The Housing Bubble

All I can think of is the modified old saying…

“When you owe China a billion dollars, you have a problem. When you owe China 894.8 billion dollars, China has a problem.”

When you owe China 894.7 billion dollars AND you have hundreds of billions of dollars invested in infrastructure in THEIR country then I’d say the problem resides in the U.S.

What debts we refuse to make good on they’ll just take in the form of equity.

The Grumbling Hive (a.k.a. the fable of the bees)

Hello there Packman,

I’ve often noted in the debates about the GDP stick. GDP is a kind of crude measure for prosperity.

While I’m in favor of mass transit investment to ease a future oil/energy crunch it often gets hit with the GDP stick.

So, people would need to spend less on cars/oil/gas/tires exc. Does that mean their lives got worse? That versus being stuck on I405 for an hour and a half per day?

What about things like the inflation vs deflation debate as well. The extreme anti-deflation stance of the banksters is because they are so heavily leveraged. Those of us with out huge debts are not as concerned. Deflation means lower prices.

Often they trot out the GDP stick. Then you have the manipulated GDP vs inflation statistics to deal with.

Of course, those public employee SOB have contracts with 10% inflation as some kind of baseline. Total crap.

When those contracts fail and bankruptcy occurs, they will get reduced pensions. And that again means deflation and lower costs.

I’m trying to keep this in mind in all the debates.

W/regards to GDP - I see what you’re saying, but I think it’s flawed. E.g.

So, people would need to spend less on cars/oil/gas/tires exc. Does that mean their lives got worse? That versus being stuck on I405 for an hour and a half per day?

To take it to its extreme (and leaving non-work usage of transportation out for the sake of argument) - what if we could turn on an “everyone telecommute” switch, such that there would be now zero usage of cars? Theoretically that would introduce tons more prosperity but reduce GDP, as you say, but only if you take a surface look.

In reality if people had more time left in their work day, and they also had more money left by not buying gas, cars, etc. - that money and time wouldn’t just be gone. That time would be spent in other means producing more stuff, and that money would be spent buying more stuff produced.

For a simplistic case - say I’m a programmer working for a software company - I could now produce say 30% more software, and the sum total of programmers in my company would increase the production of the company by 30%, in turn increasing the revenue by 30%. That 30% goes towards more GDP. Also the company theoretically would pay me more - that and my non-commute savings means I can now buy that new big-screen TV I otherwise wouldn’t have. This increases the revenue of the TV company - etc. etc.

So even though the automobile-commuting portion of the GDP would be reduced (or removed) in an everybody-telecommute scenario - the overall GDP wouldn’t, because there would be offsetting gains in other sectors. In fact, the offset would even be more than what’s lost, due to the new efficiency.

The same general principle has existed since the beginning of the industrial age. Replacing two workers with one worker and a machine doesn’t decrease GDP - it increases it. Replacing two accountants with one accountant and a PC doesn’t decrease GDP - it increases it.

BTW this is discussed in Adam Smith’s Wealth of Nations. He showed that GDP shouldn’t be measured in “hours worked”, but rather in “goods and services produced”. This means - correctly - that GDP doesn’t have a hard ceiling that’s directly limited by the actual population.

the thinking being that the act of people saving money causes economic problems because it lessens demand and therefore production; with the usual conclusion being that in the long run we’re better off not being too thrifty.

Oh, now I see why you don’t like Keynes- you simply don’t (can’t?) understand him.

You should look up the paradox of thrift and find out what it means before you embarrass yourself further.

I don’t, eh?

From the horse’s mouth:

For although the amount of his own saving is unlikely to have any significant influence on his own income, the reactions of the amount of his consumption on the incomes of others makes it impossible for all individuals simultaneously to save any given sums. Every such attempt to save more by reducing consumption will so affect incomes that the attempt necessarily defeats itself. It is, of course, just as impossible for the community as a whole to save less than the amount of current investment, since the attempt to do so will necessarily raise incomes to a level at which the sums which individuals choose to save add up to a figure exactly equal to the amount of investment.
—John Maynard Keynes, The General Theory of Employment, Interest and Money, Chapter 7, p. 84

He’s making two incorrect leaps here, with a third incorrect leap made generally by society:

1. That each dollar saved subtracts a dollar from the revenue of someone else. This is not true, if the method of saving is to invest in something, with the promise of later returns. E.g. if I save money in my 401k, and invest it into equities - that money goes towards some company, and can be spent on their equipment, etc.

2. That each person simultaneously decides to save. In practice this doesn’t happen. Different people are at different stages in life. While one person may decide to save due to newfound thriftiness - someone else is buying a new car to replace the one that finally broke down too many times. Etc. etc.

3. People generally try to apply this principle over the long term, not just during times of recession - the whole “debt is good” and “deficits don’t matter” thing. Like I say - it discounts the heterogeneity of society; while one person saves during one period of their life - others are spending, by desire or necessity.

“Paradox” implies that it would be improper to save, since if everyone did it simultaneously the economy would crash. However applying the exact same principle - there should be a “Paradox of Grocery Shopping” stating that it’s not proper to grocery shop, since if everyone did it simultaneously the parking lot would overflow and the shelves would end up empty, and there should be a “Paradox of Driving on I-80″ stating that if everyone tried to drive on I-80 simultaneously it would come to a standstill, etc. etc. These paradoxes don’t exist, because everyone knows that we don’t in a homogeneous-behavior society.

Thus there is no paradox - or if there is it’s not worth declaring as such, because it’s a universal principle across any social behavior, and is meaningless in the long run of economics - except perhaps to drive people towards incorrect debt-driven behavior.

Packman,

Probably didn’t write that very well. My point was that a lot of economists/politicians look at the car use as a large long term forced expenditure. Spending more on transportation than is really needed. Hence, going to some kind of mass transit would be an economic negative as you might “gasp” save more money.

There is that aspect of GDP that is pure spending.

I don’t really get it either. The money goes into the bank or other investments so should be a zero sum. I guess the banksters think the velocity is better on spending. Besides, savings are a liability for the banks and drive interest rates down.

Hell, people could start paying cash!

