Bitter Pill - Why Obamacare?

1) I can commiserate with you. We also went through medical bankruptcy while enjoying premium health insurance. The problem is that fifteen percent, ten percent, or even five percent of infinity is infinity. That's the math of it. Insurance has accustomed the medical industry to bill infinitely. That's the inequity of it.

Bankruptcy was not a bad thing. It was a kind and compassionate loophole available at a time when fate was very cruel to us. All the people who had actually done us a service got stiffed and had to walk away empty handed. The only cruelty which persisted was rapacious government. Took us nine years to pay off taxes, penalties, and interest. Government never walked away from its moiety.

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2) We are many hundreds of thousands of pages of regulations away from being plagued by free market problems.

It's astonishing how many times these days we see "free market" or "capitalism" blamed for problems explicitly created by the manner in which we have ended free markets and capitalism. We no longer enjoy either of these two, so we ought to stop blaming them for what we have replaced them with. Blame cronyism, blame fascism, blame socialism, blame statism. blame the inherently inept nature of government, but don't blame what we abandoned right before everything went seriously haywire.

Take drugs, as an example. Bearswatter spend most of yesterday afternoon at the pharmacy wrassling in person with the pharmacist and by phone with medicare, medicare supplement insurance, drug supplement insurance, etc., to refill a prescription on a pain pill she has taken regularly for years. Why? The War on Drugs. In a free society, she would have the right to own her body. She would be able to walk in the store and buy what she wants at a competitive price; or raise poppies in the back yard for that matter.She does not. There is no free market. Instead, there is a mandatory periodic doctor visit to an office where a team of gals pore over massive tomes hunting for just the right billing code, another team man a phone bank at the drug insurance company, the druggist hires three more gals, they all exchange forms, which go to medicare, where another team of bureaucrats waste time while doctor and druggist wait nine months to get paid. All of this contributes to the cost of these pills. Not to speak of the $400 million (I have seen estimates as high as four billion) it cost big pharma to bring that drug to market, nor the horde of regulators. The cost of pressing a pill is absolutely dwarfed by the cost of regulating it.

Now, don't go all reductio ad absurdem on me. I am not saying that Doctor Jibaro's Snake Oil Remedy brewed in the woods and sold from the back of a covered wagon is a better option.

All I am saying is: there is no free market. That is a straw man. Our society is being conquered by an army of straw men on every hand.

Drugs are but one example. You can adduce many others.

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3) The affordable care act does nothing whatever to "cage the tiger". How could it? It was written by tigers.

Does it
- reform tort law?
- reduce needless testing and procedures?
- reduce drug cost?
- make doctors more plentiful?
- make insurance company earnings less exhorbitant?
- decrease an aging population?
- reduce the strangling cost of regulation?

No.

What does it do? It makes it mandatory for everyone to buy something whether they can afford it or not. Not only that, but a thing which not everyone buys only because not everyone can afford it. Not only that, but a certain flavor of that thing which virtually nobody can afford to buy. Not done yet, it then piles a whole new array of federal and state bureaucracies on top of the cost. Which part of this is affordable? Simply shifting the cost from pocket to tax (more accurately, from pocket to public debt) does not make it affordable. If that were all that was required, then fire up the printing presses and make us all independently wealthy. The Chinese can make us each a Lear jet. I've got dibs on that unicorn I've been wanting to buy.

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4) All this comes at a time when we are broke.

Whoever the next president is, regardless of party or philosophy, he will get the blame once the true weight of Obama's folly is felt. It's the same as Obama inherited with Bush's $400 billion unfunded medicare drug coverage; just way much bigger. Obamacare is the mighty teak log which will crush our debt camel's back.

This is precisely why we need to get our house in order. Objects worthy of our attention cannot be addressed without the wherewithal. However worthy an object may be, the money does not appear out of thin air. If you simply print it, the way the Fed is doing now, then the price of everything else goes up, as it is doing now. You have to produce value to get value. You have to make something worthwhile to have something worthwhile. You cannot simply conjure it. Money may be made to grow on trees, but what you intend to buy with it must be mined and planted and harvested and manufactured. You can hold worth in your hand. It's not a parlor trick.

Which leads us to our final point: Why is it that Grandma, after a life of toil and thrift, can no longer afford to buy her pills? It is because government by a proliferation of benevolent schemes which it cannot afford has plundered her dearly acquired nest egg via rampant inflation, reducing her stash to trash. Here comes one more such scheme. It not only makes it impossible for her to buy her pills, it also makes it impossible for her to heat her cottage. Or pay the taxes.

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Good motivation does not ensure good policy.

+1 to everything Webmost just said

xmacro:
+1 to everything Webmost just said

I have to say, I agree pretty much with everything said as well. My remark about the "free market" was not to blame it, or to indicate that I believe what we've got is anything like a truly free market, merely to deflect a common misconception that it a: exists, and b: is the only viable solution to every problem.

I'm not trying to defend "Obamacare" per se, merely to point out why so many are drawn to it. You're probably quite right, it most likely will not cage the tiger. A great example of what you're saying is HIPPA. What made it into legislation bears little resemblance to the original intent of the legislation. Just as with the current problems, the foxes and tigers are writing the laws. We're just the fodder.

