Obama’s 2173%, Painfully Regressive Tax Increase
It was not an April Fools’ Day stunt, and it wasn’t funny.
On April 1, tobacco taxes went up — way up. The most visible increases were the roughly 160% hikes in the federal excise tax on cigarettes to $1.01 per pack from 39 cents, and chewing tobacco to 50 cents per pound from 19.5 cents.
The least visible increase was the most revealing one, because it showed just how far the government will go in search of tax revenue while protecting the very people it demonizes for public consumption.
You see, as state and federal tobacco taxes have risen over the years, more and more smokers have taken to rolling their own cigarettes and cigars. This of course requires purchasing the raw material. Until March 31, the tax on a pound of tobacco was $1.09. According to this retail source, you can get up to 600 cigarettes, or up to 30 packs, out of a pound.
You can see the “problem”: $1.09 is a lot less money for Uncle Sam than the up to $11.70 (30 packs times $0.39) he was extracting from regular smokers before April 1. I have little doubt that many inside the halls of government, probably with the helpful assistance of cigarette makers moaning about “unfair” competition, were characterizing the roll-your-own smokers (RYOs) as “freeloaders.”
So Congress and the president fixed that “unfair” situation by raising the per-pound tax on tobacco purchases from $1.09 to $24.78.
You read that right. That’s a mind-numbing 2173% tax increase. Now the federal tax on the raw material is pretty close to the federal tax charged on cigarettes at retail, which, equivalently stated, is now up to $30.30 (30 packs times $1.01).
In government-think, this was done, I suspect, to force the RYOs to pay “their fair share.” It shouldn’t surprise anyone if many states follow suit and impose their own per-pound tobacco tax increases.
Though they will never publicly admit it, Congress imposed this radical tax increase on RYOs to protect Big Tobacco, the tax cash cow they love to hate, but can’t live without. It’s as clear an illustration as you’ll ever see of how government all too often operates at cross purposes. On the one hand, it uses Big Tobacco as a whipping boy every time a study comes out showing some new harm or cost imposed by smoking and smokers. On the other hand, the government knows that if enough people ever stop smoking, or figure out how to get their nicotine fixes without going through Big Tobacco, tax receipts will dive.
What’s next? Making it illegal for people to grow their own? This is ridiculous.
“Not one thin dime.” Isn’t that what the Pres said about raising taxes on 95% of Americans? I don’t make anywhere near $250k and somehow, unexplainably, I feel like I’m paying more taxes… Hmm. This is very disturbing. A carton of smokes (not even the premium ones) went from $28 to $34 the other day. I wonder if I could save up all the packs I smoke in a year, send them to the gubmint and get a tax refund or something. Just to keep Obama from lying to me, you know.
I feel stressed. I’m going to have to smoke now. Maybe even drink. Hey wait! Taxes went up on liquor, too! Maybe I can save all the whiskey bottles up for a year and send them to the gubmint and get a tax refund or something.
Not one thin dime, my thin a$$!
regards
If Patrick Henry thought taxation without representation was bad, he should see it with representation.
Actually, this is perfect. People will only begin to realize the falsehood of his statements when it directly impacts their wallets.
I found it amazing that the tax cut BS was all over the media, yet hardly a word about all the backdoor tax increases from the national news.
If 0bama taxes my chocolate my PMS rants are going to go off the charts.
Hmph!
I’m very upset. If the US government taxes cigarettes as high as Canada does, where are we Canadians going to have to go to smuggle in illegal cigarettes now? I pay $7.10 for a legal pack of 20 cigarettes (when I buy a legal pack).
Here is more on the corruption:
http://washingtontimes.com/news/2009/apr/06/house-lights-up-fda-regulation/
I quit smoking three weeks ago. I’m still at the moody, angry, chewing gum like crazy stage. Now if I can figure out how to get out of the other taxes he’s putting on the middle class…
Do the Dims recall prohibition? Look for crime to soar – truck high-jackings, 7-11 robberies and on and on. Cigarettes have become a the new ‘gold’. People will die.
The government tells us the high tax is to make us quit smoking, but in reality they depend on that money for their programs. If we all quit smoking , what would they tax to make up for lost revenue? It’s time to throw them all out of office.
All you silly people: BHO was talking about an income tax cut, not reduction in taxes in general. /sarc
Seriously – anyone who believed this shyster’s innumerate claim about cutting taxes for 95% of Americans should consider going (back) to school for remedial math, a basic economics course, and at least one U.S. History class. That done, Google around to see who’s currently paying U.S. State and federal income taxes. Only about 50% of those who file pay income tax. 5% of those who file are paying over 60% of the taxes paid. No way 95% of those 50% are going to see any tax cut over the long term – let alone 95% of “all Americans”. Not when BHO is tripling the “tax credit” for tax filers with “negative” tax liability.
