Tag Archives: Socialized Medicine

Of Human Nature And Government

Human nature has numerous and variable components.  It is composed of greed, cruelty, hate and hunger for power over others, among other elements.  But at the same time we are capable of love, charity, spirituality  and a willingness to work for the common good.  Governments since the beginning of time have tried to bend, shape and mold human nature but always without ultimate success.  Governments can and do regulate our behavior but all attempts to fundamentally change human nature have by controlling our behavior have never succeeded.

When we were still very primitive and mostly nomads and hunter-gatherers, we didn’t need much structure to our society and government.  Everyone was pretty much own their own and the “glue” of society was pretty much the family unit or small tribes of related families.  It was only with the settlement of specific areas and the development of agriculture that we needed a government as such.  The rise of agriculture gave rise also to the towns.   The towns were necessary to trade the produce of the farms and for artisans to build the crude implements for the farms and then the armies to protect them from marauders.   Security was issue number one in our earliest days of societal formation.  Thus the towns and the surrounding farmers had to form a government of some kind to provide for that security and to arbitrate disputes among society.  You will recall that Moses was called the “Law Giver” by the early Jews because he not only brought the ten commandments but reams of other laws to regulate society and system of judges to resolve issues among the people.  

In our modern era the most striking example of government trying to harness and reign in human nature by controlling the actions of the people was the failed experiment with Communism.  The foundation stone of Marxism you will recall was that ownership of private property was anathema.  Indeed he said himself that the theory of Communism could be summed up by “Abolition of private property”.    From  primeval times when men first fashioned bows, knives or other tools the idea of “owning” what you made or created was yours has been part of our human nature.  It is a subset of greed.  It is yours and not “theirs”.   But even in that utopian world of everyone sharing everything equally there were always differences of “wealth”; some had the nice houses and some had to live in government apartments.  The Commies were able to control the actions of the people for a few generations but ultimately the fight against human nature collapsed.   The greater the effort to contort or shape human nature the greater the odds are that the attempt will fail.

Every nation in the world has an army or one sort or another.  That is because of the human need for security and survival.   Even the Swiss have an army, a pretty well-trained in fact.  Peace-niks around the world can campaign all they want but this will be true forever.   We are willing to sacrifice some of our liberty and desire for liberty to have an army, likewise we will allow ourselves to be taxed for roads and bridges because our human nature inclines us to believe that such things are not only good for everyone but for us as individuals.  The more we perceive this personal benefit the more we are willing to allow government to control such activities and others.   We are all so different and have very different levels of expressing and feeling our love, greed or other aspects of human nature.  When government does something big it always needs to take this into account or it actions will be rebuffed by the people.  The trick is to find that consensus middle where the majority will sense that the control over our behavior doesn’t clash to fundamentally with our individual expression of human nature i.e., our desire for liberty and control over our own destiny.   Such analysis applies to the recent Obamacare laws and the ongoing public disputations regarding its efficacy and desirability.   Yes, they have such systems in parts of Europe but it s not as monolithic as often portrayed.   Even in Great Britain you have always  been free to see your own doctor and pay for it yourself and/or receive charity donations from your church or other organization to help with costs. 

One of the biggest problems with Obamacare is the inherent unfairness the young and healthy or the old and healthy have to endure for the benefit of others.   The facts are that many folks live their entire lives and spend next to nothing on medical care and then just die one night in their sleep.   In my seventy years I can assure you that the medical premiums I have paid over the years far exceed the costs of medical care I have received by an astronomical sum.  The insurance carriers have made a f0rtune so far off of me.  Many of you will be in the same category.   I am not mad they make money.  I do want the coverage in case of need; that is why it is called insurance.  But it has so far been a one to one relationship between me and my insurance company without any government coercion on either party.   Obamacare changes all that.   Human nature is to want to “do it my way” as the old song says, not the way dictated to me by a faceless bureaucrat.   It should be no surprise to a thoughtful person that the majority of Americans are opposed to this law.  We want “ownership” over our own bodies and what we do with it.   Our medical care is the best in the world.  It is too expensive for sure but there are ways to address that issue without challenging the fundamentals of human nature to be in charge of our own lives to the maximum extent possible.  

We control the prisoner by confining him to a cell.  His behavior is very restricted but even there we cannot control his thoughts or emotions.  We haven’t changed human nature only actions.  The American people will allow control of some of our freedom but only if we see some of the personal benefit in that surrender of independence.  That is not a bad thing; it is our nature and should be embraced.

“Law, morality, religion, are to him (the proletarian) so many bourgeois prejudices, behind which lurk in ambush just as many bourgeois interests.”  K. Marx….www.olcranky.wordpress.com

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VAT Taxes And Fat Government

Well, the unofficial word is finally out now that the current administration is going to pursue the VAT tax strategy to raise even more revenues for Government, Inc.  Under Obamacare and Obamanomics there is no question that taxes will increase dramatically unless other measures are taken to rein in government spending.  Volcker may not be an “official” spokesman for the administration but he is no doubt the straw man for this proposal.  He has been close to the White House and that guy in it for a long time now.  He won’t be throwing out such comments about the need for a VAT without having been given the silent nod of approval to see how well the populace would salute that new flag on the pole.  Plus if you start talking about it , it becomes part of the dialogue and a resigned acceptance begins to seep in.