The *paradox* of thrift is that something that *normally* is a good thing (in this case thrift- Keynes is not in any way against thrift, as you seem to misunderstand), can, *paradoxically* become a bad thing in some situations (such as recessions/depressions). Because it helps feed a deflationary death spiral. This is precisely what happened during GD1. Therefore government should temporarily increase spending to offset this phenomenon. And when the crisis was over, this spending should be reduced, and the debt repaid. Interest rates should also be temporarily reduced, to spur spending. When spending increased, they should be raised.

This is a tried-and-true theory that worked rather spectacularly well for about 50 years until Mr. Reagan took over and began the (Randian!) deregulation that led to the crisis we’re in today.

Your out of context snippet (provided by the Mises Inst?) continues your false assertion that Keynes somehow thinks we should always run deficits. I know you know better than that. It puzzles me that you continue to put out disinformation.

Any other economic ideas you need explained to you?

“Hell, people could start paying cash.”

The horror.

The only thing stopping people from doing that is that they don’t have any.

Other than that it’s not such a bad idea.

This is a tried-and-true theory that worked rather spectacularly well for about 50 years until Mr. Reagan took over and began the (Randian!) deregulation that led to the crisis we’re in today.

“Spectaculary well” is in the eye of the beholder. Doubling the national debt, and Increasing the it from 20% to 44% of GDP within 5 years is certainly spectacular, not sure I’d call it “well” though. I suppose it did take unemployment down to a measly 14% at least.

In the meantime we got the creation of the FHA and Fannie Mae - two key causes of today’s crisis, and Social Security - a key cause of another coming economic crisis.

And LOL at the fingering of Reagan as a key cause of the housing bubble. Reagan certainly had a hand in the S&L crisis, but that was long ago, with his legislation’s impact long done. No - the key causes of this crisis were by far Clinton and Bush II, not Reagan - at least in terms of who was president at the time the various causes happened.

Your out of context snippet (provided by the Mises Inst?) continues your false assertion that Keynes somehow thinks we should always run deficits. I know you know better than that. It puzzles me that you continue to put out disinformation.

Not sure I’d call the very definition of Paradox of Thrift - from Keynes, and pulled from Wikipedia (not Mises), and found in most google searches on “Paradox of Thrift” out of context.

I never said Keynes proposed that we always run deficits. But the nature of government spending is obviously that it’s very difficult to turn off - if you can’t see that you’re blind. So in practice Keynes’ “spend when necessary, save when possible” approach ends up being “spend when necessary, party when possible.”

from wikipedia-

” The paradox states that if everyone tries to save more money during times of recession, then aggregate demand will fall and will in turn lower total savings in the population because of the decrease in consumption and economic growth.”

Get it? Really not so complicated.

Reagan began the wave of banking deregulation that short term caused the S&L crisis, long term caused the exact same crisis again- the one we’re in now.

Again, not so complicated. Unless you want it to be.

And uber-Randian Greenspan, appointed by Mr. Reagan, took it from there.

*sigh* How much damage has been caused by that romance/philosophy that Ayn spewed? Talk about delusional idealism…

“… we can make those dollars lose value faster than all the cheap plastic stuff that we’ve gotten from China …”

Bernanke could sure use some advice as to how to go about do this inflationary thingy of which you speak since this seems to be the goal he has set but has trouble reaching.

And the stories told about the USA in Europe makes your hair curl equally well. The common perception by those who have never lived in the US is that Americans are all fat stupid religious gun toting illiterate racists. I often find myself defending Americans as I find the people are pretty much the same on booth continents and the stereotypes are always wrong.

So before you harp on Europe based on hearsay, I suggest you go live there for a while. I grew up there, and I wouldn’t mind seeing some aspects of European society adopted in the US, or vice versa.

By the way, Europe is a large place and very very diverse. The differences between Sweden to Greece for are far are far greater than the differences between Alaska and Florida IMHO.

combo:

My take is we need to make it easy to fire mediocre guvmint workers, just like in private business. But I think they will accept large pay/benefit cuts, if they can keep their jobs for life.

Just like the private sector? Man, you REALLY have been out of work for a while haven’t you?

aNYCdj

You might want to be carefull giving the gov the ability to fire workers quickly. You could see a president coming in and firing every republican or democrat and replacing them in every post. You might get guy’s like Brownie put in more and more posts. The only qualification being you raised money.

B…b…but Brownie did a heckova job.

IMO the very overlooked/underreported downside of low interest rates. Rather than making the traditional 8-10% or so rates on long-term treasuries, the SS trust fund has been making a measly 3-5% lately. This has hammered it, and you get what we have now.

It will only get worse. One need only look to Japan to see our future in this regard. They’ve had ultra-low rates for 15+ years now.

Packman,

SS Trust Fund? Am I mistaken or are all of these funds already spent. There is nothing other than the promise to saddle future generations with more and more debt.

Lip

Well - it’s “spent” from the perspective of government as a whole. From the trust fund’s perspective there’s a $2.4 Trillion balance, as of the end of 2008 at least. This is “invested” in the form of U.S. treasuries and other government securities, which is why from a government-as-a-whole perspective the money has indeed been spent.

Key is that as time goes by and more and more of the baby boomers retire, the drawdown of the fund will get faster. In the end - when/if it actually reaches zero doesn’t really matter - just the act of it going down from its current level means that it subtracts from the bottom line of the government’s general fund.

(Incidentally “trust fund” is a bit of a misnomer, since there are actually two funds - retirement insurance, and disability insurance)

Also what gets neglected by a lot of folks is the government pension fund and other similar funds, which also have a pretty large amount of U.S. treasury holdings ($500 billion).

But when she said “super special friend rate” she probably didn’t say it was lower, just let them assume, when it was really her “super special lets take advantage” rate.

Why did they give her this listing after she’d done that? I see more grief ahead.

I have yet to see a “friend” discount on anything turn out to be less than what I can negotiate on my own; the only exception to this is my good friend at Oakley who gets me about 50% off retail.

But — do have a story to tell though about an erroneous call from a realtor — she thought she was speaking to her broker and called my cell by mistake, since that was the last call she made - to schedule a viewing.

She left a message to say that her client was making $82,000 - so would she qualify for that $450,000 townhouse?

I actually called her back. I did. I couldn’t resist!

