The end of Medicare Sunday, Apr 3 2011 

The debt hawks are to economics as the creationists are to biology. Those, who do not understand Monetary Sovereignty, do not understand economics. If you understand the following, simple statement, you are ahead of most economists, politicians and media writers in America: Our government, being Monetarily Sovereign, has the unlimited ability to create the dollars to pay its bills.
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It’s one thing to call for “smaller federal governement” or for “less federal spending” or for “cost savings” as vague, general, feel-good concepts. It’s quite another to see the actual effects of reduced federal spending.

Consider Medicare. Relative to the real cost of medicine, Medicare payments to doctors and hospitals have gone down. Many people cheer these payment reductions as evidence doctors have been making too much and charging too much, and that the government is trying to be frugal in its payments. And isn’t frugality a good thing?

Here are some excerpts from an April 2nd, 2011 article by Ricardo Alonso-Zaldivar, of the Associated Press.

Every year, thousands of people make a deal with their doctor: I’ll pay you a fixed annual fee, whether or not I need your services, and in return you’ll see me the day I call, remember who I am and what ails me, and give me your undivided attention.

But this arrangement potentially poses a big threat to Medicare and to the new world of medical care envisioned under President Barack Obama’s health overhaul.

The spread of “concierge medicine,” where doctors limit their practice to patients who pay a fee of about $1,500 a year, could drive a wedge among the insured. Eventually, people unable to afford the retainer might find themselves stuck on a lower tier, facing less time with doctors and longer waits.

Doctors are people. Nurses are people. They have personal lives. They have families. While there may be a certain amount of altruism associated with being a medical care giver, ultimately people, particularly the best people, drift toward money. So restricting Medicare payments tends, over time, to reduce the number and quality of people willing to be educated and trained in medicine, or willing to practice, particularly in primary care.

Hospitals are businesses. Potentially more lucrative businesses attract more investors than do less lucrative businesses. So restricting Medicare payments reduces the number of hospitals, and reduces the sophistication of equipment and systems in the remaining hospitals.

Medicare recipients, who account for a big share of patients in doctors’ offices, are the most vulnerable. The program’s financial troubles are causing doctors to reassess their participation. But the impact could be broader because primary care doctors are in short supply and the health law will bring in more than 30 million newly insured patients.
If concierge medicine goes beyond just a thriving niche, it could lead to a kind of insurance caste system.

“What we are looking at is the prospect of a more explicitly tiered system where people with money have a different kind of insurance relationship than most of the middle class, and where Medicare is no longer as universal as we would like it to be,” said John Rother, policy director for AARP.”

As Tea (formerly Republican) Party Patriot member dance about, hoisting their signs, Medicare slowly shows signs of distress. Doctors have begun to opt out of a system they feel is uneconomical and even unfair.

The trend caught the eye of MedPAC, a commission created by Congress that advises lawmakers on Medicare and watches for problems with access. It hired consultants to investigate. Their report, delivered last fall, found listings for 756 concierge doctors nationally, a five-fold increase from the number identified in a 2005 survey by the Government Accountability Office.

The transcript of a meeting last September at which the report was discussed reveals concerns among commission members that Medicare beneficiaries could face sharply reduced access if the trend accelerates. “My worst fear — and I don’t know how realistic it is — is that this is a harbinger of our approaching a tipping point,” said MedPAC chairman Glenn Hackbarth, noting that “there’s too much money” for doctors to pass up. Hackbarth continued: “The nightmare I have — and, again, I don’t know how realistic it is — is that a couple of these things come together, and you could have a quite dramatic erosion in access in a very short time.”

Another commissioner at the meeting, Robert Berenson, called concierge medicine a “canary in the coal mine.” . . . MedPAC’s Hackbarth declined to be interviewed. But Berenson, a physician and policy expert, said “the fact that excellent doctors are doing this suggests we’ve got a problem. The lesson is, if we don’t attend to what is now a relatively small phenomenon, it’s going to blow up.”
When a primary care doctor switches to concierge practice, it means several hundred Medicare beneficiaries must find another provider.

And why is an excellent concept like Medicare being dismantled? Because of the false beliefs our Monetary Sovereign federal government “can’t afford” to support universal health care, or the government is “too big,” or people should learn to “take care of themselves.”

The next time you hear a Tea (formerly Republican) Party Patriot (ironic, isn’t it?) scream their latest chant, “Cut it or shut it,” understand you are witness to the tolling of the Medicare bell – as well as the bell for so many other valuable federal projects. These people might as well be screaming, “Cut the American life style. Make us third world.”