Still, despite any/all of that, read the article if you get the chance. There is a lot of valid information there. The rigged game we've all had forced on us is not satisfactory, as it was, or now is, or will be under the new rules. And there will be many many rules, to ensure the proliferation of bureaucracy, and profit for the few.

phobicsquirrel

I agree a bit, however obama nor any democrat has pushed for national healthcare. The most that democrats have wanted is medicare for all which is single payer. National care would be extending VA care for all which the govt. Owns the entire thing.
The US is not broke, that is a bs taking point that is pushing this country further down the path of massive cuts and a broken economy.

phobicsquirrel:

The US is not broke, that is a bs taking point that is pushing this country further down the path of massive cuts and a broken economy.

The US Gov't borrows $0.35 of every dollar it spends. If a household did that, they'd be called deadbeats or fools. Sure sounds like we're broke to me.

But to get back on topic again:

Amos Umwhat:
xmacro:
+1 to everything Webmost just said
I have to say, I agree pretty much with everything said as well. My remark about the "free market" was not to blame it, or to indicate that I believe what we've got is anything like a truly free market, merely to deflect a common misconception that it a: exists, and b: is the only viable solution to every problem.

I'm not trying to defend "Obamacare" per se, merely to point out why so many are drawn to it. You're probably quite right, it most likely will not cage the tiger. A great example of what you're saying is HIPPA. What made it into legislation bears little resemblance to the original intent of the legislation. Just as with the current problems, the foxes and tigers are writing the laws. We're just the fodder.

Still, despite any/all of that, read the article if you get the chance. There is a lot of valid information there. The rigged game we've all had forced on us is not satisfactory, as it was, or now is, or will be under the new rules. And there will be many many rules, to ensure the proliferation of bureaucracy, and profit for the few.

It's ironic; the very Gov't bureaucracy that caused the problem in the first place is being touted as the solution. In another time, this kind of thing would be a comedy script, instead of our Gov'ts policy.

phobicsquirrel

Macro, this country has had debt for decades, nothing has changed. The only way to fix it is to grow, and one cannot grow without spending. Cutting does nithingnothing but stop growth. There is no such thing as a free market as the govt feeds billions into the largest companies. Truly I wish there was a free market. Would have fixed a lot of things.

phobicsquirrel:
Macro, this country has had debt for decades, nothing has changed.

Disagree. The amount has changed significantly. It took GW Bush 8 years to spend us $5 trillion further into debt; Obama managed to spend $6 trill in his first 4 years. As the debt rises, so too do the interest payments, which are taking an increasingly larger chunk out of our spending

phobicsquirrel:
The only way to fix it is to grow, and one cannot grow without spending. Cutting does nithingnothing but stop growth.

I agree that growth is needed, but if you look at the numbers needed, it's not enough. Even if the US were to get back to 4% annual growth, it's still not enough. The simple fact is, we're spending 35% more than we take in, which means things need to be cut, and drastically so. Hatchets need to be taken to the budget until the Gov't lives within its means. Even Howard Dean, one of the Lefts heroes, has admitted the obvious: Either Gov't spending needs to go down, or taxes on everyone, especially the middle class, need to go up. There's no other way to reconcile the numbers.

Going further into debt to generate growth isn't working; the Fed started with Quantitative Easing 1, then 2, then Operation Twist, then QE 3, and now we're on QE infinity - Ben Bernanke just got done saying a few days ago that the Fed is going to keep printing money until they print their way out of this recession. It's just ridiculous, it's like a household with $16,000 in credit card debt saying "We need to keep spending until we don't have any more debt".

The economy doesn't grow with Gov't spending, it grows when business is successful, which generates wealth. The GDP of a nation increases with the success of the private sector, not the growth of the public sector. Gov't can only spend in taxes what it borrows or taxes - those taxes come from businesses that earned the money - when Gov't taxes a business, it's effectively saying "Gov't knows how to spend this money better than the business that earned it" - but Gov't doesn't produce anything, it only consumes the wealth and money of others

phobicsquirrel:
There is no such thing as a free market as the govt feeds billions into the largest companies. Truly I wish there was a free market. Would have fixed a lot of things.

Unfortunately agree. There was a report that some of the members of the Fed board were starting to change their minds about QE - the stock market plunged on the news, which goes to show the extent that the economy is dependent on the Gov't teat.

A free market would have less Gov't in it; the stock market wouldn't depend on the Gov't as much or drop off a cliff at the first sign the Fed is thinking of tightening up its monetary policy. A freer market would have Gov't only set the guard rails in place then leave people to make up their own minds about what to do or how to spend their money.

raisindot

Getting back to the original subject, I, for one, am delighted with Obamacare.

My older son, who is 18, would have been kicked off our health care this year if Obamacare were not in place. Now we can keep him on until he is 26. Given the difficulty he will probably have in finding a job after college, this is a godsend for parents and their children.

My wife, who has the health insurance in our family, switched plans this year. She had cancer several years ago, and had Obama not outlawed denial of coverage for existing conditions, we wouldn't have had health insurance at all, since this particular plan had been notorious for denying coverage, or jacking up the rates so high that coverage would have been impossible.

Should she should ever get laid off, I don't need the government to tell me that I have to pay for health insurance--I will absolutely want to do it to protect my family. Before Obamacare, I would be paying over $1,000 per month for COBRA with no help at all from the government. At least now if this happens, due to the income loss, I will get some kind of relief, either in terms of tax benefits or actual premium relief, from the government. Once COBRA runs out what the government requires me to pay probably will be me on a lower tier plan, but that's still better than not being able to afford healthcare at all.

But, as I always say, your mileage may vary.

I'm taking a different route, when Obamacare kicks in in 2014. Gonna watch my premiums; if they double or triple, the way it's being forecast for young, healthy people like myself, I'll just drop my health insurance entirely. With Guaranteed Issue, if I get sick, a health insurance company can't refuse me, so I'll buy some when I need it, and drop it again when I'm healthy.

