How you will be cheated out of your health care insurance

We begin with these, indisputable facts:

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The federal government has the infinite power to create laws, and these laws have the infinite ability to create dollars. The government cannot run short of laws or dollars.

A. Federal laws are created from thin air by the federal government. The government creates any, and as many, laws it wants, so long as those laws are in keeping with the Constitution, which also was created from thin air by the government.

The federal government never unintentionally can run short of laws. It has the infinite ability to create laws.

B. Among the many laws the government created from thin air are the laws that created the U.S. sovereign currency: The U.S. dollar.

Initially, the government’s laws created as many dollars as the government wanted, and gave them the value the government wanted.

This infinite ability to create any number of dollars and to specify their value is known as “Monetary Sovereignty.”

The U.S. government is sovereign over the dollar.

This infinite ability to create dollars does not rely on tax collections. Even if the government collected zero taxes, it could continue creating dollars forever.

The federal government never unintentionally can run short of dollars or laws.

Similarly, the federal government has no need to borrow dollars, and indeed the government does not borrow dollars. It pays all its bills by creating new dollars, ad hoc.

The purpose of federal taxes is not to supply the government with dollars, but rather to control the economy by taxing what the government wishes to discourage, and giving tax breaks to what the government wishes to encourage.

C. Having absolute control over all aspects of the U.S. dollar, the federal government has absolute control over the value of the U.S. dollar, i.e. inflation. The government has the power to change the value of the dollar at will, a power it has exercised many times over the years.

Thus, the federal government has the absolute power to control inflation.

Keeping the above facts in mind, we can review the following article that describes how and why the federal government will cheat you out of your health care insurance.

Committee for a Responsible Federal Budget (CRFB)
Two Ways to Reduce Prescription Drug Costs
July 26, 2021

High and rising prescription drug costs are contributing to the budgetary pressure faced by the federal government. Also, a significant number of patients face very high out-of-pocket costs.

Interesting choice of words: “budgetary pressure.” The government not only creates infinite dollars from thin air; it also creates infinite budgets from thin air. And it changes those budgets at will.

So, yes, the cost of drugs easily could exceed the budget, but since the government never unintentionally can run short of dollars, there is no financial pressure.

Any budgetary pressure the government may feel is self-inflicted and essentially meaningless. (Visualize Jeff Bezos budgeting $5,000 to buy a TV set, and discovering the TV set costs $5,001. He may feel budgetary pressure, but will not feel financial pressure.)

Our two new briefs focus on options to reduce prescription drug prices. They include:

Medicare Part B could inject price competition into drug classes that have clinically comparable options but wide price variation – blunting the advantage that higher-priced drugs have under the current formula.

Injecting Price Competition into Medicare Part B Drugs

Currently, Medicare Part B, which covers outpatient physician services, pays for physician-administered drugs by reimbursing physicians the average cost for each specific drug plus a 6 percent add-on percentage of that cost. This arrangement creates misaligned incentives that blunt price competition and advantage higher-priced drugs – especially within drug classes that have clinically comparable options but a wide variation in prices.

This policy option looks at implementing “clinically comparable drug pricing,” where Medicare payments for physician-administered drugs would be set at a single price for groups of drugs within the same therapeutic class. That price would be set at the weighted average of prices manufacturers charge for each of the clinically comparable drugs.

This reform should encourage physicians to administer lower cost drugs and manufacturers to lower prices to maintain market share. The policy would reduce Medicare costs and would likely result in savings for Medicare Advantage plans and commercial payers.

The federal government pays its bills by creating dollars ad hoc. Thus, the government legitimately can be said to have infinite dollars. Federal taxes do not fund federal spending. Tax dollars are destroyed upon receipt by the Treasury.

So, there is no economic value to price competition. In fact, each penny the federal government sends into the economy is economically stimulative, at no cost to anyone.

However, the CRFB seems to claim that physicians make more money when physician-administered drugs are priced higher, and this can influence the choice of drugs. I am not sure how prevalent this situation is, but in any event, there is no fair way to prevent it.

The “weighted average” approach can penalize patients by making some of the more effective, costlier-to-produce drugs unavailable.

As a rule, price competition shifts costs from the government to the private sector, which penalizes the economy as a whole, while also penalizing drug research and development.

Over the next decade (2021-2030), implementing “clinically comparable drug pricing” could:

Reduce total (gross) Medicare spending by at least $122 billion in just three drug classes.
That includes $56 billion of savings to fee-for-service Medicare, $37 billion in lower beneficiary premiums and cost sharing, and $29 billion in savings for the Medicare Advantage program.