I told her I made more than that and I couldn’t make those payments. She said “well, her father was putting 20% down for her”. I said she’s one payment away from possible foreclosure! Then she said (and you’ll love this one) — well, its 3 times her income, isn’t it!!!!!

I laughed and said “well, I guess its none of my business:”.

Potential,

SV in this case is Silicon Valley.

“I gave up on politics and went to the farmer’s market, which is a far better use of a Sunday morning.”

I’m jealous. Our farmer’s market doesn’t start up again until May and I can’t wait.

We have a year-round farmer’s market. Another plus of living in a good climate.

DC area has a couple markets that are year round. You can get lettuce and root veggies almost all the way through the winter. Plus baked goods and meat, and eggs, mushrooms, flowers… I even got milk. Lots of vendors make prepared jellies and apple butter and the like.

At the moment, it’s the “starving time” for fresh produce. Running out of winter store but too soon for spring veggies. One vendor grows small cucumber and tomatoes in a greenhouse but it’s rediculously expensive even by farmer’s market standards.

“How exactly would I provide that shard?”

I suppose you could post a direct link to the 1990 page bill.

Nah, don’t bother — I beat you to it.

Answer me this, o prescient bubble-callers: How long can 20% annual price increases in any market last? It never ceases to amaze me that people who followed the numbers to perceive a housing bubble cannot do the same with health care. Perhaps because the gov-caint-do-nuthin-righters don’t like the conclusions?

Typical bubble psychology, just surprising to find it here.

Well said, alpha.

I’m somewhat surprised by the lack of critical thinking regarding healthcare here, despite substantial (non-partisan) evidence to the contrary. Do “gov-caint-do-nuthin-righters” actually believe those crazed Beckian diatribes on the AM dial? Or does their philosophical stance simply blind them to the mathematical realities of the current healthcare system?

I knew you could find it yourself, prof, so I let you do it. But do you accept that as Proof?

I notice you’re silent on my query as to the source of your health insurance. The reason I ask is that I find, again and again, that those most opposed to health care reform and supportive of our ‘free market’ (ha!) system, tend to be those who have some form of socialized, assured health care. You know, like from wifey who works for the school system or the county gov. Am I hitting close to home?

I would love to know what percentage of those opposed to ‘government run’ health care are themselves recipients of it.

Wrong bill. They can’t get a supermajority for the House bill in the Senate, so the House is now voting on the bill already passed by Senate (on Christmas eve).

http://finance.senate.gov/sitepages/Health_Care_Reform.html

It is the first link. And it is more like 2400 pages.

The reason I ask is that I find, again and again, that those most opposed to health care reform and supportive of our ‘free market’ (ha!) system, tend to be those who have some form of socialized, assured health care.

Really?

My observation is opposite. Most of the people I know who are opposed to it (me included) have private health care. My view is that it isn’t that great - but the alternative is far, far worse.

And comparing our cost of health care with pretty much any other country is apples and oranges. Americans generally have far worse health habits than other countries - e.g. more obesity, by a long shot. Socialized health care will either:
A. Bankrupt our country, if the current high level of private care is extended to everyone, or
B. Require an extreme cutback in the level of care, such that it will end up quite a bit *below* most other countries.

This is the elephant in the room that everyone ignores.

The cause of this is many things:
- Our transportation infrastructure and physical layout - we walk less than most other countries, mostly because we’re simply more spread out than most countries.
- Our demographics - we have more of a race and culture mix than most countries, and some portions of this mix contribute very inordinately to high health care costs.
- Our eating habits - very poor.

Most of these are simply unchangeable; those that are are changeable only with a very high amount of pain and over a long, long period. However socialized medicine will actually serve to make the situation worse - and what we have - has (Medicare). E.g. the easier it is for cousin Frank to get a fancy motorized scooter (extremely expensive) for free, the less apt he is to take the necessary personal austerity measures to ensure he doesn’t have to need one.

Socialized health care will either:
A. Bankrupt our country, if the current high level of private care is extended to everyone,

I don’t believe this but even if so, why would this matter? We’re already BK on so many levels and “doing fine” The bail-outs BK’d us, the gutting of the middle class, outsourcing and tax structure BK’d us. If we’re going to be BK because we’ve been looted, let’s have some justice about it.

B. Require an extreme cutback in the level of care, such that it will end up quite a bit *below* most other countries.

Not if restructured. Why would it be below? We spend 17% of GDP on healthcare, Canada spends 10%. Our outlays are rising theirs have been fixed at 10% for years. They cover EVERYONE we don’t come close. Many countries spend about 10% of their GDP and cover everybody and have better health stats than us. At 17% of GDP and RISING, obviously the money is there but the system is faulty.

And cutbacks for whom? 50 million have no insurance, 50 million are under insured. That’s 1/3 of the population.

Those who have insurance in the US generally get great healthcare.

However, there are far too many people without health insurance, either by choice (I’m young and don’t get sick), or because they are sick.

The problem is with the number of uninsured first and foremost.

The other issue is fundamental to health insurance. If you don’t see the cost of a good, you tend to overconsume it. Healthcare cannot be free, or we will bankrupt the country, regardless of whether there is a public option, or publicly subsidized insurance. There will be cries of “rationing”, to which I reply, damn right. It’s the only way to stop people from getting something for free that they don’t need.

If food were given away to the consumers for free, with the government paying, there would be more obesity, more wasted food, and the government would pay a greater and greater price for the food as demand from the fat consumers would balloon. Rationing would be the only way to slow the cost increase. Same thing with healthcare.

Rio,

It is a 1900 page bill. We’ll start wading into it.

As mentioned there are almost always less than clever ways of making things worse.

Anyhow, you still are not addressing cost other than putting out talking points about what other countries expendetures relative to GDP.

I’m just going to dig into the bill. For what it is worth, I’m willing to bet an internet beer that it just throws money at the problem.

It’s the liberal way.

Bear posted to the WRONG bill. The Senate one (the one the House leadership is now trying to pass) is very different. You will be looking at the wrong bill if you look at the one Bear linked to.

Rio -

- Regarding bankruptcy - technically we’re not bankrupt - any entity that can continue to get credit is not bankrupt. I’m talking true bankruptcy, either in the form of outright repudiation, or at least true Argentinian-style hyperinflation.

