Why The Health Care Bill Can't Work

The President and the Democratic leadership in congress have been working extensively to get the White House's health care bill passed before the August recess, and for now it seems like they'll have to wait. This is wonderful news for all Americans and I'll tell you why.

First of all, people like to say that the objective of this bill is to cut health care costs. Proponents cite statistics that claim that the high cost of health care is because of excessive administrative costs and inflated prices, and that a single-payer system would cut these costs immensely and reduce health care prices for everyone. This is simply impossible. Even if the government were to somehow be less wasteful and more efficient than the insurance companies, you cannot increase the demand for health care (by having everyone insured) without increasing the supply (more doctors and hospitals) and expect costs to stay the same. The only way to offset the costs of this new demand is to ration care- precisely what happens in countries that already have government-funded health care. The people that would need care the most will be disregarded as being too expensive to heal.

Another provision that will inevitably make costs skyrocket is forcing insurers to cover treatment for preexisting conditions. Obviously people with preexisting conditions should have access to affordable care, but having this care covered under insurance will mean it is being used all the time. Insurers don't insure preexisting conditions because the customers they cover would be sicker overall, making everyone under the plan pay more. The fact that these preexisting conditions require constant care means that they could be much better treated through the market. Since there is constant demand for treatment, health care providers will compete to have people with preexisting conditions choose them for treatment- usually by being the most affordable.

That being said, the true purpose of this bill is to get everyone insured, regardless of the cost. In fact, the most infuriating thing about this bill is the penalty tax that would be levied on those who don't have a private insurer and don't get this new plan after it would pass. This provision is a blatantly regressive tax that will only hurt our poorest citizens, especially since the administration has admitted that there would still be millions left uninsured even with this plan in effect.

The real reason for the high cost of health care is the minimum coverage mandated by the states. As a result, health insurance isn't like other insurance. Where true insurance is supposed to cover unexpected costs, the states have forced health insurance to cover routine doctor visits and tests. Since everyone is using the insurance all the time, costs go up. Some states mandate coverage for procedures that many find ineffective, like chiropractic care or acupuncture. New York and New Jersey mandate maternity coverage for everyone- even if you're a single male. All of this unnecessary coverage is what's making costs so high. If people were able to personalize their plans and cover only what they need, it would cut costs tremendously.

In the end, it is precisely the government who is at fault for the high cost of health care, and making them more involved will only make things worse. If the government can provide affordable, quality medical coverage for all Americans, let them prove it by providing it to our veterans.

Lots of Letters Today

I went on an email rampage today after a few good downsizedc.com dispatches the past few days.

Government was supposed to be local and close to the people. Federal government was supposed to be small compared to the combined states. The 10th Amendment limits the federal government to 20 functions, leaving all other matters to the states and the people. And yet, now half of all state budgets are paid with federal money. This allows the federal government to coerce the states into complying with laws with the threat of lost federal aid if they do not. This gives Washington more power than it was given in the Constitution. Bad laws at the state level only affect that state. Bad laws at the federal level effect everyone. The states should be responsible for their own budgets without the threat of losing money if they disagree with Washington. Please reduce aid toward state budgets.

And another:

Please don't try to fix the REAL ID Act. Please, just repeal it. I also oppose mandatory electronic medical records. I certainly don't EVER want federal bureaucrats to use REAL ID and/or electronic medical records to dictate what medical treatments I can and cannot receive. I don't want federal aid to the states to be used either to bribe state governments to comply with REAL ID, or punish them for failing to comply. The REAL ID act will not make the US more secure. It only will burden citizens with more senseless government regulation and burden states with another unfunded mandate from Washington. It does not need fixing. Please get rid of it altogether.

And another:

Please introduce DownsizeDC.org's "Write the Laws Act." You can find a summary and the full text of the bill here:
http://www.downsizedc.org/wtla_legislation.shtml

Regulations will cost American families $13,000 this year. Regulations are made by unelected bureaucrats and have the power of law, and there should be no "legislation without representation." Most regulations impose undue burdens on business and do not protect the public. Congress should not pass the responsibility of lawmaking onto bureaucrats they appoint and then not take the blame when there are consequences. That is why laws should be written by Congress and only Congress. They represent the people, and are rightly the only part of government with this power. Take away the power of bureaucrats you gave power in the first place. Support the "Write The Laws Act" today.

Can't say I did nothing today...

A Government of Enumerated Powers

After reading today's Downsizer Dispatch reporting the growing number of cosponsors for John Shadegg's Enumerated Powers Act, I felt compelled to write my congressmen to support it.

Please bring John Shadegg's 'Enumerated Powers Act' (HR 450) to a vote as soon as possible, and please do all you can to support the passage of this bill. The federal government is defined in the constitution as a government of enumerated powers. The supreme court has affirmed this fact many times. And yet, most federal bills today blatantly overstep these powers. Our founding fathers knew very well what unchecked government power was capable of and wisely limited government's power. The federal government has ignored these restrictions for too long, and we already feel the damaging effects of a power-hungry central government through more and more laws that restrict rights, higher federal taxes, and more reckless deficit spending.
The federal government is not responsible for ruling the nation- each state is sovereign and can create its own laws and regulations. If these laws and regulations are beneficial, they will inevitably be accepted throughout the union. You have sworn an oath to honor and uphold the Constitution. Please support this bill and force Washington to exercise ONLY the enumerated powers given to it in the Constitution.

It is exciting that bills like this one and also Ron Paul's "Audit the Fed" bill are gaining so much momentum in congress. I suppose it is inevitable that after times of massive expansions of Federal power, people realize the harm done and try to reverse the trend- often unsuccessfully. However, the wave of deregulation after the 1930s and 40s is evidence that this sort of trend has happened before. This bill, however, is particularly exciting, as apparently the Constitution hasn't been enough to restrain overeager government. Perhaps by bringing this issue to light, the inevitably growing number of dissatisfied citizens will take notice of the injustice Washington has wrought on this nation for decades and, at least for a few years, realize that small government is the best government.

