I don't have time to back all of these claims up with data. I'll leave it up to you to google for the evidence, or the contrary. I don't care if you liberals think it's just blathering because I don't take time to explain it all to you in detail – you won't listen anyway. I just do this to make a list for my own reference.
10 LIES OBAMACARE TOLD ME
- Obamacare won't lead to a single payer system, thereby eliminating private health insurance. Here's the deal – with the government plan available, it will be cost effective for your employer to stop offering you health insurance – so where will you go? To the government plan, cause it's 'cheap' (since you'll be subsidizing it through your taxes).
- Obamacare is not meant to eliminate private health insurance. Just listen to Obama and his administration's speeches on this, as well as experts. It will inexorably go there unless real protections are built in.
- Obamacare will improve health coverage for all. Untrue. In fact, for the 68% of us who are happy w/ our health insurance, it will DECREASE the quality of care – just look at the dissasfaction levels in Canada and the UK, and you'll see where we're headed.
Having worked in the HMO industry, I know how the money flows, so let me explain at least ONE probable way in which the current plans will hurt your care. In a capitated system (which I think the current plans are), where
physicians are NOT paid by services rendered (a.k.a. fee-for-service), but per person (per 'head', or 'capitated') whether
they come in or not, physicians have an incentive to NOT see you,
because it cost them money rather than earns them money. - Obamacare will not lead to rationing. Perhaps you haven't heard Obama talk about 'attenuated care' for the elderly – translation? Your healthcare coverage will decrease based on your age – it will be 'spent' on people with higher value. Or, as we say in the programming world, you can have it cheap, fast, or good, choose two. If it's 'cheap' and fast, it won't be good. If it's going to be delivered fast and good, it won't be cheap. And if it's cheap and good, there will be a long line. Just ask the Canadians.
- Obamacare wont' be used for abortions. The Hyde amendment only covers Medicare. It doesn't cover the hundreds of thousands we already give to Planned Parenthood, and now with Obama's rejection of the Mexico City policy, we are now already paying for abortions overseas. You can bet that the liberal abortion lobby, who have the liberals in their pockets, arelobbying for a piece of the pie, and their dirty, bloodstained fingers are already manipulating their Congresspersons behind the scene.
- Obamacare will SAVE us money in the long run. If all you consider is the reduction in administration costs that one single pipe and capitated billing create, and the gains of preventative care, perhaps you might think that. But what you are ignoring is that:
– employers will be dumping people onto the public system, which will overburden it
– the incentive for money saving that competition creates will be gone, so either our costs go up or our quality goes down
– government systems are fraught with fraud, and unlike the insurance industries, there won't be much incentive for the government to fight it – easier to just hike the taxes - Obamacare will help the elderly. See rationing argument above. The AARP has been taken over by liberals (they support all kind of liberal causes that don't help their constituents), so their position doesn't count. Watch as thousands of members cancel their membership over the next few months. You see, they won't deny your grandma healthcare for her late stage cancer – I mean, they'll deny her treatment, but they'll offer her a cost-saving Death with Dignity service!
- We are in a crisis and only creating an expensive, expansive new government program will solve it. There are much better solutions which not only are priced better, they support the free market principles that work AND can reign in insurance company greed. But this plan, which of course the insurance companies would want to oppose just for their own survival, is just poor judgment even if it 'sticks it to the evil capitalist insurance companies' (and they are greedy bastards).
- Obamacare won't turn out to be as poor and economically unsustainable as Native American healthcare, the VA, and Medicare. Who are you kidding? This program is gobs larger, and they can't even manage the 'little' ones! On what grounds would anyone think this is somehow different? It's ambitious, yes, but equally foolish and naive. Wake up Utopians!
- George W. Bush created the healthcare problem, as well as global warming on Mars. That's right. It's all his fault – stupid, chimplike, warmonger George and his evil cronies actually made Satan fall from heaven too. The Obama admin can only create good, and all evils are the previous admins fault, no matter how far in the distance they are.
I hope to God that Obamacare does not pass, because it's just another expensive cure that is worse than the illness. The next GOP president should run on a "Common Sense" platform, once we see how this Utopianism masquerading as intelligent hope creates it's own mess, worse than the last. Long live the Gingrich!
Here is an idea that I have heard floated lately … Whatever final Bill is decided upon, lets find a blue state or 5, do a year long test run and then make a decision on the tweaks and balances. Hey, if you can take 6 months to find a family dog, can we take some time to see what kind of a real stinker Obamacare is?