Is there anything wrong with what you or me are doing? No - we're both doing the economically smart thing for us, and trying to preserve our wealth and savings. The problem is the way the law is written; so many other things they could've done but didn't.

EDIT: I'm not being sarcastic; this is literally what I'm going to do. If the fine for not having health insurance is lower than my premiums, it's cheaper for me to just drop my insurance and re-buy it when I need it.

raisindot:
Should she should ever get laid, ...

Marital trouble at home? LOL Stick out tongue [:P]

raisindot

xmacro:
I'm taking a different route, when Obamacare kicks in in 2014. Gonna watch my premiums; if they double or triple, the way it's being forecast for young, healthy people like myself, I'll just drop my health insurance entirely. With Guaranteed Issue, if I get sick, a health insurance company can't refuse me, so I'll buy some when I need it, and drop it again when I'm healthy.

Is there anything wrong with what you or me are doing? No - we're both doing the economically smart thing for us, and trying to preserve our wealth and savings. The problem is the way the law is implemented; so many other things they could've done but didn't.

EDIT: I'm not being sarcastic; this is literally what I'm going to do. If the fine for not having health insurance is lower than my premiums, it's cheaper for me to just drop my insurance and re-buy it when I need it.

Personally, I see absolutely nothing wrong--morally or otherwise--with your approach. Obviously, you'll get a lower level of coverage if you pay the fine, but that's how it's always been in this pay-to-play healthcare business.

xmacro:

raisindot:
Should she should ever get laid, ...
Marital trouble at home? LOL

Yeah, yeah, yeah, always a smartass in every crowd.

raisindot:
Getting back to the original subject, I, for one, am delighted with Obamacare.

My older son, who is 18, would have been kicked off our health care this year if Obamacare were not in place. Now we can keep him on until he is 26. Given the difficulty he will probably have in finding a job after college, this is a godsend for parents and their children.

My wife, who has the health insurance in our family, switched plans this year. She had cancer several years ago, and had Obama not outlawed denial of coverage for existing conditions, we wouldn't have had health insurance at all, since this particular plan had been notorious for denying coverage, or jacking up the rates so high that coverage would have been impossible.

Should she should ever get laid off, I don't need the government to tell me that I have to pay for health insurance--I will absolutely want to do it to protect my family. Before Obamacare, I would be paying over $1,000 per month for COBRA with no help at all from the government. At least now if this happens, due to the income loss, I will get some kind of relief, either in terms of tax benefits or actual premium relief, from the government. Once COBRA runs out what the government requires me to pay probably will be me on a lower tier plan, but that's still better than not being able to afford healthcare at all.

But, as I always say, your mileage may vary.

No, my mileage may not vary. You conveniently dodge the element of compulsion here. If you voluntarily bought insurance which would cover your adult son, but I did not, then my mileage might vary. If your delightful Obamacare forces me (or more accurately, my grandchildren) to buy insurance for your son, then, no, neither my mileage nor my grandchildren's mileage may vary. If you want to do it, do it. Don't force me and then say my mileage may vary.

Time and again, liberals complacently characterize their coercive schemes as merely a difference of opinion. Bull. Nothing I propose starts with taking your money nor ends with telling you what to do. Everything liberals propose does.

Note this: The very fact that you could not afford it without a mandate lends weight to my argument that we cannot afford to mandate it for all.

Let's shift gears here:

What if our real object actually was to make health care affordable? What useful role could government play? I suggest to you that any three of us could sit round a lounge smoking a good cigar and before we reached the band we'd have fifty solid effective ideas. Here's a quick go:

First, let's get the money: Government could stop the war on drugs. Turn that budget saved to the following:

Government could buy patents on common drugs and make them available to anyone willing to press those pills for fifty cents a pop. Buy the patents via eminent domain, cheap, like they do land, when they build a ball park for millionaires.

A president could stand on his hind feet and, like Kennedy did with the space race, he could boldly state: "We shall cure cancer in this decade." Put Lance in charge. I bet he'd give his other nut for the chance. And his girl friend would understand.

Now that we don't need to awe the Russkies by dominating the moon, we could turn NASA's technical expertise to making CAT scanners or MRIs or robotic limbs. I bet they could make dang fine good ones.

We have an array of idle factories. Get some unemployed factory workers and make durable medical goods. You're already paying them unemployment.

... while idle auto plants could make ambulances

... and idle sewing factories funny smocks your butt hangs out of

... and idle carpenters could add a wing

Ancient Greece and Rome made gymnasia free and available to all, believing that a healthy body is important. We, on the other hand, make excuses that we can't even afford PE. Turn that thing around. A YMCA in every neighborhood, I say. Sports as a way of life, as among Samoans.

Tort reform of course.

Any well intentioned person of average intelligence could come up with dozens of suggestions off the cuff. None of them will happen. Why? Not because the people with the power to do these things are too dumb to think of them. But because the people with the power to do these things have no desire to accomplish these ends. Don't believe what they say; look what they do. Bush's folly was rightly criticized for including a prohibition on medicare negotiating better prices on drugs. Round comes Obama's folly, cooked up by the very same people who criticized Bush's folly, and what did it do? Prohibited medicare from negotiating better prices for drugs. If able, intelligent, people in power do not do what they say they want to do, then what are we to suppose, other than what they said is not what they wanted to do? What, then, did they really want to do? Well, they watched big pharma lavish tens of millions to court congress, and they said to themselves: "We can milk this cow again!" This time to the tune of over a hundred million. That's what they wanted. And they got it.