In more accurate words, implementing “clinically comparable drug pricing” could reduce the federal stimulus to economic growth by $122 billion in just three drug classes, while having no financial benefits for the private sector..

The policy would also generate private sector spillover savings. For example, in the rheumatoid arthritis class of drugs, the policy could reduce commercial drug costs by at least $21 billion.

Actually, there could be zero private sector spillover savings, if the government simply would pay, but the pharmaceutical industry would receive $21 billion less from the government.

Limiting Evergreening for Name-Brand Prescription Drugs
To encourage medical innovation, the FDA grants temporary market exclusivities to new name-brand drugs. These exclusivities prohibit generic drug competitors’ access to the market for a limited period.

However, drug manufacturers are often able to take advantage of the current rules, using “evergreening” strategies to extend their exclusivity periods and either delay generic drug market entry or limit the number of patients who switch to a new generic.

One evergreening tactic manufacturers employ involves introducing a new “line” or version of their drug shortly before a generic competitor is released.

This new line can be granted its own exclusivity period. For example, a manufacturer may introduce an extended-release formulation just before a generic of the original immediate-release formulation enters the market. This can allow a brand manufacturer to maintain market share in the face of generic competition – increasing its profits and increasing payer and patient costs.

New FDA exclusivity rules could lead to meaningful savings for consumers, commercial insurers, and government payers. The policy change could also speed up the market entry of brand extended-release and other reformulations, providing clinical benefits to patients.

Under a comprehensive, no-deductible, Medicare-for-All plan, there would be no cost for consumers, and government payers (who have infinite dollars) need no dollar savings. More stimulus dollars would be pumped into the economy by federal spending.

As for commercial insurers, they probably would go the way of the manufacturers of street corner phone booths, horse-drawn wagons, Betamax, and audio cassettes.  Medicare for All could offer better service at no cost (and no need to ask for permission to have surgery).

Over the next decade (2021-2030), this policy could:

Reduce federal deficits by at least $10 billion.

I.e. reduce federal economic growth and job stimulus by $10 billion

Save Medicare Part D $7 billion in drug costs and Medicare beneficiaries $4 billion in lower premiums and cost sharing.

I.e., reduce federal economic growth stimulus by $7 billion. If Medicare for All were free, as it should be, premiums would be cut hundreds of billions of dollars, and there would be no need for cost-sharing.

Reduce federal and state Medicaid drug spending.

Medicare for all would eliminate the need for federal and state Medicaid drug spending.

Reduce private sector drug costs by $9 billion.

There is no economic need for the private sector to spend anything for drugs.

In Summary:
Incredibly, the CRFB seems to prefer saving money for the infinitely endowed federal government at the expense of the money-deprived.

The CRFB suggestions are based on these myths:

  1. Federal finances are like private finances
  2. The federal government is funded by federal taxes
  3. The federal government can run short of dollars.

In truth, the federal government has infinite dollars available, has no need for tax dollars, and never can run short of its own sovereign currency. It needs to run deficits in order to grow the economy and prevent recessions, and it has absolute control over every aspect of the U.S. dollar including inflation.

Spending by the rich encourages the media, the politicians, and the economists to promulgate these myths. The purpose is to widen the income/wealth/power Gaps between the richer and the poorer, aka Gap Psychology.

Here are the CRFB notables, whose mission in life seems to be to help the rich become richer by widening the Gap between the rich and the rest. They have been quite successful.


Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell
Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell



The most important problems in economics involve:

  1. Monetary Sovereignty describes money creation and destruction.
  2. Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics. Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps:

Ten Steps To Prosperity:

  1. Eliminate FICA
  2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone
  3. Social Security for all
  4. Free education (including post-grad) for everyone
  5. Salary for attending school
  6. Eliminate federal taxes on business
  7. Increase the standard income tax deduction, annually. 
  8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.
  9. Federal ownership of all banks
  10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

The Ten Steps will grow the economy and narrow the income/wealth/power Gap between the rich and the rest.


3 thoughts on “How you will be cheated out of your health care insurance

  1. All you say is true. But the CFRB and everyone else earning a great living wants to leave the system as it is.They’re hoping everything can keep going on an on forever without major change. Rulers won’t budge an inch.
    Hate to be so gloom and doom, but we’re all on a collision course with reality. The only thing that must be and can be created and destroyed is nonreality.


  2. I don’t see how they can win. Opposing innovation is competing against God. All is changing. I can’t help thinking of the little Dutch boy with his finger in the dike.


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