Lots going on with this. And it’s not happening in a vacuum. The increase in petty crime that will result from this and other destructive federal policies is no accident, IMHO. Just the sort of “mission” to which a Civilian National Security Force could be assigned, don’t you think? Helps the civilian police force and avoids posse comitatus at the same time. And what the heck else are we going to do with all those early-release prisoners?
The oil industry is alternately demonized and exploited in a similar way to this. Taxes on gasoline were effectively raised when ethanol additives were mandated. Average mileage dropped as a result, forcing consumers to purchase more gallons of gasoline, which is taxed per gallon, not per mile driven. This increased the State and federal governments windfall tax revenue by a sizeable amount. By comparison, where oil companies profit approximately $0.09 per gallon of gasoline, the government profits $0.45 on average. And this of course doesn’t include the corporate tax oil companies ALSO pay on their $0.09 profit and any other profits from other business.
Any wonder why the government has never really gotten serious about supporting alternative energy for transportation? They’d never recover from the loss of revenue if they weren’t taxing our annual gasoline addiction to the tune of $60-70B.
I can smell in our future another tax on each mile we drive, say, under an amendment to the cap-and-tax plan, aimed at fixing a nonexistent problem. But that’s not an income tax increase.
And prohibitive taxes on ammunition will no doubt follow these tax increases on tobacco. That’s not an income tax increase either. And of course it only affects an electoral minority – in this case, the wack-os who buy ammunition in the first place. Watch for this to start with “military grade” ammo and go on from there.
Are we having fun yet?
#11, you are exactly right. What hypocrisy! I tell all my friends now who are smokers, “Be proud because by smoking you are providing a public service…health care to children.” Joe Biden might even say it’s patriotic now to smoke!
But, if the number of smokers went down, they’d try and tax something else. Maybe sodas, the way the NY governor tried earlier this year.
My two clueless Senators Webb and Warner – in a tobacco producing state, no less, – voted for this SCHIP regressive tax. I gave up the weed on my anniversary in February. But now am worried that the SCHIP swindle will have to rob revenues from some other part of the budget. They say that even before the April Fool’s Day hike, Big Tobacco jacked up prices. I still get coupons in the mail from Marlboro. They’re still offering only $3 off a carton. Hell, that’s what they were offering last year.
my fellow americans have elected a group of zealots.ultra brazen from the presidency to the speakers to a widening group of legislators. I cannot imagine changing the mindset of these folks in my lifetime. Yet I find cause
for optimism..The nation has survived many attackers and their minions.
I can see a time ,soon, when those who went along with what they saw as a noble experiment will recoil from the politics they failed to question and join with a more moderate less secular crowd to regain a country that I can admire on a day to day basis.Note: my pride in my nation has never wavered. I shall be willing to speak out and willing to discuss ways to overcome this class and racial divide driven and nutured by a far left zealotry.
As one of the 60% of Americans who pays the “fair share” of the other 40% of Americans who pay no federal taxes, I say good for Obama and the Democrats on this one. Money that my wife and I could be putting into a house is going to pay for the socialized healthcare of many of these “poor smokers.” It’s about damn time that these people had to start paying out the nose to support the system that will support them when they inevitably line up to suckle off the public health care teat when they find themselves with no savings and lung cancer or emphysema.
**As a fairly conservative libertarian, I don’t care if you do a nightly cocktail of tequila and heroin polished off with a night cap of a pack of marlboros. Your life, your choice. However, the moment you expect me to support a socialized health care system because you “cannot afford health insurance,” I say it’s time to hike up the vice taxes and viciously enforce them on all parties who demand what amounts to public subsidies for their lifestyle choices.
“to support the system that will support them when they inevitably line up to suckle off the public health care teat ”
What about the healthy alzehiemer patient that lives to 110? Who is going to suck harder? Perhaps you don’t need to worry about it. B.O. will likely legalize doctor assisted suicide next, then we can quietly exterminate them, eh Mike?
18 posts in, and someone has already started us down the path of having Godwin’s Law invoked. At least you wasted no time. I commend you for the alacrity which you have displayed here.
You can bet that if this had happened under Bush the network news would be all over how it is unfairly targeting the poor and minorities.
Instead we get barely a peep. If you do a Google search for “government raises tobacco taxes” here is what you get…
http://www.google.com/search?hl=en&q=government+raises+taxes+on+tobacco
On the first page there is one story from Fox and none from ABC, CBS, or NBC. The rest are from a few newspapers.
I went through five pages of links and not a single one to the big three networks.
@17. Mike T: – … it’s time to hike up the vice taxes and viciously enforce them on all parties who demand what amounts to public subsidies for their lifestyle choices.
