RSS Feed MenuHere’s an interesting tid-bit from the Washington Post dated April 24, 2007 in which it predicts that: “By 2017 Social Security will start to pay out more in benefits than it collects in taxes.”
Yet just today I look and see from the AP that the government must borrow to pay back some of the $2.5 trillion in IOUs being cashed in by Social Security because: “This year…the retirement program is projected to pay out more in benefits than it takes in.” Wow is it 2017 already? Gosh how time flies!
And herein lies a telling illustration of why I am opposed to the healthcare bill now being hammered out by the Democrats in congress. It is not because I don’t think healthcare is broken. It is because such a massive shift in the economy, such an enormous transfer of power to the federal government, is based upon projections of something that simply cannot be predicted with any degree of accuracy needed for such a program to work. If these guys are off their numbers (and they always are) we will be in serious financial quick-sand down the road.
There is an immutable reason why centralized socialist policies don’t work over time. Government, unlike the private sector, is not incentivized to maintain the fiscal discipline needed to stay on budget. It is in fact hardwired to be inefficient. When you run a business as I do — one that is not “too big to fail” at least — you have no endless revenue stream to draw from. No taxpayers to stick up again and again if my costs run out of control. I am rather a closed system and if I run deficits for very long a la our friends in D.C. the verdict of the market is swift and final… we run out of cash, shutter our doors and yours truly goes broke. Game over. So I am constantly monitoring my operation. My very livelihood and that of my family depends on my diligence and accuracy. And trust me, I have had to make some gut-wrenching calls in the past, including terminating employees and reducing my own compensation, to keep this ship afloat during some tough times at the outset. But government has no such obligation to be fiscally responsible.
So when you hear Democrats promise that middle class taxes will not go up, that this will cost under $1 trillion, or that this program will be “deficit neutral” do yourself a favor and just turn off your TV. They are not being truthful… not with themselves and not with you. And they are setting this country up for a financial meltdown while insulting our collective intelligence along the way.
Look, I just got our firm’s insurance renewal notice from Oxford. Our premiums are going up by 20%+. So I am on the front lines of the healthcare debate and will be the first to admit that the system needs reform. But this is not the way to do it. Once it is turned over to the federal government to manage, it will be all over. Empty promises aside, everyone’s taxes will skyrocket. (There are only so many “rich” people to soak before the tax man comes knocking on the middle class door when this monster’s cost overruns spiral out of control.) And what will we get for it in return if we even make it to the 2014 launch date? Another bloated entitlement already charging headlong towards insolvency.
Democrats and their supporters look to my Oxford bill and say: “You see Brad? This is exactly why we have to do something. And doing something is better than nothing.” Something maybe, but not anything.
balconesfault // Mar 18, 2010 at 3:58 am
The Bush family exited from the oil drilling and mineral rights business by trading and selling and merging and acquiring until he severed his connections with the firm in 1990 for a killer profit on some of the final stock traded in the transactions and made him a millionaire many, many times over.
I’m sorry – but this is just not true. Bush did not make a killer profit that made him a millionaire many times over from his oil business. In fact, his highly questionable dumping of Harken stock right before the value plummeted netted him about 400K. Again, he needed to borrow 600K from the other Ranger owners to be able to buy into the franchise.
Bush never had the money even to buy his Prairie Chapel estate until the ownership consortium sold out to Clear Channel/Hicks and Bush was given a 20x return on investment by the other owners, all of whom had been investors in the Rangers for far longer, none of whom made anything close to the return Bush netted.
That is the deal that made him a millionaire many times over. Even Saudi real estate tycoon Sheikh Abdullah Bakhsh’s investments in the Bush family oil businesses didn’t make W anywhere near as much.
Jeffry1 // Mar 18, 2010 at 9:08 am
Firefighting and Policing the same as health care? Did somone REALLY try to make that argument? Stop…firefighting and policing are necessary publis services, just like defense. It is all part of the function of government that we as Americans understand as necessary and outlined in the preamble: “…establish justice, insure DOMESTIC TRANQUILITY, provide for the common defense, promote the general welfar (in its generic definiton, not “prmote entitlements”) etc.
