Big government reaches a whole, new level with the passage of the "Patient Protection and Affordable Care Act" of 2010. by Walt Thiessen
(libertarian)
Monday, March 22, 2010
The announcement of the passage of the "Patient Protection and Affordable Care Act" of 2010 by the House of Representatives yesterday should come as no surprise to anyone except the most gullible of freedom-lovers who proclaimed two months ago that the election of Republican Scott Brown as Senator from Massachusetts, replacing the late Ted Kennedy, meant the end of President Obama's health care bill. It didn't work out that way, and it couldn't work out that way. Yet, without doubt, we will hear from disillusioned and angry conservatives (and yes, even libertarians) about how shocked they are that the measure managed to regain its legs and get passed at the 11th hour.
As I wrote in December, health care is driven by the monetary and banking system:
But there's one question no one on either side of the debate is raising, (except me, it sometimes seems). That question is: why do health care costs keep going up? The answer is as plain as the nose on your face. The costs keep going up because the government, through its endless stream of regulations and programs, keeps forcing more and more money into the health care system. As I previously noted in this column, it's simply supply and demand. Just force more money into the system, and the price will go up, every time, without exception.
Well, guess what? The amount of money being forced into the system by government just went up...dramatically! Clearly, the notion that Sen. Brown's election would derail health care reform was sheer fantasy. When you have an expansionary monetary system, there will always be more than enough money to throw at anything, no matter what you want, so long as you have the political backbone to do the hurling. Those who crowed victory in late January are waking up today to utter disillusionment and disbelief, simply because they don't understand the nature of our monetary and banking system anywhere near as well as they think they do.
Our nation is now staring at a coming financial crisis that dwarfs all previous financial crises, including the 2008 crisis. Starting in 2014, we are scheduled to be dealt a crushing, new set of crony-based rules that will rip apart what's left of health care. Let's take a look at some of the "benefits" of the new plan, courtesy of the New York Times.
If you are insured, either on your own or through your employer, you can keep your current plan or you can buy coverage through new state-run insurance marketplaces, called "exchanges," starting in 2014.
If you are insured and receive coverage from Medicare, you will pay less for preventive care and prescription drugs. Your benefits might change if you are insured through a private Medicare Advantage plan.
If you are insured and receive coverage from Medicaid, you and your children can maintain eligibility and receive free preventive services.
If you are uninsured, you can get coverage from a high-risk pool or you can get coverage through Medicaid (if your family makes less than $30,000 a year at the same levels as Medicare patients receive.
If you do not buy insurance, you will pay an annual penalty of up to $2,085 per family in 2016.
Sound great? Yeah, right. Among other things, the "high-risk pool" includes people with pre-existing conditions. Calling this group "high risk" has to be one of the most understated exaggerations of all time. This is the group that, all by itself, will drive health care costs for everyone through a roof higher than anything we've experienced so far. There is no way to insure such a group, because it's impossible to collect more in premiums from them than they will use in medical services, and there are precious few limits in place that will prevent people with pre-existing conditions from using up everyone else's medical resources in the process. Thus, politically-driven rationing is right around the corner, combined with massive inflation, because no other outcome is possible under such a system.
Oh, did I mention that, "46 percent indicated that they would leave medicine — or try to leave medicine — as a result of health reform," according to The Medicus Firm, in a survey publicized by the New England Journal of Medicine. Why? According to Medicus:
"Why would physicians want to leave medicine in the wake of health reform? The survey results, as seen in Market Watch, indicate that many physicians worry that reform could result in a significant decline in the overall quality of medical care nationwide.
"Additionally, many physicians feel that health reform will cause income to decrease, while workload will increase."
The resulting drop in supply should do wonderful things for the cost of health care, since a drop in supply of any good or service in the face of stable or rising demand will always result in higher prices.
I love the exceptions to the annual penalty provision. According to the Time article:
American Indians don’t have to buy insurance. Those with religious objections or a financial hardship can also avoid the requirement. And if you would pay more than 8 percent of your income for the cheapest available plan, you will not be penalized for failing to buy coverage. Those who are exempt, or under 30, can buy a policy that only pays for catastrophic medical costs. It must allow for three primary care visits a year as well.
