Thursday, June 28, 2012

OK, So Now What?

Well, no one saw that coming, did they?

Virtually every professional pundit said they 'knew' that the individual mandate would be overturned by the Supreme Court by a 5-4 majority today.

They got the 5-4 majority correct.  They just didn't envision Chief Justice Roberts siding with the 4 Justices appointed by Democratic presidents Clinton and Obama. On anything. Ever.

So what the heck happened and what does this all mean now for your health care; your taxes and our national budget deficits and economy?

This may take some time to sort out but here are some initial impressions and thoughts:
  1. This might be the first time in history, in America at least and possibly in all of mankind, where you will be taxed on something if you DON'T buy a particular product or service.
  2. The days of employer-provided health care benefits may come to a swift end.
  3. You might want to seriously consider: A) dumping all of your employees into the exchanges and save anywhere from $200 to $1000/month per employee if you own a business with over 50 employees and B) putting yourself into one of the exchanges if you are self-employed as soon as you can and save perhaps the same amount or more.
  4. President Obama and the Democrats who voted this federal legislation into law after 'assuring' everyone on planet earth that this was 'not a tax'; 'not a tax'; 'this is most definitely NOT a tax!' in March, 2010 now have more 'splaining to do' than Lucy Ricardo ever had to do with Ricky.
  5. The total cost now of Obamacare can be more easily calculated to be well in excess of $2 trillion and based on other CBO forecasts that wound up under-projecting the costs of programs such as Medicare by factors of 10 or 20 times, this could wind up costing well over $3 trillion when and if fully implemented by 2020.
  6. As long as Republicans hold control in either the House or the Senate during that time period, however, full funding of the new regulatory and administrative federal machinery to implement Obamacare may resemble the proverbial 'Pushmi-Pullyu' double-headed llama from Dr. Doolittle: no new appropriation bill for HHS may ever pass the US Congress again.
'Hello, American Express and Visa?  Do you have any more credit cards you can issue to our sons and daughters and grandchildren?  Cause they are most definitely going to need them now to pay for all of this new federal spending.

We can't get into the head of Chief Justice Roberts nor would it do us any good if we could because we simply are not smart enough to understand all of the judicial precedent and navel-gazing that went into his decision as he wrote for the majority today.

But we have read at least some of the decision (you can read it here as well: SCOTUS Health Care Decision. It is 'only' 193 pages) and have read some other commentary such as this one from Charles Krauthammer who calls John Roberts a 'genius' in effect for limiting rampant federal power for the future with this one decision.

And it seems to us as if there may be some 'silver lining' in this for those who have opposed the passage of Obamacare from the beginning.

For one thing, Chief Justice Roberts pretty much brought the hammer down on congressional abuse of the Commerce Clause and the Necessary and Proper Clause, both of which have been massively used to justify an almost explosive expansion of federal powers over all matters of our lives and the states' prerogatives over the past 30 years.

Maybe this one decision will pinch the flame out of that candle.  That remains to be seen.

For another thing, his decision pretty much says that if it 'walks like a duck', 'quacks like a duck'; and 'paddles like a duck', it must be a duck in the same way that the 'penalty' for not having insurance is a 'tax'.  

Plain and simple.

All of a sudden, President Obama and every Democrat who voted for passage of Obamacare (and the one sole Republican who lost in 2010 already anyway so he doesn't have to worry about it in 2012) have been officially, legally and most importantly, 'constitutionally' tagged as 'having voted for the largest tax increase in American history'...while at the same time 'having voted for the greatest expansion of federal debt in the shortest amount of time in American history as well.'

Regardless of whether you like this law or not, those are two mighty big scratch marks on the hood and side panel of any car, truck or van carrying a candidate to and from town hall meetings and campaign events.

In fact, based on past experience, these two issues are so easy to manipulate in a tough campaign that it is easy to see how they might look like a big red target on the backs of everyone who supported it in 2010 who is still around running for re-election this year, including President Obama.