Of course the government needs certain revenues to operate.  That is obvious.  The first priority should be to discuss and reach a consensus about what the government should be funding and then how much needs to be spent.   Who would want to defend the current Internal Revenue Code?   It is a mess and a true burden on the people and the businesses that supply the jobs for the people.  Many would be more than willing to consider a new method to raise revenues for the government including a type of consumption tax like the VAT,but, but, but that would have to be in exchange for a complete elimination of the current Tax Code, lock, stock and barrel.  Take away all 70,000 plus pages and all those tens of thousands of additional pages of Code regulations and make a fresh start.

Of course with the VAT you will end up with thousands of pages of definitions about what something is and whether it can or cannot be taxed.  That is because to keep it progressive as the left will insist upon, you will have to exclude certain items from the VAT, such as, food, maybe a certain amount of rents, some clothing, etc.   Lord only knows what the “etc” will be.  No doubt it will be an extensive list and then comes those tricky definitions that every special interest group in the world will be trying to craft to protect their self-interest.  Can’t say as I blame them.  For one thing who wants to keep up with all that paperwork that will be required by business to account for and report the VAT taxes due?

Regrettably we all know that the Internal Revenue Code will not be eliminated.  The VAT will be an additional tax to be borne on the backs of the people and a restraint on the growth of business.  It will still come with all those new definitions and regulations.  Of course that VAT will be a new tax on the middle class in spite of the repeated promises of the current administration that they would not have their taxes raised and indeed would receive only tax reductions from the Administration currently in power.   Taxing folks on what they consume with a VAT wouldn’t be all bad because its operation would tax the “wealthier” more because they would consume more.    If the Income Tax were gone you wouldn’t even have to file a return.  That would be nice.   The tax lawyers and accountants would be looking for new specialties. 

That VAT would be a percentage of the GDP and even after you eliminate all the government spending and the exemptions you would be taxing probably 5 trillion dollars worth of transactions annually.  You can make your own estimate from our current GDP of about 14 trillion.   The VAT will probably start pretty low but then be increased by subsequent Congresses as the appetite for more money for government programs grows.  We can’t even make the federal government workers take a pay cut because of their political clout even though they earn much, much more than their private counterparts, why do we think we will ever rein in government spending.  Remember when the Income Tax amendment was first proposed the fellow who said it should be limited to 10% was laughed out of the room. 

It has become a cliche lately that we are becoming like Europe but the cliche does appear to be accurate if these proposals along with all the other expansions of government are implemented.  Cap and Trade, the health care law, EPA rules on carbon dioxide emissions and the tax increases on everything that moves, breaths or exist all combine to turn us in that direction.  Look at their situation, chronically high unemployment because employers are so reluctant to take on new employees, very slow economic growth, and little innovation.  Yes, they have some innovation here and there like Nokia or the Hadron collider but it is paltry compared to the history of the US.  Nanny will be there to look out after us and guide our every step through life but it seems a drab and dreary life to many of us.  It will be a safe secure existence without any spark of inspiration or joie de vivre.  Welcome to our Brave New World.

Give me my free health care, my free education, my subsidized housing and mortgage, my food stamps and my free lunch.  www.olcranky.wordpress.com

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Watch Who You Invite To Dinner–They Might Eat You

That old saw about being careful what you ask for because you just might get it is often really true.   This can be especially true with the direction and power of government “we” claim we want to embrace.  They always start off with promises of help; they are coming to the rescue and will help you with a particular problem that seems to big for you to manage on your own. 

At the beginning of the 5th century the Roman empire was in the last stages of its decline.  It had withdrawn at this time from Britain where it had ruled supreme for over 350 years.  Britain during that period was as much a Roman province as any other.  But the Empire was in decline and the last of its troops left for the Continent to fight the rear guard actions against the advancing Barbarians who were nibbling at every border of the Empire.  You may recall the movie about King Arthur made a few years ago where it was implied that Arthur was in fact one of the last of the Roman commanders and that he rose from the ashes of the Empire in Britain.  A romantic notion but there is no historical evidence to support that theory.  But we do know for a fact that in the mid 5th century that a local king named Vortigern gained a precarious control of most of southern Britain.  As usual he was having trouble with the Scots and even with many of his nearer neighbors who weren’t completely on board with the idea of a single government ruling the land.  He had rebellions locally and outright threats of invasion from the Scots.  The Scots had been troublesome for centuries.  That is why the Romans built Hadrian’s Wall during the reign of that Emperor.  It is quite impressive.  It is not as large as the Chinese Wall but very vast nonetheless.  It was erected along the border with the Scots specifically to keep them out.

Vortigern’s armies, if you could even call them that, were relatively small and had lost all their cutting edge after the departure of the Romans.  His rule was tenuous.  So he looked around for some help with his domestic discord and lack of military prowess.  He turned to the Saxons of coastal Germany.  He sent envoys to negotiate with them to come as mercenaries to bolster his arms.  Terms were reached and the Saxons came.  At first it was a very small group  estimated to be no more than a few boatloads of them to the east coast of Britain.  The leaders of this first band of Saxons were Hengist and Horsa and they liked what they saw.  They were given small encampments for their men and then their families plus they got supplies.  It worked for a while and the Saxons suggested even more troops and a permanent settlement near the Picts to thwart any advances by them.  Soon it was thousands.   Soon the Saxons realized that they really didn’t need the permission of the Brits to come there.  They liked the land.  More came and soon they were doing pretty much as they pleased and were not under the control of any Britain,
Vortigern or any other. 