- 50 million is not 1/3 of the population - 100 million is. Also 50 million is a gross overstatement; even the worst numbers put out (42 million) include illegal aliens.

- Nevertheless, your other data just proves my point. We spend so much more on health care than socialized countries, despite having so many uninsured. Adding coverage/insurance for all those currently not insured will add huge costs to our overall health care system - it will not somehow just magically spread out the current costs across a larger set of people, unless the costs per person is greatly reduced. The only way for government to do that is to reduce the level of service, because it sure won’t happen through efficiency - the government just doesn’t do efficiency.

Nevertheless, your other data just proves my point. We spend so much more on health care than socialized countries, despite having so many uninsured.

Actually I think you just proved my point.

50 million is not 1/3 of the population - 100 million is. Also 50 million is a gross overstatement; even the worst numbers put out (42 million) include illegal aliens.

But I said 50 million uninsured and 50 million under-insured. That’s 100 million and 1/3 of our population.

And 50 million is not much of an overstatement if one at all. Families USA estimated 45.7 million in 2007. It’s higher now because of job losses. And:

Study: 86.7 million Americans uninsured over last two years
3/4/09 CNN

One out of three Americans under 65 were without health insurance at some point during 2007 and 2008, according to a report released Wednesday.

The study, commissioned by the consumer health advocacy group Families USA, found 86.7 million Americans were uninsured at one point during the past two years.

Among the report’s key findings:

• Nearly three out of four uninsured Americans were without health insurance for at least six months.

• Almost two-thirds were uninsured for nine months or more.

• Four out of five of the uninsured were in working families.

• People without health insurance are less likely to have a usual doctor and often go without screenings or preventative care.

“The huge number of people without health coverage is worse than an epidemic,”

“Those who have insurance in the US generally get great healthcare.”

That’s simply not true. I have what would be generally considered good health insurance. I don’t overconsume and have trouble getting necessary health care when I need it.

“There will be cries of “rationing”, to which I reply, damn right. It’s the only way to stop people from getting something for free that they don’t need.”

I’m not getting anything for free and I’m not getting anything I don’t need. I’m having trouble even accessing the coverage for which I’ve paid.

What passes for health care for the average Americans is an embarrassment.

My daughter would agree with you. She refuses to go back to Kaiser because they couldn’t accurately diagnose the strep throat that she had had before.

It just amazes - and saddens - me, how many of the same people on this blog who see the problem with extending “affordability” of such a huge expense to all people won’t be a huge problem. Why is this any different than government-assured affordability of housing? Other than the propose scale - much larger - it isn’t.

Can’t you see that doing such a thing will only serve to make costs skyrocket even further? It’s the same dang principle. And it will have the same result. It will be worse, in fact, because you can’t just ramp up health care the way you can ramp up house building. It takes a lot more expertise - expertise that only a small subset of the population (as opposed to homebuilding) is even capable of gaining.

Look - I’m not a cruel-hearted person. I don’t like seeing people doing without health care, or having to get by with meager health care, any more than anyone else. But we’re talking about the lesser of evils here. We simply cannot afford it. Period. End of story - or end of country.

The only way for government to do that is to reduce the level of service, because it sure won’t happen through efficiency - the government just doesn’t do efficiency.

First, it’s clear that our for-profit model “just doesn’t do efficiency,” not when our GDP expenditure on healthcare is about 17%, vs. about 10% (or less) for our peers in the developed world. Our current system is wildly inefficient on both on a dollar allocation level (e.g., notoriously high administrative costs) and on an efficiency-of-service level (e.g., duplicative or unnecessary services, or high-tech services at greater cost when simpler options would do). I suggest you check out Dr. Atul Gawande’s considerable writing on the issue — he makes it clear that costlier, more test- and gadget-heavy care does not mean better care.

Secondly, government could increase efficiency for the consumer in a market-empowering fashion, by removing a number of market-level restrictions: for example, by removing the inability of small businesses to pool their purchasing power, by allowing healthcare competition across state lines, or by allowing both individuals and entities to buy pharmaceuticals in Mexico or Canada at a fraction of the cost.

The stories I hear of “poor health care” are generally certain kinds of insurance/providers (Kaiser being one of them). I have personally never felt that I was getting less than adequate care, and most people that I know have never had such problems (even those that went through very difficult medical problems). Those who have had the issues, either coincidentally, or not, have been Kaiser patients.

Packman- Got any friends in California? I bet they no longer prefer their private coverage, as their payments increase 20% a year.

You see, they’ve had this ‘housing bubble’ out there, that’s wiped out a lot of people and caused a lot to lose jobs (maybe you’ve seen it in the news). Now all the healthy people are dropping their coverage because they can’t afford it, leaving only the sick, which of course makes coverage costs skyrocket. Which makes more people drop out, which makes premiums even higher, which makes more people drop out, which makes…

But of course, the housing bubble is ‘contained’ to Cali and a few other states, and the green shoots we’re seeing everywhere will soon make everyone flush, and our health care system will work well once again, right?

PS- The ‘Americans’ are uniquely unhealthy’ argument can only be believed by someone who has rarely if ever traveled outside the US. Take a trip to France and count the joggers, and ask for fat-free pastries. Over-eating/smoking/drinking are not in any way unique to America. You think we invented gout?

Yes, I do have friends in CA, though I haven’t talked with them in a while. If I were to ask them which they prefer - it would have to be qualified with the ability to not pay taxes for Medical and Medicare - if that part was included I guarantee they’d still prefer private. People seem to forget that.

I never said American’s were “uniquely unhealthy”. Yes I have traveled to lots of other countries, including many European and China. You’re right of course they do also have unhealthy people/habits as well - but there are generally far fewer overweight and obese people in other countries than in the U.S. - at least that’s been my observation - from traveling and discussions with others. I admit I haven’t sought out statistics though.

They’re cool with 20% per year increases, as long as they don’t have to pay for medicare/caid? Give ‘em a ring, I bet they aren’t- if they’ve run the numbers. And what will their rates be when they hit (now unavailable under your plan) medicare age? I bet it’ll be a pricey retirement. And fraught with fear of losing their ‘free market’ coverage. Yeah, sounds a lot better than that horrible guaranteed coverage for all that everyone else has…That costs less….That works everywhere else but somehow just can’t work here…

BS. I lived in CA for 10 years. I didn’t see 20% per year increases in my insurance costs. Sorry.

