Thursday, December 24, 2009

keep yourself honest about the health care debate

1) So I get upper middle class (and above) and union fears about taxation to subsidize poorer people ( Transfer of wealth is never considered fair unless it's transferred to you).

2) I get fears of people being forced to buy health care (it's just me, my 6 kids, my truck and trailer, you commies can force me to wear seatbelts, drink floridated water and buy healthcare if you can survive my buckshot)

3) I get fear of government (Regan was the second coming of Christ last I heard, and uncle Ronny says social programs are the steeping stone to slave labor camps in Russia - I'm only barely exaggerating)

4) I get fear of pork barrel spending. These bills have all the elements of corrupt government. States getting exempted from state medicare matching is blatent buy offs.

5) I get "We're mortgaging our children's future"

6) I get the moral imperative of state sanctioned policy on end of life decisions, including abortion and when it costs too much, so lets pull the plug. As evil as insurers are, they're not beholden to the public will, so they're free to make immoral choices (cut the old bat off at $2M for God's sakes - what's the sane choice for a democracy?)

I have retorts for all the above. And personally I don't like insurance being used for plannable health care (otherwise it shouldn't be called insurance). I'd prefer that life saving procedures be part of a federally subsidized plan, and all other activities be transparently priced as gas is today. Such that negotiated rates for the same procedures by the same doctors can go away. Amortized pricing could go away as well, as start up practices could operate with reduced overhead and historic liability (legacy service providers could be given a one time start-from scratch loss-catchup by the gov). With extensive high priced care being subsidized, then the average man doesn't have to pay $50 for an asprine while sitting in the ER (and so on until you get the head scratching $3,000 bill). Similarly, medical modalities can have better cost benefit analysis, etc. It's complex and has many right minded nay-sayers. But I'm unconvinced - as I feel our current medical pricing / profit structure took decades of hands off pricing analysis to from (with many intermediaries that could always pass on costs to the next layer). I believe if we paid off most of those inefficient historic decisions, and immediately enacted a more free market style basic potentially affordable care (with subsidies for the lowest levels), we could produce an enviable result.

But that aside, here are my personal retorts which likely would not move anyone from their biases (be they justified or no)

1 - If you are not socially benevolent , or are, but require direct praise for your benevolence then fine. To each his own. But if you're of the Christian persuasion, then you'd best check you get-to-heaven list a few more times.
MATTHEW 22:20-22 - money is printed and maintained by the gov. So don't fret if the gov. wants it back. This is apparently not important nor incompatible with the wishes of God.

Matthew 19:21-24 - Hording wealth at the expense of your fellow man is apparently frowned upon. (more directly hording wealth at all is bad, but I'm taking creative license, since people seem to ignore this passage entirely in modern history)

Luke 10:25-37 - Don't leave the poor (or those in distress) unattended. While you can argue that this doesn't necessarily apply to government policy, I'd say that if the gov is a democracy and people can opt to vote for or against helping their fellow men in need, then I'd say it's a moral imperative (Al-Qaeda certainly thought so). There is a legitimate issue of free riders (professional welfare con artists, low employment incentives, etc). But I think a modern society can apply their intellect and legislative powers to overcome this excuse.


2 - The one legitimate role of any government is to define right and wrong. Gov. is a social contract of-the-people for-the-people as a whole (even dictatorships have to contend with the wills/fears/angers of the people - see the USSR). If we all dump our waste in the lake, we all die. Thus we as a people nominate watchmen to oversee the lake and make sure NOBODY dumps there. Setting rules is the will of the people for the safety and enhancement of a standard of living for same peoples. Building a bridge is too laborious/expensive for private ventures (usually), so we tax the community and travelors to maintain a bridge. But the people decide how pretty / how big / how many lanes a bridge is.

If the hardened libertarian would like to give up his drinking water, his policed streets, his roads, his electricity, his telephone lines, his managed and effective wireless spectrum (eg cell phones, wifi, bluetooth), his food supply being non poisonous, his air breathable, etc. Then fine, go move to Africa where libertarianism runs wild (albeit in the form of tribalism).

3 - Gov is whatever we make of it. If we voters abdicate our civic duties, and allow proxies to buy their seats of power (so they can live the life of luxury, privilege, power - with a lifetime extension), then you reap what you sow. I too fear a gov selected by ignorant and ill minded (compared to even greeks thousands of years ago who had similar levels individual knowledge and wealth as the US). Theoretically reducing the spending powers of gov reduces the temptation and rewards. But even the legislative 'rules' are worth hundreds of billions to lobbyists (eg carbon trading, clean air/water, rights of construction/mining/drilling etc). A person in power will always have temptation of some sort. A BIG way to reduce that temptation is to make all elections publicly financed. Then at least the honest Jimmy Stuarts of the world wont have to decide between raising money for his next marketing campaign through deal making and being out-spent out of office next race. This also breaks the back of the two party system of entrenched corruption - today you NEED the support of one of the two parties (apparently it doesn't even matter which) for FUNDRAISING. So their weapon to keep you in line is to threaten cutting off support.