If they wanted to make health care more affordable they would have. They don't and they didn't.

They got what they wanted. They most always do.

Webmost, I've enjoyed most of your comments on here. Not sure I agree with everything you've said, but at minimum you've stated it well and logically.

One thing I keep hearing people here and in my social circles comment on is how we increase growth, by spending or not spending. Has it ever occurred that growth might just be the exact opposite of what we really need. That constantly racing to expand and remain the front runners has been what has gotten us into this mess. We're keeping up with the Jones. The very nature of our economy as it has been since the foundation of our centalized banking system is to grow, expand, collapse, and inflate, then begin the whole cycle over again. The means to this end is inflation. Most people don't really understand what that means with a privatized central bank. Inflation = debt. The more our money is inflated, the more we owe to these centralized bankers.

I personally am not really interested in hearing any of their ideas that do not first start with restructuring our banking system at it's core.

beatnic

I think we do need to increased spending. But, not government spending. It leads to nowhere. We need companies to spend. There are ways to make that happen. It just won't happen with the current administration.

Just to expand on what I stated above:

Our government could use a big step backward.
Our expected standards of living (top to bottom) could use a big step backward.
Our markets could use a big step backward.
Our military could use a big step backward.
Our banking system could use a MASSIVE step backward.
The pace of our society could use a big step backward.
Our production of useless, pointless goods could use a big step backwards.
Our effects on our environment and our planet could use a big step backward.
Our political system could use a big step backward.

I'm not anti-technology or anything like that, but at what point do we stop expanding and growing??? We live in a finite world. Infinite growth is not possible. At the very core, this has always been the fundamental problem with "free market" and "capitalism." They're certainly neat ideas, but eventually you run out of things to capitalize on, you run out of resources, you run out of money, you run out of planet. Until we evolve a little and figure out how to make the world run on a resource economy (operates on effeciency) versus a monetary system (operates on scarcity) then we're just going to keep repeating these cycles over and over again.

In the words of Nietzsche, "Human, all too human."

beatnic:
I think we do need to increased spending. But, not government spending. It leads to nowhere. We need companies to spend. There are ways to make that happen. It just won't happen with the current administration.

It actually doesn't matter. Spending is spending. Let's try an example.

Example 1: Government wants to spend money. Govt goes to federal reserve and gets some money. Fed creates money and charges 6% on the dollar of compoundable interest. Govt takes the check (it's really all digital now) to the treasury and the money is printed (which it's really not, it's all digital now). Govt does whatever it's going to do with the money and for the example at hand, we'll just say they use the money wisely, it generates growth and they receive the money back with taxes with which they pay back the money owed to the Fed.

Example 2: Business wants to spend money. Businesses grow under the current amount of currency in the market. Eventually, they will reach what is called equalibrium, which means they can only produce as much goods as there is money to pay for the goods in the society. This would be considered a good thing, we're not anywhere near this right now. At this point the only way for the economy to grow is to create more money, which is performed all the time all the way from the Federal Reserve right down to you local Bank of America (the money they loan out is made of thin air and is only actually only backed my 10% of what they actually possess.) Sooooo...... the goverment goes to the Fed and asks them to create more money, which they do at a 6% interest charge and so forth.

Here's the big problem!!!! $1 created is equal to $1 owed to the Federal Reserve bankers plus 6% interest. Doesn't matter if it's the government who wanted it created or the private sector. It's still equal to $1.06 of debt. So, essentially, if there were no dollars in circulation at all, they were ALL returned to the Federal Reserve, the full debt would be paid to the Fed. EXCEPT.... except that they money to cover the 6% was never actually created. It can never actually be paid. If we rounded up every dollar and took it back to them, we'd still owe them all the compounded interest we've been accruing since December 23, 1913.

The fact of the matter is that we've been selling this country off to the bankers 6 cents at a time for the last 100 years and you can never generate enough money to pay them back. They rigged the game from the get go. The only way out of it is to stop playing their game. Every politician you see standing in Washington is only there to perpetuate this cycle. Unless they are vehemently speaking out against the Federal Reserve they have no actual desire to free of this nation of debt.

clearlysuspect:
Webmost, I've enjoyed most of your comments on here. Not sure I agree with everything you've said, but at minimum you've stated it well and logically.

One thing I keep hearing people here and in my social circles comment on is how we increase growth, by spending or not spending. Has it ever occurred that growth might just be the exact opposite of what we really need. That constantly racing to expand and remain the front runners has been what has gotten us into this mess. We're keeping up with the Jones.

I understand your point, but you're confusing a few issues. Let me see if I can explain this (I''m not nearly as eloquent as Webmost has been on the HC issue, so I won't even try to comment on that)

First off, you misunderstand the economy; you talk as if the US is consciously trying to grow - this is incorrect. An economy is made up of every citizen - millions of people, every day, trying to better their lot in life. The economy of a nation grows simply because of its citizens, not because someone in a position of power decides it

Second, you're incorrect that growth is the exact opposite of what we need - every nation needs growth, for the simple reason that stagnation is death. As more babies are born into a nation, the population swells. As the population swells, more jobs are required for those new members of society. Assuming those new members of society can get jobs, they then begin creating wealth at their jobs, and in turn get paid for it. By creating wealth through their work and collecting their paychecks, they increase the size of the nations wealth.

