Posted tagged ‘Repeal And Replace’

Democrat and Republican Establishments vs. Healthcare

July 18, 2017

 

Private or Public - Traffic sign with two options - services and companies owned by state or private businessman. Socialist / Capitalist question of privatization, school system, health service

The grass roots of the Democrat party is trying to pull the party toward an ideology of a centrally planned socialist economy. The grass roots of the Republican party is trying to pull the party toward an ideology of individual freedom and free markets. The establishment leadership of both parties only pay lip service to the ideologies of their grass roots base, because the status quo leadership of both parties wants two things. 1) They want to protect and grow the power of government. 2) Each wants to be the majority party that wields this Government power.

The ideology of the grass roots is a petty annoyance that has to be finessed politically in order to cobble together a 51% majority to gain control of the levers of power. You can see this playing out in the current healthcare issue.

The establishment Republicans in congress want no part of getting rid of Obamacare and replacing it with a free market in healthcare. Grass roots want government to get out of the healthcare industry and allow the best possible solutions to be spontaneously created by individuals cooperating in a free market. This article; DISGUSTING New Senate Healthcare Bill Adds Back Taxes That Were Originally Eliminated, at economicpolicyjournal.com. shows the Republican establishment for what it is. It’s a party giving big government favors (at taxpayer expense) to people who fund their reelections. This is being disguised as solutions to our current healthcare problems. The original problems in healthcare were caused, in the first place, by government intervention into the free market over the last 100 years. (Read: New Government Healthcare Regulations will Not Cure The Results Of Previous Government Regulations.)

The Democrat party is having a similar problem in California. The establishment of the party had an opportunity recently to pass a single payer healthcare system. When they didn’t pass the bill, the grass roots of the party started to rebel because they want government run healthcare. This article; California Democratic Party Civil War Underway, at cacus99percent.com. shows that even the Democrat establishment realizes a single payer system isn’t workable and will bankrupt the state.

So are the grass roots of the Democrat party and the establishment of the Republican party fighting for the same thing? The Republican establishment wants more government intervention in healthcare than the grass roots constituents of their party, and the grass roots Democrats want more government intervention in healthcare than members of the establishment in their party. Although they differ in the degree of government intervention, I think, California grass roots Democrats and establishment Republicans agree with the direction healthcare is moving. And similarly and grass roots Republicans and California establishment Democrats disagree with moving in that direction.

SO WHERE ARE WE?

We’re in a mess? The first thing I want to clear up is this point. There are no “solutions” to the problems in healthcare. There are only trade offs or tolerable bests that exist. Why do I say this? Because healthcare is an economic good. Which means it is a scarce. It doesn’t exist in abundance. It has to be produced by someone before it can be consumed. It is not like the air we breathe. Everyone on the planet can breathe as much air as they want because it exists naturally in abundance. It doesn’t have to be produced by anyone before it can be consumed. Some might say “I pay for the air I put in my tires”. Yes you do, but you are not paying for the air. They are paying the cost of compressing the air. Compressed air in particular is an economic good, air is not.

As much as some would like to believe healthcare is a right, saying it is a right doesn’t make the reality that is a scarce economic good magically disappear. Because of this fact, there has to be a way of rationing healthcare because there is not enough to satisfy the demand for it. There are two ways to ration economic goods. Through prices in a free market, or by bureaucrats in a central planned government system.

WHY HAS THE PRICE OF HEALTHCARE SKYROCKETED?

You have to look no further than the law of supply and demand to figure out the answer to this question. What do I mean? On the one hand every regulation passed by politicians and bureaucrats concerning healthcare over the last 100 years works to restrict the supply of healthcare. When supply is decreased against a fixed demand the price will increase. On the other hand politicians and bureaucrats are using tax payer dollars to subsidize healthcare which increases demand. When demand increases against a fixed supply the price will go up.

