Archive

Posts Tagged ‘obamacare’

Obamacare

November 14, 2013 Leave a comment

Most of the ground I will cover here I have been over already on this blog but I want to revisit the issue just to point out that it is playing out exactly the way I have predicted and to point out a few important points that some people may be missing about Obamacare.  I wrote this post over three years ago explaining how this bill was meant to destroy the private insurance market.  It deals with the specifics in more detail.

As most people know, a lot of people are losing their plans and experiencing dramatic rate increases in spite of the President’s numerous emphatic promises that this would not happen.  The line from the administration now is that these plans are being cancelled because they are substandard plans which don’t offer all of the coverage that people need.  Leaving aside the fact that the President never once promised that if you like your plan you can keep your plan as long as the government considers it adequate, this is still a complete lie.

It is true that plans are being cancelled because they don’t meet the minimum requirements set forth in the bill.  But these requirements are not in there to protect you from substandard insurance plans.  They are there because the point of the bill is to transfer wealth from the healthy to the unhealthy.  The way this is done is by forcing everyone to buy certain coverage even if they don’t need it and forcing them to all pay (more or less) the same price.  In this way the insurance companies lose money on the sick people but make it up by charging the healthy extra.  This wouldn’t be possible in a free market because companies would compete over the healthy people.  This is why insurance companies support the law, it creates a price-fixing cartel by which they can extract money from their customers without having to worry about that pesky competition.

In light of this it looks like there aren’t going to be enough healthy people signing up to be the cash-cows in this system.  This seems to be engendering a sense of comfort among many conservatives who think that Obamacare will collapse without these people supporting it.  This is a gross misunderstanding.  If you believe that, when healthy people don’t sign up and insurance companies start losing money, the government will wake up and say “hey, maybe our attempt to take over and micromanage the health insurance industry was misguided, I guess we better just let the free market handle it” you haven’t been paying attention for the last hundred years.

It won’t be Obamacare that collapses.  There is no provision in the bill saying that if it doesn’t work, it will go away.  It will be the insurance companies that collapse.  And this is exactly what progressives want because then they will simply say that the evil private insurance companies failed us and the government has to, reluctantly, move in and take over the whole industry.  But don’t worry this means everyone will get all the healthcare they “need” and it will be cheap and easy and provided by pixies and unicorns with breath that smells like sunshine.

Advertisements
Categories: Politics Tags: , ,

Taxes, the Constitution and the Slippery Slope

[Note: This was written several weeks ago but not published so it’s a little out of date.]

A modern-day “conservative” is basically a libertarian who doesn’t believe in slippery slopes.  Indeed, there is a widespread denial of the phenomenon which defies logic.  Nearly every time someone tries to point out that something the government wants to do may lead to undesirable consequences, they are met with an automatic dismissal–“oh what the slippery slope argument?” (rolls eyes)—as though practically every time someone has warned of a slippery slope, it hasn’t ended up being the case. (See “argument from intimidation.” )

The left has to whitewash the notion of a slippery slope because their entire movement is based on it.  It is all about getting people to go along with things that most of them wouldn’t want through subtle manipulation over a long time-period.  It’s right there in their name—“progressive.” For too long, conservatives have allowed the government to start down these slopes and then tried to steer the slide away from the collectivist disasters that they are designed to funnel us into.  But they are always one (and quite often several) steps ahead of us because they designed the slope in the first place so that whenever we try to steer around Scylla, there is an undetected Charybdis waiting to swallow us up.  Nowhere is this more apparent than in the healthcare debate.  I will get into the economics of healthcare next time but first we have to talk taxes.

There is a real divide in political ideology in the country but it is not between Democrats and Republicans or liberals and conservatives.  It is between people who think society should be socially engineered through force by a centralized authority and those who think it should not.  It’s true that most of the people on the “should not” side are also on the conservative/Republican side.  But how often do you hear a “conservative” pundit say they want “small government” and then in the next segment call for the government to do something to bring down gas prices, fight “speculators,” save children from their parents and engage in all sorts of other interventions designed to engineer society in a supposedly conservative way?

Taxes

In order to have a government you need taxes.  In order to be free, you must have an absolute prohibition on the government (at least the Federal Government) using the tax code to socially engineer society.  Once you let go of the premise that social engineering is the proper purpose of government, and that the proper role of the individual is to try to influence the government to engineer it in the way that individual desires, then you become a libertarian (welcome aboard).  To most conservatives, this sounds great until they realize that giving up this notion means giving up your mortgage interest credit, your earned income credit, your continuing education credit, etc.