"I don't have time to back all of these claims up with data."
That just about says it all.
I have an idea: let's get rid of all government run (ie, "socialist") programs, starting with Social Security and Medicare and education. That way, all those seniors busy disrupting Democratic town-hall meetings will have to get a job and quit sponging off the public.
Hi Danie:
Your claim that a public option will make it cost effective for employers to drop your insurance makes little sense. It already IS cost effective for employers to drop your insurance (or not to give you insurance at all). Te only employers who offer health insurance to their employees do so because that's part of how they entice their employees to work for them–insurance is part of their compensation package. Eliminating their private insurance and replacing it with an UNWANTED public plan would be a pay cut for their employees. They'd cut their pay anyway if the labor market will allow it.
I don't time to address the rest, but I will say this: we SHOULD have a singe payer system but unfortunately the "centrist" Dems are bought by the insurance lobby.
your friend
Keith
Keith, from what I know about you, you are fundamentally opposed to violence against others. But a single-payer system, like all socialist endeavors, takes resources from one group and gives them to another. It is not like a charity, wherein people do this of their own good will and love. It is done through force or the threat of force. Whether a small group of men in D.C. are able to come to a mild consensus on doing it makes no difference.
Louis, that is an excellent idea. Of course I'm sure you don't mean it, which is a shame. Elderly citizens in the United States currently extract far more resources from the system than they ever put into it, even when one accounts for inflation. They represent a powerful voting bloc, however, and it's politically unpalatable to take benefits away from old people.
The programs that chiefly benefit seniors (e.g. Social Security and Medicare) are some of the greatest drains on the American economy. They are not insurance programs. The money which was originally taken from those seniors has long been spent on other programs, most of which are equally foolish. It is a Ponzi scheme unlike any other, and if we persist in trying to maintain it, it will eventually lead to our own, national bankruptcy.
The Democrat's proposed health plan will only make the situation worse. You cannot change the basic rules of supply and demand. Medicare is out of control due precisely to the fact that there is far more demand (effectively unlimited) than there is supply. It only maintains the illusion of prosperity due to the subsidy which is provided by the rest of the economy. When that sort of program is inevitably extended to the rest of the country, there will be no possibility of maintaining it for long.
If you think health care is too expensive now, wait until people can have as much of it as they like. Again, infinite demand runs up against limited supply. The result is either explicit rationing through controls, or implicit rationing through long waits.
"It is a Ponzi scheme unlike any other, and if we persist in trying to maintain it, it will eventually lead to our own, national bankruptcy."
Other nations find the right balance for universal health care. Why can't we?
Cin, thanks for the response. To answer you question, I can only say that there is no such thing as a free lunch. Other countries who have socialized medicine face the exact same issues. There can be no "right balance", because it's not an issue of fact, but rather one of opinion.
Do you prefer to pay a high price for something, but have ready access to it, or do you prefer to get something inexpensively, but suffer from shortages? Where markets are free to adjust their prices to demand, shortages almost never occur. And when prices rise dramatically, as they occasionally do, the price system creates financial incentives for newcomers to meet the additional demand.
Where markets are not free to adjust their prices (e.g. when the government caps the total amount of money being spent on health care), the result of increase in demand is a shortage. Imagine if the government decided to similarly socialize bread. All bread would be 'free' at the point of purchase, and would ultimately be paid for by taxation. But that would increase an individual's demand for bread, since he has no incentive to self-ration. But while more bread would be consumed, no more bread is being produced. Ergo a shortage.
When you health care is consumed without cost to the consumer, it's demand must necessarily rise. That means the the total (that is, absolute) costs of socialized health care is greater than it would otherwise be privately. This is an a priori economic truth.
And yes, that means that the total cost of health care, per capita, in places like France and Canada, is higher right now for a given level of service than it would be under a similar, but private, system. These countries struggle with the issue of rationing. And I don't mean to use that word in a pejorative sense, but it's the only word that's appropriate.
All scarce resources must be rationed, either explicitly via top-down controls, or implicitly via a bottom-up (i.e. market driven) price system. There is no "right balance", because as with all economic issues it's merely a matter of trade-offs. Unfortunately, as with all political issues, it's one in which a one group forces their choice onto everyone else.
In 2000, the World Health Organization ranked the United States #37 between Costa Rica and Slovenia. Surely we can do better than that. What was notable was that many of the top health care systems belonged to countries who had national health care. It would be beneficial to a lot of sick and potentially sick Americans if we could do the same.