Bureaucratic intervention into the healthcare market by government has worked to decrease supply and increase demand over the last 100 years. We don’t have to look any farther than the law of supply and demand to understand why the price of healthcare has increased.

Over the last few decades the price of healthcare has gone up exponentially. Politicians see this increase but instead of getting rid of the policies that caused the increase, they try to to shift the increased costs of healthcare to the tax payers or insurance policy holders. But shifting costs doesn’t cut costs. In fact, shifting the cost increases costs because the only people who have an incentive to keep costs down are the people who pay them.

REPLACE WITH WHAT?

The truth is a free market is the only way the lowest possible price can be discovered. Healthcare can never be “free” because it is an economic good. Third party payers and cost shifting schemes distort supply and demand information. This distortion increases the costs above what they would be in a free market. Replacing Obamacare with a different set of government regulations won’t work. The only thing that can bring down costs is a free market in healthcare.

Unfortunately most people have a hard time wrapping their head around the abstract concept of a spontaneous order of a market vs. the seemingly concrete plans by central planners.

Having an order formed by individuals cooperating and competing inside of laws concerning property, contract and tort, allows for trial and error of multiple ideas by millions of people. The best way of doing something will be discovered and imitated.

A top down order formed by bureaucrats making plans that boxes individuals inside of narrow rules limits the amount of knowledge that can be brought to bare in discovering the best possible way of doing something. It also makes it almost impossible to change direction when the one and only plan is obviously not working. Just look at our present situation.

SOLUTION

Remember there are no solutions to healthcare, just trade offs. There is only one way to get to a point where individuals actually can make the decisions about the trade offs concerning healthcare. Get Government out of healthcare.

Since the grass-roots and the establishment of the Democrat party is never going to allow a free market in healthcare, the only chance is to help the grass-roots of the Republican party purge their party of the establishment leadership in their party and replace them with members who understand how free markets work. Repealing and replacing members of the Republican establishment takes consistent effort over many election cycles. Just look at what has happened to the shift in political power since the Democrats ruled all three branches of Government, most state houses and most governorships in 08 (read here).

 

Related ArticleSpontaneous Order = Free Market Economy, at austrianaddict.com.

Related ArticleSpontaneous Order More Complex Than Top Down Planning.

Related ArticleSpontaneous Order Utilizes More Knowledge than Central Planning Could Ever Hope To Utilize.

Is The Recent Georgia Run Off Election A Portent For The 2018 Midterms?

June 29, 2017

Infographic model of USA congressional votes. Editable Sample.

The recent Georgia 6th district win by (R) Handel over (D) Ossoff was spun as a good omen by each side for their chances in the 2018 midterm congressional elections. We’re not going to make any predictions about 2018 because the election is a year and a half out and a lot can happen in an instant which can change the political landscape. So let’s analyze some numbers that exist today, and also look at some possible situations which may, or might not, influence 2018. Do you like the words may and might? These words suggest a subjective opinion. But the numbers are objective.

ANALYZING SOME NUMBERS

-A party needs 218 seats in the house to gain control. The D’s hold 193 seats. The D’s need to defeat 25 incumbant R’s, and win all 193 seats they presently hold to win control of the House.

-The D’s will need 51 seats to gain control of the senate because the Vice President (Pence) is the tie breaking vote. 34 senate seats are being contested in 2018. Of the 34 seats, 25 are held by D’s and 9 by R’s. So the D’s need to defeat 3 incumbant R’s and win all 25 seats they presently hold to win the House.

-The D’s thought they had a chance to flip the congressional seat in Georgia. They spent a record amount of money for one congressional seat. ( Democrats Get Crushed In Georgia Election Despite 7x Spending Advantage.) If they need to flip 25 seats held by the R’s in the House and 3 seats in the Senate, are they going to have enough money to fund each of these campaigns? But in order to win the minimum number of seats to win back the House and Senate they are going to have to target more than the minimum number (25 & 3), because losing just one seat spells doom.