Small problem: there’s kinda two things going on here. Three, if you count the fact that smoking is not a vice by any rational measure. And no, I am not now, nor have I ever been a smoker.
What you’re suggesting is that we “viciously enforce” tax regulations on some people who have no intention of demanding taxpayer-funded health care. I’m not sure how that makes sense, that is, I’m not sure how it will achieve any desirable outcome. Unless your desire is to allow Congress to collect more in taxes, to be dumped into the slush fund they’re using to keep themselves in control.
IMHO, like any other behavior involving risk, people who choose to smoke bear individual responsibility for any cost associated with their smoking. Some folks might disagree with this but, notably, no smokers I know disagree.
Either way, this social group (smokers) isn’t necessarily the same as the group (idiots) that is falling for the “promise” of socialized health care hook, line and sinker. There’s some overlap between the two groups, but I think it’s dangerous to conflate the two as if they’re the same, as you seem to have done here.
That said, you’ve also exhibited the brainwashed view that is helping to bankrupt us due to skyrocketing health care costs. Don’t take that as a harsh criticism – pretty much everyone has been brainwashed the same way. And it’s a deeper aspect of this problem that we desperately need to get a handle on before the professional political class uses it to completely bankrupt and then subjugate us through controlling access to health care.
Insurance protects against risk. That’s its only value. If the risk is never realized, aside from the ‘peace of mind’ afforded, the money spent for the insurance itself is essentially wasted.
We don’t insure ourselves against the need to purchase a new car every so many years. We don’t insure ourselves against the costs of our daughters’ weddings. We don’t (typically) insure ourselves against major auto repairs we know we’ll need at some point (i.e., extended warranties notwithstanding). We don’t insure ourselves against the annual costs of our food or utilities. We don’t insure ourselves against the inevitable expenses of moving to a new rental or purchasing a home. All of these present significant expenses, but we don’t insure against those expenses. We plan for them.
Somewhere along the evolution of health care, however, we were duped into believing that even a trip to the doctor for an annual physical involves significant financial risk. We’ve been similarly brainwashed into believing that all other day-to-day, nominal health care costs present a risk against which we need to be insured. The result: comprehensive health care insurance.
Ultimately, this insurance is the biggest part of what has caused health care costs to skyrocket – at rates multiple times that of inflation.
Here’s the thing: getting basic health care should NOT involve any financial risk. When I was young, only the most serious health issues involved any real risk. People paid for day-to-day and even basic emergency health care out-of-pocket. And by some miracle they didn’t go bankrupt in the process. Even when my best childhood friend was hit by a car and spent a month in the hospital with a concussion and a punctured lung, his not-very-well-to-do parents didn’t go broke on the expenses.
Today, even day-to-day health care is too expensive for most people to afford without comprehensive health care insurance, which is nothing more than socialized medicine that is not (yet) run by the federal government.
Lots more on this here, if interested. Turning our current broken system over to a corrupt government won’t “fix” it. That’ll only make the situation 100x worse. And it’s exactly the problem at the core of the government’s excuse for raising these taxes.
During the Soviet era the government would crackdown on public drunkeness which would supress the traditional Russian sport of drinking. Since the Soviet government was highly dependent on revenue from Vodka their tax take would fall off at which point the crackdown would end and the public could once again drink themselves into a stupor.
Sounds like Obama is following the the footsteps of his beloved Communist heros.
Actually, what I’m doing is collectively judging smokers as a class of people. In my experience, most of the people who still smoke are the sort of people who will find themselves without enough money to buy private health coverage for the diseases they will almost invariably inflict on themselves. It’s about the averages here, and I’m not going to be sympathetic to a class of vice consumers who, in my experience, aren’t exactly randian Objectivists regarding personal responsibility for their health.
Collective judgment is offensive to everyone, except when they feel inclined to do it. For most Westerners, it’s a fundamental hypocrisy. They will needlessly hype exceptions to the rule, rather than admit that certain classes of people tend to share certain behavior patterns, and that collective discernment or even collective judgment on that basis is rational.
I am also entirely unsympathetic to the “poor people who smoke” rubbish. The poor pay virtually nothing to support the system, and they are the main reason we have so much government between the crime they cause and the social welfare benefits they receive. Since I am a middle class non-smoker, I have absolutely no problem with the government shifting part of the tax burden to poor smokers so that they can shoulder some of the responsibility they have for funding the system.
If we are going to have to deal with socialism, then by God it should financially rape every class of society. If it rapes the rich and middle class, then by God it should impoverish the poor until they mewlingly cry out for free market capitalism.
What’s next?
How about a sex tax, Mike T? You know, lube, Viagra, etc. That’s surely a vice when compared to smoking. Just consider all the STDs that could be prevented!