Just from a market perspective though, the status quo is unsustainable. When someone without health insurance gets sick, they go to the emergency room, get treated, can't afford to pay, go bankrupt and premiums go up. As you said, there is no such thing as a free lunch but that's what is happening right now. Also, from the perspective of the health insurance company, it makes more business sense to collect on premiums and when someone makes a claim find some way to deny it and drop their policy.
Regarding socializing health care, I don't believe a single payer system is really on the table anymore, though as I pointed out above, I wish it was. What's left is a public option. That means that people will have a choice between a government health care plan and private insurance provided by corporations. Now, if private insurance is good, people should opt for the private insurance over the government insurance. Someone used the VA as an example of government run health insurance. Well, why would free market health insurance companies fear health insurance as poor as that of the VA in the free market? I can tell you this though, some kind of health insurance is preferable to none. Private insurance will still be there for people who want it, but I'd like to have another option because health insurance industry is so powerful and profitable that they can pick and choose who their customers are. That's not good for the market either.
Don't be fooled by your own political group's attempts at misdirection: If the current health plan is passed, we are on a direct path to a single-payer system. It's inevitable, and not because the path is spelled out in the bill itself, but because of the economic consequences therein.
What will happen is that (if it's passed) the public option will not be able to compete on an equal footing with private suppliers. This is almost a given. If it could compete on equal footing, then it wouldn't really be any different from a private, not-for-profit health insurer, of which there have been many. But because it's driven by government policy, and not by traditional metrics of success (e.g. a balance sheet), it will inevitably fail to thrive. Like other government failures, however, it will get bailed out with taxpayer money.
You may think that's not true, of course. You may believe that the "public option" can compete, on equal footing, with private concerns. If so, however, I'd ask you to consider what would happen if you are wrong and it can't. Will it be shut down, or will it be bailed out? I think you know the answer. And if you don't, call up someone at Amtrak, or the Post Office, or Fannie Mae.
Why should this lead to single payer? Because with the help of taxpayer protection, the "public option" can undercut it's private competitors, driving them out of business. Initially this govt. health plan will thrive, because it has everything in its favor. Unlike other insurers, the government is not constrained by requirements to be run profitably. As soon as it has a significant subscription, it will be politically impossible to let it fail. And so it will become a net drain on the rest of the economy, in precisely the same manner as Medicare/Medicaid/Social Security. That drain won't be reflected in the subscription price, though, and so it will continue to grow in size until other insurers are marginalized or non-existent.
And for what it's worth, I agree that the U.S. has horrible problems with it's current health system. But that's precisely because there is already too much government intervention in the marketplace. People seem to think, because we have a nominally private health care market, that it's driven by free-market concerns. This is absolutely not the case.
Currently we have heavy government intervention in the health insurance market. In particular, insurers are essentially cartelized by government regulations. The effect of these regulations is not, as one might expect, to benefit the consumer, but rather to benefit the insurer.
Consider a hypothetical regulation that all insurance policies provide three days worth of maternity care for all patients. Who benefits from this regulation? You might think that it's patients, but that's not the case. Because if all insurers must provide this care, there is no meaningful competition on the matter. They don't provide coverage for free, of course. They will all charge their customers for this coverage, even if the customers are not interested in maternity care. Customers have no incentive to look elsewhere, though, because all insurers will be required by law to provide it.
It's as if the government mandated that all restaurants served "free" bread and butter. The cost would be added to the overall dinner fees, and so the restaurants would make extra money. And the consumer who wasn't interested in bread and butter couldn't opt for a cheaper restaurant, because they all have to offer that service anyway.
This is regulatory capture, caused principally by the heavy lobbying efforts of the health care industry itself. Our current medical system is chock full of this stuff, in various forms. And this regulatory capture, along (of course) with our generally high level of individual care, is the fundamental cause for our excessive costs.
The solution is not more health care, which will only make our costs go higher. The solution is less health care. And rather than have the government tell us what health care we can have, which will be the inevitable result of all these "reforms", will need for people to be able to make that decision for themselves.
Currently our health care system is like an all-you-can-eat buffet, where our employers largely cover the costs through a reduction in our monetary compensation. We get the most utility from this situation when we use as much health care as we can possibly, usefully get. This situation will only get worse when, instead of our employers grabbing the bulk of the bill, the government is grabbing it all.
"When someone without health insurance gets sick, they go to the emergency room, get treated, can't afford to pay, go bankrupt and premiums go up."