-The D’s think that Hillary winning the popular vote by 2.86 million shows the majority of people agree with their vision for America. But if you look at California, New York and Massachusetts you get a different view of the numbers. Hillary won California by 4.27 million votes. She won New York by 1.74 million votes. She won Massachusetts by 1.0 Million votes. That is a 7.01 million vote advantage in three states. But it also means she lost the other 47 states by 4.15 million votes. If you take the .8 million advantage the R’s had in Texas the number shrinks to 3.35 million. Still the R’s have a broader base of support, while the D’s support is concentrated.

-The D’s hold a total of 193 house seats. Of those 39 are in California, 18 are in New York and 9 are in Massachusetts. So 66, or 34%, of their house seats are from these three states. This means they have 127 seats spread across 47 states. In most of these house seats the incumbant has an advantage because these districts have been gerrymandered. It may be difficult for the D’s to find enough competitive seats to win back the house.

-R’s control both chambers in 33 states, while D’s control both chambers in 13 states with 4 state chambers being split. (The R’s also have 33 state governors) The party in power in each state will be able to redraw the house districts after the 2020 census. The D’s have to win back control of some of these state chambers or it will be  more difficult to win control of the house after 2020.

-What about the senate? I’ve read (here) that R’s Flake from Arizona, Heller from Nevada and Cruz from Texas are vulnerable. But if the D’s don’t win all 25 of the seats they are defending, it doesn’t matter if they win these three seats. Of the 25 seats D’s have to defend, 12 are listed as vulnerable. But 10 of these are in states that voted for Trump in 2016. They are Nelson-Fla, Connelly-In, McCaskill-Mo, Tester-Mt, Heitkamp-ND, Brown-Oh, Casey-Penn, Manchin-WV, Baldwin-Wi and Stebenow-Mi.

CONCLUSION

Mathematically the D’s have an uphill battle to regain control of the house and the senate. But the unknown future is what will ultimately decide 2018. What are some of these unknown events that could affect political change? We can only speculate what they will be. Here are some of my speculations.

BIASED SPECULATION ABOUT UNKNOWN FUTURE EVENTS

(AKA MY BEST GUESSES)

-The economy will be the most important issue. As we know from history the economy, or the perception of how good or bad the economy is, will be at the top issue for each individual voter. The economy is not healthy right now. The financial bubble created by the Federal Reserve is over leveraged with a mountain of debt. The Fed is in the process of raising interest rates. It is also in the process of reducing Its balance sheet. This means it is not rolling over (refinancing) as much previous debt. Money is not being pumped into the financial market like it was when the Fed was in QE mode. This will eventually lead to a correction (recession). A recession is needed to correct the previous monetary interventions by the Federal Reserve over the last ten years. The Fed would like this correction to happen during Trump’s presidency because it thinks it will be able to deflect the blame away from its previous monetary policies and push the blame on Trump. They know the mainstream media will help with the blame game. The other thing that will help the Fed get away with this is the ignorance of the citizens when it comes to Fed policies.

The quote by Keynes on the top right of my web site says it all: “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.

-Will Healthcare be an issue in 2018? Yes. But the people who got hammered under Obamacare because of the increased insurance costs, didn’t vote for Trump, as much as they voted against continuing Obamacare under a Clinton presidency. do you really think these voters will, 2 years after the fact, go back to the party that crushed them financially? I don’t think these voters will, 2 years after the fact, go back to the party that crushed them financially even if the R’s don’t repeal Obamacare, or pass a bill that is spun as a repeal of Obamacare, but really isn’t. These voters know the D’s have destroyed our healthcare system with Obamacare. They also know the D’s want to implement a single payer government run system. These  voters in the other 47 States know their only hope is to try to force the wimps in the R party to get rid of the policy that raised their health premiums higher than what they could afford. These people have been backed into a corner. And when an individual has been backed into a corner he will will fight because he has no other choice.