How about a fat tax, Mike T? If you’re over your healthy BMI (body mass index) weight, then the government should tax the food you eat. Because fat people will get diabetes and other obesity-related diseases at a much greater rate than the general population.
Driving is dangerous, too, Mike T. A driving tax is a no brainer because about 40,000 people die in America each year from car accidents. I wonder how many people are just injured and need to go to the hospital from car accidents.
What about folks who have a genetic predisposition to some disease, Mike T.? Just think! A DNA tax for all those African Americans who are predisposed to sickle-cell anemia.
I would say that you’re painting with a pretty broad brush here Mike T. With consideration to the way that you’ve worded your statements, I feel that you’re kind of trying to force a moral agenda on those who have “vices.”
Where will it end?
regards
21. goy: said: “IMHO, like any other behavior involving risk, people who choose to smoke bear individual responsibility for any cost associated with their smoking. Some folks might disagree with this but, notably, no smokers I know disagree.”
I agreee completely! If I end up with cancer, emphysema, what have you, it’s my own fault and I’ll take the blame and responsibility for it and pay for it as well. I don’t want to pay for some indigent drug addict welfare-dependent slacker’s kids to have health care! It’s not my responsibility because I smoke!
regards
21. goy:
“We don’t insure ourselves against the need to purchase a new car every so many years. We don’t insure ourselves against the costs of our daughters’ weddings. We don’t (typically) insure ourselves against major auto repairs we know we’ll need at some point (i.e., extended warranties notwithstanding). We don’t insure ourselves against the annual costs of our food or utilities. We don’t insure ourselves against the inevitable expenses of moving to a new rental or purchasing a home. All of these present significant expenses, but we don’t insure against those expenses. We plan for them.”
We don’t insure against those events precisely because we’re not trying to avoid them. Is there a reason to compare them to things that we are trying to avoid like a disease or accident?
You’re accusing me of trying to force a moral agenda when I am the one who said that I don’t care if you take a nightly cocktail of liquor and heroin polished off with a pack of cigarettes. Unlike most libertarians, I want socialism to be excruciatingly painful for society. “Nice socialism” is the worst kind because it is a tyranny of good intentions that people will usually tolerate.
As a matter of principle, I have no problem with the government imposing painful taxes if society imposes socialism on the minority that doesn’t want it. In fact, I say the more the government can grind the majority’s nose into the ground through taxes, the better. Maybe that will take away their taste for socialism. If not, at least we’ll have the justice of seeing them taxed into poverty to pay for their “free benefits.”
If you like this one, wait until Cap And Trade hits. We’re going to see some horrendous increases in not only the cost of power, but the cost of everything that is created/distributed with power, which is EVERYTHING. That’s the tax increase that we’re all going to pay.
Then, wait even further for the hyper-inflation. You’ll be able to use your hard-earned dollars for toilet paper, because that’s all it will be worth.
Nobody brought up Nazis; we just realize that socialized medicine inevitably leads to triage and euthanasia.
Rocketeer, you wouldn’t want to use dollar bills as toilet paper because they aren’t water soluble. You’d clog up your toilet if you tried to do that.
BUILDING DEBT THAT CANNOT BE PAID BACK
The Dems are destroying America’s market place.
http://greensrealworld.blogspot.com/2009/04/impossible-unsustainable-debt.html
26. Ryan S: - Is there a reason to compare them to things that we are trying to avoid like a disease or accident?
Sure. The comparison holds because these are all significant – but not bank-breaking – expenses we know we will incur at some point. That foreknowledge is the reason we don’t insure against them – it has little if anything to do with the fact that we’re trying to avoid them. The most important facet of this is that we plan for them.
The same ought to be true with the vast majority of health care we receive. Whether we want to avoid it or not, we should all have a physical once a year, we should all have a flu shot if we think it’s important, etc. On top of the guaranteed / scheduled health care, there is also the virtually guaranteed care we’ll need when we get a bad cut, sprain, infection, broken bone or other quotidian “emergency”. The point is that NONE of these should involve costs that are so high as to present a financial risk. Yet they do.
Remember, I’m not talking about open heart surgery or a brain aneurysm here. Those are things that I believe present a risk high enough to warrant insurance in the form of a catastrophic / major medical policy. That’s exactly what most people had when I was younger, and it worked just fine. But even there, our current model is all wrong.
The policy should not be our employer’s responsibility. As we’ve recently seen in MA, it’s too easy for the State to turn that benefit into an entitlement. The responsibility should be our own, and our relationship with the insurance company should be direct. A direct-to-consumer relationship is the only way to keep the cost on such a thing down. The same is true for how we pay for our health care.