1. CBO report 2005 report suggested that obesity and lifestyle in US did not account for much of the difference between US and other countries.
2. Packman ” Nevertheless, your other data just proves my point. We spend so much more on health care than socialized countries, despite having so many uninsured. Adding coverage/insurance for all those currently not insured will add huge costs to our overall health care system -”
- We are already paying for uninsured health care, via higher costs from hospitals and drug companies. Via higher taxes. Via longer waits at the ER.
3. Packman ” it will not somehow just magically spread out the current costs across a larger set of people, unless the costs per person is greatly reduced. The only way for government to do that is to reduce the level of service, because it sure won’t happen through efficiency - the government just doesn’t do efficiency.

- Again the costs are already spread out, just not obvious when you get your hospital bill or insurance bill.
- Gov has been reducing payments to MD’s over the last decade. They reduce payments for surgeries. They just removed billing codes that allowed consultants to bill at higher amounts. MD”s hospitals and nurses are getting a smaller and smaller share of health care dollars. What they haven’t done is reduce drug costs (see medicare prescription drug plan that forbids medicare from bargaining for a lower price or blocking high priced drugs) and what they will pay for. Medicare could do those things. The VA does a much better job in restricting care based on a cost benefit analysis and in my view that’s what we need. People can still buy supplemental insurance to cover those things. They can still pay out of pocket or join a trial if the tx is not covered.
- Medicare advantage (private medicare) costs 15% more than medicare administered via the gov. VA costs with it’s very sick population are less as well.
3. Packman” BS. I lived in CA for 10 years. I didn’t see 20% per year increases in my insurance costs. Sorry. ” They may be talking about the recent increases that insurance companies pushed through right after they thought healthcare legislation was dead. Literally they were dancing on it’s grave. Large increases were pushed through.

Anthem Blue Cross plans to go ahead with rate hikes in California
Executives at the health insurer and its parent firm, WellPoint, defend increases of as much as 39% in a hearing before an Assembly panel. The changes are slated to go into effect May 1.
February 24, 2010|By Duke Helfand
Russel A. Daniels, Associated PressReporting from Sacramento — Executives from California health insurance giant Anthem Blue Cross, under fire for scheduled rate hikes of up to 39%, insisted Tuesday that their premiums were fair and legal, and they told lawmakers they expected that the increases would go forward.

But here’s the defense…

Health Insurance Company Rate Increases, Profits Not as Big as Obama Claims
Published: Mon 15 Mar 2010

Lucas Eichmann

Nonprofit Blue Cross Blue Shield plans take up one-third of the private medical insurance market. The nonprofit group in Michigan asked for a 56-percent rate hike without garnering any national outrage.
—

The Real Numbers
In reality, the rate increase that California’s Anthem requested was 20-35 percent. The only way the increase could reach 39 percent was if the insured insisted on the best-of-the-best plan and also advanced into a different age group at the same time.
—
Oh, only 20-35%? Well, that’s no biggie. Certainly won’t encourage the healthy but broke to drop out.

Do you live in California now, packman? Because now is when the rate hikes are happening. I didn’t say they’d been going on forever. As you know.

“It is the first link. And it is more like 2400 pages.”

Polly is truly awesome.

And my inclination to pick through a 2,400 page bill to figure out what king of porkulous FIRE sector lobbyists insisted had to go into health care reform in order for them to agree to it is even lower than my propensity to weed through the 1,990 page version I incorrectly posted above.

Slim’s prediction: A lot of the current insurance company villains, upon seeing the new rules and regs that they’ll have to comply with, will say adios to the health insurance biz. Just won’t be worth the bother for them anymore.

Which will lead to a public option as the default option.

“A lot of the current insurance company villains, upon seeing the new rules and regs that they’ll have to comply with, will say adios to the health insurance biz.”

Yup. Same thing happened to private (defined benefit) pensions, once there were enough rules to drive insane any reasonable person who had to follow them.

Dude,

We have beaten canada to death and exactally why it isn’t a good comparison.

1) They are further along in the cost curve. If you look at percent of GDP spent on health care over time, you will find they have trended downward as faclities have been paid off.

2) The cost control measures work quite well there may cause regression in the quality of care when applied to the USA. They live as a leech organism pulling away trained professionals and technology from other.

3) They have good care in cities but distributed care in outer areas is not good. So, there are massive regional variation. If you are selling thise program to the liberal base, aka unemployable long term alpha-sloths with zero education that live in cities, then I could see the apeal. This will not have a positive impact on care in the majority of subburbs, where most of the middle class lives. Basically the middle class will take it in the shorts.

4) Pointing out others pay less isn’t addressing cost issues. I want to know where the current costs are originating and what specifically this plan is going to do.

In general there are some good points to medicaid/medicare and I DO NOT see any advantage of creating new structures to handle the current mess. I don’t hear anything about reforming that system.

I’m going to dig into the bill tonight and will try to have a semblance of a post about it soon. Maybe you should do so as well so we both don’t just keep bouning off the walls shouting the same old points.

One would have to ask, if medicare/medicaid suddenly limited itself to being solvent and only paying out what it takes in; What effect would that have on cost of medical care in the US? Instead of chasing the boogyman of insurance companies, a low margin business, why not look at the root costs.

My guess is because the democrats just NEVER think that way. It’s all about seeing things as a humanitarian issue.

That’s all well and good. That same mindset produced the “war on poverty” which had the effect of increasing poverty.

If you remember, and I assume you don’t, the welfare queens of the 80s and all the project kids who’s primary goal was figure out how to collect welfare and sit in govt sponsored housing project. It was an epic disaster. Remember increased incentives to have children with no incentive to get off assistance?

And please don’t bring up Brazil. I think they are riding the crest of increasing debt and the alternative fuel bubble. I expect that will come crashing down fairly soon. We just had a big party worldwide of increasing debt and it felt good for a lot of people. Now, not so much.

Nice bunch of smoke-blowing there, James. Too bad your ‘facts’ are just a bunch of archy bunker gut-feelings, or you might really be on to something.