Over a period of a century or so others came.  The Angles joined the slow conquest of the Isle.  They gave the name to the language we speak today.  The Jutes came along also.  There never was a D-Day or a singular invasion like with William the Conqueror some 500 years later.  A local prince or chieftain would decide to move to Britain and outfit his fleet and equip the people and off they would go to another unoccupied spot in Britain.   They were promised land, slaves, and spoils of their local victories and they took advantage of those military victories.  Within a period of a century Britain was now an Anglo-Saxon domain.  They were not guest, mercenaries or even conquerors any longer, they were the people of Britain.  The were invited to dinner and decided they liked the house so much they just moved in and dispossessed the prior owners.

There is a lesson there.   Choose your direction and associates very carefully.  A promise of aid and assistance might lead to more than you bargained for.  Someone is always in charge–a dictator, a State, a people.  Our secret in western civilization is that mostly we have had the people in charge.  Ever instance of a dictator or State being in charge has ended badly.

Wow, you can jump with glee.  You soon will have 16,500 new folks with the Federal government to help you.  That is the number of new IRS agents to be hired under the health care bill to enforce the taxes and penalties imposed on individuals and companies.  I didn’t realize it was such a big jobs bill.  Gosh, I can’t wait to give them even more money to ride our backs.  http://www.olcranky.wordpress.com

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Learning From History Or Confusing Facts–Which Is Fed Doing

Bernanke has made so many references to the Great Depression over the last 18 months that it is impossible to keep count.  We have all read or heard by now that he spent his academic career studying the Great Depression and therefore he is the pre-eminent expert to guide us through the current financial mess.  It is a good thing he has studied it.  We definitely can learn from our history and for that matter the history of others who have been down similar road before us regarding economic difficulties.  He has stated numerous times the fault of the government during the Depression was to back off of easing monetary policy too soon as a contributing factor in prolonging the duration of the Depression and uses that as the  justification for the printing of trillions of dollars and the “buying” of US Treasuries and other instruments in the market place such as mortgage-backed securities.  He projects continuing those policies for the indefinite future and wants us to believe that is a good thing.

Of course all that activity by the Fed results in the expansion of government control in even more vital sectors of the economy.  There is a significant percentage of folks out there who love that and place complete trust in the role of government.   He constantly makes a comparison to those events of the ’30’s to the events and occurrences of today.  Some of that is legitimate and appropriate.  We can find useful knowledge from past events.  However today’s Fed is far more political than it has ever been.  It is at this moment essentially another cabinet position of the current administration rather than the completely independent body it was intended to be when created.  While we study the similarities between then and now it is also important to recall the differences between the two eras.

Social Security was just starting and the ratio of workers was very high compared to the retirees.  Also the live expectancy was only 62 and most importantly of all the system was not considered a retirement plan but merely a welfare plan for the most needy of the elderly.  The Federal budget was small compared to GDP at that time and the military budget was non-existent.  That lack of military power played its part in  the rise of Mussolini, Stalin and Hitler.  It was certainly not our fault alone but we didn’t exactly step up to the bar and push back against those tyrannies.  Indeed many were embracing Stalin at the time.  We also didn’t have food stamps, subsidized housing, a government program that controlled the mortgage industry like Fannie, Freddie and the Fed do today; there was no Medicaid or Medicare to pay for at that time.  

You are all reminded of what that great philosopher Brother Dave Gardner taught us all decades ago that you can’t do the “same” thing again, ever.  As he taught you can only do something similar to what occurred before.  Unless you know how to do time travel you can never do the same thing again.   Bernanke  is forgetting this valuable lesson in his comparisons to then  and now.  He keeps talking about us doing or not doing the “same” thing today as was done then.  His methods at the moment are working hand in glove with the group in the administration that is promoting a European style economy.  There are lots of positive aspects to that European model, but it has some very negative downsides.

Mostly what the European model lacks is the spirit of rugged individualism and innovation that are the hallmarks of the American economy historically.  They lack that.  Just look at all the major advances in science, medicine, physics, economics and industry over the last 150 years and the US is the clear leader in any category by leaps and bounds.  Sure who wouldn’t want 6 weeks vacation every year, “free” medical care and free higher education and a public dole that allows a comfortable existence without working.  But we need to be objective and also recognize the flip side of all those.  They have had and still have much higher rates of unemployment than we do because it is almost impossible to fire anyone once hired so companies are very reluctant to add employees.  In France now there is great controversy over this issue.  There free higher education system is wonderful but remember only a tiny fraction of their population has access to it; the majority are in “trade” school by about age 16.  They are rapidly reaching the point of insolvency because of the huge debt burdens of their governments to support their welfare programs, see, Greece, Portugal and Spain for starters and then Italy  and Ireland with Britain and France trailing pretty close behind.   Even the EU is finally realizing that someone has to work, wants to work rather than live on the dole, build new things, and that everyone can’t just sit home and write poetry or sip Merlot in front of their 50 inch TV.  

Bernanke is taking the wrong lessons from 75 years ago.  Failure for incompetence or bad decisions is a good thing, a sound dollar is a good thing, low taxes are a good thing, smaller government is a good thing and promotes a more vigorous and growing economy.   Even in the completely non- capitalist Soviet society people had to work, indeed they were required to work for the social justice of all was the theory.  We need the government to be an honest arbiter and referee of our capitalist society but no more than that.  It doesn’t and shouldn’t be in the auto industry, the banking business, the mortgage business, credit card business or the medical industry.  When some of those industries faltered the big government types said we had no choice but to rescue them, excuse me, we did have a choice.  They could have failed and then re-emerged as better companies in every instance and the creditors and shareholders would have suffered no more than should be expected for making bad decisions.  We are seeing the consequences of those decisions now–a growing Nanny government who is morphing into a dictator government to achieve social justice for us all.  Lord protect us from ourselves.  People deserve the government they allow to rule them.  Hopefully, we will deserve better soon.

