Financial topics

[Reality Check]

The government can't run anything ...

I, personally, would agree with that statement if you had stated:


"The government can't run anything well."

But the Soviet Union proves that the government can run even something as vital as the food distribution system for decades as long as the goal is only to keep the vast majority of the people alive. It is a brutal, but true, fact that the high quality Health Care a majority of Americans have enjoyed over the past few decades is, not required to keep the vast majority of productive Americans alive. Therefor, if Obama Care introduces long waits for needed surgery, and retirement health care is limited to palliative treatments, and very expensive health care treatments such as transplants are limited to the wealthy elite and those with political connections, even then the vast majority of productive Americans will survive. Health Care is not as vital as the food supply ( nobody starts a revolution because sick old grandpa passed away a few years early ).

The control portion of Obama Care is law. Thanks to the Chief Justice of the Supreme Court of the United States the non-choice, choice between paying for "quality, affordable health care" and receiving only some portion of that, and paying for "quality, affordable health care" and receiving nothing, has been declared a constitutional federal government mandate.

The Public School Systems in the United States also are run by multiple governments ( local, state and federal governments all create mandates ); function very poorly and at relatively high cost ( when compared to private schools which constantly out perform public schools ); and Public School Systems are funded by mandatory taxes on both those who use them, and those who never use them, but the vast majority of Americans send their children to these monopoly public schools and would vote out of office any politician who suggests taking away the "money of the public schools" and using it for non-Public Schools.

Just like in the Soviet Union, grey markets in food production were allowed to provide the food that prevented mass starvation, Obama Care will be modified to avoid revolution, but federal government controls under Obama Care are here to stay. I am not assuming the primary purpose of those controls is to provide "Quality, Affordable Health Care", while you apparently believe the American People both understand a complex concept like "Quality, Affordable Health Care" and will hold Democrats accountable for delivering it.

A majority of Americans over the age of 18 during the "temporary" Nixon wage price controls either do not remember them or do not consider them a failure the way you do. As the last election shows a majority of Americans do not share our belief that "Government can do nothing well".

Once the choice is between no health care and Obama Care for the vast majority of Americans, Obama Care, whatever it morphs into, will be viewed as a needed entitlement. Obama care does make "well care" a free entitlement ( to some degree ), at the expense of more expensive and harder to get "sick care". The vast majority of people are "well" so the massively increased costs to truly sick people will likely not start a revolution.

Socialized medicine in Britain is very poor compared to what has been available in the U.S. for decades, but the people over there consider it a success.

Obama Care will leave the law books when the vast majority of other federal laws cease to function in the United States, just like the Patriot Act it is here to stay, in one form or the other, as long as the United States federal government endures.

[John]

> But the Soviet Union proves that the government can run even
> something as vital as the food distribution system for decades as
> long as the goal is only to keep the vast majority of the people
> alive. It is a brutal, but true, fact that the high quality Health
> Care a majority of Americans have enjoyed over the past few
> decades is, not required to keep the vast majority of productive
> Americans alive. Therefor, if Obama Care introduces long waits for
> needed surgery, and retirement health care is limited to
> palliative treatments, and very expensive health care treatments
> such as transplants are limited to the wealthy elite and those
> with political connections, even then the vast majority of
> productive Americans will survive. Health Care is not as vital as
> the food supply ( nobody starts a revolution because sick old
> grandpa passed away a few years early ).

The reason that the Soviet Union, East Germany, North Korea and Cuba
all got stuck economically in the 1950s is because you CANNOT exert
that level of control successfully. Even China has given up
controlling most of the economy. So I disagree with your basic
premise.

I've written about this many times. This is not politics or ideology.
It's mathematics. It's easy to prove mathematically that socialism
cannot work as population grows. If you're a serf lord or a war lord
and you control a couple of hundred people, then socialism is easy.
You just appoint your son to be chief bureaucrat, and have him monitor
all commercial transactions. As the population P grows exponentially
(proportional to e**P), the number of transactions between two people
grows even faster (proportional to e**2P). So as the population
grows, the number of transactions grows even faster, the number of
bureaucrats grows even faster. By the time you have a few million
people, socialism requires every person to be a bureaucrat.

The Soviets, East Germans, North Koreans and Cubans solved
the mathematical problem by freezing the economy in the 1950s,
so that nothing ever changes. So there are no new products,
no new services, and nothing that disturb the 1950s equilibrium.
As soon as you allow in something like the internet, then
all the socialist economic models collapse because all the
assumptions no longer hold.

Attempting to control the entire medical economy will fail with
100% probability, for the same reason. Even if the administration
could figure out how to control everything in 2015, the
underlying assumptions will already start to fail in 2016,
and people will go outside the system.

I've had the same doctor since the 1980s. For years, I would kid him
about keeping all his patient records in many cabinets full of file
folders rather than putting them on a computer. Then, two or three
years ago, he got a computer, and he keeps all his (new) patient
records on it, and he can order prescriptions over the internet. It's
a nice system, but it's ten year old technology, and it's going
to be obsolete soon, because of new technologies coming along
related to IBM's Watson technology.

Obamacare is already collapsing because of faulty economic
assumptions. Any changes in medical technology only add to the
collapse. There is a 0% probability that they can turn this around
and make it into socialized medicine.