Health care is a highly personal matter. We will have a race to bootom in trying to national such a thing. By the way, Mass. healthcare plan is going broke, and has INCREASED premiums. Just took a while for it to happen. But it does eventually happen to all entitlements. Look at Schaefer’s opening sentences.
balconesfault // Mar 18, 2010 at 9:24 am
Stop…firefighting and policing are necessary publis services
Just to understand – you’re willing to extend the term “domestic tranquility” to cover firefighting … but not “general welfare” to cover healthcare?
Health care is a highly personal matter.
And just a very few months ago, I was hearing commentors on this list attacking the Obama Administration for shortages of the swine flu vaccine.
SpartacusIsNotDead // Mar 18, 2010 at 1:13 pm
Jeffrey1 wrote: “Stop…firefighting and policing are necessary publis services, just like defense. It is all part of the function of government that we as Americans understand as necessary and outlined in the preamble . . . ”
You’re obviously unfamiliar with the facts surrounding the history of firefighting in this country. Firefighting, like primary education, was originally provided by the private marketplace – not government. Of course, Americans determined that these services are so essential to a better society that they should be made available to every American without regard to his/her ability to pay for them. The exact same thing is happening with health care. And, of course, 30 years from today people will wonder how we could have ever considered it prudent not to provide universal health care.
I’m not surprised conservatives are dead wrong about health care. They have been dead wrong on every single major societal advancement in this country’s history (slavery, public education, suffrage for women, social security, civil rights, medicare, gay rights, etc.). And, like the reversals on Medicare and social security by Ronald Reagan and just about all other conservative politicians, conservatives 30 years from today will be full suppporters of universal health care.
I am surprised, however, that conservatives repeatedly make the exact same mistake in taking the wrong side each time. It’s actually funny that they’re not smarter.
Jeffry1 // Mar 18, 2010 at 1:18 pm
First of all…we were criticizing the shortage of swine flu as an example of government inefficiency. And now you want that same government to run 17% of the US economy?
And no “general welfare” does not translate into confiscatory taxation to force mandatory health insurance on everybody who is having financial difficulty. Otherwise it would say “promote the general entitlements.” Unless of course you think Guevenor Morris had that in mind when he wrote the preamble. And I do not see how sending the country over a financial cliff when 85% of Americans are already insured and of the vast majority of those with insurance are happy with their plans promotes the general welfare. The term “general” is not the same as “every single man woman and child.” If 85% covered is not the “general” populace I don’t know what is.
balconesfault // Mar 18, 2010 at 1:35 pm
First of all…we were criticizing the shortage of swine flu as an example of government inefficiency.
Yes – let’s leave it to the free market to provide the swine flu vaccine.
You do realize that the only difference between the super new high-tech device that sells for $600 today … and $300 three months from today … is the free market managing supply in order to maximize profits?
Any pharmaceutical company which developed such a critical vaccine independent of government as purchaser would be taking a significant risk. Many times they would do so, only to find at the end of the development process that there wasn’t a major market for their product. So when they ended up at the end of the development process with a product that was in very high demand, what is the logical step.
a) immediately release as much as they can make to the marketplace – say, 25 million units, at $20 per unit, with the continuation of production that they can deliver another 25 million units a month later?
b) start by strictly limiting the amount of product available in the marketplace – say 1 million units, priced at $500 per unit. After a few weeks, drop the price to $200 per unit and release another 5 million units to the market. After a few weeks, drop the price to $100 per unit and release another 10 million units to the market.
I’m not calling said company that chooses option (b) evil or malicious or such, by the way. I’m calling said company a rational actor in the free market, seeking to maximize profit … and, as I stated above, balance out the times they have taken the risk of developing a vaccine to have the investment lost. Even if they feared a competitor bringing a similar product to market a month or two after them, it would make sense for them to maximize their profit for as long as they could while they had an advantage on the marketplace.