Not So Hard To Believe...

I just sent this email out to the congressman who claim to represent me regarding the new federal budget:

The latest federal budget is out of control. The government can barely control the parts of the country it's in charge of currently, and the new budget represents an unprecedented increase in government intervention in all parts of Americans' daily life. I do not support the federalized health care authorized in the budget. I do not support the "cap and trade" boondoggle described in the budget. I do not support the increased aid to distressed homeowners described in the budget. I do not support the national food tracking provision that is included in the bill. I do not support a national "public service" system that will no doubt become mandatory in the future. I certainly do not support a universal pre-kindergarten system- the idea of MANDATORY institutionalization of such young children genuinely frightens me. I am also angry that the Democrats are threatening to use the 50-vote reconciliation procedure to get this budget passed if Republicans don't support it.

These provisions are a thinly veiled attempt at greater federal control over every aspect of daily life. This budget plan will not stimulate the economy, and on the contrary has the Congressional Budget Office estimating that the national debt will rise to 82% of the national economy by 2019. You do not have my consent to vote for this bill, and to support it represents a complete lack of conscience toward your constituents, and furthermore, a total disregard of the Constitution which you have sworn to uphold as a Congressman.

The fact that Washington thinks they can get away with a budget proposal like this one is proof of their disrespect toward the people. The fact that it actually has a chance of passing proves that the Constitution is worthless.

Thoughts of civil war seem less and less ridiculous every day.

Lunch Break's Over

Wow- has it been two weeks since the last post? My senior project for college has had me up late for a while. I finally get a break for a few weeks.

I'm a bit excited at all the bad financial news I hear and read about all the time- it gets those who know what they're talking about more exposure. It's a bit strange to think about it as I read through my macroeconomics textbook since the topic is suddenly a current event.

Perhaps I should have been an economist. It is all very interesting to me, particularly the current chapters' focus on John Maynard Keynes, the bane of classical economists everywhere, and his theories on aggregate supply and demand. His theories are quite popular with pro-government types, as he asserts that government spending and central control of the money supply are a valid way to stabilize output and absorb any aggregate supply not demanded by the market. This is supposed to help limit short-term economic fluctuations in the economy, particularly unemployment. While Keynes's theories are sound, they are ultimately flawed by the inability for the government to restrain itself from involving itself in the economy more than necessary. Besides, as the textbook quotes Milton Friedman on later in the text, the goals of economic policy should be long-term instead of trying to micromanage the economy out of every small recession.

In addition, I've thought about how the Fed claims that its purpose is to stabilize prices, but after reading the textbook I've found that this isn't the case- the Fed can only stabilize output. The Fed runs under the assumption that injecting money into the economy to stimulate demand may raise inflation, but it will lower unemployment and help to keep output up during a recession. It's true that inflation by itself is not a problem as long as the rate of inflation stays constant. Interest rates and wage rises usually try to take inflation into account, so people only lose money when the inflation rate changes and things need to readjust. In the long run, after the market has adjusted to the new inflation rate, unemployment rises again, and all people are left with is higher prices. If the market adjusted freely, output would drop in the short run, but prices would stabilize in the long run.

Of course the government would rather hurt poor Americans by forcing higher prices on them than take a hit on output, which would means less tax revenue for them to spend. So the Fed stays- for now. There seems to be a lot of pressure on congress to support Ron Paul's "Audit The Fed" bill, which has 28 cosponsors in the House. While greater Fed transparency should of course be welcomed, I agree with those who say that the central bank is unnecessary.

Price controls never work, and are the main reason a record 18.6 million homes in the US are currently vacant.

Speaking of macroeconomics, I've recently finished Atlas Shrugged by Ayn Rand, which was fantastic, and I recommend it to anyone who isn't intimidated by a 1200 page book. It may beat you over the head with its Objectivist message, but some of the parallels with the present economic environment are a bit eerie.

"Cap and Trade" Is Not The Way

I've just sent this email to my Congresspersons, though I expect a cap and trade scheme to be voted on soon. No government could resist that kind of a power grab.

Maybe I'm just a pessimist, though they haven't given me much reason not to be.

Please oppose all cap and trade proposals. Sen. Bob Corker brought up a much better solution in the Senate committee hearings: that Congress should impose a tax on all fossil fuels, and reimburse the earnings by cutting payroll taxes. This idea makes much more sense then adding new government regulations, especially since the cap and trade law in Europe, the Emissions Trading Scheme, has proven to have little to no effect in reducing European CO2 output, and ended up being abused by many companies to make windfall profits by selling carbon credits they didn't need in the first place.

A cap and trade scheme is not the solution to promoting green energy. Please do not support it. Instead, I urge you to please get behind Sen. Bob Corker's idea- the decreased payroll taxes would really benefit everyone in this recession.

Downsize D.C.

Downsizedc.org is one of my favorite sites on the web, and in honor of its greatness, I've applied a nice banner to the blog shamelessly plugging the "Read The Bills Act." If you support not being an idiot, I suggest you take a look.

The site makes it very easy to send messages to your Representative and Senators supporting small government and civil liberties issues. I use it all the time and it's one way to say "I did something" about issues you think are important. It's a great resource and their newsletter is well-written and very informative about bad legislation that are ignored by the news networks.

I also use congress.org to send messages, as I've found that I get a sooner reply from my Rep and Senators. Plus I can send emails to Mr. President, for what it's worth!

I encourage anyone who is passionate about these issues to check these sites out.