What you are describing is a forced subsidy. How is that any different than if the person never has to pay the bill in the first place? Either way the cost of their treatment is being paid by someone else. In the current situation, it may be through voluntary participation in a health insurance plan. In your preferred situation, it's mandatory through taxation. Either way, a mere "public option" doesn't change it.
"Also, from the perspective of the health insurance company, it makes more business sense to collect on premiums and when someone makes a claim find some way to deny it and drop their policy."
There's no evidence I'm aware of that this is actually taking place on any significant scale. There are plenty of anecdotes to the effect of people claiming that the insurers didn't honor their obligations, but the counter-claims are overwhelming. That is, most people have their health claims honored. Similarly, most people have their fire insurance, and other insurance claims honored too, so long as they are on the level. Otherwise why would anyone subscribe to these services? Reputation matters.
Hi Stewart: I do not agree that taxation is theft. Taxes are the debt you owe for living in our country–it is like rent. Collecting taxes SHOULD not require violence no more than force SHOULD be needed to collect rent. That's how I see it anyway.
your friend
Keith
That's absolutely right Keith. It's an important part of the basic duties of government, collect taxes and use those taxes to provide for the common good.
Of course when our elected officials collect taxes to provide for more selfish motives, then the people are protected by the rule of law, a non-partisan military, and upcoming elections.
Taxes go up, taxes go down.
Elections have consequences.
Hi Stewart
You wrote: The programs that chiefly benefit seniors (e.g. Social Security and Medicare) are some of the greatest drains on the American economy. They are not insurance programs. The money which was originally taken from those seniors has long been spent on other programs, most of which are equally foolish. It is a Ponzi scheme unlike any other, and if we persist in trying to maintain it, it will eventually lead to our own, national bankruptcy.
I think you are wrong about this. All retirement works the same: retired people (who no longer produce economic goods) are supported by the goods produced by the non-retirees. As long as there are people being born, they will produce enough to take care of the retirees. If they CANNOT produce that much then eliminating social security won't change that.
your friend
Keith
>> KEITH: I think you are wrong about this. All retirement works the same: retired people (who no longer produce economic goods) are supported by the goods produced by the non-retirees. As long as there are people being born, they will produce enough to take care of the retirees. If they CANNOT produce that much then eliminating social security won't change that.
Actually, that's the LIBERAL SOCIAL WELFARE model, not the retirement model.
The retirement model is: a person contributes to their retirement fund to support THEMSELVES during their old age.
And the Social Security fund, as originally designed (if I am not mistaken), was supposed to be a MINIMAL sustenance provision for people who lacked the foresight or means to save for their own retirement. AND the money contributed was supposed to be SAVED by the government for later payout, not leveraged and lost on other programs (both parties are guilty here).
The reason that we NEED young people to pay into the system to support the current retirees is because we did not stick to the model.
This newer model is not sustainable in a declining population, which the Europeans are finding out, and so will we if our country continues to succumb to secular values which devalue family and believe the lie of the population problem. Of course, just having the baby boomers sucking from this system while we pay in will show us that, reduced population or not.
"Either way, a mere "public option" doesn't change it."
Ah, but it does. One needs to pay for their public option. It's not free but hopefully it will be more affordable for poor people. Without the public option, premiums will continue to rise as the number of uninsured continues to rise.
"There's no evidence I'm aware of that this is actually taking place on any significant scale."
There are many loopholes such as pre-existing conditions that health care corporations use to deny coverage and maximize their profits. It makes good business sense to maximize profits by screening people; not insuring people who are at risk and insuring those less likely to become sick. Fire insurance and other insurances are different in many ways. One is that people get sick or just visit the doctor far more often than they have a fire ot flood or car accident. Another way is that unlike auto insurance which is national, certain health insurance companies dominate certain regions of the country. This leaves little to no choice regarding health insurers. For example, I used to consult for Blue Cross Blue Shield. They dominate the South. If you want health insurance that's who you get regardless of their reputation. Let's face it, most health care companies don't have good coverage that's affordable.
"It's as if the government mandated that all restaurants served "free" bread and butter. The cost would be added to the overall dinner fees, and so the restaurants would make extra money. And the consumer who wasn't interested in bread and butter couldn't opt for a cheaper restaurant, because they all have to offer that service anyway."
If there was only a few restaurants that serve bread and butter and who work in conjunction with each other to set prices, what if the mandate is that restaurants can't sell the customers bread and butter at more than a 2x markup? Also, a mandate that restaurants can't refuse customers bread if they don't think they will make a large profit on the customer?