Watch and see just how fast the ad wars heat up with these two themes in them.  We would be shocked if they don't start airing tomorrow at high noon.

One other thing that we have been struck by in the Krauthammer article is this:
Chief Justice Roberts seems to be saying that 'Congress passes laws and Presidents sign them into law.  The Supreme Court should not be 'legislating from the bench'' which in any other case besides this momentous one would have conservatives cheering from the rooftops and setting off fireworks.
Chief Justice Roberts also seems to be saying this profound thing to the American people:  

'If you want this law to be repealed, you have to work to get a majority of your fellow Americans to vote against President Obama and elect Mitt Romney this fall.'  

'You also have to work your tails off to remove at least 6-7 of the Democratic Senators in the US Senate and replace them with Republicans who will help round up enough remaining Democrats to invoke cloture by getting to 60 votes in the 113th Congress next year when they consider repealing the entire law.  

'And then, of course, you also have to help the Republicans maintain control of the US House so they can pass a law to repeal Obamacare in the first place.'

This is going to take your time, your effort, your energy and yes, your money.  

Chief Justice Roberts seems to be sending out a curt Constitutional lesson to the entire country,as Charles Krauthammer said in his article:  

'This is the way representative democracy is supposed to work.  

9 Justices on the Supreme Court are NOT supposed to be the ultra-legislative branch of the government simply because we the people don't directly elect them.  

So don't ask us to do your job which is to make democratic republics work and show the people of the world how America is supposed to function.'

If we all learn that one lesson and take it seriously to heart, this SCOTUS decision might be one of the most brilliant and effective decisions ever written in America.

So...get to work.

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Tuesday, June 26, 2012

Let's Say The Individual Mandate of Obamacare Is Overturned by The Supreme Court....

What happens to the deficit?

It could go down according to 'many' respected observers.

It could go up according to 'many' other respected observers.

You are going to hear the Democrats wail about how repeal of the mandate is going to 'increase the deficit'.  Republicans will say that it will 'decrease the deficit'.

'(I don't) Does anyone really knows what time it is?  (Care) Does anyone really care (about time)?' (with apologies to Chicago)

Here's some things to ponder as we await the Supreme Court decision this Thursday:

Even though the 'individual mandates' that would require every person to buy health insurance 'or pay the penalty' (more on that misnomer later) may be declared unconstitutional and therefore, unusable, the taxes that are already in place to pay for the very high costs of Obamacare will most likely not be ruled unconstitutional by Supreme Court action.

That, plus the fact that 10 years of tax hikes when passed in 2010 were paired against 'only' 6 years of spending hikes to start in 2014, means that the tax hikes are already starting to sink into the American economy and business cash-flow statements.

If the mandatory spending is eliminated, we could have a situation where the tax hikes remain in place. 


And, as difficult as it might be to admit, just like the expiration of the Bush/Obama Tax Cuts (President Obama agreed to extend them so they are now his as much as Dubya's) this year on December 31, 2012, these tax hikes will help reduce the deficit going forward.

Expiration of the Obama/Bush Tax Cuts will take place automatically unless Congress passes a bill to extend them again in November or December and President Obama signs it either as a lame-duck on his way out as our 44th President or as a victorious re-election winner heading into his second 4-year term as Chief Executive and Commander-in-Chief of the United States of America.

He could just veto the extensions and let all of the $3.3 trillion in tax cuts expire and really make a huge dent in our deficit/debt picture going forward.

Of course, that would include virtually every single taxpayer in the nation, the 48% of those who still pay income taxes, that is, including the middle-class wage-earner.

The Big Whopper in all of this is the dreaded 'AMT' or 'Alternative Minimum Tax'.  Should the Obama-Bush Tax Cuts expire on 12/31/12 as under current law, roughly 28 million new taxpayers will be hit with this higher stealth tax in 2013, up from 'only' 4 million in 2012.

So if you are a deficit-hawk, be careful what you wish for.  You might just get lower deficits this way, albeit through higher taxes.

