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Friday, July 17, 2009

End All Health Insurance?

A lot of discussion and debate is currently going on as the U.S. Congress struggles with the current health care issues. Many parties are estimating that between 30-50 million people living in the U.S. (legal & illegal residents) do not have health insurance.

Generally speaking, the problem with the health care system is that the cost of health care, even routine services is very expensive, as compared to the average income. The need for health insurance has grown as the the costs of medical care has grown, and health insurance is now out of reach for many people.

As an example. approximately 2 years ago I developed a kidney stone. Due to the size and other conditions, my doctor recommended that I undergo a common out-patient procedure called Extracorporeal shock wave lithotripsy (ESWL). This is a fairly painless, but very effective procedure that was completed one morning at a local hospital. Fortunately, I belong to a company sponsored health plan, so I did not concern myself with the expense. I was literally shocked when I received a copy of the insurance pay outs for my care. The doctor, hospital and various other charges totaled over $10,000!

If I did not have insurance and was faced with the decision to have this procedure, I would have definitely investigated less expensive alternatives. This leads to my point. Many people believe the problem is that 50 million people do not have health insurance. However, I see it in the opposite light. I think the problem is that when a significant number of people do have insurance, providers will raise costs to the maximum attainable amounts, receiving the maximum money from insurance carriers. Since insurers are guaranteeing payment, the question isn't whether or not a procedure will be performed, but how much can the provider charge.

Think of it this way. If nobody had insurance, and health care providers had to price their services according to the demand and payment set by the masses of people, supply and demand principles would drive down the cost of health care. Each individual would have the ability to negotiate or pick and choose services that fit their budget. The money we presently pay for premiums would be saved. The additional taxes we pay for local, state and federal health care programs would also be saved.

Another significant consequence is that more people would be forced to take a more active preventive role in their own health. A large percentage of the U.S. population is obese, extremely careless with their diet, and are sedentary. Many do little to educate themselves on health, fitness and nutrition issues. If a person is faced with paying out of pocket for each and every expense, most people will become very proactive in their own health.

I understand that accidents happen, people are exposed to viruses or bacterias. Genetic factors may cause a host of diseases that are beyond an individuals control. These things, while surprising, are not completely unforeseeable. They happen to most American families at some point. The problem arises when people do not prepare for these things and pretend they are victims when they do occur.

I see it all to often with young adults. They educate themselves and enter the work force chasing the American Dream. Great! They work to buy a nice home, drive nice cars or SUV's. They get a 50" LCD, DVD, Xbox, wheels etc, and then find out the cost of their health insurance. Many will then elect not to have health insurance. They then pay little attention to their health and daily nutrition, and will turn to local and state government programs when the inevitable happens.

Developing an attitude of personal resposibility would change this scenario. I beleive they should educate themselves and enter the workforce, chasing the American Dream. Instead of starting with extravagent things, secure adequate housing and transportation. Secure a proper nutritional supply of food and other health necessities. Save for potential and inevitable health care issues. Once these things are in place, then add the toys.

This article is too short to fully cover the ramifications and consequences of a no health insurance nation. Questions regarding expensive research, private fundraising such as the MDA, or public grant money at large public universities, will provide much material for debate. Should their be provisions for the family that prepares to the best of their ability, but are struck with a devastating disease that requires expensive experimental treatment.? Their are answers and consequences for these scenarios. My hope with this writing, is that people will think about the idea of no heath insurance, and then think about the daily value they place on their own health.

A shift from victim and entitlement mentality, to a mentality of personal responsibility, will be required to fix the current health care situation.

Tuesday, July 14, 2009

They All Promise No New Taxes

They all promise they will not raise the taxes on middle income people. Obama and Bush made the promise and both seemingly kept to their promise. Unfortunately, they, along with Congress, have already given us a long term tax increase, while taking credit for not raising taxes.

How did they do it? How will they continue to do it? They do it by sneaking it in on us.