“leach organisms, welfare queens of the 80s, unemployable alpha-sloths(!) that live in the cities…”

It’s like a trip back in time! ” Boy could old glenn miller play….”

Oh, and how many countries do we have to show you that have lower health care costs, longer life expectancies, and higher rates of user satisfaction before we’ve answered your every niggling doubt? Ten, twenty, thirty? Is there any point where evidence will change your mind? I’m inclined to doubt it.

We have beaten canada to death and exactally why it isn’t a good comparison.

Please don’t force me to compliment France now.

Pointing out others pay less isn’t addressing cost issues.

Yes it is, by comparing how different systems address costs.

And please don’t bring up Brazil. I think they are riding the crest of increasing debt and the alternative fuel bubble.

I wasn’t but now that you mention it, Brazil made public health-care a right for all citizens 1988. This was well before any “boom”. In fact Brazil was in much worse shape in 88 than the USA is in now. I guess they just decided it was the right thing to do and they’d figure out how to pay for it later. Maybe morality trumped money in 1988’s Brazil healthcare debate.

As far as the Obama plan, It really doesn’t interest me that much unless the public option makes a comeback.

Didn’t that used to be Blue Cross Blue Shield? Then BC/BS was bought up and became for-profit. I believe rather strongly that (unlimited) profit motive has no place in health insurance of any kind. Health insurance has guaranteed constant demand — hardly a free market. If health insurance companies want to enjoy this competitive advantage in the so-called “free market,” they should give up (most of) their profits in order to participate. Kinda like utilites.

IMO, the whole bit about Public Option only being used by 5% of the population is wrong. I’d wager that if Obama signed a PO, a whole lot of people would be uninsured very quickly. Wal-mart would drop their entire health insurance program before the ink was dry. And I mean that literally, not metaphorically.

At this point I’d be happy if we find a way to cover almost everyone reasonably, eliminate job-lock, and eliminate shadow discrimination against 50+ age workers who are looking for a job.

Walmart -

already has pushed most of its healthcare costs onto the taxpayer by keeping its wages so low employees qualify for welfare.

Walmart also hires for part time, so their employees don’t get coverage. Like many companies are doing.

You’re right, Oxide, BC/BS did start out as a not-for-profit. Who, what and when will start the next version?

“I guess they had a new machine to pay for…”

Bingo. My doctor friends in another country consider it morally repugnant that a doctor could receive a financial benefit of any kind from recommending a test.

Speaking of that new machine to pay for, I’ve ranted here before about dentists. And the “need” for a new set of x-rays “to update our files.”

Back when I was going to Dr. Pricey, that “need” seemed to arise, oh, about once a years. Which made me wonder why the dental office’s files were so emotionally needy.

After all, my studio files aren’t clamoring for frequent updates. They’re just sitting over there in a filing cabinet, not clamoring for anything.

But the diff between Dr. Pricey’s office and my studio is that I don’t have an x-ray machine payment to make. All of my equipment is bought-and-paid-for.

I’ve actually accused my dentist of this and I flat out refuse X-rays now unless I deem them necessary.

I’ve asked the same question here- are dental x-rays really necessary every year or two? If you have no preconditions? It seems excessive to me, not just from a cost perspective, but from a radiation to my head perspective. I don’t have my body x-rayed every year or two. But man, if I try to say no to them, I really get the hard sell, with all these fearsome possibilities threatened.

My questioning of dental x-rays is based on personal experience. Right after I graduated from college, I started having tooth pain in the upper left quadrant. Went to a dentist. Who x-rayed it and found nothing wrong.

Well, the little bugger kept right on hurting. And hurting.

Three years later, I saw another dentist. Who x-rayed it and found nothing wrong.

Well, the little bugger kept right on hurting. And hurting.

A year and a half later, the pain really cranked up. So, I saw a third dentist. To her everlasting credit, she correctly diagnosed the problem. She did so by taking x-rays and performing other tests. Diagnosis: Abscessed tooth.

Then, at another appointment, she extracted it. I felt so much better that same day that I went for a nice bike ride through some of the hilliest parts of Pittsburgh.

Bike Pittsburg !!!

Do you know that now you can bike from just outside Pittsburg to DC without geting on a highway. They have opened up the collasped rail tunnels along the Yak to Cumberland MD…and then along the C@O Canel to DC.

Note that there is a 22 mile long climb north from Cumberland…great going down it, not so much the other way.

Canadian Politician Comes to U.S. to Have Heart Surgery

N.L. Premier Williams set to have heart surgery in U.S.
Kenyon Wallace, National Post Published: Tuesday, February 02, 2010
Keith Gosse “I can confirm that Premier Williams did leave the province this morning and will be undergoing heart surgery later this week,” said Mr. Williams’ spokeswoman, Elizabeth Matthews.
Newfoundland Premier Danny Williams will undergo heart surgery later this week in the United States.
Deputy premier Kathy Dunderdale confirmed the treatment at a news conference Tuesday, but would not reveal the location of the operation or how it would be paid for.
Ms. Dunderdale will become acting premier while Williams is away. He is expected to be away from four to six weeks.
A decision to leave Canada for the surgery, especially if it is available here, raises questions about the Premier’s
confidence in Newfoundland’s health care system.

Did they airlift Harry Ried`s wife to Canada?

I don’t think that anyone will argue against that when money is no object you get great healthcare in the US, possibly the best in the world. That’s not the issue at hand here.

They pay less, total, for health care.

First of all, this statement needs to be supported and documented, and you have to make sure you’re paying for the same thing. I have no doubt that people in Rwanda pay less than we do for health care, because they don’t get any.

But even if this statement is valid overall, it doesn’t show the whole picture. For example, some drugs are subject to patent royalties in the US but not elsewhere, so they can be sold much more cheaply in other countries. In effect, the rest of the world is free-riding off of our pharma research.

I don’t think that anyone will argue against that when money is no object you get great healthcare in the US, possibly the best in the world. That’s not the issue at hand here.

Gee Colorado I wonder why that is? Nah, couldn’t be that socialism is a scam?

There is no free lunch.

Fortunatly, it has been pointed out that socialist countries pay less. Hence, the prime minister of said system wouldn’t go all funny and come to the US for care. That would just be comical beyond all belief.