Since most of the added cost to Medicare and Medicaid will be eliminated because of the number of people who would have otherwise been covered by the new federal mandate, there are billions of savings there from future baselines.

But how much?

One other thing to consider is just how much more of this added expected cost will then be re-transferred back to the private sector via the ubiquitous 'cost-shifting' where the costs of covering indigent, uncovered-by-insurance care is 'shifted' onto the costs of the private sector through their insurance plans.

It sure won't be cost-shifted to Medicare since the writers of this legislation have done about as much to insure that reimbursement rates to doctors who still will see Medicare patients will be slashed to the bone.  Plus, Medicare is broke today so it can't assume any more costs period.

We have taken a look at past CBO analyses and reports and come up with this range of outcomes:

Repeal of the mandate could increase the deficit by over $200 billion over the next 10 years and it could decrease the deficit by $200 billion over the next 10 years. Here are both of them. CBO1 and CBO2.  See for yourself.

Here's a chart prepared by CBO detailing the cash-flows of possible repeal of the mandate:

Table 4. Comparison of the Estimated Effects of Enactment and Repeal of PPACA and the Provisions of the Reconciliation Act Related to Health Care

Effects on the Federal Deficit 
(Billions of dollars)  Effects of Enactment           Effect of Repeal
2010-2019  2012-2019     2012-2019  2012-2021
Insurance Coverage Provisions
Gross Effect  938 931 -934 -1,390
Net Effect  788 778 -733 -1,042
Other Provisions Affecting Direct Spending  -492 -498 477 732
Other Provisions Affecting Revenues  -420 -412 376 520
Net Increase or Decrease (-) in the Deficit -124 -132 119 210
Sources: Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation.
Notes: Estimates for the effect of enactment of PPACA and the Reconciliation Act are from the cost estimate released in March

So when the momentous Supreme Court decision is handed down this Thursday, and the talking heads on both sides will try to make you think it is the moral equivalent of Brown v Board of Education in terms of national importance, just think to yourself:  'What does this all really mean to me anyways?'

Because we have not even touched the heart or the root of any of these medical care delivery problems or mechanisms such as tort reform, defensive medical practices, liability insurance reform and perhaps 100 other factors that are driving the cost of medicine up at 3 times the rate of general inflation in the economy.

That is what you'll be voting on this fall:  'Who can and will address the real costs of our medical system in America today?'

We already know where President Obama is coming from.  What will the alternative be from Mitt Romney and the GOP?

Or the rising Independents across the nation?

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Monday, June 18, 2012

'Mr. President: The Economy (In the Rest of the Nation) Is Not 'Just Fine'!'

We just returned from Washington DC where we were helping our son move into a new place as he starts his residency at Georgetown University.

As we drove around Washington and Northern Virginia, we were struck by two things:

1) The traffic. (It has gotten worse. Unbelievably so)
2) There were hardly any 'For Sale' or 'For Lease' signs on boarded-up buildings and businesses.


We started counting them as we waded through the traffic on Wisconsin and M Streets and steered clear of the hordes of people lining up to go into shops such as the Georgetown Cupcake store where they had police monitoring the lines so they would not get run over by on-coming traffic in those tiny side streets.

We came up with maybe 3 'For Lease' signs in all of Washington or Georgetown.

We saw 3 of them in one small corner of a strip mall in Charlotte alone when we returned late last night.

What in the Sam Hill is going on?

We now fully understand why President Obama 'confidently' confirmed to the nation recently that 'the private sector is doing fine' in his press conference that caused him so much grief.

As President Obama drives around Washington and Georgetown and probably Hollywood for his fundraisers, he probably doesn't see any 'For Lease' or 'For Sale' signs popping up all over the place like daisies.

There is a veritable economic boom going on in the Washington DC area!

And why not? The economic stimulus was mostly for more government services which leads to more government spending, contracts and ancillary services such as legal, consulting and accounting work, all of which Washington has in spades.

We saw one beautiful home in Georgetown that was for sale for '$202....' which may have been the phone number on the sign come to think about it. But you could tell it was expensive. And would probably sell for more than the listing price in that government-spending fueled economy up there.