The health reconciliation bill has a provision to manipulate the accounting with regard to deficits and Social Security. You recall there are changes to Social Security to save money but they say it is revenue neutral because the money is replaced.  What is actually provides is that to the extent enforcement of this act reduces Social security funds they shall  be replaced by the Treasury every quarter.  Sounds good except that is just more IOU’s going to SS from the Treasury, it is not real money, merely another promise of money down the road but it helps balance the books for health care proponents.  www.olcranky.wordpress.com

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Boomers And Health Care Reform Costs

Those unintended consequences of all major Federal social legislation will always emerge from the woodwork.  The recent health care reform is no different.  Regrettably those unforeseen consequences always cost more money, never less money.  If someone has an example where it cost less I am all ears.  Inform me.  There will be many that will arise from the health care that will carry an enormous financial burden.  It is hard to say what all of them will be but there is one that is there already that will add billions and billions to the costs for the health care and the health insurance companies and the government obligations undertaken with the new bill.  Just like with Fannie and Freddie the government has given an implicit guarantee of the costs even if not directly.  As insurance companies fold the company will take them over or bail them out to keep the program in place rather than letting it fail.  It is a program “too big to fail”.  Consider the consequences for the elderly and those Boomers quickly reaching the age to go on Medicare.

By now you are familiar with the mandate provisions of the health reform act.  If you don’t have health insurance you are subject to a fine of $695 or 2.5% of your income whichever is greater.    For now we will assume that provision passes Constitutional muster which it should not under the Tenth Amendment, the commerce clause and the Fifth Amendment.  There has already been substantial discussion that  the young and healthy will opt to pay the penalty rather than the cost of insurance which is indeed a very good assumption because it will be cheaper.   Soon the act will eliminate all pre-conditions for acceptance by the insurance companies.  The young will simply wait until they get sick or have an accident and then make a quick call and sign up for coverage.  After their treatment they will drop the coverage again and go back to paying only the penalty.   This behavior will have a very negative effect on the revenues and profits of the insurance carriers.  If it depletes the revenues so badly they no longer can make a profit then what is the point of being in the insurance business?   They will bow out and in walks Government, Inc.  
The young doing this by themselves might not be enough to bring down the insurance companies but they are small fry compared to what will be happening with the elderly and the Boomers.

At age 65 you sign up for Medicare.  You are dumb not to because they have taken your money for years for the program and you are “entitled” to it.  As I have said before I would be happy not to be involved with Medicare at all if the government would simply give me back my money at only 2% interest for the 40 plus years I have been paying into the damn thing and I will take care of my own health insurance needs.   When you sign up they also will automatically take the premiums out of your Social Security check.  You have no choice in the matter it is automatic.   The result is that all these old folks have medical insurance and are not subject to the penalty of the new act.  They are not required to do anything else.  The overwhelming majority of these people also have a supplemental policy to cover those expenses not covered under Medicare.  That market is huge, very huge.   In case you haven’t noticed the elderly have many more medical problems than the young and their medical expenses are astronomical compared to the 30-somethings.   We are expensive to maintain in the health system.  The most expensive demographic group by far.

When the program is fully implemented in a couple of years you will see millions of the elderly do just what I am going to be doing.  They will immediately drop their supplemental coverage.  They will have their Medicare and suffer no penalty.  When me or the little lady gets sick and needs one of those $50,000.00 pacemaker surgeries, we will immediately call the insurance company and sign up on the way to the hospital.  We’ll pay about 2 or 3 months of premiums.  When the surgery is complete we will drop the coverage again.  We pay a few hundred dollars in premiums and get that expensive surgery with the Medicare and the supplemental policy.  Even when they cut back on the Medicare benefits we’ll have the coverage under the supplemental policy.  It should come as no surprise that not just a few but millions of people will be doing this.  Of course will all the Boomers coming along the numbers will be staggering.  The insurance companies won’t be able to sustain those losses for long.  The losses will be big.  The insurance companies will stop offering supplemental coverage.  Then who will take up that slack?   Good ole Government, Inc. again.   I mean what politician is going to allow old grandma to expire for lack of a pacemaker?   If you doubt what I have posited I suggest you check out the bill and use your own common sense about the way human nature works.  Who is going to pay for years maybe for supplemental coverage when they are guaranteed to get it on the way to the hospital or after the doctor has given the bad diagnosis.   I don’t know how this issue will be handled but it won’t be pretty and it sure won’t be cheap.  Someone should get the CBO to score that one.  To think it won’t happen is delusional.  I for one will cancel my supplemental the month after I am guaranteed coverage regardless of whether or not I am in the hospital; they have to take me.  Like to see the business plan that projects profits on that kind of model.

It should give everyone pause to realize that in the last couple of weeks that the credit worthiness of the US has plummeted so low that some large corporations are paying less interest for their borrowed funds than the US.  The two-year US treasury bill now pays more interest than Abbot Labs, Berkshire Hathaway, Johnson and Johnson and a few others.  Think about that one for a while.  The implications are not good.   http://www.olcranky.wordpress.com

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2 Cents Worth On Politics, Economy And Life

Ok, I understand a lot you might not think these wanderings of a wandering mind are worth even that price.  But even in today’s economy you can afford the 2 cents and we’ll kick in a 1 cent rebate if you fill out the application form and mail it in within 2 days. 