Why do I get the feeling that the native American tribes are about to gain a huge influx of new members? And I expect we'll see some new religious sects being created soon. Let's see: I have a great-great-great grandmother (or something like that) who was a native American (we have a picture of her--her name was Cella), although my family has no idea of which tribe she was a member. Do we qualify?
Of course, as medical care costs rise more quickly than most people expect, most of us will reach the point where we will see 8% or more of our income going toward medical insurance. How nice: we won't have to pay an annual penalty. On the other hand, by that time, we won't be able to afford health care, or anything else either, except those of us who are among very rich. And that assumes that we have jobs.
Many of us won't have jobs, you know. In fact, those numbers are about to skyrocket. With the coming collapse of real estate via the next round of residential mortgage resets in mid-to-late 2010 and 2011, combined with the imminent collapse of the commercial real estate market with over one-half the properties "under water", the next financial crisis wave will arrive even before Obamacare kicks into gear. Will "official" unemployment rates reach 15-20%? Will "unofficial" unemployment rates reach 30%? I wouldn't bet against either of those two scenarios, and neither should you.
Ladies and gentlemen, we are about to see, experience, and participate in the ultimate financial train wreck, and it's looking like the government are doing their best to gurantee that all the legal exits off that train are now blocked.
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It is not now or ever been about healthcare, medicare, social security, farm subsidies, corporate subsidies, a list with no end. They know that all they had to do is get their nose under the tent, plunge the knife till resistance is felt and bide their time, then repeat as required. Well they plunged it to the hilt Sunday.
Progressives created the need and dependency with Social security and other government programs, progressives then sealed the deal with Medicare, all the while locking us in with withholding, created by the ,“WW II War powers act” Those of us that remember doctors making house calls and reasonable hospital stays understand what medicine looked like pre-medicare.
If this is allowed to stand they will force us to buy, sell, live and work anywhere they desire based on any reason they deem expedient. The power to do so? The IRS. I had a great Uncle who testified at those Congressional war powers hearings, he claimed that if instituted and not repealed at the end of WW2 withholding would be the death of our country, not immediately but over time. The reasons are obvious. We are now a populace disconnected with no power except the 2nd. Amendment.
Our children and grandchildren will in the future refer to us as the damned generation. I was in Washington on Saturday, Those Americans demand better than this, along with the more than a million at the 912 event and the millions who support them. Their was a mood there that convinced me that even if the Supreme Court does deal with this quickly, we are in for a period of Civil strife that has never before been seen in our country since the revolution. It is unavoidable now, just think about this, the great masses of entitled in this country, what do you think they will do if this is declared unconstitutional? Now that Health care has passed their sense of entitlement has become a right.
If we don't fight we will deserve everything we are about to receive. I asked an assault rifle toting Capital police officer if he could use it on protesters like these, he didn't respond and somebody told me that it was an unfair question because he was just doing what he is told. I contended that it is on this level that ultimately these decisions will be made, Liberty being very individual and personal. Later I realized that I should have also asked him if he was there to protect us from the Congress and President, now that would have been the fair thing to do.
Posted By: Walt Thiessen
Date: 2010-03-22 13:04:48
Bentree, I'm not sure you fully understand. You got it right with your first sentence. Then, you concluded that the problem was the IRS. Wrong! Even the IRS depends upon the fiat monetary and banking system for its survival. Take away the ability to create money out of thin air, and the IRS will transform over time from an evil menace that most people tolerate to an evil menace that no one is willing to tolerate anymore. Then, watch how quickly the voters, liberal, conservative, libertarian, and centrist alike will rise up against it!
Similarly, take away the power to create money out of thin air, and you will leave the Congress with chains on their hands. It's easy to spend money you don't have when you can create it out of thin air with a whip of your magic wand. It's much, much harder when the magic wand is no longer available.