-The mainstream media has lost, and is continuing to lose, credibility. They don’t have the power they, and we, think they possess. If they had this kind of power, Trump wouldn’t have won the election. They won’t be successful in pushing the big government progressive propaganda of the left. I don’t think they realize what people outside of California, New York, Massachusetts and D.C. think of them. Many people see them as biased. There is enough access to information that most people don’t have to be propagandized anymore unless they want to be. They won’t be successful in pushing the big government progressive propaganda of the left as they were decades ago.

CONCLUSION

Your guess is as good as mine!

 

Related ArticleNew Gov. Healthcare Regulations Will Not Cure The Results Of Previous Gov. Regulations, at austrianaddict.com.

Related Article0% Interest Rate x Eight Years = The Fed’s ZIRP Doesn’t Work, at austrianaddict.com.

Related ArticleBias In The Unbiased Mainstream Media, at austrianaddict.com.

 

Healthcare: Market Solutions vs. Bureaucratic Decrees

March 28, 2017

Modern thin line design concept for HEALTHCARE website banner. Vector illustration concept for healthcare diagnosis and treatment.

Our current battle over healthcare is being debated from a false premise. Most people have bought into the lie that healthcare is or should be a right. It isn’t a right as understood by most people. The right to keep and bare arms doesn’t mean someone else is obligated to supply a gun. The right to free speech  doesn’t mean someone else is obligated to supply a microphone, a stage and an audience. But for some reason we think a right to healthcare means someone is obligated to provide it.

The truth is healthcare is an economic good or service produced by individuals. These individuals own what they produce. It is their property. No one has a right to what someone else produces.

How can you gain possession of what someone else owns? 1) You can produce something they want and exchange it for what they have produced. 2) They may give it to you as a gift. 3) You can steal it. 4) You can have someone steal another persons production, exchange it for what you want, and have them give it to you indirectly. 5) You can have someone else steal it and give it to you directly.

Government intervention into the healthcare market, up to and including Obamacare, has been an incremental march away from the first two and toward the last two. Everyone knows that direct theft of another person’s property is unethical and immoral because it is illegal. But when we are one or two steps removed from the direct theft, for some reason we think it’s ethical and moral because government says it’s legal.

hand writing economic demand - supply graph on chalkboard

ECONOMIC REALITY OF HEALTHCARE

Healthcare is an economic good ruled by the laws of economics. Scarcity, subjective value, supply and demand are a few laws we need to look at in order to understand why government central planning isn’t the right process to ration the scarce good we call healthcare.

SCARCITY: Healthcare has to be produced. It is a scarce good. It isn’t like the air we breathe. Air doesn’t have to be produced by anyone. The abundant supply of air exists naturally. You might say the air I put in my tires Isn’t free. The air you put in your tires is first compressed and then forced into your tires. Compressed air has to be produced, therefore it is an economic good and not free like the air you breathe.

SUBJECTIVE VALUE: Everyone values healthcare differently. There is no objective value that can be placed on healthcare. The value for healthcare is subjective depending on each individual’s needs and wants. Both the demand for and the supply of healthcare is valued subjectively.

SUPPLY AND DEMAND: Since healthcare is scarce and valued subjectively, the law of supply and demand comes into play coordinating its production and consumption. The price reflects subjective valuations by individuals related to supply and demand. The subjective valuations at the existing price drives supply and demand to a new coordinating price.

The law of supply and demand states that more is demanded at a lower price than a higher price and more is supplied at higher price than a lower price. Price changes are constantly re-coordinating supply and demand according to the subjective valuations of individuals.

The supply of healthcare is limited by the scarcity of the resources, labor, capital and time needed to produce it. It is also limited by the demand for healthcare. If the demand for healthcare increases against a fixed supply, the price will go up in order to ration the scarce resource. As the price rises more resources, labor, capital, and time will be attracted to producing healthcare. As the supply increases to meet the higher demand a point will be reached where the price will stabilize and then decrease as supply outpaces demand.