Nothing is wrong with a government job.  We had one for 12 years on Capitol Hill. We know tons of people who do great work as soldiers, military personnel, accountants at the Pentagon and scientists and researchers at the NIH who do it because they like being 'public servants' in the truest sense of the word and have always done it in order to serve the greater good of our nation.

Can we really and truly and honestly expect to be able to resuscitate the entire moribund American economy by pumping in more stimulus money through government contracts in every area of the nation so that we can all live as well as the people in Washington, DC, Georgetown and Northern Virginia seem to be doing right now?

40% of which is borrowed from the Chinese as part of the fastest expansion of federal debt in American history since WWII. What happens when that dries up?

We saw a great HBO movie recently about the economic meltdown on Wall Street that led to this mess, 'Too Big To Fail' (you need to see it as well). One scene showed the Chinese treasury minister lecturing then-US Treasury Secretary Hank Paulson about the dangers of having excessive foreign debt as he mentioned the possibility that Russia and China were thinking about dumping hundreds of billions of their bond holdings in Fannie Mae and Freddie Mac on the market one random day.

Pretty scary to contemplate.

We don't have room here to fully unwind the cash flows as they move from government contract to consultant to lawyer to accountant to contract manager to the workers on any particular infrastructure project around the nation.

It appears to be 'working' in Washington DC,. Georgetown and Northern Virginia, at least temporarily.

What happens to all of this economic activity though when a new Administration or Congress comes in to clamp down on federal spending and all these contracts disappear into thin air? (Don't laugh. It could happen one day you know. Probably under a new political party that erupts out of this tsunami of dissatisfaction that is building against both major political parties right now)

It ain't working to jump-start the rest of the national economy, Mr. President. Things out here just 'ain't fine' no matter what you might see everyday around the White House. And there is no amount of tax money that can be raised from the pockets of hard-working Americans that is large enough to do the same thing in Kalamazoo, Michigan and every other Main Street, USA as what has been done in Washington DC.

Only full restoration of confidence in the Executive in the White House and in the US Congress to do 'the right things' on fiscal and economic policy will trigger the magical 'invisible hand' that Adam Smith talked about to 'arouse the animal spirits' which drive people to take economic risks and try to make money for themselves and their families.

This will lead to the creative job creation we all need and so desperately want to see in America today.

Will President Obama and Congress let us have it again...or do we have to wait another four years to wait, wonder and worry about our economic well-being?

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Monday, June 11, 2012

Here's How to Cut Government Spending to 15% of GDP...Overnight

Reform SS and Medicare.


Make them analogous to 401(k) plans or defined contribution programs in the private sector.

Make them live up to the 'truest' definition of the words 'trust fund' just like we want every banker to do nowadays post-economic meltdown.  Make them the 'true' trust funds that every politician on both sides of the aisle who have done absolutely nothing to fundamentally reform them have claimed them to be over these past 52 (Medicare) to 78 years (SS).

You would immediately reduce the 'share' of federal spending relative to the size of the American economy to 15% or less.  When the economy recovers, it could fall as low as 10%.

Now wouldn't that be special?

Let's think about it together.

Social Security alone accounts for about 5% of GDP today.  Medicare/Medicaid combined account for another 5%+ of GDP and is expanding quickly.

Both represent the largest portions of the federal government and they are only going to grow and consume more and more tax dollars each and every year going forward as the huge glut of Boomers retire.

After all, both of them 'supposedly' have 'trust funds' into which payroll taxes are deposited by each and every person and then taken out when that person retires and makes a claim on 'their' Social Security and Medicare 'investments'.

Why not just fulfill the promises of politicians ever since FDR and LBJ and go whole hog and make both SS and Medicare 'true' trust funds, off-budget and fully vested for each and every American worker?

If Bernie Madoff got sentenced to serve 150 years for swindling thousands of folks with his Ponzi schemes, then what sort of sentence should every politician serve for deliberately misleading hundreds of millions of Americans over the past 78 years from the truth about both the Social Security and Medicare 'trust funds' in 'there are none'?