Of course, a libertarian tax code would also get rid of all the credits that you don’t use and offset this with lower rates (way lower rates if we also had a libertarian spending policy), so nearly everyone would be better off.  But strangely no congressman ever proposes a bill eliminating all tax credits and lowering rates.  Why is that?  Perhaps it’s because politicians like power and their power derives largely from their ability to divert money to specific segments of the public.  But I digress.

The Constitution

The founding fathers were libertarians.  In light of this, doesn’t it seem like they would have put something in the constitution prohibiting the Federal Government from using the tax code to target certain individuals and behaviors in order to socially engineer society?  Yes it does, and in fact they did just that.

“Representatives and direct taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers…”

-Article 1, Section 2, Clause 3

“No Capitation, or other direct, Tax shall be laid, unless in proportion to the Census or Enumeration herein before directed to be taken.”

-Article 1, Section 9, Clause 4

So how is it that we just witnessed the Supreme Court uphold a bill which gives the Federal Government the power to force every individual to buy healthcare on the grounds that the penalty for not complying is actually a tax?  The answer, of course, is that we allowed progressives to undermine this important provision of the constitution a hundred years ago when we passed the 16th amendment.

You might recall when President Obama expressed his regret that the constitution was only a charter of negative rights saying what the government can’t do to you and not a charter of positive rights saying what the government must do on your behalf.  The response of conservative commentators was to shout “see, he wants to change the constitution from a charter of negative rights into a charter of positive rights!”  But this was a misdirection, as I pointed out a while back.

What we should have said is “wait a minute, it’s actually not either of those things, it is a charter of enumerated powers.  It says what the government may do on your behalf.”  This is a very important distinction. All of the debate over the healthcare law was centered on the commerce clause.  The question was posed: can the government force us to buy broccoli under the commerce clause?  The court avoided answering this question, and so far nobody is asking the same question with regard to the power to tax.  Can the government “tax” me if I don’t buy broccoli?  Of course, the answer is yes.  Whatever the government wants me to do, it can declare a tax against me if I fail to do it.  There is no longer anything which falls outside of the enumerated powers of the Federal Government.

So what is the point of the constitution then?  It stops the government from discriminating against me based on race, infringing on my freedom of speech, freedom of religion, right to bear arms, etc. The protections contained in the constitution have been reduced to only those protections which are specifically mentioned.  In other words, it has been transformed into a charter of negative rights.

The slippery slope

Imagine the response if, in 1913, you had stood up and said “if we allow this amendment, there will be nothing stopping the government from taking over the healthcare industry, or any other industry, and telling us what we have to buy, and how much we have to pay for it, because this will ultimately transform the constitution from a charter of enumerated powers into a charter of negative rights.”  But the reality is that this power to tax us however they see fit, does give them the power to do pretty-much anything they want to us.  (Speaking of slippery slopes, in 1913, the top rate was 7% and this was supposed to be temporary.  By 1918, it was 77% and in 1944, the top rate was 94% and the first bracket was 23%)

I’m not making a slippery slope argument in reference to the future. I am making it in reference to the past.  We have been sliding for a century, the whole process is right there in the history books.  There is no speculation involved, you just have to look around and notice that we are at the bottom of the hill.

It’s not enough to just blame Obama or Democrats or Chief Justice Roberts or the media for what is happening.  This is happening because Americans have lost touch with the moral and philosophical foundations of liberty.  If we hadn’t we would have stopped it in 1913 (along with a lot of other things that started in 1913).  Progressives actually don’t want liberty and they are purposely trying to undermine it.  Conservatives don’t want this, we have just been tricked into going along with it.  But the reason we fell for it is because we stopped being libertarians.

This government is a Hydra with so many heads nobody can count them.  There is always one head nuzzling up to you while six others are devouring your neighbor.  Then, when one suddenly comes for us, our reaction is to try to cut off the head, but even if we succeed in cutting it off, two more spring forth (repeal and replace?).  In the end, everyone gets eaten unless we actually slay the monster—unless we can look at the head nuzzling us, the head devouring us and the head claiming to be protecting us from the one that is devouring us and say “you all gotta go”–in short, unless we become libertarians again.