"The solution is less health care."
That might cull some of the sick and elderly out of the population but it would bring down costs and lessen spending. These people are dying at the buffet of the healthy. I'm being facetious, of course.
"If the current health plan is passed, we are on a direct path to a single-payer system."
If that was true, I'd be a very happy man. Unfortunately, I think the public option is the best we can hope for. Speaking for myself, I'd jump at the chance for a public option. I think many people would, especially those without health insurance. I think it would be very popular. It would be like the government opening up a bread and butter restaurant though only bread and butter is served and not caviar.
"And so it will become a net drain on the rest of the economy, in precisely the same manner as Medicare/Medicaid/Social Security."
A lot of other countries, with far less resources than we have, offer much better social programs than we do. Their people are better educated, live longer, and have a higher standard of living on average. If they can do that, why can't we? It seems that we are falling behind.
"It's not free but hopefully it will be more affordable for poor people. Without the public option, premiums will continue to rise as the number of uninsured continues to rise."
Of course it will be more affordable to poor people. It will probably be more affordable to rich people, too. But that's only when you look at the point-of-sale costs. It will increase the amount of health care which is consumed in this country, and therefore it will necessarily increase the overall cost of health care. But instead of having to pay for it individually, thereby giving us all incentives to be responsible, we'll pay for it collectively, thereby giving us all incentives to consume as much as possible.
"There are many loopholes such as pre-existing conditions that health care corporations use to deny coverage and maximize their profits."
Pre-existing conditions are not "loopholes", for reasons which you clearly understand.
"One [difference] is that people get sick or just visit the doctor far more often than they have a fire or flood or car accident."
Of course. But the costs of visiting your doctor for a check-up, and the costs of a course of antibiotics, are absolutely trivial compared to that of fire damage. Paying for regular doctor's visits and predictable medicine with "insurance" makes about as much sense as using flood insurance to clean your bathtub.
"If there was only a few restaurants that serve bread and butter and who work in conjunction with each other to set prices, what if the mandate is that restaurants can't sell the customers bread and butter at more than a 2x markup?"
The collusion you're describing is not only allowed, but enforced by the government. Again, this is regulatory capture, wherein the mandates of government appear to help consumers, but actually benefit the big industry. If you want more choices in health care, you need less regulation and state intervention, not more.
As for capping the costs of treatment, that's an absolutely perfect way to create shortages. Whenever governments enforce price controls, whether they on gasoline, food, rent prices, or human labor (i.e. the minimum wage) they create shortages. You cannot artificially control a supply curve that way.
"Unfortunately, I think the public option is the best we can hope for."
I know that I'm just encouraging you, but you're entirely wrong about that.
As I pointed out, the "public option" will never be allowed to fail financially. I think you recognize that this is true. Therefore it will have little incentive to actually charge its customers market prices, and therefore it will be able to consistently undercut its private competitors. The result will be that it will make little sense for most people to opt for a private insurer, since the public insurer nominally cheaper due to public subsidy.
Eventually a huge swath of America will be covered by this public plan. The overall cost of health care in this country will continue to spike, however, as people consume more subsidized services. Private costs will also increase, as private consumers are forced to compete with increased public demand. There will be continued outcries for further "reform", in order to control costs. The political establishment will blame absolutely anything but its own policies, of course, and they will claim that increased costs are due to things like anti-competitive insurers, network inefficiencies, and who knows what else.
Their solution, naturally, will be further government intervention. And since most people do not have the first clue about what "supply and demand" really means, they will embrace a fully nationalized health care system. It will be easier at that point, since far more Americas will be accustomed to having the government directly involved in their personal health care.
There is a conflation, I think intentionally by the left, of the terms "insurance" and "care."
Every person in America can walk into a hospital and recieve medical treatment. Illegal aliens, uninsured… everyone. The law already demands this.
Health insurance is a business model by which people pay ahead of time to protect themselves financially in the event of catastrophic health failure.
Now why would people, especially Obamacare supporters want to blur that distinction? Honestly, I'd like to know.
Also, while you're at it, can you explain to me why I can't purchase insurance from a company in a different state? Oh, and finally, why can't I purchase insurance that just covers catastrophic failure, similar to say car insurance, but can only find insurance that covers things that are both regular maintenance items and things I will never ever need, like abortion coverage? Are those free market issues or goverment restriction issues, and how do you think those impact health care costs?
Thanks for your help!