Maybe the simple answer (on cost) is we have a bad wealth distribution, some inflationary effects and a general will to blow money on our health?

Lehigh- here’s your health care cost breakdown per capita. Guess who’s no.1? USA! USA!

http://www.nationmaster.com/graph/hea_spe_per_per-health-spending-per-person

The pharma thing is a bit of a straw man. *You* show *me* some stats on that, eh? And even if it were true, why should we subsidize the world’s pharmacy? It’s busting us.

And do you see all those countries that spend less? Every other one in the world? Well, in the vast majority of the developed ones, they also live longer, have higher rates of satisfaction with their health care systems, and cover everybody for life. And I’ve got stats for that, too!

But somehow, I’m given to believe, America is uniquely unable to do this. We’re “exceptional”.

Lehigh? James? Packman? PBear? Where’d you all go? (*crickets chirping*) Sleepy sleepy time?

I guess it is tiresome defending weak, fact-free arguments from reality. But we had so much great data for you guys!

Guess you only like charts and whatnot when they say what you want them to say…(Guvmint bad!)

G’night kids…g’night ATE…g’night john-boy…

“Where’d you all go?”

Sorry to tune out — I have a day job and all… musicians need to support their habits, ya’ know.

Anyway, for the record, I don’t really have anything against health care reform per se, as you and a couple of other posters mistakenly suggested after my morning kvetch. I simply think that the effort to communicate a 2,400 page bill to the average American voter was an abject flop. The fact that the MSM is preoccupied with which politician is likely to vote for it rather than the actual contents of the bill suggests that the OB administration has lost control of their message.

Medicaid/Medicare is available if you’ve paid taxes for the last couple of years.

So, that particular peice of socialized medicine is already there.

Medicaid is available to those who haven’t paid taxes as well, for instance people on SSI.

I am custodian of an individual on SSI, his treatment is county and state administered. I’ve seen firsthand the lack of quality care delivered by the govt. God help us if this is how we all end up.

Hey X,

The primary thing you need in older age is family near by and support group around you.

I’ve talked with many a folk that lived in wonderful third world countries. My X was from Africa. They had socialized medicine so consequently, if you were going to die you went to the public hospital. They were good with burials.

Another friend from the socialist dream state of USSR. Well, he isn’t exactally positive on the idea of a socialized medicine. He advocates taking the socialists out for some target practice with his AK47.

But of course it will be a easy squeezy fix after the 2000 page masterwork is passed. Hopefully the democrats will make use of the abortion funding and they will be a self eliminating problem.

Hopefully the democrats will make use of the abortion funding and they will be a self eliminating problem.
Pelosi said as much to the Dem pro-life contingent, when she explained why keeping abortion funding in the bill was necessary.

I agree with you about having family near as support.

http://ow.ly/1irMs
“Stupak notes that his negotiations with House Democratic leaders in recent days have been revealing. “I really believe that the Democratic leadership is simply unwilling to change its stance,” he says. “Their position says that women, especially those without means available, should have their abortions covered.” The arguments they have made to him in recent deliberations, he adds, “are a pretty sad commentary on the state of the Democratic party.”

What are Democratic leaders saying? “If you pass the Stupak amendment, more children will be born, and therefore it will cost us millions more. That’s one of the arguments I’ve been hearing,” Stupak says. “Money is their hang-up. Is this how we now value life in America? If money is the issue — come on, we can find room in the budget. This is life we’re talking about.” “

Yes james great comparisons of Africa and Communist Russia. Why bother with Europe Japan Canada. Try presenting some facts and something other than the ramblings of your friends.

Hmmmm, I grew up in Communist Russia. I never liked the healthcare there - until I came here! It was so much easier getting a doctor’s appointment, for example…

I have super duper health insurance through my employer. And it sucks! The insurance is too expensive, but that’s just a very small part of the problem.

The “for profit” healthcare system means that doctors DO NOT diagnose, DO NOT treat, DO NOT prevent. The doctors in “Communist Russia” tried to prevent and treat the problem - all they do here is push drugs, tests, and “maintenance” for (often imaginary) problems. The only thing so far I found superior here is emergency surgery, the quality of everything else is horrible.

Well! There ya go! Straight from the horse’s mouth, so to speak. (No offence NYchk). Communist Russia had better health care! More effective, less profit motivated.

(Packman, James, Lehigh, PBear…are you guys still in sleepy sleepy land? Don’t wake up and read this, you’ll think you’re having a nightmare…and wet your Ayn Rand jammie-jams.)

Surgery in the US is superior… If only we could add superior preventive and illness care as in other countries, along with access to care - we truly would be number one.

Of course we “can’t afford” to offer healthcare “as it exists today” to everyone - but why should we, when what exists today is clearly broken? The costs are insane, and not even real. It’s not the universal care that’s impossible, it’s the current system that’s completely unsustainable.

We’re complaining about RE agents skimming 6% off the top of every real estate transaction, raising the costs and driving the unwarranted housing inflation, but we’re okay with healthcare providers skimming much more off the top? collecting premiums but denying care? doctors having to overinflate the costs of their services?…

I don’t understand why it’s okay for doctors to charge $350 for a one minute useless visit if you “self pay”, versus accepting $70 for the same visit from an insurance company? Isn’t it LESS expensive for a doctor to deal with a self-pay patient who pays cash right away, instead of billing insurance company (and often getting refused altogether)? Hospital sending a $50,000 bill for surgery, then accepting $4,500 from insurance? But if you didn’t have insurance, they would hound you for the entire $50,000 and drive you into bankruptcy? Madness…

US is the only developed country in the world where you can lose your house and your life savings just because you fell sick. How shameful and disgraceful. This is not in the best interests of society at all. Law, order, and protection of human life should be at the core of any civilized society. Otherwise, what’s the point of working hard and saving, if in the end you will be robbed blind by insurance companies and healthcare providers? or worse, denied care when you truly need it?

basura, I don’t think you agree. Spokaneman appears to be disagreeing with the DC bill from the left. (?)

And yes, they want to spin it before the election, but come on, that’s not the real reason. If all they cared about was getting re-elected, they wouldn’t have picked up risky HC at all. It’s darn near a third rail.