Now when a nation stagnates or declines, everything goes down. Less money in the system means less products are produced, which means scarcity of products increase, which leads to higher prices (economics 101: Scarcity = price; when a product is scarce, the price is high, when it's abundant, it's low. See diamonds vs lettuce). Eventually, as the national wealth declines, so too does that nations power, but more importantly, it's standard of living declines as well. Since less is being produced, wages either stagnate or decline as well since workers aren't producing as much or not producing as much wealth as before. When wages come down, two things happen: buying power, and the standard of living declines, and the jobs that are available don't need as many people to produce - people are laid off because they aren't needed to produce anymore. The reason we're in a recession is because the nations growth has flatlined (0.1% in 4th qrtr of 2012) and people can't find jobs. So you see, if a nation's economy isn't growing, it means the entire nation itself is in decline; to say that we need less growth is wrong.

EDIT: It should be said that I'm not an economist; I try my best to explain things, but I could easily have bungled some explanations.

clearlysuspect:
The very nature of our economy as it has been since the foundation of our centalized banking system is to grow, expand, collapse, and inflate, then begin the whole cycle over again. The means to this end is inflation. Most people don't really understand what that means with a privatized central bank. Inflation = debt. The more our money is inflated, the more we owe to these centralized bankers.

I personally am not really interested in hearing any of their ideas that do not first start with restructuring our banking system at it's core.

Not correct, at least not entirely correct. I'm not really going to touch inflation - it's a can of worms, and then some; it covers everything from the valuation of the dollar to monetary policy to natural inflation inherent in every economy, so I'll just leave that alone.

That said, I agree the Fed is out of control with the monetary printing; QE has been a failure, and the Fed is out of ideas, so it keeps printing money. On the upside, your 401k and stock portfolion look great; on the downside, the party needs to end, and when it does . . . well, hopefully I'll pull out of the stock market before then, because the crash is going to be epic.

As for your other argument, the boom and bust cycle is built into capitalism; it's inherent in the system. The alternative is socialism, where the economy is low and flat - it doesn't bust, but then again, it never booms.

clearlysuspect:
I'm not anti-technology or anything like that, but at what point do we stop expanding and growing??? We live in a finite world. Infinite growth is not possible. At the very core, this has always been the fundamental problem with "free market" and "capitalism." They're certainly neat ideas, but eventually you run out of things to capitalize on, you run out of resources, you run out of money, you run out of planet. Until we evolve a little and figure out how to make the world run on a resource economy (operates on effeciency) versus a monetary system (operates on scarcity) then we're just going to keep repeating these cycles over and over again.

In the words of Nietzsche, "Human, all too human."

I'll admit, Capitalism isn't the ideal system of wealth creation, but the simple fact is, it's the only one that's ever actually worked - no one's ever come up with a better system.

There was a study by Columbia University; it found that since 1970, the free enterprise system has decreased poverty in the entire world by 80% - it is literally the greatest antipoverty achievement in world history. Capitalism has the ability to lift entire nations out of poverty and put them on the track to wealth and national happiness. There simply isn't any other system on the planet that's ever been able to achieve this.

At it's core, Capitalism is about freedom and liberty; the freedom to buy and sell as you, the individual, wishes; it doesn't force anyone to buy your goods, and it doesn't force you to sell what you don't want. And therein lies it's greatest strength. It is the greatest system for wealth creation and poverty elimination that's ever been devised.

jthanatos

clearlysuspect:
beatnic:
I think we do need to increased spending. But, not government spending. It leads to nowhere. We need companies to spend. There are ways to make that happen. It just won't happen with the current administration.
It actually doesn't matter. Spending is spending. Let's try an example.

Example 1: Government wants to spend money. Govt goes to federal reserve and gets some money. Fed creates money and charges 6% on the dollar of compoundable interest. Govt takes the check (it's really all digital now) to the treasury and the money is printed (which it's really not, it's all digital now). Govt does whatever it's going to do with the money and for the example at hand, we'll just say they use the money wisely, it generates growth and they receive the money back with taxes with which they pay back the money owed to the Fed.

Example 2: Business wants to spend money. Businesses grow under the current amount of currency in the market. Eventually, they will reach what is called equalibrium, which means they can only produce as much goods as there is money to pay for the goods in the society. This would be considered a good thing, we're not anywhere near this right now. At this point the only way for the economy to grow is to create more money, which is performed all the time all the way from the Federal Reserve right down to you local Bank of America (the money they loan out is made of thin air and is only actually only backed my 10% of what they actually possess.) Sooooo...... the goverment goes to the Fed and asks them to create more money, which they do at a 6% interest charge and so forth.

Here's the big problem!!!! $1 created is equal to $1 owed to the Federal Reserve bankers plus 6% interest. Doesn't matter if it's the government who wanted it created or the private sector. It's still equal to $1.06 of debt. So, essentially, if there were no dollars in circulation at all, they were ALL returned to the Federal Reserve, the full debt would be paid to the Fed. EXCEPT.... except that they money to cover the 6% was never actually created. It can never actually be paid. If we rounded up every dollar and took it back to them, we'd still owe them all the compounded interest we've been accruing since December 23, 1913.

The fact of the matter is that we've been selling this country off to the bankers 6 cents at a time for the last 100 years and you can never generate enough money to pay them back. They rigged the game from the get go. The only way out of it is to stop playing their game. Every politician you see standing in Washington is only there to perpetuate this cycle. Unless they are vehemently speaking out against the Federal Reserve they have no actual desire to free of this nation of debt.