How about '16 trillion years in prison' just to acknowledge the fact that they also managed to run up a huge debt at the same time they were deliberately misleading the public on the 'trust funds' (sic)?

Had we Americans screwed up the political courage in 1980 as the people in Chile did and converted to a market-based plan on Social Security at least, every Boomer would be retiring now with a substantial next egg plus a one-time cash benefit of perhaps $100,000 or more on which to live comfortably in retirement.

Instead, now you are 'looking forward' to about $1700/month in SS benefits.

There.  Don't you feel better about that?  That is the government 'taking care of you' instead of letting you put your money into the market and seeing what the free enterprise system can return to you over the course of a 45-year working career.

Assuming we had converted to a 401(k) type of defined contribution model for SS in 1980, all of the Boomers would be retiring  in far, far better shape than they will today.  Close to 50% of them will retire with hardly any other savings or pensions other than what they will receive in SS benefits so we can't just cut and run and leave them on the streets begging for food on the corners.

But not only would converting SS into a true trust fund off-budget be better for the US citizens, it would also  'lower' the federal government share of GDP by close to 5%.

Same with Medicare.

Instead of the confusing and misleading 'trust funds' (sic) which are supposed to fund Part A, Part B, Part D and soon to be Parts E,F,G,H,I,J,K,L,M,N,O,P,Q,R,S,T,U,V,W,X,Y and Z under the Obama health care expansion mandates (unless the Supreme Court rules otherwise, that is), we can and should move all health care in the federal government to a catastrophic health care insurance plan that can be fully funded for people below the poverty line and then scaled down as income and wealth assets increase.

We might never get Medicare fully 'off-budget' that way but we would most certainly get Warren Buffett and Bill Gates and every other well-off to very well-off citizen off the federal assistance rolls where even the manual laborer working hard in the hot sun every day 'subsidizes' them with his payroll tax contribution of 1.45% of every dollar he earns.

There is no reason on God's green earth why such a minimum-wage hard working worker needs to be paying $20 every other week in Medicare payroll taxes to subsidize the Medicare Part A and B benefits of anyone in any income category above him.

That just isn't ethical or it?

Neither is claiming that SS and Medicare are 'trust funds' (sic) when in reality they are nothing more than the transfer of funds from the working population to the retired population.

It is time to reform both programs and make them stand alone on their merits and individual funding mechanisms.

It would also 'shrink' the size of government back down way below where it has been for the past 40 years.

Wouldn't that make advocates of smaller limited government based on free enterprise and capitalism happy?

Thursday, June 7, 2012

Why Are Liberals Considered 'Leftists' and Conservatives Considered 'Right-Wingers'?

Doesn't it strike you as 'odd' how everyone seems to be calling everyone else certain names in the political world nowadays....but no one seems to know what they are or what these labels mean anymore?

'Here's a simple definition of ideology:  'A set of beliefs about the proper order of society and how it can be achieved.' 
And here's the most basic of all ideological questions: Preserve the present order, or change it?
At the French Assembly of 1789, the delegates who favored preservation sat on the right side of the chamber, while those who favored change sat on the left.  
The terms right and left have stood for conservatism and liberalism ever since.'*
Presumably after the French Revolution, all those who stood for 'conserving' the monarchial reign were guillotined while the ones who won the right to 'change it' got to do all the guillotining but that is another story for another time.

We bet you think you are a 'true blue believer' in large, more compassionate government.  Or you believe that the best government is that which governs the least as did Thomas Jefferson and James Madison. So you are either a 'rightie' who thinks you are always right on all the issues or a 'leftie' who thinks you are always right on all the issues as well.

We think we can prove you wrong with a couple of simple little tests:

'Are you for more or less government spending when it comes to agriculture programs?  Defense? Education? Transportation? Health Care? Social Security? Medicare?'