This is something that really bugs me about conservatives. They think the other guy thinks like they do. Election this, election that, follow the money, must be an ulterior motive, etc. Is it so hard to believe that there are people who don’t like seeing other people in pain? Simple as that?

This is something that really bugs me about conservatives. They think the other guy thinks like they do. Election this, election that, follow the money, must be an ulterior motive, etc. Is it so hard to believe that there are people who don’t like seeing other people in pain? Simple as that?

Exactly! They want you to pray to Jesus, but not follow him.

Lets face it …..A lot of the problems we have today are because of monopolies and price fixing . Why are the health care costs so high to begin with ? Because it’s a insurance system rather than a pure capitalist structure based on supply and demand .If the providers and insurance companies keep going only the chosen fews will be able to have this high price health care with its expensive drugs that are pushed by another industry . The government can’t afford it either . Just like we can’t afford to pad the pockets of Wall Street either. The systems don’t even allow for the supply and demand to correct the problem except for in some sectors.

So, the point is how is it solved along with the unemployment
problems . All prices don’t jive with reality .

So,if you happen to have a employer that buys most your health care ,your lucky ,or if you happen to have a lot of money your lucky regarding health . If your high risk of filing a claim your dropped ,or some form of prejudice
is extended ,except if your over 65 and than you get medicare ,(which is a cheaper policy but as another poster noted you will still spend 200 to 300 k in the course of your retirement ,and that doesn’t cover long term nursing care ).
I added up what I have payed out for 17 years and it has been over 250k , and that was with medicare ,so I think I agree with that post .

Lets face it ,the costs are killing everybody ,just like the costs of housing killed everybody verses wages .

If costs structures become so disjointed from real ability to pay of the citizens and the government can’t afford it either ,than something is very wrong .Just look at the average wage and tell me if a family could really afford all the different costs expected from them ,especially if you add taxes to all that .

So ,we have some crazy form of capitalism with insurance systems and out-right socialism with monopolies ,rigging all the prices and pricing the people out of the market on almost all needs ,while the rich are getting richer . We are so crazy that we spend trillions bailing out the investment sector
of the markets .

What’s really weird out here is I have a little concrete work that needs to be done. Probably something in the $500 range.

The local boyz won’t even bother to quote, which makes no sense as construction out here has ground to a halt. Maybe they’d rather be fishin’.

I’m guessing to small of a job for slow times. During busy times they could fit you between two big jobs. Now? Why mobilize for a tiny little job in a single day when it takes just as long to clean the trucks as it would for a big day and there is a minimum load from the batch plant that is probably twice the amount of concrete you need.

I’m in the northern ‘burbs. Only joined Costco recently in order to get supplies for my parents at a cheaper price. Next time I’ll know better!

Sam’s is not the bargain it used to be and hasn’t been for years.

Just heard from a guy from Las Vegas . He in essence said that
the unemployment rate there is about 25 % . He said that a lot of casinos have closed down their hotels and restaurants and
just have the casino part open . So Las Vegas is recession proof
they always use to say . So the entertainment business that was local, giving local jobs ,verses the outsourced manufacturing ‘
lost jobs ,is now another sector going down the tubes .

My apoligies, I have had problems lately remembering that the markets are perfectly efficient. Maybe a few hours watch Larry Kudlow will help with that?

“I have had problems lately remembering that the markets are perfectly efficient.”

The disconnect between the academic fantasy land where this idea was conceived and real world market reality is truly mind boggling.

Clarification: My sis did not do one of those deals herself; she simply did not think there was a legal problem for those who funded new house, car and cash-at-closing out of mortgage loan proceeds. I am not sufficiently versed in the law to have a legal opinion on this issue.

I constantly wonder about how long denial can last in places like Fairfield before used home sellers (both owners and the realtors who work for them) adjust their expectations to reflect the 50 percent reduction in market values since the bubble peak?

I will add that I see little evidence denial has yet ended in our ‘hood (Rancho Bernardo — San Diego 92127). Prices on the MLS are still about where they were three years ago…

So I’m going to turn down a pay raise because 6% of it will get sucked away into the SS black hole?

I don’t think so.

Right now all hope lies in wages not yet earned, so it would be a shame if more and more people saw less incentive to grow those wages.

It’s not just a matter or growing wages, it’s a matter of whether people choose to work in the above-ground economy or not. One can find many examples around the world of pragmatic workers (even in legitimate fields) who decide to keep most or all of their income off-the-books. And that kind of dis-incentive making would impact much more than just Social Security.

Exactly ET, people will adapt - it’s already happening. If people are pushed (in the pocketbook especially) they will push back.

So how do I become an “underground economy” SW Engineer. Do I go to flea markets and sell code snippets?

You lost me on that one. Maybe rephrase it?

When he said “I want to get back what I put in”, the implication was that what he paid into SS was like a savings account.

However, at the same time he was “saving”, the government that was voted into office (his government, like it or not), was spending the savings account on other stuff, rather than raising taxes to pay for the other stuff (or buying less stuff).

My statement to him was that by virtue of enjoying lower taxes than he would have otherwise needed to pay if the SS fund was not raided year after year, he already got out what he paid in, albeit indirectly.

I hope that makes more sense.

Yes - that makes sense. And you’re right.

Most people when confronted with that information would be dumbfounded and extremely angry. The government would never tell it to people that way though.

Just think how much better off our economy would be if that money had been invested in something like say corporate bonds, CD’s, or even equities. Not that I would advocate such a thing for government-controlled funds; but that’s what would have been the case if SS had never existed in the first place.

Thanks for that, Rental. I never thought about it that way. I’m adding that to the talking points for next Thanksgiving.

Of course, won’t most folks who oppose entitlements just cite that as proof that it doesn’t work, is wasteful? Wouldn’t they argue for cutting taxes and cutting the entitlements entirely as the right approach?

“(interest only loans only required paying interest until reset day)”

And the banks get to log these loans as performing! And they get to show the value of the loans INCREASING as deferred interest is added to principle!

Not to worry, it’s all very, very good!

Plus isn’t the repayment schedule shorter? Like if they had a 30 year with the first 5 years interest only, then at the reset they have 25 years to pay off the balance?

“Plus isn’t the repayment schedule shorter?”

Yep. $1,000,000/25 is larger than $1,000,000/30.