stock market is a reflection of cash for clunkers and housing purchases and may not carry forward in 2010.

The unemployment rate of 10.2% doesn’t factor large numbers of individuals whose hours were reduced to 33 per week.  It doesn’t reflect that men and teenagers, especially African-American, have been disproportionately affected.

There is real stimulus that could bring down this fever and it isn’t a trillion dollar take over of health care or cap and trade where 85% of permits are free. It isn’t in bailing out any more TBTF banks or auto (union) companies.

The only growth one sees is deficits for miles and miles and miles!

“Health Care Reform” should be dedicated to controlling costs and increasing affordability and accessibility.  However, we are presented with trillion dollar reform that does none of the above.

It will take our exceptional, innovative system and dismantle it, while dramatically increasing the federal deficit and national debt.  The majority party is going from exceptional to exceptions!

How so you ask?  In order to score under a trillion dollars over 10 years, more of the cost burden for Medicaid is shifted to already strapped states.  Guess which 4 states are excluded? Would it surprise you to learn that Nevada is one?

Exception No. 2:  the 40% tax on “cadillac”  health care plans will exempt union employees. This comprises 16 million in the workforce.

Exception No. 3:  proposed yesterday, it would exclude government employees from the tax levied on “cadillac” plans.  This is another 2 million workers.

With so many exceptions to paying for reform that does not control costs or cover everyone, who will pay and at what cost now?  Should not the Baucus bill, which is not yet a bill, be remarked by the CBO before debate?

This means taxes on young adults, working families and seniors will all increase.  Seniors will also see cuts in Medicare and less availability of care, and others will not have discretionary income to afford health services.

Despite the profound increase in taxes on the “rich” and businesses, ultimately the average working class American will pay for all this health care.  The majority party and administration knows it will be in the trillions!

They are continuing to give payoffs and bailouts to special groups. There is neither transparency nor fairness!

Prepare yourself for exceptional taxation for unexceptional health care!

Gold reached $1072 an ounce and then fell, and oil broke through $75 a barrel. Certainly, this is related to the dollar weakness just as when a barrel of oil escalated to the $140’s last year.

With a rise in the price of commodities and a falling dollar, there is the signal of impending inflation.  It also bolsters China and other countries who should be acknowledged for their economic growth.

There are serious implications to the demise of the dollar.  In the short term, it has helped the stock market because multinational companies sell more goods overseas because of lower prices.

In the long term, it weakens the U.S. economic growth and will cost all of us more for goods and services as our dollar will buy less.  Gasoline prices will rise and transportation costs will be greater.

Long term we look at inflation unless the Federal Reserve acts quickly and aggressively.  But the Fed is looking at unemployment and will be hesitant to act.

Our deficits and debt have also created weakness in the dollar and less desire for dollar assets.  This too has repercussions that are unintended.  It emboldens emerging countries with dictatorial governments but market based economies.

They have found that adopting market or capital economies can be attractive while continuing their political regimes.  We continue to lose influence in these regions and these countries preferentially trade with other emerging markets.

We have recently seen this with both Russia and China’s refusal to sanction Iran and to develop trade policies with Iran despite their statements to the contrary at the recent U.N. summit.

With the dollar demise, we see the influence of western democracies decline as well.  Should we care about declining influence?  After all we have never been a colonial imperial geography seeking nation, despite claims to the contrary.

We should care about losing influence, as we will lose liberty. Burgeoning deficits and debts, falling dollar and anti-growth government policies make us prey to the agenda of foreign nations.  Similar to post WWII U.K.

Those who don’t know history, repeat it.  Are we on the same trajectory as Britain?

The U.S. dollar continues to sink compared to other currencies. Gold his it highest level at 1039.  The stock market gained back some of the losses of last week.

What does all this mean and should we be concerned that the dollar is in a nosedive?  Depending upon which economist you favor, it may mean little or it could mean that we are in for rough seas ahead.

Gold is considered a hedge against inflation and certainly many individuals and countries have been purchasing commodities. This is both reasonable and worrisome.

Worrisome, because the flirtation earlier in the year with the rest of the world moving to a different reserve currency has turned into serious dating.  China, Great Britain and the European Union have began looking to other currencies.

A report in a U.K. newspaper suggested that oil-producing countries would shift away from pricing oil in dollars.  Although denied, were this the case, demand for dollars worldwide would decline.

Although our exports would be more attractive with a weaker dollar, imports would be more expensive.  This drives up inflation.  Additionally, it is less attractive to foreign investors so long term it is a negative for the markets.

Additionally, other countries have lost conviction that the U.S. will manage its debt and inflation adequately.  Trillion dollar health care reform efforts do nothing to assuage this doubt.

Although our economy has begun to recover in spite of only 18% stimulus input, and without job growth, the submerging dollar and gold rush does not forebode well for the future.

Inflation is on the horizon.  Not immediately, but it may occur and sink the green economic shoots that have emerged.  Unless the Fed acts quickly, we could face inflation that would devastate our economy, think stagflation.

That may be a tall order for the central bank that caused both the tech and housing bubbles and their subsequent bursting.  If they target the unemployment rate to guide interest rate hikes, they will respond too late.

Australia raised its interest rate 25 basis points this week. Neither Australia nor Canada were affected by this global recession to the degree of other countries. They are commodity rich exporters which is helpful in this environment.

This in indicative to me that we need to clean up our balance sheet, cut spending and perhaps even forego the remaining stimulus money and return it to the treasury (yes, that is us the taxpayers).

Hold tight as we submerge into a W shaped recession and unemployment rises above 10%.