Posted tagged ‘The Affordable Care Act’

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.

 

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The Election Is Over! What Happens Now?

November 17, 2016

United States of America elections 2016 word cloud

Now that the dust has settled, or is settling, after the presidential election, lets look into the crystal ball and see what the future brings.

FOUR THINGS THAT WILL HAPPEN

1) We will see a true opposition party to the party in power. The democrat party will use every parliamentary tool available to them, in the House and Senate, to stop everything the majority party, lead by Trump, wants to pass. They will also use every political and rhetorical trick (lying) for the same purpose. There is nothing wrong with this. The  minority party is supposed to be a check on the power of the majority party.

The Republicans should take notes on what the Democrats will do, because they certainly didn’t use their power and political rhetoric to thwart the agenda of Obama and the Democrats the last eight years.

2) The leaders in the Democrat party will do everything politically and rhetorically to chip away at the Trump Presidency. Even though they may talk about the parties coming together, they don’t mean it. How can a party lead by people who want to centrally plan every aspect of peoples lives, agree with people who want to cut the size and power of government? Government gives central planners their power. These planners don’t want that power taken away. Of course I’m assuming that the Republicans want to cut the size and scope and government. We all know that there many big government Republicans. Many of Trumps stated policies will expand government power and the debt. In fact some of these policies will not work because they disregard the laws of economics. But more on this some other time.

3) Being anti-war will be back in vogue. Where has code pink been for the last eight years? Obama has intervened in Egypt, Libya, and Syria. He has ordered 10 times more drone strikes than Bush. We are still in Afghanistan. Gitmo remains open. Where have the protesters been? Or are these groups purely political?

4) Investigative journalism will make a come back. After taking an eight year break, the main stream media will again start doing their job of being a check on government power and corruption. They will do this because their vision of the world doesn’t coincide with the party in power, not because of some new found fidelity to their job. I wish the MSM would treat every President, Senator, Congressman, and bureaucrat like they treat Republican Presidents. If you thought they hammered Trump during the election, you haven’t seen anything yet.

WILL IT WORK?

One of the most important things that has happened because of this election is the MSM has cut it’s own throat. This election has pulled back the curtain on the MSM. People have finally witnessed what they thought was true all these years. The MSM has discredited itself in the minds of enough people, that no one trusts them. The propaganda they use to advance their world view doesn’t have the effect that it used to, because they don’t have a monopoly on information anymore. The marginal straw has finally broken the camels back when it comes people trusting the MSM. And that’s a good thing.

Keeping government power in check is the job of the opposition party, the press, and the people. Unfortunately this doesn’t happen when the Democrats are in power. Why? Because the MSM is biased toward the world view of the Democratic party, people are too busy with the daily grind to stay informed, and the Republicans are too afraid of the media and the Democrats to mount any real opposition. Presidents, Senators, and Congressmen of both parties should be treated like the MSM treats Republicans. People not trusting people in positions of power is a good thing for individual liberty.

 OBAMA HAS CREATED MORE REPUBLICANS THAN THE GOP HAS CREATED

At the start of the Obama presidency the Democrat party had 57 Senators plus two Independent Senators caucusing with Democrats. The Republicans had 41. Democrats had 255 congressmen. The Republicans had 179. Democrats had a lock on all three branches of government. Democrats also had 29 Governors. The Republicans had 21. Democrats had control of 27 State legislatures. Republicans had control of 14, with 8 split.

As Obama tried to push through the Affordable Care Act (what an oxymoron), tea party and liberty groups started to organize politically. After the last 4 election cycles, 2010, 2012. 2014, and 2016, we are seeing the fruits of their labor. Here is how the score card reads now. The Republican party now controls the Presidency, 52 Senate seats, 239 house seats, and 34 Governorships. The Republicans control both the senate and house in 32 states, 3 states are split (read here).

Candidates who want smaller government have been beating establishment Republicans in primary elections since 2010. The Republican party is slowly turning more libertarian in its thinking. What’s left of the old establishment Republicans will eventually loose in a primary or retire. Their replacement will be a more liberty minded candidate. Purging the Republican party of leaders who think solutions come from big government takes time.

The Democrats can blame their losses on Obama and themselves. Obama pushed his big government central planning agenda (namely the Affordable Care Act) and the Democrats helped get it passed. They are now reaping their just rewards.

CONCLUSION

We know the Democrats and the main stream media will oppose Trump and the Republican majority in congress. It is our job as followers of Austrian economics to oppose Trump and the Republicans when they try to pass legislation that expands the size and power of Government. We don’t want Republicans to “get something done” if that “something” goes against the laws of economics, takes away individual liberty, and increases the power of Government.

Net Neutrality?

February 26, 2015

Here is a video of The President talking about net neutrality.

Sounds like he really wants to protect us, the little guys, from big corporations doesn’t it. Why should we believe the man who pushed a bill titled, “The Affordable Care Act”? Obamacare has made individuals less free to choose how they want to pay for their healthcare. Insurance companies were for this law because they thought they would benefit from its passage. With the stroke of the pen, the law created 30 million more costumers for insurance companies. The fact that it expanded Governments power over the individual makes politicians and bureaucrats happy. But who among us wouldn’t want our power expanded? Is the term “Net Neutrality” any different from “The Affordable Care Act”.

You can bet your life that Net Neutrality regulations will make the internet less neutral, less free, and more expensive.

Net neutrality laws will help the already established tech companies and hurt the upstart competitors who, under normal market conditions, would normally be a check on the big providers. The threat of competitors trying to get market share keeps them in line. This is what Uber is doing to the taxi cartel. Big tech companies will be for this, or at least be tepid in their resistance to it. Once Government regulates the internet, these tech companies will be the protected cartel.

Politicians and bureaucrats will not only be able to tax the internet more easily, they will be able to make rules about content, access, and will probably make you get a license to have a website. Think of what bureaucrats (Lois Lerner) in the IRS did to stifle liberty minded groups from getting their message out. Politicians and bureaucrats are only in favor of free speech if they agree with what is said, they are never neutral when it comes to losing power.

Politicians and bureaucrats have been trying for years to figure out how to intervene into the internet. The internet is what has allowed our economy to grow in spite of the interventions by the Government and the Fed. Now, for some reason, the President and bureaucrats want to intervene into an area of the economy that has had exponential expansion without the “help” of Government regulations.

IS THE DEPARTMENT OF THE INTERNET COMING SOON?

DEMOCRATICALLY ELECTED TYRANTS

Tyrants want to control information because truth is never on their side. Even democratically elected tyrants want to have the ability to control and/or propagandize their message. The internet is a marketplace where truth can be discovered, and lies can be uncovered, because of the volume of information that can be brought to bear almost immediately.

The President, the FCC, most democrats, and some republicans are showing their true tyrannical colors by supporting these regulations, but the internet Jeannie is out of the bottle. The marketplace will find ways to deliver this highly demanded economic good outside of these Government regulations. The tighter they squeeze, the more we will slip through their hands.

Related ArticleBeck Breaks Down What He Thinks Is The Real Goal Of Net Neutrality, at theblaze.com.

Related ArticleInternet Fast Lanes Would Be Banned Under Planned FCC Proposal, at entrepreneur.com.