Even still, this is no excuse to not fix blatant problems through government action. We should never be afraid to hire new watchmen (Or as Sarah Palin calls them - death panelists)

4 - I loath compromise, but I am an economist at heart. I'm willing to add up a bundle of goods and bads to get an opaque number. Such that another bundle of goods and bads could produce another comparable number. If one number is better than the other, then HELL YES TAKE IT. The alternative is usually to not choose ANYTHING. And many times that is actually the wiser choice.

Pork barrel spending is the calculus that the cost of the bad is neglegable compared to the value of the goods. Defense spending ~ $600B. Unemployment insurance extension ~ $1B. Is that a lot.. yes. is it worth hurting defense spending? No. So it gets a rider / an amendment / pork barreled.


In the McCain v.s. Obamma debates, the amount of pork barrel reform was considered in the low billions. Compare that to a trillion dollar budget and it's literally round off error.

5 - Firstly, these bills are investments that pay out dividends that actually get our money back in less than 10 years, so thats not applicable here. This was originally brought up with tarp. But much of that money has already been paid back. Other of that money was a secret payout to foreign governments through AIG. This too was an investment. In some cases, if we hadn't, those COUNTRIES would continue to default, furthering the downward escalation of the world economy. Yes there was profit taking by G. Sacks and friends, and they should burn in hell. But Reganomics made Goldman Sacks - so bite me exclusive free-market conservatives.

The REAL mortgaging my children posters went up for the stimulous package. You can argue how many cents on the dollar we got for that investment money. I seriously doubt it was an investment that would yield greater than 1.0 . I seriously doubt proposals were evaluated from a feasibility standpoint. It was mostly pork - albeit pork that paid peoples salaries. But if you factor in the economic welfare (as I as an economist-at-heart do), then the educational programs have a non dollar value. The safety and cleanliness of new roads is hard to measure (certainly we're not GROWING traveling capacity like the original interstate acts did - we're we're merely replacing existing roads). The social value of less crime due to continued employment of police officers is hard to measure. While a bugler break-in has a measurable dollar value, a rape does not.

That being said, I didn't see any China re-investing in their future style stimulus so I'm largely disappointed. This green research is BS in my opinion. Give the money to universities through the NSF. You get better cost controls, and in the end, patent-free technologies (usually).

The last thing I'll say on this topic is that nay-sayers have the benefit of blissful ignorance of the future. If you invested NOTHING with stimulous I (and soon II). What would be the social and financial costs that we would bare? Would our continued tax revenue shortfalls match the cost of the stimulus package ANYWAY? To say nothing of the continued devastation of economic welfare (which people like me care about). In other words. We spent $700B. This directly produces some $100B in immediate profits that we get back. The future profits degrade out to say $300B. So the actual cost is only like $300B in present value (very very rough numbers). Would inaction produce an additional $1T in US losses which is taxed at say 25%, thereby losing the gov $250B. With respect to borrowing, you either borrowed the effective $300B over 30 years or didn't collect $250B to pay existing 30 day debt that have matured. Its effectively the same. You still had to issue new bonds.

So the bill's true cost (from my very rough numbers) is $50B in future debt obligations. Compare that to the continued losses of $750B to the non gov. public ($1T net of taxes). Then add on the social costs (loss of employable citizens, home ownership benefits, etc)


6 - It is true that you have a moral imperative with a gov agency that doesn't exist in the private sector. Personally, I, being an agnostic, don't have this issue. And in fact, believe that the PREVENTION of the ending of life in a semi-mutual-consent fashion is religious, and thus violates the establishment clause. I, however, recognize that my view on life is a minority (even if my views on abortion are in the majority). As a social contract with my peers, I must therefore compromise. And it seems that provisions for non profit 'alternative medicine', such as planned parenthood should be allowable for those that can't afford the direct costs of abortion (assuming no government dollars can directly go that way). I would not find it feasible that this legislation should be used as a tool to effectively undermine the practicality of abortions for the demographic that statisticly needs it the most and for those that abortion grants the greatest statistical manner of 'making it' in life. Cold as it may be, numbers don't lie (were I to have them handy - read freakonmics). And I'm wanting to error on the side of helping those that need it.


So thats my rebut-el. And notice I haven't even mentioned the benefits of health care reform, which I believe even the conservative republicans are for (given their initial enthusiasm). If only they could do it by giving grants to the best and most fool proof free market in history - oh how the willful mind easily forgets.