Tag: health care

–Et tu, Wall Street Journal?

An alternative to popular faith

The average person doesn’t understand the difference between federal government finances, state government finances and personal finances. The same could be said of most politicians and most editorial writers.

But one expects more of the Wall Street Journal, whose editors are, after all, immersed in finance all day long. So it was saddening to read WSJ’s March 1, 2010 editorial titled “Back to the ObamaCare Future.”

The editorial begins, “Natural experiments are rare in politics, but few are as instructive for ObamaCare that Massachusetts set in motion in 2006.” Do you detect the problem? The WSJ thinks a state-run, health-care program provides a learning template for a federally run program, despite the crucial differences in ability to fund programs. (States’ access to money is limited; the federal government’s access is unlimited.)

The WSJ properly criticizes Governor Deval Patrick for wanting to set hospital and doctor rates. Why does the governor want to do that? So he can cut the rates. You see, the Massachusetts program is running a deficit (of course), so rather than committing political suicide by raising taxes, the governor wants to assure worse health care by discouraging doctors and hospitals from operating profitably in his fair state.

The editorial continues, “The administered prices of Medicare and Medicaid already shift costs to private patients, while below-cost reimbursement creates balance-sheet havoc among providers.” Yes, that’s right. Medicare pays too little, which forces our most talented doctors into boutique programs, where annual fees run anywhere from $50 to $5,000 (or more?) Eventually all the best doctors will be unaffordable to the very people Medicare is supposed to help. And smaller hospitals will disappear. This because of federal price controls.

The editorial continues, “It doesn’t even count as irony that former Governor Mitt Romney (like President Obama) sold this plan as a way to control spending.” Sure, states need to control costs, but why doesn’t President Obama understand the difference between state spending and federal spending?

Let’s see if we can clarify the difference: Taxpayers pay for state spending. Taxpayers do not pay for federal spending. Can I make it any simpler?

Because states do not have the power to create unlimited amounts of money, they must rely on taxes and borrowing. Eventually, the ability to borrow runs out, and everything falls on the taxpayer. Ultimately, there is a direct relationship between state taxes and state spending.

The federal government does have the power to create unlimited amounts of money, and so does not need to rely on taxes. It does not even need to borrow (See: https://rodgermmitchell.wordpress.com/2009/09/10/it-isnt-taxpayers-money/)

The biggest problem with Medicare (and Social Security, for that matter) is that it’s limited by FICA collections. Medicare is a version of federal price controls, which WSJ properly criticizes. Government price controls always are damaging. As WSJ said, “. . . hospital rate setting in the 1970s and 1980s . . . didn’t control costs . . . and it killed people.”

If government medical rate setting doesn’t work, and in fact kills people, please tell me again how the universal health care plan is designed to save money.

And if the federal government has the unlimited ability to create money, without ever charging the taxpayer, please tell me again why the universal health care plan is designed to save money.

Oh, the unnecessary damage the debt hawks have caused — not just financial damage, but human damage — and all for refusing to acknowledge that federal deficits not only are beneficial, but necessary for a growing economy.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

–Improving health care, Obama style

An alternative to popular faith

Today, 2/18/10, the Obama plan is to improve America’s health care by cutting Medicare payments to doctors and hospitals. This is like improving America’s education by cutting teachers’ salaries.

So, who should pay for universal health care? The only one who can afford it: The federal government. How? Via deficit spending.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

–The cost of ignorance

An alternative to popular faith
        Ignorance is expensive. Government ignorance is especially costly.
        Here is just one of many, many projects prevented because of Congressional ignorance about money and federal finances. It may not be as immediately harmful as the lack of universal health care, a fully funded Social Security and the elimination of an expensive, byzantine tax system; it’s a terrible shame, nevertheless:

Cost-cutting NASA eyes three cheap space missions

WASHINGTON (AFP) – NASA has named low-cost missions to Venus, the moon and an asteroid on a shortlist to become its latest space adventure, as the US agency faces astronomical political pressure to cut costs.
        The proposed probes — to the surface of Venus, the moon and to bring back a piece of a primitive asteroid — must all come with a price tag of less than 650 million dollars, a fraction of the cost of manned space flight.
        The agency, in a statement Tuesday, said the winner of the competition will be announced in mid-2011, with the project to launch by the end of 2018.
        NASA has faced growing pressure to cut its budget as the US government’s debt soars and as the United States buckles under the deepest economic crisis since the Great Depression of the 1930s.
        The agency has also seen dwindling political support, with its White House and congressional paymasters reluctant to fund the type of expensive manned space exploration that saw the agency put 12 men on the moon.
        A plan to return humans to the moon by 2020 came under withering criticism from a panel tasked by US President Barack Obama to look into the future of space exploration, as the project’s initial budget of 28 billion dollars exploded past 44 billion.
        Against this backdrop, the agency is asking scientists to come up with low-cost ideas to further space exploration.
        One project led by the University of Colorado’s Larry Esposito would send a explorer to Earth’s sister planet, Venus.
        The explorer would descend through the carbon dioxide-rich Venusian atmosphere, landing on the planet’s surface in the hope of gathering evidence that could explain why it is so different from Earth, despite being close in size and space.
        A second project would place a lander on the moon’s southern pole, collecting rocks that are thought to come from the lunar core, offering an insight into how the moon and Earth developed.
        Another project would travel to an asteroid to snatch around two ounces (56 grams) of material before returning the payload to Earth for extensive tests.
        The winner will be the third in NASA’s cost-saving New Frontiers program, which was launched in 2006.
        The first mission will fly by Pluto and its moon Charon in 2015 and then a target in the Kuiper belt, at the outer reaches of the Solar System.
        “These three proposals provide the best science value among eight submitted to NASA this year,” said NASA’s Ed Weiler.
        “These are projects that inspire and excite young scientists, engineers and the public.”

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

–Does your money belong to the government?

An alternative to popular faith

The November 23, 2009 New Yorker contained an article by James Surowiecki, titled “The Debt Economy.” He claims what he calls “tax breaks,” adversely skew the economy and cause people not to “make decisions based on economic fundamentals (but) on tax considerations.”

He gives the example of corporate interest payments vs. dividends. The former are tax deductible “tax breaks”; the later are not, which provides a “debt bias” (his words) to the economy.

Mr. Surowiecki disparages “tax breaks” as being “unnecessary” and having “nonexistent social benefits.” His solution: Eliminate tax breaks.

Consider health insurance. The government encourages companies to provide it by allowing payments to be tax deductible for the companies, and not taxable to the employees – i.e., using before-tax dollars. In contrast, people who purchase their own health insurance must use after-tax dollars. In Mr. Surowiecki’s world, the economy would benefit from eliminating the “tax break” by taxing employees’ health benefits.

This solution suggests taxes are the norm, and tax breaks are departures from that norm. That is, all the money you earn belongs to the government, and only an aberration or “break,” allows you to keep some of it.

I disagree. It is taxes, not “tax breaks,” that skew our economy, forcing decisions away from economic fundamentals. Eliminate taxes and the economy would be steered by the economic fundamentals Mr. Surowiecki craves. All taxes depart from these economic fundamentals. There are no innocuous taxes. They all make a difference. So the very act of imposing a tax, any tax, will skew the economy.

Further, there are no “fair” taxes. You can read a one-page article on this subject at: http://rodgermitchell.com/FairTaxes.html

Tax breaks are less harmful than taxes, not only because taxes skew the economy, but because all taxes remove money from the economy, thereby reducing economic growth.

Taxes are not the norm. Your money does not belong to the government. When deciding whether to tax debt or to “untax” non-debt, the economy would benefit from the later.

*Faith is belief without evidence. Science is belief from evidence.