And the Fed takes all that money and turns the profit back over to the Treasury department every year. 70+ billion a year in the last few years. And the current Federal funds rate is ~0.25%. So is the discount rate. I am not a big fan of the Fed, but they are not the boogeyman you are looking for. We have prospered as a nation with the Fed and without.

They don't can peaches, you know.

That's the difference between government and business spending. Government hassles everyone from the Mexican who wants to come pick peaches for pesos to the printer who wants to print the label; and then it bleeds everyone from the farmer who planted the trees to the trucker who delivers them, while the farmer and the trucker and the picker each earn literally half what the hasslers and bleeders do. Business? What's it do? It cans peaches.

See, government ain't into peaches; government is into power and pork. $52 billion in Sandy relief doesn't come until three months after the wind subsides. Then we discover there's really only $17 billion in relief, most of which comes in half related projects years down the road, while the other $34 billion is going to windmills, head start, and other assorted humbug. What do ordinary people do? Before the wind even dies down, ordinary people are driving truckloads of flashlights and blankets and canned peaches to Joisey and Nyawk. Much of this donated and all produced by business.

There's peaches, and then there's leeches.

I've quoted this before, but it bears repeating, because this, I think, is the nub of our difficulty:

"The dogma that the State or the Government is the embodiment of all that is good and beneficial and that the individuals are wretched underlings, exclusively intent upon inflicting harm upon one another and badly in need of a guardian, is almost unchallenged. It is taboo to question it in the slightest way. He who proclaims the godliness of the State and the infallibility of its priests, the bureaucrats, is considered as an impartial student of the social sciences. All those raising objections are branded as biased and narrow-minded. The supporters of the new religion of statolatry are no less fanatical and intolerant than were the Mohammedan conquerors of Africa and Spain."

Ludwig von Mises
1881-1973
Austrian economist

and:
"Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive."

C. S. Lewis

Government has its place, but only if kept it in its place.

... but we are wandering far from the topic here.

clearlysuspect:
Just to expand on what I stated above:

Our government could use a big step backward.
Our expected standards of living (top to bottom) could use a big step backward.
Our markets could use a big step backward.
Our military could use a big step backward.
Our banking system could use a MASSIVE step backward.
The pace of our society could use a big step backward.
Our production of useless, pointless goods could use a big step backwards.
Our effects on our environment and our planet could use a big step backward.
Our political system could use a big step backward.

I'm not anti-technology or anything like that, but at what point do we stop expanding and growing??? We live in a finite world. Infinite growth is not possible. At the very core, this has always been the fundamental problem with "free market" and "capitalism." They're certainly neat ideas, but eventually you run out of things to capitalize on, you run out of resources, you run out of money, you run out of planet. Until we evolve a little and figure out how to make the world run on a resource economy (operates on effeciency) versus a monetary system (operates on scarcity) then we're just going to keep repeating these cycles over and over again.

In the words of Nietzsche, "Human, all too human."

I've only gotten this far this morning, I'm sure others commented, which I'll read, but I have to say I see a lot of good points here. I've thought for years that we keep getting caught in this loop of creating "bubbles". Things can only expand so far before they collapse. There are legions of examples, housing market etc. Same thing with minimum wage, every time it goes up everyone loses.

beatnic:
I think we do need to increased spending. But, not government spending. It leads to nowhere. We need companies to spend. There are ways to make that happen. It just won't happen with the current administration.

Or with the previous one. I think there needs to be a ceiling on compensation for the man at the top. No, not a maximum wage, but a ratio and proportion like we forced on the Japanese. The man at the top can make unlimited money, as long as everyone else who did the work gets to come along. Also, there must be a proportion of profit that is re-invested in the company or other viable investments. I realize that this is a little simplistic, but a look at what happened to Columbia Health Systems under Rick Scott should show what happens when the guy at the top can take it all. We seem to be doing that same thing on a national scale. The country can't grow, or even just reach equilibrium if these things keep happening.

https://www.youtube.com/watch?v=QPKKQnijnsM

xmacro:
+1 to everything Webmost just said

I congratulate you on your growth. I made most of those same arguements a couple years ago, and you called me a liberal elitist, and other words to that effect, and indicated you thought I was insane. Probably the heat of the moment. The congratulations are sincere, by the way, you've done an outstanding job presenting your views in this thread.

raisindot

webmost:
Let's shift gears here:

What if our real object actually was to make health care affordable? What useful role could government play? I suggest to you that any three of us could sit round a lounge smoking a good cigar and before we reached the band we'd have fifty solid effective ideas. Here's a quick go:

First, let's get the money: Government could stop the war on drugs.

Totally agree with you there. Stupid waste of money. I'd also stop the war on illegal immigration. We're spending way too much money trying to close borders that can never be closed.

webmost:
Turn that budget saved to the following:

Government could buy patents on common drugs and make them available to anyone willing to press those pills for fifty cents a pop. Buy the patents via eminent domain, cheap, like they do land, when they build a ball park for millionaires.

Hey, I agree with that totally this idea in principle. And generic drugs are kind of doing this today, although certainly not to a level of 50 cents a pill. The problem with this is that it disincentivizes pharmaceutical companies to create new drugs. Why should they risk millions of dollars and years of research on developing drugs that may or may not work if in the end they're not going to be able to take in huge profits? And, besides, doesn't this idea conflict the libertarian idea of government keeping its hands off the private sector?

webmost:
A president could stand on his hind feet and, like Kennedy did with the space race, he could boldly state: "We shall cure cancer in this decade." Put Lance in charge. I bet he'd give his other nut for the chance. And his girl friend would understand.