My prediction: Rather than fund Medicare properly, as a Monetarily Sovereign nation easily could do, Congress will attempt to outlaw concierge doctors or add a tax to medical services provided by these doctors. This will exacerbate the problem, as fewer people will enter and remain in the medical profession, but addressing a bad law with a worse law often is Congress’s knee-jerk approach.

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

No nation can tax itself into prosperity, nor grow without money growth.

MONETARY SOVEREIGNTY

–How to fix Medicaid, plus an idea for universal health care. Monday, Mar 21 2011 

The debt hawks are to economics as the creationists are to biology. Those, who do not understand Monetary Sovereignty, do not understand economics. If you understand the following, simple statement, you are ahead of most economists, politicians and media writers in America: Our government, being Monetarily Sovereign, has the unlimited ability to create the dollars to pay its bills.
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Here are excerpts from an article titled, “Medicaid bills settled in a hurry before aid ends,” by Dennis Cauchon, USA TODAY:

State governments are rushing to pay billions of dollars of medical bills before special federal assistance for Medicaid expires July 1.

The “hurry-up-and-pay” effort will put an extra $1 billion or more into the pockets of financially struggling states — and increase the federal deficit by a similar amount.
[…]
The federal stimulus law and a later extension provided states an extra $80 billion in 2009 and 2010 for Medicaid, the nation’s health care program for the lpoor. This was done by reducing the states’ share of the program from a national average of 40% to 28%.
[…]
Because states run the $400 billion a year program — while the federal government reimburses them — states can time payments to maximize the federal share.

Two thoughts: First, why doesn’t our Monetarily Sovereign federal government pay for 100% of Medicaid, instead of asking our monetarily non-sovereign states to pay? Can anyone answer that?

Second, wouldn’t the idea of having states run Medicare as a universal health care program, with the federal government funding it, satisfy the “anti-big-government” people? I know it won’t satisfy the debt-hawk contingent of the Tea (formerly known as “Republican”) party. Nothing short of a depression will satisfy them. But at least federal funding combined with state operation, should remove the fear of big government and so-called “socialism” from universal health care. Then no American would need to do without health care.

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

No nation can tax itself into prosperity, nor grow without money growth.

MONETARY SOVEREIGNTY

–The G7’s backwards thinking about the Japanese yen. Save Japan from its friends. Friday, Mar 18 2011 

The debt hawks are to economics as the creationists are to biology. Those, who do not understand Monetary Sovereignty, do not understand economics. If you understand the following, simple statement, you are ahead of most economists, politicians and media writers in America: Our government, being Monetarily Sovereign, has the unlimited ability to create the dollars to pay its bills.
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Once again, the mainstream economists have things backwards. I recently came across this article:

Is G7 yen intervention a good idea? by MICHAEL SCHUMAN, 3/18/2011
In a highly unusual step, the G7 agreed on Friday morning to coordinate their efforts to control the sharp rise in the Japanese yen. The decision today was prompted by a sudden surge of strength by the yen that by Thursday morning (in Tokyo) had pushed the Japanese currency to a record high against the U.S. dollar. Though the yen had subsequently pulled back a bit, it was still at a level worrying to Japanese policymakers. Japan freaks out when the yen strengthens, because it makes Japanese exports more expensive in international markets and thus can dampen economic growth.

Last week, I posted about why charitable contributions to Japan were meaningless. Now, the economists want to facilitate Japanese exports. Before you read any further, stop and think about this question: What is the purpose of Japanese exporting? The answer is not what you may have been told.

The purpose of Japanese exporting is to import yen. Japan doesn’t want to expend massive amounts of time, energy, labor an raw materials just so they can supply us with cars, computers and television sets. The Japanese are a nice people, but they’re not that generous. No, the sole purpose of expending time, energy, labor and raw materials is to acquire yen.

But, Japan is Monetarily Sovereign. It has the unlimited ability to create its sovereign currency, the yen. Even were Japan’s exports to fall to zero, the Japanese government could create sufficient yen to support its economic growth. Japan has no need to import yen (i.e. export goods and services).

The G7 (soon to be overtaken by the E7, but that’s another story) is using an obsolete gold-standard philosophy in a post-gold-standard world. Today, Monetarily Sovereign nations do not need to import their sovereign currencies. Stimulating Japan’s yen imports is like stimulating rain over the ocean.