I tried to read the Reconciliation bill yesterday on health care.  The problem is that to truly understand it you have to also have at your side the Internal Revenue Code, the Social Security Act, the Senate Bill that was passed, the Medicare statute and the Medicaid bill at a minimum.  Almost every paragraph makes a reference to another piece of legislation and amends it and without that other statute before you it is hard to translate the reconciliation bill.  Reading a Chinese instruction manual to assemble a child’s toy would be easier.

The reconciliation bill does provide that employers with less than 30 employees are exempt.  Why is anyone exempt if it is such a great idea?  What employer that it is right on the brink of that number at say 29 or 30 would want to add any extra employess and subject his company to the burdens of the new taxes and mandates?  He won’t and there goes job growth.

When you think you have it rough take a moment and find an old salt who was in the US Navy at the end of WWII and was on one of the many ships that brought our POWs home after their release from the Japs.  They were skeletons and were given ice cream, mashed potatoes and every luxury item the Navy could provide so they would gain a few pounds before getting home.  They all did.  It took several weeks to make the trip.  Sailors are notorious complainers but none complained then about the favored treatment of those POWs.

Is anyone going to ask the question publicly about putting the debts of Fannie, Freddie, AIG and GM and Chrysler on the books of the US as a debt?  They aren’t there now but we all know too darn well that they are obligations of taxpayers and the shortfalls will have to be paid with tax dollars.  Why doesn’t that debt show up on the balance sheet?  I bet you can figure that one out.

It took only about 5 years to build Hoover Dam.  One wonders how long it would take to build the same project today.  It would take longer than that to obtain the permits from government and Lord only knows how long the litigation would last.  Then the actual construction with union delays and work rules would drag forever.  Could we build such a dam today? 

Everyone should spend at least a few days during their lifetime working on a farm or ranch.  I mean really working not some dude ranch deal.  Dig some post holes with a hand-held digger and string the wire or help birth a calf by pulling its hooves out of the mother to help her.  Walk beside the tractor with a flat bed trailer attached to it and pick up and stack the bales of hay in the field for a few hours.  Those bales are heavy.  You think of hay as being light and fluffy but when it is still green and wet in the field it weighs a ton–especially that 300th one you pick up in one day.

Plumb bobs and levels have been around for centuries. But I am always amazed at how those guys got every so even and true when they build St. Paul’s or Winchester cathedrals.  Those pieces of twine to mark and keep all the work straight were very precise as you can tell from the finished product. If I had been in charge I am afraid they would be more like the leaning tower of Piza.

Would anything be scarier than trying to land a jet on an aircraft carrier with a runway that is only a few hundred feet long?  I guess trying it at night might the ultimate challenge of nerves.

Under the latest iteration of the mortgage bailout for individual homeowners that Government, Inc. has on the table you can actually get paid to abandon your house.  When first announced in late ’08 or early ’09 it caused an outrage because it punished the prudent and rewarded the spendthrift.  Now they will pay $1000.00 each to the mortgage holder and the loan servicer and get this, they will pay $1500.00 to the homeowner as “relocation” assistance for going along with a shortsell when the value is less than the mortgage.  So, if you were going to dump the property anyway and take a walk now you get to do it with 1500 bucks in your pocket.  Is this a great country or what?

The latest version of health care does have the individual mandate to buy health insurance.   You must do it or be fined or taxed whichever you want to call it.  In addition to other Constitutional issues that can and will be raised one wonders if the Fifth Amendment argument will be made by some to oppose it.  It reads in part “,nor be deprived of life, liberty or property, without due process of law; nor shall private property be taken for public use, without just compensation.”   The 16th amendment allows the Feds to tax income, not a status (insured or uninsured) but they aren’t taxing income.  Your money is “property” being taken for a public purpose, to with: a national health insurance program.  Where is the due process to take your money when you are being taxed on a status?  Merely passing a law doesn’t make it due process.  The takings clause also doesn’t allow your money to be taken since it is not income they are taxing.  Those legal beagles need to get to work. It will make an interesting case.

And goodnight Mrs. Calabash wherever you are.  www.olcranky.wordpress.com

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Mental Cobwebs On Health Care

Many of us watched with interest or amusement, take your choice, the so-called summit on health care issues this week.  The comments from all sides did provoke thoughts about the process of changing our laws and the substance of any change.  One could make a pretty good argument that there is really on one issue and that is costs.  You can talk about health care insurance reform all you want but that is the tail on the dog.  It is disingenuous for some to argue about the “obscene” profits of the insurance companies.  One lady talked about how they made over 12 billion dollars in profits last year as though that was a terrible thing to occur.  Would she prefer that they all lose business. 

Health insurance is not any different than all other businesses.  They can only exist or better stated thrive if they provide a good or service that the consuming public needs or wants.  If you started a buggy whip business today with the latest state of the art facilities and machine tools and the highest quality leather it is still likely your business venture would fail because the market doesn’t support any demand for that product.  One hundred years ago virtually no one had health insurance and yet people still went to the doctors and we had hospitals.  Then the companies thought about providing insurance to cover those medical expenses and an industry was born.  Does 12 billion these days really strike you as a particularly huge sum of money?  Just think of the hundreds of billions thrown out the door in Washington every month and the trillions in budget items.  Frankly, I sure want my health insurance company to make a profit.  If they go broke then want good will my policy do me in a time of need?  Goldman Sachs probably paid out more than that in bonuses last year.  Don’t even get started on the billions we wasted on Government Motors or Chrysler for what? 