I agree with you there, as well. But any president would have to put up massive funding, as Kennedy did for the space program.-Not likely to happen with the current Congress. And, anyway, isn't this another example of government trying to take control of an issue better left to the private sector to solve?

webmost:
Now that we don't need to awe the Russkies by dominating the moon, we could turn NASA's technical expertise to making CAT scanners or MRIs or robotic limbs. I bet they could make dang fine good ones. We have an array of idle factories. Get some unemployed factory workers and make durable medical goods. You're already paying them unemployment.

Rather than trash NASA, I'd much rather shift the billions of dollars being spent to create Star Wars, open new army bases, and develop totally unneeded military technologies that are the pet projects of Congressional to this effort. Let NASA (in cooperation with private industry) design them and have Raytheon, GE and McDonnell Douglas manufacture them. But, once again, aren't we now giving government the power to tell private industry what to do. instead of letting private industry solve the issue for itself?

webmost:
While idle auto plants could make ambulances...and idle sewing factories funny smocks your butt hangs out ...and idle carpenters could add a wing

There really isn't a shortage of ambulance of silly smocks in this country, so not sure how this would solve the healthcare crisis. Still, a good way to keep people working. But, like all these other suggestions, they all require stimulus-style spending from the government. This increases the deficit and the debt, and, once again lets the government dictate policy.

webmost:

Ancient Greece and Rome made gymnasia free and available to all, believing that a healthy body is important. We, on the other hand, make excuses that we can't even afford PE. Turn that thing around. A YMCA in every neighborhood, I say. Sports as a way of life, as among Samoans.

Actually, this is not true. The gymnasia were only available to rich Greek or Roman freemen and what they called 'professional' athletes back then. Slaves, women, foreigners and the working classes were not allowed there at all. And these gymnasia were supported by mainly by private subscriptions. In other words, a non-government program that excluded ordinary citizens from participating.

All of these ideas are good. And all of the require massive government and a mandate for government to be in charge of improving healthcare. Wouldn't a libertarian be in total opposition of this, saying that the government needs to let the private sector itself solve the healthcare issue, even if this means keeping drug prices so high most people can't afford them?

webmost:
If they wanted to make health care more affordable they would have. They don't and they didn't.

They got what they wanted. They most always do.

Totally agree here. The incestuous relationship between insurance companies, for profit hospitals chain, the AMA and pharmaceuticals and their puppets in both parties in an absolute disgrace that prevents any meaningful attempt to solve this crisis. But, then again, from the libertarian point of view, shouldn't Congress just step away from this whole thing entirely and let the private sector itself sort it out? After all, if the government just lets the hospitals, insurance companies, pharmaceutical companies and physicians work it out themselves, they'll certainly come up with ideas that will result in affordable healthcare for all, won't they?

Martel

Since this is tangential to the op, I considered not posting it, but the thread has veered some anyway. What I find fascinating about this is that there is not only a perception of reality that is really far apart from reality, but that across the spectrum, there is an ideal that comes nowhere close to reality.

I will say that I think the current American healthcare system is broken...mostly because it's not about healthcare anymore. Healthcare providers are simply cogs in the system at this point. At any rate, the video is about wealth distribution in America. It doesn't present every bit of information I might like to see, but it is pretty accurate as far as I can tell regarding its statistics.

jgibv

Amos Umwhat:
The March 4 edition of Time magazine's feature article is "Bitter Pill" by Steven Brill.

If you've ever wondered "Why would Americans vote for a President who's pushing Nationalized Health care?" the answers are here.

Reading through the Time article now, interesting so far.

Amos Umwhat:
If you've ever said "The 'Free Market' is the best and/or only way to keep costs down and is the best solution to our problems" Brill has ably proved you wrong. The market does not remain "Free" if it's not regulated.

LOL -- that's funny.
IMO, the "free market's the only way to keep costs down" is about the same as saying "wall street and the big bank's were "too big to fail"....what a load of horse dung

Amos Umwhat:
Warning:
If you, like myself, have ever lost your house because of medical bills incurred by a family member, even though you had premium insurance at the time, you're likely to be enraged, or at least nauseous at knowing the why the tens of thousands of dollars they made from your troubles weren't enough to satisfy the money lust of the medical-industrial complex.

Enough is enough, the time to cage the tiger is long overdue.

Fortunately have not had that struggle --- but Frontline ran a piece about this about a year ago, very powerful, and eye-opening story ....
http://www.pbs.org/wgbh/pages/frontline/sickaroundamerica/view/

Martel:
Since this is tangential to the op, I considered not posting it, but the thread has veered some anyway. What I find fascinating about this is that there is not only a perception of reality that is really far apart from reality, but that across the spectrum, there is an ideal that comes nowhere close to reality.

I will say that I think the current American healthcare system is broken...mostly because it's not about healthcare anymore. Healthcare providers are simply cogs in the system at this point. At any rate, the video is about wealth distribution in America. It doesn't present every bit of information I might like to see, but it is pretty accurate as far as I can tell regarding its statistics.

The biggest problems with video's like this, is that it's not quite honest. The video acts as if wealth in this nation is a zero sum game, that if someone has more money than someone else, then they must've taken it from that other person

In reality, wealth is being created all the time; the reason wealth is concentrated in the hands of a few is because it was mostly produced by those few. A poor person doesn't create anything - as has been said, "I've never seen a poor person create a job", whereas a business creates not only products, but jobs as well - wealth is created through them.