And in any event, Japan soon will create and spend trillions of yen to rebuild its nation. That massive influx of yen will weaken the yen, and the G7 can breathe a sigh of relief. It also will engage in an orgy of back patting, for accomplishing something not only unnecessary, but something that would have happened naturally.

But what can you expect from a group that still has no concept of Monetary Sovereignty, perhaps partly because three of the “7” (France, Germany, Italy) were foolish enough to surrender their own Monetary Sovereignty.

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

No nation can tax itself into prosperity, nor grow without money growth.

MONETARY SOVEREIGNTY

–Interview with Abby Romaine on WNZF. Is she the smartest lady on the air? Thursday, Mar 17 2011 

The debt hawks are to economics as the creationists are to biology. Those, who do not understand Monetary Sovereignty, do not understand economics. If you understand the following, simple statement, you are ahead of most economists, politicians and media writers in America: Our government, being Monetarily Sovereign, has the unlimited ability to create the dollars to pay its bills.
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Today, Abby Romaine again interviewed me on her WNZF show, Center: Uncensored. From what I can tell, Abby is the only radio broadcaster in existence who understands Monetary Sovereignty. This is particularly frightening, as Monetary Sovereignty is the basis for all modern economics.

The two things I puzzle about: How did she come to understand, and why is she the only one? Yes, there are MMT economists who get it, but if anyone out there knows of another media person, whether radio, TV or newspaper, who understands Monetary Sovereignty I sure would like to know his/her name. The editors of the WSJ and the Chicago Tribune don’t get it. No newsperson gets it. No columnist gets it. But Abby does.

Those interested in writing to this brilliant lady can reach her at: abby.romaine@gmail.com

Anyway, today she and I discussed Ron Paul, perhaps the nation’s leading architect of economic ignorance, and the Tea Party (formerly known and the Republican Party) and John (“America is broke”) Boehner, and the deficit and the debt.

I enjoy talking with Abby, because I like talking with smart people, but I probably mouthed off too much (Old people do that). My only concern is that Abby gets it. She understands that a growing economy requires a growing money supply, and federal deficits are the federal government’s method for growing the economy. She understands that federal debt could be eliminated tomorrow, simply by crediting the bank accounts of T-security holders. She understands that federal debt is not the accumulation of federal deficits, but rather that debt could exist without deficits and vice versa. And she understand that a nation with the unlimited power to create money never can be “broke.”

Why am I concerned? Because not being a radio guy, I don’t know if listeners would rather hear two people argue, and she and I don’t argue. She does play excerpts from Tea Party speeches, and perhaps that provides enough counterpoint. But Ron Paul? This guy is so ridiculous, even staunch conservatives find him an embarrassment. Maybe she should play some excerpts from an Obama speech. He at least sounds more rational, though he too is ignorant about our economy.

By the way, I thought Obama, coming from the rough ‘n’ tumble of Chicago politics would be endowed with major testosterone. But, he seems to be wimping out. The Tea (Republican) Party has a plan: Cut federal spending, which will slow the economy. Obama and the Democrats will be blamed for the poor economic performance, and in 2012, the Teas will be able to foist their own guy or gal on the American public, which by the way is exactly how the Teas won the House last year.

Never mind that executing this plan will hurt America. That isn’t a Tea concern. Cynically, they are interested solely in power. Paraphrasing my question of Abby: “What do you call American citizens who knowingly hurt America?” Then I answered my own question: “I’d call them traitors.” The irony is, the Teas love to wrap themselves in the America flag.

Second thought: That’s not irony; it’s marketing. Address the negative head-on, and turn it into a positive. Remember when cigarette advertising featured doctors telling us how healthful smoking is? Or Volkswagon bragging about how ugly the Beetle was? The Teas make a virtue out of cutting the benefits Americans enjoy.

Anyway, Obama has allowed the Teas to define the discussion. He doesn’t argue, as he should, that cutting federal spending is the dopiest idea since taxing Social Security benefits. Instead, he forlornly whines that yes, the deficit is too big, and we should cut it — only please cut it less. Just when we need leadership, we get groveling. As a Chicagoan, I’m embarrassed. Mayor Daley never groveled. He lied (They all do), but he never groveled.

If Daley were president, I suspect he’d look the reporters in the eye and say, “To cut federal spending is just, plain stupid.” And he’d be right.

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

No nation can tax itself into prosperity, nor grow without money growth.

MONETARY SOVEREIGNTY

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