Hi Daniel:
Continuing the discussion:
KEITH: I think you are wrong about this. All retirement works the same: retired people (who no longer produce economic goods) are supported by the goods produced by the non-retirees. As long as there are people being born, they will produce enough to take care of the retirees. If they CANNOT produce that much then eliminating social security won't change that.
Actually, that's the LIBERAL SOCIAL WELFARE model, not the retirement model.
The retirement model is: a person contributes to their retirement fund to support THEMSELVES during their old age.<?i>
What you describe doesn't conflict with what I said at all. A person contributes to a retirement fund which means when he retires he will have money to buy stuff with. But the stuff he buys is stuff that will be PRODUCED by other people–the retiree is no longer producing stuff inasmuch as he is retired. IF the country cannot produce enough to satisfy the retiree it won't matter how much money he has is his fund.
And the Social Security fund, as originally designed (if I am not mistaken), was supposed to be a MINIMAL sustenance provision for people who lacked the foresight or means to save for their own retirement. AND the money contributed was supposed to be SAVED by the government for later payout, not leveraged and lost on other programs (both parties are guilty here).
Social security is more than a retirement fund, it is also an insurance fund which is why my cousins received social security when their dad died. The social security trust funds (like all trust funds) are NOT saved by being stored under mattresses. They are invested in bonds or stocks. SS invests its funds in government bonds which are the safest possible investment which is why they pay so little interest.
The reason that we NEED young people to pay into the system to support the current retirees is because we did not stick to the model.
I think this is incorrect. Originally, SS was a "pay as we go" program–current payroll taxes were used to pay for current benefits. But because of the looming Baby Boomer retirement, SS increased payroll taxes ON the baby boomers to build up a trust fund to pay their retirement when they later retired. The trust fund would never have existed if not FOR the boomers paying more in taxes.
This newer model is not sustainable in a declining population, which the Europeans are finding out, and so will we if our country continues to succumb to secular values which devalue family and believe the lie of the population problem. Of course, just having the baby boomers sucking from this system while we pay in will show us that, reduced population or not.
It seems to me yo are still missing the key economic point. At any point in time our economy produces some zillion dollars of stuff. A portion of that output will go to people who are retired. If our economy cannot produce enough to support the retirees it won't matter HOW much money they paid into the system. If there's a problem it is a demographic problem, not a financial problem.
your friend
Keith
Keith,
Are you invisioning a scenario where seniors have an excess of money without necessary available goods to spend it on? I'm trying to paraphrase to understand your correction, because I appearantly did the same misreading you're attempting to correct.
Because what I think Daniel and Stewart were getting at, is that Social Security is about to get upside down on money going into the system and therefore money going out (or bankruptcy to maintain payments).
I don't think there's any question that retirees aren't making (many) goods. The younger workers do that. And those goods will be sold to market to anyone who can buy, be they retired or not. It's not a question of "are there goods to buy" but of "do the retirees have any money to buy the goods". The problem of the split between the retired and the not-retired isn't production, it's taxation. FICA taxes on the current workers pays for the current retirees. If there are too many retirees to be supported by current FICA income, we've got a problem.
HI James:
You asked: Are you invisioning a scenario where seniors have an excess of money without necessary available goods to spend it on? I'm trying to paraphrase to understand your correction, because I appearantly did the same misreading you're attempting to correct.
What I am doing is getting past the distraction of money, looking at the economy as the production of stuff that gets comsumed. The conservative argument as I understand it is that our economy will not be able to produce enough to pay out promised social security benefits at some point in the future without drastically affecting the consumption of non-retirees. And that the shortfall will be massive–otherwise their arguments about the ratio of retirees to non-retirees seems off point. If the economy CAN produce enough to keep our promise to retirees while also providing enough for non-retirees then we can create a system by which the retirees would get what they were promised–any shortfall in a PARTICULAR program like Social Security can be fixed by simple taxing and spending. The problem isn't a financial one–if it were financial that wouldn't be a problem.
your friend
Keith
"What I am doing is getting past the distraction of money, looking at the economy as the production of stuff that gets comsumed."
Charitably, Keith, I think your grasp of the economics here is lacking.
There is no argument that I'm aware of that suggests the economy cannot produce enough "stuff" to fulfill the needs of retirees. Such an argument wouldn't make any sense.