[Higgenbotham]

Draghi said this morning that the EU will not entertain the possibility of buying Portugese bonds, as the Portugese bond market continues to collapse, as does the Euro.

http://www.reuters.com/article/2013/07/ ... 2W20130704
http://www.reuters.com/article/2013/07/ ... 0820130704

The US 30 year bond rallied on the Draghi comments, then fell to a 2 day low. Not good. It indicates lack of a safe haven in the international bond market.

http://quotes.ino.com/chart/index.html? ... &a=&w=&v=w

[Reality Check]

Obamacare is already collapsing because of faulty economic
assumptions. Any changes in medical technology only add to the
collapse. There is a 0% probability that they can turn this around
and make it into socialized medicine.

I wish you were correct. I truly do.

But the financial collapse of Obama Care is just not there, not this year, and not next year.

I agree the legislation does not, and can not, do what various supporters claim it will do, but so what ?

It is being run by bunch of liars who do not care if they follow the law, or not.

And it is so complex, and has so many parts, they just point to small parts they can either tell the truth about that small part working, or get away with telling lies about that small part working, and present those small parts of it as proof the whole thing works.

The main stream media does not have the knowledge, education or sophistication to call them liars, even if they wanted to.

If the law is not working for Obama politically, they just ignore the law, or change it by regulatory fiat, even if they do not have that legal authority to ignore it or change it.

I disagree that financial concerns caused the delay by the way, that was pure political decision on the part of Obama, probably a brilliant political decisions at that.

[John]

We already see the business mandate collapsing, and soon we'll see the
individual mandate collapse.

I agree that other parts of Obamacare will survive -- like the parts
about preexisting conditions, or parents insuring their kids to age
26. Whatever parts remain, Obama will claim that Obamacare is a
success because those things have been implemented.

But the heart of Obamacare were the mandates, and they can't survive
in anything like their current form. So yes, Obama will claim the
credit, but not for anything that looks like the original Obamacare
concept.

[Reality Check]

There is a 0% probability that they can turn this around
and make it into socialized medicine.

They can if they follow the "anarchy" path defined in the below link by aedens.

I agree that Obama Care in it's current form will not work well, but then again, never let a crisis go to waste.

But as the partisans for Obama Care stated, they can always "fix it" later.

http://www.youtube.com/watch?v=KFXuGIps ... LGNel9UVBA

[Reality Check]

We already see the business mandate collapsing ...

Delaying the political fall out from business mandates until after the next election is hardly a collapse.

I believe with your professional experience you know that the changes to corporate health care systems mandated by Obama Care were built into the corporate software long before this delay was announced.

Those changes that employees do not like will now be implemented "voluntarily by employers" without an Obama Care mandate to blame.

The reporting requirements that were the most difficult for employers to meet, those requiring employers to have intimate knowledge of the income of all members of any household any employee belongs to, have been delayed until after the election.

That was probably done for political reasons to avoid employers creating their own forms which blame Obama Care for the information requests. By next year there will likely be a very obtuse mandatory IRS created form that employers simply have their employees fill out and play dumb about what it is for.

[Reality Check]

... and soon we'll see the individual mandate collapse.

Collapse, no, delay one year, very likely.

The politically tone deaf Republicans will likely fall into this trap.

They will propose killing all mandates, and they they will compromise on delaying all mandates one year until after the elections.

Thus Obama can avoid the fall out from the left by blaming all the delays on the Republicans forcing him to compromise, and at the same time he will avoid all the fall out from any of the new mandates going into effect right before the election.

Yes, Obama may actually be that bright, as hard as it is to believe.

[John]

You're missing the point. These mandates can't be implemented without
economic disaster just like Nixon's wage-price controls couldn't be
implemented without economic disaster. It's not a matter of
postponing it a year. The same economic forces that make the mandates
impossible in 2014 are still going to exist in 2015. Obama will
salvage something, and call Obamacare a historic success.

[Reality Check]

But the heart of Obamacare were the mandates, and they can't survive
in anything like their current form.

If you are talking out past the year 2020, you may be right.

But Obama Care so far has been costing less, not more, than projected, for the simple reason the Uninsured and the Sick have not been signing up for it.

Almost none of the eligible uninsured people with pre-existing conditions signed up for the high risk insurance pool setup immediately after Obama Care passed, so they stole the money ( probably illegally ) to set up the federal exchanges in states where the state government opted not to.

Why would the uninsured sick people not take advantage of that opportunity provided by Obama Care ? The insurance left 40% to be paid by the uninsured patient as co-insurance, had massive deductibles and co-pays, and had very large monthly insurance payments. The patients were going bankrupt with, or without, the insurance, so for those who could afford the very large monthly premiums, they might as well keep the monthly premiums and go bankrupt in a big way, rather than in a less big way. Many many more simply could not afford the monthly premiums.

The exchange insurance is also piss-poor insurance with only the 30% coinsurance policies with Massive deductibles being subsidized, and then only if you meet the complicated requirements to qualify for a subsidy. The premiums will be high, even compared to the already expensive individual health insurance market Realistic projections have much fewer of the eligible uninsured ( or already insured ) signing up for it and receiving subsidies. This might change if illegal aliens are brought into the program in a big way ( they have to lie to get in - but verifying their citizenship status in any meaningful way is prohibited by the Obama Care law ).

The individual mandate on the other hand will likely raise money from college students and other young adults through the individual mandate taxes ( penalties ).

The fall out in the next few years, if any, will be political, not financial.