If we must go with group plans for catastrophic policies, they should be administered through a local municipality, not our employer. We change residence far less frequently than we change jobs, and the actuarial group size of most towns is larger than most companies’.
rocketeer –
Your comments are spot on! Just wait is right… you ain’t seen nothing yet.
Anyone putting any Democrat in any seat of government is to blame. We must vote these pompous elitist environmentalist politically correct tyrants out of office. I warned you long ago about the Dems and this is just the beginning. Two more years of absolute control?!
This is not your grandfather’s Democratic Party. Well maybe it is but this time it’s on steroids. The question is which method will break you first taxes or inflation (which comes with printing a trillion dollars)? Those Dems are sly ones. Sure they won’t tax your 1040 higher but they’ll tax you never-the-less and ever-the-more. As any consumer in New York can tell you there are a million ways to levy taxes. We are all now Joe the Plumbers. This stupid tax will create less funds not more as people find alternate ways to buy cigarettes. There be cigarette wars besides drug wars in our streets. It’ll be like the movie Soylent Green where they had armed guards delivering meat because it was so expensive except it’ll be your local grocer’s cigarette order. Punishing smokers so more children could get health insurance is unfair. Let’s punish milk drinkers so old people can get private limo service. Gov’t borrowed trillions of the people’s money to bail out failures and guess who’s gonna pay for it? We’re getting screwed at both ends. We keep voting in the Barney Frank’s, Schumer’s, Pelosi’s, Reid’s, Rangel’s and Waxman’s perhaps we deserve what we get.
24. HonestJon:
Don’t mention fat tax too loud, the Obamites might think it’s a good idea! Actually, that idea has been around for a while now and would it cut a swath across the American population. What’s the percentage of supposedly “obese” adults in the USA? Maybe 35%?
—————————————-
Who is John Galt?
@23. Mike T: - If it rapes the rich and middle class, then by God it should impoverish the poor until they mewlingly cry out for free market capitalism.
I would agree, except for one thing. Well, two things.
First, again, this approach just puts more money into the hands of Congress. And while we’re at it, let’s stress that’s both political parties in Congress. I don’t know about you, but I’m for taking every dollar OUT of these career criminals’ hands that we can possibly manage.
Second, if we’re honest about judging classes of people based on their past behavior, a valid generalization would hold that the poor cry out for what they’re told to cry out for. Perhaps you saw how easy it was to enrage the public against AIG employees willing to stay with the company and reduce its losses (read: cost to the taxpayer), simply because they received contractual salary increases that the government had not only approved, but passed legislation to protect. Besides, you just got through characterizing the poor (correctly, I would say) as anything but Randian Objectivists. You won’t hear the “poor” screaming for capitalism.
Not only that, but we now have taxpayer-funded advocacy groups like ACORN (extremely well-funded, thanks to the Porkulus bill) pushing economic and social(ist) policies that will do everything BUT demand free market capitalism. On the contrary, what we’ll see is one of two things: price controls on tobacco products that lower the tobacco companies’ profit (but not the government’s windfall tax – see above regarding gasoline) or tax rebates for the “poor” similar to tax credits for sales tax. And a status of “poor” will be based on the same pseudo-scientific criteria used to determine onse’s status as “rich”.
Another day, another Obama lie. I don’t know how the man can live with himself. He must have no conscience whatsoever.
32. goy:
I blanked and didn’t realize you meant accidents in lieu of your examples and not the examples themselves.
Good points.
35. Mike2: If raising taxes so egregiously on tobacco users is considered a good idea, then an “obesity marginalization levy” is justified as well. Just think of all of the environmental damage obesity causes: Fat folks obviously fart more than skinny folks (methane is bad for the environment (it’s a greenhouse gas, you know)); it requires more fuel to haul a fatass around than a slender person; the amount of food that a gaggingly gargantuan gelatinous gulper consumes depletes the amount of food left for everybody else-increasing demand and forcing farmers to expand their fields which shrinks the available land for wildlife.
I also advocate (with consideration to the above) an “extreme ethanol consumption reduction levy.” (Only on finished product, not ingredients as I brew my own beer.) All those people exgassing beer farts is just plain wrong on so many levels. There’s no telling how many billion cubic meters of methane that such a tax would eliminate. And just think of the health benefits that this country would reap!
Maybe the gubmint could just tax the crap out of all of the obese, beer-drinking smokers until they are too poor to afford smokes, beer or food. A health utopia!
/sarc off
regards
“someone has already started us down the path of having Godwin’s Law invoked.”
Mike T, I never mentioned Nazi’s, but thanks for bringing it up. When you put a government in charge of your health care, especially a group of officials that believe in assisted suicide (as is becoming mainstreet in Europe) What do you suppose will occur to save high health expenses? Plausable.