The changing price sends information to consumers and producers about the scarcity of healthcare. These price changes are figured into the subjective valuations of how much each consumer will demand and how much each producer will supply.

Free market prices are the most efficient way to ration healthcare in a world of scarcity and subjective value.

government regulations, magnifier, pencil

GOVERNMENT INTERVENTION INTO HEALTHCARE

Government mandated healthcare subsidies, taxes and regulations distort the prices that would normally exist in a free market. Consumers demands and producers supplies are going to change according to these distorted prices. A mismatch of the supply of and demand for these scarce resources is brought about by government intervention.

What did you think was going to happen when more consumers were brought into the market by the Obamacare individual mandate? Subsidies also increase demand. Prices were guaranteed to rise as demand was artificially increased.

What happens when prices for healthcare services paid by Medicare and Medicaid are fixed below what they would be in a free market? The supply of health care would decrease at these lower prices.

Obamacare created more demand and at the same time created the incentive to supply less. What happens to the price when more is demanded and less is supplied? Even though our politicians told us costs would go down under The Affordable Care Act, anyone who understood basic economics could have predicted which way the price would go. And that isn’t even including paying for the government bureaucracy needed to implement the ACA.

NOW WHAT?

The failure of the Republican repeal and replace bill is a good thing. The bill was just an exchange of a set of not quite as bad new government regulations for the existing bad government regulations. Their is only one way to reduce the cost of healthcare. Get rid of government subsidies, taxes and regulations. Unfortunately all Democrats and a majority of Republicans don’t understand basic economics.

Quoting Ludwig von Mises – “Economic history is a long record of Government policies that failed because they were designed with a bold disregard for the laws of economics.

Republicans are also scared of political fall out when they get rid of healthcare entitlements. The Democrats and their accomplices in the main stream media will trot out all the sob stories of people whose ‘access’ to healthcare was taken away. Of course the MSM didn’t tell the stories of all the people who had their healthcare costs sky rocket under the ACA. These rising premiums paid for the increased costs and subsidies caused by government intervention.

Millions of families got crushed by the higher cost of healthcare. These were small businessmen and people who worked for small businesses in the more rural counties in America. These are the same people who were barely able to stay afloat when the economy crashed in 08. They cut their discretionary spending to the bone. Many had to use their savings and retirement accounts to make it through the recession.

When the Affordable Care Act was implemented after 2013 there was no spending left to cut to pay for the higher cost of healthcare. Wives had to go back to work just for the insurance. Men took second jobs for the same reason. These are the people in the swing states of Ohio, North Carolina, Florida, Iowa, and the Democrat States of Wisconsin, Michigan and Pennsylvania who voted for Trump. He was their only hope. They literally couldn’t afford to vote for Hilary.

Fortunately market alternatives to Obamacare are starting to appear around the country.

Read Here- Direct Primary Care, A No-Insurance Model.

Read Here – Florida West Virginia Lawmakers Take Interest In Insurance Free Approach.

Read Here – Atlas MD, Wichita’s Premiere Cash-Only Clinic.

As the price of Obamacare goes higher the demand for Obamacare will decrease. This higher price will also bring about lower cost market alternatives to the Government run system. These alternatives will be outside of the system. We can call these free market alternatives as long as Government doesn’t try to shut them down with regulations. If they do try to shut them down they will then become black market alternatives (the new free market).

Fracking is an example of a market alternative to the OPEC cartel and our Governments regulations on drilling off shore and on public land. When the price of oil rose to above $110 dollars a barrel it became affordable for hydraulic fracturing to take off on private land. Now that it is profitable to frack at $45 a barrel the OPEC cartel has lost its monopoly power. The high price of $110 was what eventually brought the price of oil down. Healthcare will be no different. The market will find an alternative as the price goes higher.

Read Here – Trumpcare Defeat Could Be A Small But Important Victory For Healthcare Freedom.

Read Here – Ryancare Is Failing -What Should Happen Next?

