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Today is August 22, 2009 and the Republicans are opposing the Health Care reform on the grounds that a public option will create a situation where private insurance will no longer be available with in a few years. I don’t know, that maybe true but it will take awhile for the private sector to go away.
The Democrats don’t want reform without a public option (read Government run ala Medicare) but that will not control cost. Medicare is effectively bankrupt. Cost control and Government to my mind are an oxymoron. Princess Nancy (Pelosi) has said that the House WILL NOT pass anything that doesn’t include the public option while the President seems willing to accept half a loaf just to move this ahead.
Neither party is talking about TORT reform to basically put a muzzle on the law suits that have driven malpractice insurance to the point that some Doctors are leaving the profession, making it hard to get health care at any price. For example there is only one Cardiologist listed in Jacksonville (a city of 76,000) and eight in Wilmington (a city of 95000).
Wilmington is a better place to live, I believe. But what about Minot, North Dakota or Missoula Montana? How many cardiologists are there in those places? (Three and Seven if you really want to know and the population is 36600 and 107,000 respectively).
If Doctors already have concluded that lifestyle is important to them and their families, then trying to mandate cost structures will simply reduce the number of Doctors. As the current Doctors reach the point of retirement, will there be replacements in the ready? How many of our Doctors today are not American by birth? In no way am I suggesting that they are not as great as American born, but they represent a brain drain on their country of origin. As those countries (mostly third world emerging countries) begin to offer a similar lifestyle to the USA then the young Doctors may decide to return to their homeland after training leaving us short handed at best.
It is simple economics. If I were smart enough to make it through med school I’m probably smart enough to do almost anything for a career. If the Government is going to dictate what I can and can’t do for a patient, what I can and can’t charge for services I may seriously question spending several hundred thousand dollars on the education to become a doctor. Maybe I’d become an engineer or an electronics wiz kid and develop some new high tech gizmo instead. These could be the “unintended consequences” of the public option. Of course, Nancy and her crew could care less. They have the Congressional Health Care Plan which assures them of the best of everything, AND it is there for them after retirement too. So voting them out of office doesn’t hurt them one bit from the health care perspective.
The economy is showing signs of bottoming. Housing re-sales finally went plus to last year in July selling at an annualized rate of 5.24 million units. This is the highest rate since August 2007. However it was in part due to the sale of many foreclosed properties at ridiculous prices. It is nonetheless a significant positive move and it makes a dot above the “0” line. If we can string a couple more dots together above the line then we will have a trend, regardless how humble. The Philadelphia Fed Index and the Empire State Index have both been trending upward all year but only crossed the “0” line into positive territory in July. Again one dot doesn’t a trend make but both indexes have established solid upward trends just finally going positive.
Some of the headwinds to a robust recovery are the continuously skyrocketing debt, the continuous impending layoff announcements numbering between 75,000 and 100,000 per month. This is shown to be just the tip of the iceberg as first time unemployment applications continue in the 560,000 range each week. This is improving, it had hit a peak of 669,000 the fourth week of March.
The progress is fragile and could be halted by any number of things. Confidence in this country’s economy is weak, Consumer Confidence is well below 50% sort of the “0” point between contraction and expansion. Consumer sentiment, which is highly correlated to spending continues to trend downward. People are afraid. They are afraid of losing their jobs, afraid that their home values will continue to plunge, afraid that their retirement nest egg will continue to be eviscerated. They are saving their money to help them through any tough times that come their way. Smart, yet self defeating. Since our economy is 66-70% consumer goods driven, the increase in savings has a negative impact on the largest single sector in the economy, slowing recovery and endangering their jobs.
As I tell my economics students, check out the opening line of the Constitution. It says “ We the People” . That is all there is, just us. You can tax business all you want, they raise prices and we pay (the tax. You can tax the rich, but they will find ways to earn that money in the lowest tax environment, even if that is the Cayman Islands or Bermuda or wherever. We the people live in a dynamic environment. Nothing is locked in forever. This is a free country. We are free to leave or free to stay. Most of us descended from ancestors who came here from some place. They came because they saw opportunity. Let us not have our smartest, most productive citizens searching for that opportunity elsewhere.
The top wage earners, the often maligned top 1% of Americans, pay more than 40% of all the taxes collected. The next 24% (making up the top 25% of wage earners) pay 46%. So that the top 25% together pay more than 86% of all the taxes collected to run government. The rest of the citizenry, (75%) pay the remaining 14% of all the taxes collected with the bottom 50% paying less than 3% of the dollars collected. So for every dollar the government spends (on health care for example) the lowest 50% of the wage earners (all those who earn $32,000 or less per year) as a group contribute 3 cents. The top 1% already pays 40 cents (in taxes in addition to their own health insurance costs). If that seems a little Robinhood-esk to you, you understand the problem. If the top 1% gets smaller who will pay their share? You, me and our kids and grandkids maybe for generations to come. We dare not cause the rich and famous to seek their opportunity else where. Remember the story of the Golden Goose. Let us not be the generation whose greed killed the goose.