Death Panels

December 28, 2010 2 comments

Death panels are in the news again.  Here is the story.  Basically, they tried to include end of life planning in the healthcare bill but the public didn’t like it so they took it out and now they are doing it through the bureaucracy over the weekend…..on Christmas…… oh and they advised Democratic congressmen not to brag about it too much.  So having the government pay for end of live planning isn’t really such a bad thing (at least it’s not any worse than when they pay for other things).  But there are two important things to take away from this.

First, this is how things get done now, not through congress but through the bureaucracy.  All the attention is on what congress passes but regardless of what they pass, the bureaucracy does whatever it has to do in order to advance their progressive agenda.  We mistake these bills for a battle over how powerful the government will be but for the most part, the battle is already over and we have lost.  We have let the executive branch gradually gain the power to do practically whatever it wants so now they have a big debate and the public weighs in and then they do whatever they want regardless of public opinion and the outcome of congressional proceedings.  We have to realize that our problems are deep and systemic.  They won’t be fixed by just electing Republicans or repealing the healthcare bill.

Second, and more importantly, even though what they are creating now are not death panels, death panels are the inevitable result of their philosophy.  The progressive moral code says that “healthcare is a human right.”  This is not like the right to life, liberty and the pursuit of happiness.  Let’s examine the difference.

Negative rights:  This means you cannot be prevented from doing something.  These are the rights of which the founders spoke.  The right to life does not mean that you are guaranteed to never die.  It means that you cannot be prevented from trying to remain alive.  There are certain negative rights with which everyone is “endowed by their creator.”  These are part of the laws of nature.  There is a liberty inherent in man simply as a result of being man.  This cannot be taken away by the government, the government can only change the options between which he is at liberty to choose.

Positive rights: This is the right to get something no matter what.  This is the right to healthcare.  It is entirely different from a negative right.  If “right” is understood to mean a negative right, then we had a right to healthcare when the country was founded.  That is, you had a right to get whatever healthcare you could buy or get someone to willingly buy for you.  But this is not what they mean.  They mean, you should get healthcare no matter what, even if nobody is willing to provide it for you.  There are no positive rights inherent in nature.  Every creature is born with the freedom to try to survive but no creature is born with the guarantee that it will survive no matter what it does.

I have said before that progressives are people who don’t believe in scarcity.  This is the case here.  They say “I believe everyone has a right to healthcare.”  But if they believe this then they are simply factually incorrect.  There is no natural right to healthcare.  What they mean to say is “I wish there were a right to healthcare.”  Well that’s all well and good but the fact is that there isn’t and in the presence of that fact the question which confronts us is whether to embrace the rights we do have or to sacrifice them grasping for an imaginary one we wish we had.

This may sound like hyperbole but it must be understood that creating a positive right always infringes upon someone else’s negative rights.  If someone is to be guaranteed healthcare that means that someone else must be compelled to provide it for them.  This means the second person’s right not to provide it is sacrificed.  Sometimes it’s more subtle than this.  For instance if you are healthier than I am and the government gives me the “right” to buy health insurance for the same price as you, what it is really doing is preventing you and the insurance company from engaging in a mutually beneficial trade (insurance for some amount of money less than the amount for which it would be willing to sell it to me).  In other words, they are taking away your negative right to healthcare.

So what does this have to do with death panels?  Once you acknowledge that scarcity is not caused by greedy capitalists, it is a fact of nature, you have to acknowledge that goods must be rationed.  The question then is how to ration them.  Here are two ways.

1.  Everyone has the right to their own property and labor and the right to trade it with whomever at whatever prices they want.  This means that you have a right to whatever healthcare you are willing and able to pay for.  You make the decision about how much of it is worth buying just like any other good.  You can negotiate an insurance contract with an insurance company and buy as much or as little as you think is worth buying on terms that are beneficial to both parties. 

2.  Everyone has a right to healthcare.  Healthcare must be provided to anyone who wants it potentially at someone else’s expense.  This already violates the moral premise of private property but it doesn’t even address the issue of rationing.  Rhetorically this solves the problem of rationing by assuming scarcity away.  But the problem is still there and eventually it must be dealt with.  You can’t actually give everyone all the healthcare they want because there isn’t an unlimited supply of it. 

What’s more, people will now make decisions which are inefficient since they are no longer trading their own stuff for healthcare, they are just demanding it and someone else is paying for it.  So naturally they will want as much as they can get. Under the first rationing scheme a person might find themself toward the end of their life and be faced with the opportunity to undergo an expensive procedure which is expected to prolong their life for a few months.  They may decide that it would be better to pass the money on to their children or donate it to the local orphanage or what have you.  Or they may not, since it’s their money they could decide the best way to use it.