Whenever the government wishes to fund a program for which they have no money, they simply turn to the U.S. Treasury and Federal Reserve to create this needed money. Most of it is electronic money, but spendable, none the less. This will increase the money supply (think of typical supply & demand principles). Since the U.S. Dollar is no longer linked to a finite good, such as gold, the U.S. Dollar is only worth what other entities are willing to pay for it, in comparison to other currencies (such as the Yen or the Euro). When the money supply is increased, it becomes more abundant, lowering it's value.

So, you may be wondering what this has to do with taxes? Very simply, since the government is creating dollars based on nothing and increasing the money supply, the value of the U.S. Dollar will drop over time. When the money is created, they sell Treasury Securities for the initial amount. This is how the government borrows the money. Once the money is placed into the banking system, the funds are multiplied exponentially through the factoring system, as outlined by the Federal Reserve Bank of Chicago's Publication "Modern Money Mechanics" (no longer in print).

Basically, the goods or services that $100 will buy today will cost $110 on a future date. This is what we call inflation. Hypothetically speaking, if you have $10,000 in the bank today, it will be worth much less in the coming months and years, because of the increase in the money supply. Now, take a moment to think about the TRILLIONS of U.S. Dollars that are being created to fund new programs, for which we do not have tax dollars support.

A second event is also occurring. Since the U.S. Dollar is losing credibility (dropping in value), the interest paid on these Treasury Securities will have to be increased, in order to entice investors to continue purchasing these notes. Unfortunately, this will also drive the consumer interest rates up for mortgages, vehicle loans, business loans, credit cards etc.

So now we are losing buying power on two fronts. The money supply is being increased, making the money we have worth less (meaning we cannot buy as much stuff), and we will pay more to service our debt due to increased interest rates (just to keep the stuff we have). How much buying power will we lose? It is hard to say. Currency investors (many outside of the United States) and the actions of the U.S. Government will determine the value of the dollar and interest rates. Projections are difficult, considering the staggering and unprecedented amount of money creation occurring.

Hopefully, you can now see my point. Normally, it is perceived that when the government needs money for a program, they raise it through taxes. Since raising taxes is currently considered political suicide, they create the money from nothing, and the average citizen funds the program through money degradation and higher interest rates.

So the next time you hear a politician saying they will not raise taxes, think about the other alternative (and damaging) ways they will fund their programs. Maybe the best answer is to not create new vast and expensive programs?

Sunday, July 12, 2009

Why am I a Slave to a Stranger?

Here is my question:

How does anyone in the U.S. Government justify making me a slave to other people?

Yes, I said it. A slave.

Allow me to explain. Let's say that we have two independent U.S. Citizens in our illustration. Me (John), and a fictitious character we will name Fred (no inference to anyone in particular). Now how did the U.S. Government make me a slave of Fred? They did it very simply.

Tomorrow I will wake up and go to work. I will put in a weeks worth of work and earn a wage for my labor. When the week ends, my employer will pay me for this labor. Before I get my cash though, my employer is required, by law to send a portion of the money I earned to the federal and state governments to cover my share of taxes. I'm not happy about the income tax, but I understand it and can deal with it. I want to pay my fair share for the roads, military and a few other commonly shared services these taxes support.

However, once Uncle Sam decides to "bail" another entity out, such as our fictitious colleague Fred, the money I earned is being taken from me and given to him. The problem is that there is no direct product or service being returned to me.

Let's say the government wants to "help" Fred with his mortgage or pay for his health care. Maybe Fred lost his job or bought a home, cars or other toys that were just too expensive for his income. I feel bad for Fred, but now my money is being taken from me involuntarily, and given to Fred, even if Fred is not contributing. So tomorrow I will wake up and go to work, and my money will be taken from me without my consent. Then the government gives my money to a guy named Fred, who I don't even know, and of which I will not receive any direct benefit in return.

This is actually worse that a slave relationship, because slave masters normally feed and house their slaves. In this case, Fred is more like a pimp, sending me out to do the work and taking my earnings.

Of course it gets worse than that. Since the government has promised not to take any additional sums of money from me now, they are borrowing the money from other sources. This not only enslaves me to Fred, but to the lender we will owe all this interest to in the future. In addition, this not only makes me a slave (or prostitute), but also forces people into slavery once they are born in the future.

So, I just want to know, what did I and future generations of U.S. Citizens do to deserve this?