The premiums charged by the insurance companies and the claims they pay are directly related to the cost YOU incur for your medical treatment.  If the cost of your care was less your premium would be less.  Because of the recent cutbacks in Medicare expenditures my Supplemental policy premium actually went down a little this year from last year.  If and MRI costs $200.00 rather than $1000.00 then that w0uld be reflected in the price you pay for your insurance.  Of course there are lots of folks involved in that chain of events that leads to your MRI and its costs.  There is the manufacturer and all its employees who certainly want the highest wage they can get and the company needs to make a profit to continue with R & D to develop even more wonders to diagnose and treat us.  Then there is the hospital and all its employees who constantly complain that they aren’t paid enough.  The technician who administers the exam sure wants to be paid big time.   Then there are the nurses and doctors who actually deliver the services and evaluation that helps us get better, if that is our fate.   If everything in that whole process were a bit cheaper here and there then your premium would also be cheaper. 

There really aren’t any villains in our health care system.  Each person or company merely wants to make a profit or good salary and there is nothing inherently wrong or evil about those desires.   We do know some things that work to reduce costs.  Improved efficiency is one for sure.   There are plenty of experts around now who offer ideas to dramatically improve our medical delivery efficiency without the need for legislation or an agency or bureaucracy and definitely without new taxes.  We also know from any logical and objective reading of history that competition will lower costs.   There are many ways to enhance competition such as the States entering compacts to allow more companies to do business in their State and granting their citizens the right to buy health insurance from many companies.  Again that requires no dramatic legislative move or additional costs. 

Most importantly we can devise medical accounts for individuals to use for the insurance and even their co-pay or insurance premiums.  Make each of us a real consumer and look for the best bargain and prices.  Give the people an economic incentive to shop and save and they will.  That won’t cost more money either.  Yes, it would reshuffle money in the tax code perhaps but it should be a net wash if designed carefully and modified after a few years experience.  Here the parts are greater than the sum of the parts.  Don’t bunch us all into one great unit controlled from Washington but let us be separate and do our own thing.  The parts will collectively and ultimately make better decisions than the grand pooh bah in Washington.  

The real dispute in the current debate remains one of power.  Some believe that Washington  can and will do the right thing and be more efficient than the market or individuals.  They are true believers that Nanny knows best for y0u.  I suppose some of sincere in that belief.  But sincerity for one is fine unless their sincerity becomes a mandate for me.   Let them do their thing and let me have the freedom to make my own choices and bear the consequences of those choices.  No scarier words exist than “trust me”.  Those folks who want to trust Government, Inc. with their health care worry me because what they are really saying is that you and me should trust them to make the right and most efficacious decisions for us.  I don’t trust them.  Not with my life or my money.

“Do not enter the path of the wicked, and do not walk in the way of evil men”.  Proverbs.  www.olcranky.wordpress.com

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Forget for the moment the merits economically or socially of the current proposals for the health care reform bill(s) wending its way through Congress, lets talk only about the administration of the new program and the agencies created by the proposed bill.  It is not for nothing that the Washington executive branch and administrative departments have been referred to often as the gang that couldn’t shoot straight.  Whenever there is any criticism of federal or government employees I notice how the Chris Mathews types also start talking about policemen and firemen and teachers and how valuable they are to our society and that we sure wouldn’t call them lazy or inefficient bureaucrats.  Wow, such a revelation.  Nope the criticism of the typical government employee has much more to do with the Post Office, the IRS, FDA, USDA, the Depts. of Commerce, Interior, Education, Labor, Social Security, Fannie, Freddie, and all those other countless agencies, boards, commissions, Congressional staffs that are the creatures of Congressional programs.  It literally would take more than these article to simply list all of them.  Think of that a moment, merely to list them.

I do hope you have noticed that the current plan is for the IRS to administer the new health care program.  It boggles the mind to think how many new employees will be added to the Federal payroll for that service.  The IRS can’t even keep up with its mail and documents that you send them.  If you have ever had any dealings with them at all you are aware of this.  They ask for something, you send it and then they ask you two months later for the same thing.  They are so incompetent that they won’t even accept responsibility for the advice given to you by their own employees.  Did you know that?  Really, if you have a question about your tax situation and go directly to the IRS for help filing out your return and follow the advice given to you by one of their agents and you get audited a year later regarding the same question the IRS is not bound by the advice given you.  They can and will take a contrary view.  If they don’t have enough confidence in their people to stick by their recommendation then why should we have any confidence in them?

If you get frustrated now trying to navigate you way through a phone menu when you “call” the IRS then just wait until you have to make a call to them regarding a medical procedure you want and are having to get their clearance so it will be paid for under your new Federally mandated health insurance policy.  How long will it take to talk to a live human being?  When you get them they no doubt will ask for more paperwork that you have already furnished and will tell you to go to the local IRS-Health  Care office to see a case officer.  Notice how they always come up with those titles rather than simply calling them what they are which would be clerks.   “Press One for English, Press Two for Portuguese, Three for Spanish…and Interpreter will be provided.”   I wonder what they are going to interpret, languages or the Health Care bill. 