On the other hand if a person finds themself in a similar situation under the second scheme, naturally they will want as much healthcare as possible because the benefits will be disassociated with the costs.  The costs will be bourne by others but the check will be signed by the government, quite likely a government that had promised to reduce healthcare costs.  So who will decide whether or not it is worth it to get the procedure? 

The free market is a mechanism for rationing scarce goods.  It happens to be the only mechanism compatible with individual liberty and property rights and it also turns out to be pretty efficient most of the time.  But the free market doesn’t guarantee that everyone will be “equal.”  If you go on a quest to make them “equal,” you will have to destroy the free market.  If you destroy the market and the price mechanism, you must have another way of rationing (one that is not compatible with individual liberty and property rights). 

I’m not saying that they have created this system already I am saying that it is a logical necessity of the system they are creating.  Of course they aren’t going to tell you that they are creating a system where the government has to decide what you can and can’t get.  They are just going to tell you that you can have whatever you want. But scarcity is a law of nature you can’t just wish it away.  Eventually this system will cause a “crisis” by which they will pretend to be totally surprised.  They will have no choice but to ration care.  But don’t worry because the structure to do this will already be in place.  We will just have the bureaucracy tweak the rules a little bit, no congressional approval required.

Healthcare

November 11, 2010 Leave a comment

Here are a few stylized facts:

1. Most Americans don’t like the healthcare bill.

2. Most Americans “like” social security and medicare.

3.  Democrats claim that once Americans learn what is in the healthcare bill they will like it.

They are right about this.  Well that’s not exactly accurate.  What they mean when they say people “like” social security is that people don’t want to end it.  And this is what they really mean about healthcare as well.  But this doesn’t mean it’s a good idea.  Every time I see a Democrat on tv saying to a conservative/Republican “so you don’t think we should have social security?” and see the Republican squirm and back down I want to scream at my TV.  “Yes!  Social security was  terrible idea!  Medicare was a terrible idea!” 

These programs are one of the main sources of our current calamity.  One way or another they are going to collapse, either because we phase them out or because they (along with many other problems) collapse the whole government around them.  But people “like” them because these programs send them a check every month.  It’s not rocket science!  It’s not that over the last 40 years everyone underwent a deep intellectual consideration of the issue and decided that it’s a good idea for the government to take your money by force for your entire life and give it to someone else on the promise of taking someone else’s money and giving it to you when/if you get old enough.  It’s not a good idea.  It’s not efficient, it’s not sustainable, it violates the fundamental tenants of individual liberty and responsibility, it’s not a good idea!

But by now, people have planned their lives around social security and medicare.  We have a generation of seniors who have paid into it their whole lives and believed that they would get a certain amount of benefits back.  They were told that this was a perfectly stable system and it was fair and everything would be fine.  These were lies.  But now they have planned their retirement based on the expectation of that money.  If you take it away they will be screwed.  Of course they don’t want to end it.

It would seem like a crime to take away social security benefits from people who have paid into it their entire lives.  And it is a crime.  But the crime has already happened.  The crime was taking that money in the first place and giving it away to someone else (much of it has gone to other programs).  Now the question is not “should we rob the public of their social security money?” it is “since we have already robbed the public of their social security money, who should end up paying for it?”  I am not proposing an answer to this question here I just want to point out that the crime occurred when we instituted the program in the first place not when it eventually collapses.

The exact same thing is happening with the healthcare bill.  It’s not that people will decide it’s a good idea once it’s been in effect for a few years, it’s that it will distort the whole healthcare industry to the point where people will not want to go back to a system that makes sense because it will imply some short-term disruption to their lives (given the nature of the issue, for some it will be long-term) which they will not want to bear.

Here is an example.  Since you cannot be denied care for having a preexisting condition (the part of the bill which is simultaneously the most destructive part and the part which everyone supposedly agrees on) people will go without health insurance (and potentially pay a fine) because when they get sick they can just go get insurance and insurers will be forced to take them (and the price will be regulated).  As I have pointed out before, this is a complete distortion of the meaning of insurance.  But once it is instituted, if you try to go back to a free insurance market it will yank the rug out from under these people.  They would have to pay a fair price for insurance which, if they had a preexisting condition, may be exceptionally high.  That’s why you get insurance before you get sick.  That’s the point of insurance.  But once they distort the system, they make going back to something that makes sense extremely disruptive.