Read Here – Forget Obamacare, Ryancare, And Any Future Reformcare – The Healthcare System Is Completely Broken.

Economic reality will end Obamacare. Let’s hope the Government doesn’t end the market alternatives that have started to take root.

 

Must Reads For The Week 3/11/17

March 12, 2017

ECONOMIC STUFF

Donald Trump and Peter Navarro Suffer From ‘Trade Deficit Disorder‘, by Mark J. Perry, at carpediemblog. Here is an excerpt form the article: “In his speech and op-ed, Navarro laid out Team Trump’s trade agenda that involves expanding US exports, reducing imports, and thereby reducing America’s merchandise trade deficit and supposedly therefore increasing our nation’s economic growth. Unfortunately, that’s a pure mercantilist trade agenda, which is an approach to trade that has been discredited now for several hundred years.

How Did Peter Navarro Ever Get A Ph.D In Economics From Harvard? economicpolicyjournal.com. Regular people being ignorant about economics is one thing. But having a Ph.D in economics and being economically ignorant is dangerous.

What Is Laissez-Faire? by Jeffery Tucker, at mises.ca. It simply means ‘Let it be’. A majority of people believe that complex order comes from top down planning by leaders possessing authority. It is inconceivable to them that unplanned order arises when people are allowed to manage their own lives and interact with others. Language is an example of complex spontaneous order. The rules of English were not written by someone and everyone started to follow them. People communicated with people and over time the ‘rules’ were established after discernible patterns (unwritten rules) were recognized. Attempts by Government central planners to control every aspect of society leads to chaos and conflict. Laissez-Faire. Please!

Repeal And Replace Needn’t Be Complicated, by Hunter Lewis, at mises.org. Do you use the term “healthcare system” or “healthcare market” when talking about ‘healthcare’. Most people talk about our “healthcare system”.  This shows we think of healthcare as a centrally planned system. The cost will never go down unless we see healthcare as an economic good rationed by prices in a market. Obamacare was 2500 pages of rules and regulations designed to ‘fix’ what was left of a healthcare market already encumbered by mountains of government regulations. The only ‘fix’ to our current “healthcare system” is to allow it to become a healthcare market. LAISSEZ-FAIRE! Get rid of all government regulations and a complex healthcare order will almost magically form itself. It won’t be a perfect order (nothing man does is perfect). But it will be the best that can possibly exist in a world of scarce resources and subjective value.

High Prices Don’t Cause Economic Bubbles, by Frank Shostak, at mises.org. When central banks increase the money supply (counterfeit money), scarce resources are misallocated to activities that would have never come into existence under normal market conditions. The 08 bubble was caused by the Fed electronically printing counterfeit money. It was not allowed to liquidate. More electronically printed counterfeit money was created to stop the correction. This counterfeit money has and is creating our present financial bubble. Excerpt from the article: “The emergence of a bubble or a monetary balloon need not be always associated with rising prices – for instance, if the rate of growth of goods corresponds to the rate of growth of the money supply then no change in prices will take place……what matters is not whether the emergence of a bubble is associated with price rises but rather with the fact that the emergence of a bubble gives rise to the emergence of non-productive activities that divert real wealth from wealth generators. The expansion of the money supply, or a monetary balloon, in similarity to a counterfeiter, enables the diversion of real wealth from wealth generating activities to non-productive activities.”

The Fed’s Dependence On The Consumer Will Backfire, by C. Jay Engel, at mises.org. Production is the creation of wealth and consumption is the destruction of wealth. Spending is consumption. Consumption is the destruction of what has been produced. Spending doesn’t grow an economy. We can only spend out of our own production. What we produce allows us to spend. Consumption has to lag behind production for an economy to grow. When consumption is increased by debt and money printing, we start a process where consumption is out pacing production. We start to eat our seed corn so to speak. Artificially increasing spending is a quick shot of adrenaline.  But it has no staying power.

 

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