No way O’Dumbo will raise all the ‘vice’ taxes. Democrats wouldn’t be able to afford they’re whore house visits and call girls in waiting. Well the democrat politicians will still be able to afford them since they put them on the expense account and we pay the bills. I can see truck hijackings increase. You can probably clear half a million on one truck load of tobacco. That’s more than you could get out of the looney Islamic (O’Dumbo’s brothers/cousins) terrorists for a nuc weapon.
The “lowest-income Americans” are much more likely to smoke, and much less likely to have private insurance. Obviously many of those who will develop smoking-related illnesses will rely on the government healthcare system. In the vast majority of cases, smoking does not occur by accident nor by force. People choose to engage in a dangerous behavior, and in many cases those of us who have chosen not to, end up footing their hospital bills.
If the government can discriminate against “the rich,” why not discriminate against “the smokers,” and make them pay “their fair share”? Why not establish a system whereby everyone who buys cigarettes must have health insurance? In most states you can’t drive a car without insurance, what about smoking?
It’s not a question of imposing a non-smoking moral agenda, it’s a question of being respoinsible for the outcome of freely participating in an inherently self-destructive, behavior. You can chose to light up as often as you want, so long as you’re willing to pay for the fruits of your own excesses.
“it’s a question of being respoinsible for the outcome of freely participating in an inherently self-destructive, behavior.”
So you would support a tax on fast food and junk food as well. Obesity being such a huge problem in this country leading to a long list of health problems and is by choise as well. If you choose to eat to much and not exercise you should pay a tax? It IS the equivilant, and the exact reason the government should stay away from this kind of persuits.
@ #43. Smoking, even in moderation, is toxic. Eating is not.
But now that you mention it, I WOULD support a fat tax! A tax on all fast food would raise the cost on what unfortunately is a staple for many in the underclass. But what about a national snack tax? Researchers at Yale estimated even a 1 cent snack tax could raise 1.8 billion nationwide (http://opa.yale.edu/news/article.aspx?id=4590), which could be used for health promotion programs. Most states have a sales tax that penalizes excess consumer goods consumption, why not a tax that penalizes excess food consumption? Do you REALLY need those Doritos? What about that SuperBig Gulp?
If you look at the incidence of type II diabetes (and all its complications) across the US, and how it has skyrocketed over the past 30 years, you’d realize it’s nothing short of an epidemic, brought on by consuming high-fat, high-refined sugar products in excess, while living a sedentary lifestyle.
People love to blame McDonald’s for their obesity, but like smoking, nobody forced them to overeat. In the vast majority of cases obesity is NOT a product of faluty genes, but, like smoking, the result of years of engaging in a self-destructive behavior. I don’t have the figures, but I’m guessing that this is also something more common among the uninsured underclass. I see no problem with the government financially discouraging overeating, as well as finding a way to offset the high cost of treating obesity-related medical complications.
If I have taken care of my body, and have not engaged in smoking or overeating, why do I have to subsidize the medical costs of those who didn’t? Again, if the government can discriminate against “the rich,” or those who consume cigarettes or alcohol, why not “the overeaters”? And again, it’s not a question of imposing a fat-free moral agenda, it’s a question of taking responsibility for your acts. You can continue to eat to your heart’s content, so long as you are willing to pay for the fruits of your own excesses.
That was then… In Richmond, Va. last fall, Obama said, . “If you make less than a quarter of a million dollars a year…you won’t see your taxes increase one single dime. Not your payroll taxes, not your income taxes, not your capital gains taxes — nothing.” –except of course the 62 cents a pack rise in federal cigarette taxes imposed this April.
You make my point very well Chileno, keep government out of healthcare and your would NOT be subsidizing bad behavior. And we would still be the land of the free. The government telling you what to do, eat, etc etc… is NOT freedom! If someone chooses to ride a motorcycle without a helmet, power to them. They have the right to exterminate themselves. Government control isn’t freedom.
Are you still glad you voted for Obama?
#46: “keep government out of healthcare and you would NOT be subsidizing bad behavior.” If only it were so simple! Your libertarian utopia is just a pipe dream. Last year the US government spent nearly $600 billion in Medicare/ Medicaid, and that’s not going to change any time soon. Like it or not, your tax dollars are going to be spent on someone else’s healthcare. Wouldn’t you rather the government recoup some of its losses from those who knowingly put themselves at risk, instead of you?
I could care less if someone wants to ride a motorcycle without a helmet, and decide to kill themselves. The problem is they’re usually only partially successful, and end up with head/body trauma, requiring major medical interventions -possibly at my expense.