A business doesn't redistribute wealth from X to Y, it creates an entirely new amount of wealth that it then spreads through its products and payroll; the products are distributed throughout the economy in the form of products, and the payroll is given to its employees - this is all new wealth, not taken from anyone, and yet the business will show up on that chart in the video as one of the top 20% or so, and the narrator will act as if the business took it from the bottom 20%.

Take the example of Google or Apple - they create products that make your life better; where would we be if no one had created a user friendly interface for the tablet and made it mainstream? Or revolutionized the smartphone? What if Google hadn't made a better search engine? What if Apple hadn't created the Mac? The world would be the worse for it, yet by their work, both Apple and Google have not only added products that enrich peoples lives, they've made a fortune doing it - they didn't earn their billions by taking it from anyone, they created that wealth through their products, yet in that video, they'd show up as the top 1% and the narrator would treat them as if they stole it from the other 99%

What's also left out is the tax side of things - the bottom 50% not only pays nothing, they get rebates - when tax season rolls around, the bottom 50% are paid by the top 50% of taxpayers. Additionally, the top 20% pay 72% of the taxes right now - taxes haven't been this high for the top 20% since the Carter Presidency and the stagflation years, yet you would never know that from the video.

That's the problem with video's like that - wealth creation isn't a zero sum game, but it's treated as one by those with a propaganda agenda

Martel

xmacro:
Martel:
Since this is tangential to the op, I considered not posting it, but the thread has veered some anyway. What I find fascinating about this is that there is not only a perception of reality that is really far apart from reality, but that across the spectrum, there is an ideal that comes nowhere close to reality.

I will say that I think the current American healthcare system is broken...mostly because it's not about healthcare anymore. Healthcare providers are simply cogs in the system at this point. At any rate, the video is about wealth distribution in America. It doesn't present every bit of information I might like to see, but it is pretty accurate as far as I can tell regarding its statistics.
The biggest problems with video's like this, is that it's not quite honest. The video acts as if wealth in this nation is a zero sum game, that if someone has more money than someone else, then they must've taken it from that other person

In reality, wealth is being created all the time; the reason wealth is concentrated in the hands of a few is because it was mostly produced by those few. A poor person doesn't create anything - as has been said, "I've never seen a poor person create a job", whereas a business creates not only products, but jobs as well - wealth is created through them.

A business doesn't redistribute wealth from X to Y, it creates an entirely new amount of wealth that it then spreads through its products and payroll; the products are distributed throughout the economy in the form of products, and the payroll is given to its employees - this is all new wealth, not taken from anyone, and yet the business will show up on that chart in the video as one of the top 20% or so, and the narrator will act as if the business took it from the bottom 20%.

Take the example of Google or Apple - they create products that make your life better; where would we be if no one had created a user friendly interface for the tablet and made it mainstream? Or revolutionized the smartphone? What if Google hadn't made a better search engine? What if Apple hadn't created the Mac? The world would be the worse for it, yet by their work, both Apple and Google have not only added products that enrich peoples lives, they've made a fortune doing it - they didn't earn their billions by taking it from anyone, they created that wealth through their products, yet in that video, they'd show up as the top 1% and the narrator would treat them as if they stole it from the other 99%

What's also left out is the tax side of things - the bottom 50% not only pays nothing, they get rebates - when tax season rolls around, the bottom 50% are paid by the top 50% of taxpayers. Additionally, the top 20% pay 72% of the taxes right now - taxes haven't been this high for the top 20% since the Carter Presidency and the stagflation years, yet you would never know that from the video.

That's the problem with video's like that - wealth creation isn't a zero sum game, but it's treated as one by those with a propaganda agenda

I agree with this for the most part, as well. Although I think there is a difference between wealth and income which kind of negates the tax arguments--I think the wealth illustrated by the video includes the tax income received by those lower on the scale.

I don't think that business is bad. It does add value to the overall national economy and raises everyone's potential wealth, but the question this video raises is this, does the increase in wealth accurately reflect the value of many of those in the middle and lower brackets? I don't doubt that Steve Jobs, Bill Gates, or someone like Andrew Carnegie from a previous era do more good than harm with their business ventures. Yet I don't think that's the point of the video, really. It's more about perception...we as a nation tend to think that wealth is distributed much more evenly than it really is, AND we think that our false perception of reality is unfair when the actual distribution is much less even than we perceive. I find that extremely interesting.

One other thing I would point out: while wealth is being created all the time, is potential for growth infinite? I don't think it is. Not on a world with finite resources. Now, let's all move to Mars and create some jobs in the asteroid belt! Or just play asteroids. That was a fun game.

Xmacro, I'm not wrong. Nor am I right. And the same is true for you. These are my opinions and the way I view the world. If you view it differently then I guess that's what makes this world special. I believe we're just viewing this from two very different perspectives. I understand the arguement that capitalism and free market is the best thing we have going for us because other systems have failed in the past, but it's still an incredibly flawed system. It's a system that would allow a man to become so wealthy that he couldn't count his yachts in one sitting while children live on the streets and starve. I don't except that this is the "best system" just because we as humans haven't figured out how to evolve past it.

If a system demands growth for growth sake, if it demands production of pointless goods for the sake of money and wealth, then I see that as a flawed system. I'm not saying we're failing as a nation for not seeing this, I'm saying we're failing as a species.

And just for further clarification, I don't hold the solutions. I'm not a smart man. I have my opinions of where we should be. I see humans starting to cover the globe like locusts, eating everything in their paths, consuming, wasting, littering, poluting, and all for the sake of growth and expansion and wealth. I don't think it's right.

I think we need some big steps backward.