'Are you for or against more government oversight into the sensitive personal areas of privacy and probity such as abortion, gay rights, illegal immigration or gun control?

You see?  We can see some people nodding: 'yes', yes', 'no', 'oh, heck no!' as they go through each line.

Hardly anyone we have ever met has been for less government spending 100% across the board. Including tax breaks for corporations or targeted industries.  Any time you cut taxes for one small part of the economy or society, that is 'just like spending more federal taxpayer money' on that program.  6 of one; half-dozen of the other as they say in the Joint Taxation Committee on Capitol Hill.

'Tax expenditures' they call them.

We can't find anyone who is 100% for more government spending across-the-board either, truth be told.  Liberals have a tough time swallowing more defense spending while conservatives choke on spending more for domestic programs.

And since liberals as well as conservatives seem to have great difficulty proposing higher taxes to pay for their expansive use of the government till, there is no word in the federal budget vocabulary to make the analogous comparison that 'higher taxes are like less federal spending'.

Think of higher tax revenues as the opposite of 'tax expenditures' in the budget.  More like 'black holes of taxation'...they take in every tax dollar in sight and you really never see the impact of them ever again, do you?

Same with liberals and conservatives on the social issues where they tend to flip-flop on their 'unlimited' versus 'limited' government intrusion views.  The same liberals who want more federal involvement (spending) to help the poor also want less federal intrusion into what they consider completely private issues ranging from abortion decisions to gay marriage to smoking marijuana.

The same conservatives who want less federal spending except in defense also say they want limited government except when it comes to setting norms and rules and regulations for society on the touchy social issues named above.

So, what is it?  Are you a big-government liberal or a small-government conservative?  100% of the time.

Would you sit on the 'right side' of the US Congress today and scream out, like the French Assembly right-wingers did in 1789:  'We want to preserve the current order in the United States because it seems to be working so well lately!'? (Obama supporters in 2012)

Or would you be a crazy left-winger screaming out for rebellion and revolution and calling for 'change the hope, please!' because things have not gone so swimmingly over the past several years? (Obama opponents in 2012)

Be honest.

'Plus ça change, plus c'est la même chose' as the old French saying goes.  

'The more it changes, the more it is the same thing'.

* From 'The Righteous Mind: Why Good People Are Divided by Politics and Religion' by Jonathan Haidt, p.277

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Saturday, June 2, 2012

The Evolutionary Health Insurance System We Need In America Today

This is a direct lift from a very good book you should consider reading very soon, 'The Righteous Mind: Why Good People Are Divided by Politics and Religion'  by UVa professor of social psychology specializing in evolutionary psychology, Jonathan Haidt. 

Maybe we do have a chance of 'evolving' out of this current ideological impasse that has frozen our national politics into doing nothing of any consequence over our debt situation for these past 12 years now and counting. 

We have written about this issue before (see 'Gutter Insurance') and it has to do with the complete absurdity of our current health 'insurance' system, either current or post-Obama health care legislation. 

 We don't have a 'health insurance' system in America today. We have a pre-paid 'health payment' system in America. The massive federal expansion to take full root in 2014 as passed by then-Speaker Nancy Pelosi and Senate Majority Leader Harry Reid and signed into law by President Obama in 2010 only exacerbates the current problematic system. 

What we all 'want' and really and truly 'need' in America for the 21st century is a national plan administered by the states that will cover the 'catastrophic' costs of every citizen. 

We don't buy car insurance (mandated by each and every state if you want to drive a car legally) to cover the cost of every oil change and lube job. We buy car insurance to cover the costs of the damages to the car when damaged in an accident and to cover the liability in the case of it being your fault. 

Not the same with the current health insurance market in America or Medicare and Medicaid for that matter.  Virtually every health 'payment fee for service' plan in America covers everything from the smallest hangnail removal to the catastrophic costs of a head injury or illness due to diabetes, heat attack, cancer and stroke. 

That is exactly like buying car insurance to pay for every oil change, lube job and touch-up paint to the exterior. Imagine just how expensive car insurance would be with such add-on features. It would be ridiculous. 