By your logic (of no government intervention in healthcare) what would happen if a poor, uninsured man suffered a serious motorcycle accident? Or developed smoking-related lung cancer? Would you leave him to die? Would the hospital be forced to treat him free of charge? This would again mean I have to pay for his care, as the hospital would offset its losses by charging more to those (like me) who do pay.
In terms of smoking, the government isn’t telling you you can’t do it -it’s telling you there’s a serious cost involved. If you’re willing to pay the price, go ahead, light up.
“By your logic (of no government intervention in healthcare) what would happen if a poor, uninsured man suffered a serious motorcycle accident?”
Once upon a time there used to be a popular thing called charity. People would turn to each other or an organization or a church when they needed assistance. Now the government wants you to turn to them. Are they doing this out of love for you or love for themselves?
So your health care plan for the poor is… charity? I do believe in charity, and donate often. It compliments the government system, particularly among those falling off the government’s radar (e.g. the homeless, the runaways). But if the top 200 US charities earned $40 billion in 2006 (according to Forbes), and the government is spending nearly $600 billion annually in Medicare/Medicaid, charities can hardly replace government healthcare spending.
Placing a substantial portion of your citizens at the mercy of charity would create large gaps in healthcare. Besides failing the individual patient, this could lead to serious public health problems. What if there weren’t enough charities to vaccinate the underclass for measles, or to treat those with tuberculosis? The reason hideous diseases like smallpox or polio are no longer seen is because of government coordinated public health campaigns. Leaving such issues to charity is not only foolish, it’s dangerous.
I understand you want to lessen the impact of government on an individual’s rights. I’m no fan of big government or “social engineering” myself. But issues like these (smoking, obesity, using a motorcycle without a helmet) are ultimately public health issues, where the government (and the taxpayer footing the bill) has a right to limit an individual’s foolish behavior.
- But issues like these (smoking, obesity, using a motorcycle without a helmet) are ultimately public health issues, where the government (and the taxpayer footing the bill) has a right to limit an individual’s foolish behavior.
No, Chileno. You have this absolutely backward. And it’s thanks to our utterly broken public education system that you don’t understand this.
In the United States, government has no rights. Government has only authority. And in our Constitutional Republic it has precisely the authority expressed in the Constitution and not one thing more. That our government regularly exceeds this authority is a completely separate issue, and one that will only be addressed when we begin holding it accountable for its actions. But as Jefferson noted with exasperation, mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. Unfortunately, although it took over 200 years, the American People now find themselves confronting a long train of abuses and usurpations, pursuing invariably the same Object [which] evinces a design to reduce them under absolute Despotism.
Nowhere in the Constitution is the federal government given the authority to provide health care for citizens. The closest you’ll find to this – “the general welfare” – is an expression meant to keep the People safe from harm, not to guarantee individual health care, or food, or shelter, or a job, or heat, or any other individual economic or personal necessity not mentioned in the Bill of Rights. Government has neither the responsibility nor the authority to provide any of these, much less to take from one citizen in order to give to another. The fact that they do it anyway is a testament to Jefferson’s insight.
More specifically, nowhere in the Constitution is the federal government given the authority to make moral judgments regarding who gets health care and who does not, based on issues that you happen to think are “public health issues” this week. Guess what: if you vote to give the government this authority, YOU won’t get to decide those things. Are you that naive that you believe government bureaucracy can be relied upon to make intelligent, moral decisions in this regard??
Medical facilities can not legally refuse to provide primary, critical care in a case like a motorcycle accident victim (or anyone else who’s life is in jeopardy) with no insurance, no job and no assets. Who pays for that? A combination of sources: the facility, tax savings (per the operating loss as a deduction), charitable donations and taxpayer-funded, government subsidies. Taxpayers DO NOT foot the entire bill for patients who must legally be treated. Far from it.
This leaves non-emergency, quotidian health care, which is no more or less critical than food, shelter, clothing and heat. As such, the government has no authority to intervene in this regard – at least no moreso than State and federal welfare programs already provide these other necessities for those who claim not to be able to afford them.
Put another way, just exactly why do we need “a health care plan” for the poor, specifically? And if we have such a plan, what’s the food plan for the poor? What are the housing and clothing plans for the poor? Those are necessities too – necessities which typically add up to a lot more money of the long term. And I’m sure we can come up with plenty of other things we need “plans” for.
The fact is that there is nothing particularly special about health care. Nor should there be. The reason you THINK there is something special about it is that you’ve been trained to. Like almost everyone else – including most folks writing for and posting comments on this site.
Decades of insurance company interference in the relationship between health care provider and consumer has elevated health care above all the other necessities of life. Why? So that they can convince you to purchase THEIR product in order to get it, instead of simply paying for it yourself – like you do with all other necessities of life!