This is the same outfit that can’t get the swine flu vaccine delivered on time and now they will be in charge of your emergency appendectomy.  One wonders how the phone menu works for those emergencies.   In future you will have to work things out with your insurance carrier, your doctor and the hospital and then Government, Inc.  The same folks who brought you the Katrina rescue efforts will be in charge of this program.  The people who thought it was a great idea to try KSM in Manhattan will be coming up will all the new medically approved procedures and deciding which ones to eliminate.  I already find it very frustrating trying to read and understand my health policy as it is with my private carrier.  Do you think the process will be more explicit and easier to comprehend when the language of every policy is drafted by our new Health Commissioner?  It will be a one size fits all program.  From looking at the news at night when I see any kind of street scene I do notice that we Americans sure do come in a variety of sizes.  It is going to be like the Army, everyone wears size ten shoes, if not,  then you can wait until the size 9’s arrive and good luck with that. 

A Federal bureaucrat has never met a form he didn’t love and one that he couldn’t figure out how to add a few more lines to “for clarity”.  I challenge you to order a Medicare brochure that allegedly explains how it works when you are ready to sign up and your options.  It is more like trying to read Shakespeare in ancient Greek.  The guys who manage the TARP slush fund (that is what it will be if Government, Inc. gets its way) will be running your local hospital.   The men who dreamed up the PIPP program will be managing the hundreds of billions of dollars annually that will flow through the Federal coffers.  Those folks who turn a blind eye to the fraudulent accounting for Social Security, Medicare and Medicaid will be handling all the nation’s health expenses and expenditures. 

Maybe they will operate it like we are doing with GM.  Since we own it and are propping it up for the unions and their votes and even paying with tax credits for people to buy their cars, maybe we can steal a page from that playbook.  Who knows, maybe someday soon they will pay you to get sick with a tax credit so long as you  will use their program; of course, that assumes they believe you really should have a job and some income.  It would be so much easier on them if we all would just cooperate and work where we are told for what they believe is “reasonable compensation”  and hand it all over to them.  They will spend it wisely no doubt for our benefit.  www.olcranky.wordpress.com

Today health care, tomorrow the entire economy.

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Left Lies About Health Care

The air is thick these days with cross currents of accusations that one side or the other is telling lies about the pending HR 3200 health care reform bill.  Again you are all urged to read at least some portion of it for yourself.  You can google it.   The phrase “death panels” is tossed about by both sides.  Frankly, I think it is a fair paraphase and debating point for those who oppose the health bill.  When you read it the intent of the section is quiet clear.  You don’t need to be an Oxford don to discern that the message is to encourage people to forgo treatment and accept death.   That is the whole point.  It darn sure isn’t there to promote attempts to be really aggressive in prolonging your life.  Those sessions and the message they send were important enough to the drafters of the bill that they put it in there.  They could have assumed that most doctors, patients and their families would discuss those issues when they all felt the time was right.  The bill prods them to discuss impending death.  So it is a bit dramatic but a fair analogy.  They sure aren’t “life panels”.  The left starting using the argument that some where between 50% and 62% of all bankruptcies are caused by medical costs.  I have heard and seen numbers between those two bandied about and one just last night by an MSNBC commentator.

Over the years I have learned that there is so much to learn.  The amount of information and knowledge that I have not attained is stunning.  That is one of my biggest regrets with aging, I will not be able to learn all that I would have wanted.  There is lots about a lot that I don’t know.  But there are a few things that I do know about in great detail.   The first time I heard such a number my ears pricked up because I immediately realized how absurd that figure was.   I have been doing bankruptcy work for over 40 years.  I specialize in Chapter 11 and workouts.  I and my partner were active in helping draft and discuss the creation of the Bankruptcy Code during the ’70’s.  He even went to testify on several occasions.  My name was on the first check to found the American Bankrutpcy Institute which these days is constantly being quoted by AP and others regarding bankruptcy matters.  I have handled hundreds if not a few thousand bankruptcy matters during my career.   

First, I would  like to know how they gathered this alleged information that medical costs were the cause of individual bankruptcies.  The data gathering I submit was skewed and the seeker found just what they were looking for in the first place.  When a bankruptcy is filed the debtor has to file lots of paper work.  They must list their assets, liabilities and a great deal of other information.  They have to disclose their bank accounts, payments made in the last year, trusts in their name, and special payments they made.  They are very detailed.  But they do NOT ask  why they filed bankruptcy.  A creditor at the first meeting can ask the question but that is only asked in business cases normally, not individual cases.  Secondly it is not asked in personal cases because it doesn’t matter anymore.  They are were they are.   The debtor must list in detail their creditors by name, address, amount owed and what for and if they challenge the debt among other things.  If all they did was track schedules filed in bankruptcy cases to see if there were any debt listed to a doctor or hospital then that would  not be an  accurate reflection of  the cause of bankruptcy.  That would be merely one debt among others. 

If the data was gathered by making some kind of survey in writing or by phone then the data would be even more misleading.  People lie about money, duh.  People rarely like to own up to their own mistakes especially when they don’t have to and there is another convenient excuse.  I bet you have noticed this human characteristic yourself.  If a debtor filed for bankruptcy and  owed anything to a doctor or hospital I can well imagine that they would say that was why I had to file.  He will conveniently omit the fact that he gambled away and lost $17,000.0o the prior year in Vegas.  He will not blame an extravagant life style for his financial demise.  That fancy flat screen TV and gear that cost $4000.00 and all those nice expensive trips he took with his girlfriend or wife will not be mentioned as the cause of his bankruptcy.   The fact he charged it all on his credit card and was living well beyond his means will not be singled out as the reason he filed.  I handled hundreds of straight Ch. 7 bankruptcies over the years.  In only a handful of cases was outstanding medical bills due the cause of a bankruptcy.  The fact is almost anywhere across the country those debts will not put people into bankrupty unless they have a really bad lawyer.  Doctors and hosptitals don’t file suit for those debts even if they are due.  That is a fact.  Check your local abstract of judgment records.   Even if you owe money to a hospital and get sick again, they will still treat you when you show up.  It would be a rare case where someone filed bankruptcy due to medical bills. 