Same with health insurance.  Covering everyone in the nation purely for catastrophic cases would cost on average $350/month per person from age 18 to 90 according to some actuaries with whom we correspond. 

The chances of an 18-year old having catastrophic costs are infinitesimal to the chances of an 80-year old entering the hospital for a long-term illness. But any insurance plan would plan on having the younger cohorts in effect 'subsidize' the older cohorts and setting up such a national plan administered by the states would do just that. 

See what Professor Haidt has to say about this situation on pages 303-304 when he references a fine article by David Goldhill, a Democrat businessman, published in The Atlantic in 2009 titled: 'How American Health Care Killed My Father':
'One of his main points was the absurdity of using insurance to pay for routine purchases.  
Normally we buy insurance to cover the risk of a catastrophic loss.  We enter an insurance pool with other people to spread the risk around, and we hope to never collect a penny.  We handle routine expenses ourselves, seeking the highest quality for the lowest price.  We would never file a claim on our car insurance for an oil change.
The next time you go to the supermarket, look closely at a can of peas.  Think about all the work that went into it--the farmers, truckers, and supermarket employees, the miners and metal-workers who made the can, -- and think how miraculous it is that you can buy this can for under a dollar.
At every step of the way, competition among suppliers rewarded those whose innovations shaved a penny off the cost of getting that can to you.  If God is commonly thought to have created the world and then arranged it for our benefit, then the free market (and its invisible hand) is a pretty good candidate for being a god.  You can begin to understand why Libertarians sometimes have a quasi-religious faith in free markets.
Now let's do the devil's work and spread chaos throughout the marketplace.  Suppose that one day all prices were removed from all products in the supermarket.  All labels too, beyond a simple description of the contents, so you can't compare products from different companies.
You just take whatever you want, as much as you want, and you bring it up to the cash register.  The checkout clerk scans in your food insurance card and helps you fill out your itemized claim.  You pay a flat fee of $10 and go home with your groceries.
A month later, you get a bill informing you that your food insurance company will pay the supermarket for most of the remaining cost, but you'll have to send in a check for an additional $15.  It might sound like a bargain to get a cartload of food for $25, but you are really paying your grocery bill every month when you (or your company) fork over $2000 for your food insurance premium.
Under such a system, there is little incentive for anyone to find innovative ways to reduce the cost of food or increase its quality.  The supermarkets get paid by the insurers, and the insurers get their premiums from you.  The cost of food insurance begins to rise as supermarkets stock only foods that net them the highest insurance payments, not the foods that deliver value to you.
As the cost of food rises, many people can no longer afford it.  Liberals push for a new government program to buy food insurance for the poor and elderly.  But once the government becomes the major purchaser of food, then success in the supermarket and food insurance industries depends primarily on maximizing yield from government payouts.
Before you know it, that can of peas costs the government $30, and all of us are paying 25 percent of our paychecks in taxes just to cover the cost of buying groceries for each other at hugely inflated costs.
That, says Goldhill, is what we've done to ourselves.  As long as consumers are spared from taking price into account---that is, as long as someone else is always paying for your choices--things will get worse.'
And so on.  Haidt goes on to explain how the market supply and demand forces have conspired to drive DOWN the cost of LASIK eye surgery by close to 80% since it was first introduced.  The procedure is rarely covered by insurance and services are delivered on a cash basis.

As we continue to sort through this desultory economy (made only worse by yesterday's desultory jobs report coupled with gloomy economic forecasts in the EU, China and Japan), maybe now is the time not only to be thinking about who our next President to lead us out of this crisis should be but what sort of economy and society we want to live in going forward.

Is it one directed from the top-down in Washington and the state capitals? Or one where every individual gets to makes their own economic decisions and the providers of such services even in health care have to compete with one another to see who can deliver the best service at the lowest possible cost?

Which is the America in which you want to live out the rest of your life and in which you want your children to grow up and live long and prosper (with apologies to Mr. Spock and the Vulcans)?

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