I had a phone conversation earlier today with a customer of mine. He kept emphasizing that we have one party, which he calls the Green Party (because of the color of money, not because of environmental politics). I kept replying that, while it's true that we're truly a one-party system, he still has the issue by the wrong end. Change the monetary system by allowing competing currencies based on commodities to participate fully in the economy, and all the rest of the evils we despise will soon disappear.
I'm sorry I left that impression, The IRS is simply a tool of government, a very High powered tool. We have a voluntary system and the IRS encourages us to volunteer.
I believe if Americans had to write a check for thier tax liability every year we would live in a truly free country and we would have the power. We lost that with withholding. If we controlled the purse strings we would still control the country. Its the golden rule, we have surrendered this control and we are now the ruled rather than the rulers.
We are in desperate need of a Washington, Franklin, Jefferson, or Adams. There are plenty of Hamiltons in Washington right now.
Since I'm one of those who thought Scott Brown's victory in Massachusetts meant the death of the Democrats' health care schemes, I suppose I'm one of those you are chastising. I thought for sure that the rejection of Obamacare -- and that was practically the only issue Brown campaigned on -- by voters in the most liberal state in the country would kill the bill. I confess that I underestimated the the Democrats' audacity and their willingness to go against the will of the Amercian people.
However, blaming this on our monetary system is simplistic. New money enters the economy as a result of Federal Reserve open market purchases of government securities, which they pay for by increasing bank reserves. Those increased reserves don't become new money until the banks start making loans out of them, first to businesses that require a lot of liquidity. Eventually the new money works its way through the economy, driving up all prices, though not uniformly. Those who get the new money first profit at the expense of those who get it last.
Actually, the health care industry is pretty far down the monetary food chain. The reason health care has been consuming an ever-growing share of national income has more to do with other kinds of government actions. On the supply side, these include regulations of the Food and Drug Administration, patent laws, occupational licensing and other government regulations. On the demand side, the main force driving up prices is the spread of insurance coverage -- especially government insurance programs such as Medicare and Medicaid -- with their associated moral hazard problems. If it was just a monetary problem, the price of health care would still be rising, but not by as much as the prices of other goods and services.
Posted By: Walt Thiessen
Date: 2010-03-23 21:27:11
Simplistic Phil? I think not.
You wrote: "Actually, the health care industry is pretty far down the monetary food chain. The reason health care has been consuming an ever-growing share of national income has more to do with other kinds of government actions."
Okay, fair enough, let's start there. And what's the source of those other kinds of government actions? More precisely, without the fiat monetary system, the Fed driven system for going endlessly deeper into debt, how on earth could the government possibly have taken as much "action" over the years as it has?
In another sense, Phil, you're right: it's simple. Not "simplistic", but it is certainly simple to understand. The monetary system, the debt-based monetary system, is the driving force behind every political issue, including health care. Without debt-based money, none of the issues we face could possibly be as extensive, as intrusive, as omnipresent as they are. Without debt-based money, they'd be a shadow of their current selves.
I agree that the current monetary system makes it easier for the government to spend money. Monetization of government debt is a form of hidden taxation. If Congress had to raise taxes to pay for every Federal program, the voters would be less likely to support these programs and government wouldn't get so big. In the county I live in, the local government is prohibited from borrowing except for capital projects. The county council is required to set the local property tax rate at the level required to fund the budget they adopt. (To be more accurate, they set it at a level needed to raise the revenue that is not provided by a piggyback tax that is levied on top of the state income tax.) Whenever the rate is set too high, homeowners descend on the county seat to protest.
However, this is not a perfect comparison. The Federal income tax is so steeply progressive, that only about half the population pays any taxes at all, and over 60 percent are paid by the top five percent of income earners (according to the Tax Foundation). Needless to say, net tax payers are vastly outnumbered and outvoted by net tax consumers.
The truth is, the whole system is rotten because it rests on the assumption that people are too stupid to make their own decisions and therefore need to have their lives controlled by the elites.
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