So often we have to accept some contention without serious challenge because we don’t really know enough about the subject to rebut or challenge it.  I know something about this.  That is a complete fabrication and I would be glad to be proved wrong if someone can do it.  Lord only knows what think tank they used to come up with those numbers.  I guarantee you they did not get that % from a bankruptcy practioner with experience.  It would be very rare for me to advise in good faith that someone take bankruptcy because of medical debts alone.  There w0uld need to be other reasons.

Our dollar and T bills are holding up better than I expected in the markets.  Unfortunately though it is like being the tallest midget in the room.  It is only because of the weakness of our economic competitors that they remain relatively strong.  As new taxes, regulations, and inflation take their toll those numbers will change.   www.olcranky.wordpress.com

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The Medicare Analogy to Socialized Medicine

During many of the debates and conversations regarding our health care issues I have heard more than one pundit opine, with a smug sneer, that some people complain about a government takeover of health care but they don’t want the government to mess with Medicare.  They then deliver what they assume is some sort of debate coup de grace by observing that Medicare is a government program.  Viola, those opposed don’t know what they are talking about or can’t think logically and the government is very good at whatever mission it undertakes.   They assume that is a slam dunk argument that has no riposte.   Well, if I were at one of those town hall meetings and that comment was made again I would have some things to say about it in reply.

First of all, the notion that Medicare is run very well is a complete joke.  If you have had to be involved with it at all then you know what I am talking about.  If you take your mother or grandmother to the doctor’s and she needs hospitalization then the fun just begins.  The red tape and bureaucracy to comply with Medicare requirements are staggering and confusing and often non sensical.   Lord forbid if there are tests or evaluations that have to be done.  If you think the insurance companies by themselves make it complicated to receive your medical treatment, I assure you it  isn’t improved when you add the Medicare bureaucracy on top of it.  What is covered, what is not covered, who will do the procedure, where can you get it done, if you’re  merely sick  there is no long term assisted living care but if you have a hearing problem it might be; the list of conflicting and confusing issues is increased, not decreased with the government involvement.   I would also take out one of the government publications explaining the Medicare prescription drug program.  Just read that at a town hall meeting.  It is not a question of being intelligent, but they are written as though it came from a Japenese mental hospital and was translated by Whirling Dervishes hopped up on absinthe.   Really, if you have never read one of those get it from a relative, read the damn thing.  That is the best illustration of how efficient the government is at doing anything.  That should be enough to rest your case.

Of course there is the little matter of money and how Medicare is paid for by all of us.  The smart set liberals deride those opposed by saying we gladly accept the socialized medicine provided by Medicare.  Well, I would say that you darn right I do.  After all the government stole my money from me in the first place for 40 years now to pay for medicare.   In my case I have paid in over $63,000.00 in Medicare taxes over the years.  Add yours up, you’ll be surprised at the amount.  I am taking my medicare benefits, I have paid for them.  Of course you must remember that I was denied the use of my money all these years.  I could have invested that money.  Even if it was only at a 3% rate of return that number would have grown to well over $100,000.00 over 40 years.  Don’t forget that Medicare is like any other insurance–it is a gamble on risk/reward.  If I die in a few years then the system will have profitted handsomely off of me.  Even if I live to a ripe old age but I have no health issues and simply drop dead some day they will likewise have made out like the bandits they are.   It was my money, not theirs.  If they had forced me to save that money and given me interest at 3% or even 2% over all the years I would be happy for them to give it back to me at age 65 and I will take care of my own health insurance needs, thank you very much.  That would have bought lots of insurance coverage.  I have paid in no telling how much for medical coverage over the years with my private policy.  I have been blessed with good health and they have made a nice profit on me.  But that it is ok and because it was voluntary on both sides of the equation.  I didn’t have to take out the policy or get the coverage.  The big difference of course is that the insurance company didn’t have the right to come take my money against my will.  They made a profit, it was not thief.  I have nothing against any company making profits otherwise my claim for coverage would be worthless.

That same argument is true with Social Security.  I have paid in well in excess of $100,000.00 over 50 years.  If I had been able to keep my own money or at least control its investment and kept it in treasury bills or CD’s and got a very low 3% return it would have been over $200,000.00 by now.  Of course I take my social security check each month and with no thank you’s to anyone–its my money in the first place that was consfiscated by the government to meet someone else’s social agenda, not mine.  I would be glad to have that $200,000.00 plus in cash now and provide for my own retirement needs without any help or interference by the government.  Of course it is also a gamble, if I die soon then the government will have made lots of money off of me.  My heirs don’t even get the excess.  My surviving spouse will receive payments but again that is merely getting back part of what we put in.  It is her money.   There is the added insult with Social Security that they steal your money in the first place, do not pay you any interest on the money whatsoever and then when you take it out, they tax you on your own damn money.  I mean you paid taxes on your income when you got that money in the first place and then they tax you again when they graciously give you back some portion of your money.  They expect me to smile and say “thank you”, that would be like saying thanks to the burglar or thief who returned your stolen goods.  You’ll be glad to have them back but not grateful to the thief.

“Liberty means responsibility.  That is why most men dread it.”  George Bernard Shaw   www.olcranky.wordpress.com

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