The only argument which does make sense, and which is not in question by anyone who has looked at the numbers (including the government's own accountants) is this: In a short while the amount of money which is being paid out to social security recipients will be greater than the amount of money which is being collected through social security taxes. And not too long after that, the amount of money being paid out to social security recipients (as well as medicare which is in a similar situation) will be greater than all of the tax dollars collected from all sources.
It has nothing to do with the amount of goods and services produced in an economy. It's purely a function of dollars. Of course one way to "fix" the problem would be to massively inflate the money supply, thus making these future, fixed liabilities trivial in comparison to tax revenues. That's not a real solution, though, because it means that people who receive social security will get practically no purchasing power from their fixed incomes.
"If the economy CAN produce enough to keep our promise to retirees while also providing enough for non-retirees then we can create a system by which the retirees would get what they were promised–any shortfall in a PARTICULAR program like Social Security can be fixed by simple taxing and spending. The problem isn't a financial one–if it were financial that wouldn't be a problem."
Again, I have to suggest that your mistaken about the economics of this issue. America's financial crisis is not about the amount of goods and services being produced. It is about the taxable value of those goods and services relative to the country's financial liabilities. America cannot tax its way out of this problem, though, and the government's own projections are clear on that point. The issue is getting worse as more and more people are becoming beneficiaries of Social Security. That's why it's a Ponzi scheme: it only works as long as the payers vastly outnumber the receivers.
The only way to properly fix the problem would be to either reduce the amount of money being paid out to recipients, or to reduce the number of recipients. I suppose you could also increase the number of people paying into the system, but let's hope that creating human beings isn't a legitimate policy option.
Hi Stewart:
Economists will tell you that money is merely a means of exchange, and that the real economy is the stuff we produce or the services we provide. What I am attempting to do is look at the real economy. If the real economy can produce enough stuff to provide for future retirees AND provide for the people still working then then the tax base will be big enough to keep social security going, a small tax increase would be enough to keep the program afloat. What I've heard from conservatives is the claim that we'd have to have incredibly high tax rates to keep the program afloat. This necessarily means the real economy WON'T produce enough to provide for both retirees and non-retirees.
your friend
Keith
Ah! I see what is at play here…
Keith, what are your views on personal property rights?
Keith, I understand perfectly well what money is. And the liabilities that the U.S. holds, with respect to Social Security beneficiaries, are denominated in dollars, not some abstract notion of "stuff".
I am not a conservative, and it doesn't really matter to me what you've heard from conservatives. The Federal government's liabilities are growing faster than its tax income is. It just doesn't matter whether you try to look beyond the veil of money itself, because again, the liabilities are growing faster than the income.
A "small" increase in tax rates would not keep the program afloat. I don't know what makes you think that's true. A dramatic increase in taxes might, but a dramatic increase in taxes does not produce an equivalently dramatic increase in tax revenue.
So yes, to use your own terms, the economy is not producing enough. But it's not some abstract notion of whether the economy produces enough to "provide" for retirees and non-retirees, but whether the Federal government can collect enough in tax revenue to make good on its actual promises. As long as the number of retirees is growing faster than the number of workers–which is is–then the government cannot perpetually maintain this system, and it will eventually consume the entire budget.
As this is an older thread, and who knows if you'll look, I'll hope you do and simply guess that you haven't gathered "what conservatives think about economics" from any conservatives, but rather from liberals claiming to understand conservative thought. This is the foundation for strawman argumentation.
I'd recommend you read some of Thomas Sowell's articles to try to get an understanding of what a fiscal conservative's views are.
Hi Stewart:
The stuff I am talking about is valued in dollars: more stuff means more dollars available. If this were not true then our economy would have been experiencing consistent DEFLATION not inflation as has been the case. So, if it would take a large tax increase to make social security solvent THEN our economy cannot produce enough stuff to provide for both workers and retirees. You are disputing this?
Keith
Stuff can be either assets or liabilities, but neither are dollars until they are exchanged for dollars.
Keith, do you think that an individual has the money they earn, and then gives a certain % to the government which represents him to provide services for the common good, or that the government allows a person to keep whatever % of income the government deems is appropriate?
Keith, you have some misunderstandings, here. The most notable one is about the money supply.
"more stuff means more dollars available. If this were not true then our economy would have been experiencing consistent DEFLATION not inflation as has been the case."
More 'stuff' does not equal more dollars, and a growing economy does not create inflation. The only cause of inflation is an intentional increase in the money supply by the Federal Reserve. If the money supply is allowed to remain constant, then a growing economy will produce a deflationary effect, as the same amount of money chases fewer goods and services. So you have it exactly backwards.