This is what they mean when they say that people will learn to like it.  They will become dependent on it.  This is, in fact, what they mean by “progressive.”  And this is why it is of the utmost importance to repeal it now before this happens.  Unfortunately, it’s difficult for me to imagine that happening….

Health Insurers Plan Hikes

September 8, 2010 Leave a comment

That was today’s WSJ headline.  So I have a few points.  First, with regard to my earlier comments about the government making it excessively difficult to be productive without working for a large company or the government, notice this quote.

The rate increases largely apply to policies for individuals and small businesses and don’t include people covered by a big employer or Medicare.

And second, recall that they blamed all the supposed problems with healthcare in this country on the free market when you read things like this.

Aetna Inc., some BlueCross BlueShield plans and other smaller carriers have asked for premium increases of between 1% and 9% to pay for extra benefits required under the law, according to filings with state regulators. (emphasis added)

… the White House contacted company officials and accused them of inaccurately justifying the increase.

About half of all states have the power to deny rate increases. Ms. DeParle pointed out that the law awards states $250 million to bolster their scrutiny of insurance-rate proposals, saying that will eventually curb premiums for people.

Some regulators say not all insurers have adequately justified their increases. “A lot of it is guesswork for companies,” said Tom Abel, supervisor at the Colorado Division of Insurance. “I was anticipating the carriers to be more uniform.”

This is nothing even remotely resembling a competitive industry.  It is a government-run industry and it has been for decades.  If you want to know how free and unregulated the health insurance market was before this bill here is a paper from 2006.

Finally, these people who are doing this, if they are not just flat-out lying to us, seem to have no idea how a market works.  Listen to this.

“I would have real deep concerns that the kinds of rate increases that you’re quoting… are justified,” said Nancy-Ann DeParle, the White House’s top health official. She said that for insurers, raising rates was “already their modus operandi before the bill” passed. “We believe consumers will see through this,” she said.

They think that they can force companies to give away more services and it won’t cost anything?  Really?  I can’t tell whether they think we’re idiots or they actually are idiots.  This seems to stem from a belief that all big companies make excess evil capitalist profits and therefore, they can always be squeezed by the strong arm of government to provide something for nothing.  This is simply not the case though, even with all of their anti-competitive regulation in the healthcare industry the rate of profit is below average. They think that companies are always trying to raise their prices arbitrarily and the only thing keeping them from doing so is government.  The idea of competition is apparently completely foreign to these people.  Furthermore consider the simple-minded approach they take to letting you keep your plan if you like it.

While the increases apply mostly to the new policies insurers write after Oct. 1, consumers could be subject to the higher rates if they modify their existing plans and cause them to lose grandfathered status.

Did this guarantee come from a careful analysis of the effects of the bill on the insurance market?  Of course not, they just wrote into the bill that insurance companies couldn’t change your plan.  They think the answer to everything is to make a law.  This is crazy.  There is always a way around these kinds of laws.  In a few years there will hardly be anyone left with “grandfather” status and the ones who do have it will probably be sacrificing other things that they would have gotten otherwise but had to give up to keep that status.  Any competent economist could have told you that this healthcare business made no sense and could only be a disaster.  Oh by the way, as a competent economist I can tell what the next shoe to drop will have to be.  Here’s a hint.

Massachusetts, which enacted universal insurance coverage several years ago, also has seen steadily rising insurance premiums since then. Proponents of that plan attribute the hikes there to an overall increase in medical costs, while insurers cite it as a cautionary example of what can happen when new mandates to improve benefits aren’t coupled with a strong enough provision to force healthy people to buy coverage. (emphasis added)

Are We There Yet?

August 4, 2010 Leave a comment

This courtesy of Monkeyfodder.  Thanks Ricky.

Notice the plan:

This clearly is a candidate for most disorganized organizational chart ever. It shows that the health system is complex, yes, but also ornate. The new law creates 68 grant programs, 47 bureaucratic entities, 29 demonstration or pilot programs, six regulatory systems, six compliance standards and two entitlements.

and then notice the way the same bill that sets up the plan anticipates numbers 5-9 and just jumps straight to number ten empowering a “strong man” (I guess we have to change it to “strong person” now) right away.

Getting that massive enterprise up and running will be next to impossible. So Democrats streamlined the process by granting Health and Human Services Secretary Kathleen Sebelius the authority to make judgments that can’t be challenged either administratively or through the courts.

Sounds lovely doesn’t it?