Now … which would be best for the general public welfare?
Of course, some politicians would no doubt demagogue the situation and demand that there be price controls on the drug, and that the company has a responsibility to release as much as they can to the market immediately. The likely result of this would be to dampen or eliminate the companies willingness to take the risk of developing vaccines in the future.
Personally, I’d rather go with the government being a guaranteed customer, and maybe sometimes overshooting or undershooting the target – but doing everything it can to make sure that if a vaccine really is that critical to our national health that the supply is maximized at an affordable price for everyone.
But that’s just me. I think like someone who believes that rational actors in a free market will act in any legal fashion to maximize their income.
Jeffry1 // Mar 18, 2010 at 3:57 pm
Do you think without the profit motive and the free markets that science, technology, medicine, etc. would have advanced as far as it has so that we can even have a discussion about a vaccine that would have been fantasy 100 years ago?
Those rational actors, as you like to call risk-taking entreprenuers, innovators, inventors, financiers of said inovation, firms (like the pharmas) who take enormous financial bets on R&D that often leads to dead ends, etc. have been the engine driving the greatest advances in mankind and have made life INIFINITELY better for the average person than it was 100 years ago.
Oh, and there is no greater boon to healthcare than a prosperous society. And their is no greater impediment to such prosperity than a bloated entitlement state. Ask Europe.
balconesfault // Mar 18, 2010 at 4:09 pm
Do you think without the profit motive and the free markets that science, technology, medicine, etc. would have advanced as far as it has so that we can even have a discussion about a vaccine that would have been fantasy 100 years ago?
Do you think that without significant government involvement that science, technology, medicine, etc. would have advanced as far as it has so that we can even have a discussion about a vaccine that would have been fantasy 100 years ago?
SpartacusIsNotDead // Mar 18, 2010 at 4:19 pm
Jeffry1 ignored the factual health care analog to firefighting and education and, instead, wrote: “And their is no greater impediment to such prosperity than a bloated entitlement state. Ask Europe.”
2009 debt-to-GDP ratios:
France – 74.9%
Germany – 79.4%
Spain – 51.8%
United Kindgon – 62.7%
United States – 87.0%
Conservatives continue to live in their own little neverland where facts do not matter.
SpartacusIsNotDead // Mar 18, 2010 at 4:22 pm
P.S. The debt mentioned above is government debt. Consequently, contrary to Jeffry1’s post, we don’t need to ask Europe about bloated entitlements. Europe should ask the U.S. about them and Bush’s Prescription Drug Benefit plan in particular.
SFTor1 // Mar 18, 2010 at 5:43 pm
I assumed people who discussed on this forum knew that historically firefighting and many times policing used to be provided by private suppliers.
Well, I guess not. Enough people have pointed it out, so let’s just acknowledge it.
Every other country comparable in living standards and economic advancement has figured it out long ago that public health insurance is the way to go, and moved to some single-payer system.
Public health care is better and cheaper. Full stop. For those who want additional health care services in the private marketplace, let them have it.
The arguments made against public health care on this thread are bizarre, kind of like advocating freedom from taxation for roads if you don’t drive a car.
Health care is an absolutely natural function for government. It goes to the most common and inescapable human needs. For private companies to profit from the satisfaction of these needs affects the rest of the economy negatively, and brings no benefit to the users of the service. Those are proven facts, that can be backed up by data from the last 40 years of the private health insurance experiment in the United States.
Conservatives would do themselves a huge favor by putting down their “Atlas Shrugged” and realizing
SFTor1 // Mar 18, 2010 at 5:50 pm
Jeffry1, ever heard of the National Institute of Health (NIH)? They are the linchpin for funding of institutions around the United States, where medical and biological research is very much a public/private enterprise.
Your risk-taking entrepreneurs depend to a large degree on public funding.