"if it would take a large tax increase to make social security solvent THEN our economy cannot produce enough stuff to provide for both workers and retirees. You are disputing this?"
I don't think I'm disputing this, no. But let's be clear: It's not that the economy cannot provide enough goods and services for everyone, retired or otherwise. It's that the economy cannot provide enough goods and service to fulfill the liabilities that the Federal government holds toward retirees. Do you see the difference?
Imagine that, tomorrow, Congress passes a bill which increases Social Security benefits to $10 million per recipient, per year. Obviously the economy cannot support that. But it has no bearing on whether the economy is producing enough goods and services for everyone. Those retirees have not earned the $10 million. It's an arbitrary number. And while the actual payouts of Social Security are more reasonable, they are still arbitrary. And more importantly, they are too high to be maintained.
I'm w/ Stewart here. The problem w/ the economy isn't that there aren't enough goods, it's that there is not enough capital investment by those who have money.
The reason is, there is too much RISK, which has been created by the fraud and foolishness of the mortgage mess (thank you libs for pushing for affirmative-lending and federal promises to take on the risk and debt of lenders), national debt, coming inflation due to money printing, and the socialist regulatory and tax overtures of the Obama admin.
While this whole thing is circular in one respect, Keith, you definitely have the cart before the horse, and artificially increasing the supply of goods or money won't solve the problem.
Even if there were enough goods and services available (and I think that there are), people can't buy them without jobs, and jobs come from capital investors, not the government providing faux jobs paid for by STEALING monies from the private sector.
The only way out of this, in my mind, is for the government to relax it's burden on private investment (and profit), thereby creating an environment for private capital investment and lending based on real collateral. Yes, we need government to do some minimal regulating to prevent fraud, but we DON'T need the burden of Byzantine regulations and high-tax schemes that borrow from Peter to pay Paul, giving the illusion of a better economy, all the time floating on ever increasing debt.
Hi James: I don't think you DO see what is at play here. I am merely responding to the claim that social security is a program in crisis. Since real economic product is valued in dollars, the claim that there will not be enough dollars to support both retirees and workers implies there will not be enough economic product to do so. If that's true then no financial fixes will solve the problem. As for my view of personal property rights, that's a different subject. I don't want to sidetrack the discussion, but if you will explain to me how it relates to the question at hand, I'll give it a go.
your friend
Keith
Hi James:
You asked: Keith, do you think that an individual has the money they earn, and then gives a certain % to the government which represents him to provide services for the common good, or that the government allows a person to keep whatever % of income the government deems is appropriate?
Neither. I believe that taxes are in effect the rent we owe to our society for living as part of that society. I DO believe that in general we have a right to set the tax rate to whatever level we want. None of this has to do with the economic question of whether or not we will be able to keep the promises made by social security without impoverishing those still working.
your friend
Keith
You want a big, fat lie about "Obamacare" (from the party of lying liars, the Republicans): check here.
Also, Newsweek came with with 7 lies about it here.
nice throw in Louis. Sike……. Obama Care is no good. If we want to correct health care there is only one change that needs to be made. Follow our constitution. If your Illegal in this country kick them out. They are the ones throwing a wrench in the system. They come over here take our jobs and don't pay taxes and then they go to the hosipital and get free hospital coverage because they are illegal and can't speek english. In turn "we the People" Pay higher insurance premiums and hospitals go bankrupt because they don't get paid.
One more throw in here. There are 30 to 40 million (low estimate) Illegals in this country and only 30,000 hospitals. 10,000 illegals enter the country each day. Just look at that figure and you tell me why we have a health care problem.
Hi Chacha:
Your estimate of 30 -40 million illegal aliens in the US is far beyond what reputable sources estimate.
Keith
Hi Keith: what is your reputable source you are going by to disregard my numbers? The Ferderal goverment? If it is you can't believe the fed goverment. They always have something political in mind.
in 2004 the fed goverment spent 176 billion to cover medical expense's. Hey Obama! Are you listening I have another Idea for a bail out plan that will stimulate the economy. GET RID OF ILLEGALS = LESS MONEY THE GOVERMENT HAS TO PAY OUT AND MORE JOBS. HMM IMAGINE THAT.
Sorry getting off subject here a little bit.
One more fact about obamacare
It will cover illegal immigrants!Sounds smart!!
Hey while you are at it MR Obama, why dont you just go ahead and raise our taxes some more and cover the whole world under obamacare. you can call it ObamaHitlerCare!! lol