This situation – this mass hysteria – has had the unintended (?) consequence of causing health care costs to artificially increase at rates many times that of inflation. This works only to the insurance companies’ advantage, since the higher the costs, the fewer people who can afford to pay for health care directly, and therefore must pay THEM in order to get it.
The “health care plan for the poor” should be the same health care plan for everyone else: get insurance companies OUT of the business of driving up health care costs, to levels where the poor can no longer afford it.
Insurance has one purpose: to manage risk. Purchasing day-to-day health care goods and services should not be so expensive that it represents a risk against which we need insurance. As I mentioned above, we don’t insure ourselves against the need to purchase a new car every so many years or any of the other major expenses we must ultimately cover. What, then, is so “special” about health care? Answer: nothing. We should plan for that just like anything else. And once we eliminate the proxy monopoly created by the comprehensive health insurance companies, and bring health care costs back in line with other commodities – commodities that have thrived despite the fact that consumer choice keeps their price relatively low – we can all do that.
Anyway, giving the government authority it doesn’t currently have is the last thing anyone should be considering right now. Look at the mess they’ve made of things over the last forty years with just the limited authority they’ve been abusing!
@ goy:
“…the United States, government has no rights. Government has only authority.” Ok, I’ll agree to that statement. It still doesn’t change the spirit of what I said.
“abuses,” “usurpations,” “despotism”? You make it sound like we’re one legislation away from North Korea! We live in one of the freest countries on the planet (go to Europe if you still have doubts). Get a grip and put things in perspective.
“Nowhere in the Constitution is the federal government given the authority to provide health care for citizens. The closest you’ll find…is an expression meant to keep the People safe from harm” The primary mission of ANY government should be to preserve the life of its citizens. (…or would you legalize suicide?) Food/shelter/basic health care are necessary for life. It’s implied the government should help those who can’t make it on their own.
Would you abolish food stamps? Public housing? Medicaid? Even with Medicare/Social Security, many today are receiving far more than they paid into the system. What would happen with those who depend on these services, and CANNOT work? Would you leave the elderly, the disabled, or the mentally challenged to fend for themselves? Charity? Sorry, the costs are just too high to depend solely on charity.
“Medical facilities cannot legally refuse to provide primary, critical care.” So the government has the authority to force hospitals to work for free. And what constitutes “critical care”? Anything in the ER? Our ERs are clogged with non-critical patints precisely because the uninsured use it like a primary care facility, driving up costs (which I will have to pay).
“Who pays for that? A combination of sources: the facility, tax savings (per the operating loss as a deduction), charitable donations and taxpayer-funded, government subsidies. Taxpayers DO NOT foot the entire bill…Far from it.” Guess again. When “the facility” covers a cost, it’s basically transferring it to me, the paying customer. “tax savings” means revenue lost for the government, which offsets this loss by using more of my tax dollars on its public endeavors. Same goes for taxpayer subsidies. The only part I’m not directly/indirectly covering for is “charity,” whose role, though noble, you greatly exaggerate.
“the government has no authority to intervene in this regard [healthcare]- at least no more so than State and federal welfare programs already provide.” How do you define “welfare”? By your logic, isn’t that government intervention? You say the government has no right (sorry, authority) to cover basic necessities like food/shelter/medicine, and yet imply welfare programs should exist? What should they provide?
“why do we need “a health care plan” for the poor…?” Because history has shown that -if you don’t take care of at least the basic health needs of your citizens, you will end up with major epidemics, that affect even those who are not “poor.” Perhaps you’re too young to know what a tuberculosis, small pox, or polio epidemic look like. The cost to society, in terms of suffering, not to mention lost revenue, would be astounding.
“what’s the food plan for the poor?” Umm… food stamps? Or would you let the poor starve? Charity? Charity’s been around for centuries, and so has starvation. Tell me, if we really don’t need government food subsidies -why do so many children in America still go to sleep hungry every night -DESPITE the existence of food stamps, and countless charitable organizations?
“housing and clothing plans for the poor?” Umm… public housing? Or would you have cities look like Appalachia? Except for a winter coat, clothing is minor compared to housing, food, and health.
“The fact is that there is nothing particularly special about health care.” Wrong. Your health, if affected by a transmissible disease, can affect everyone else. If you have no food, you will die. If you have tuberculosis -others will die. Ah, but tuberculosis is so uncommon these days. Yes, and that’s because of government public health interventions -including forcing (yes, forcing) people to take their TB meds. Ever heard of Typhoid Mary? She was a chronic carrier of Typhoid fever, infecting at least 53 people (3 died). She refused to stop working as a cook -and had to be forcibly quarantined. In your libertarian dreamland, the government would have no authority to stop this woman’s right to cook.
“Decades of insurance company interference in the relationship between health care provider and consumer has elevated health care above all the other necessities of life.” Sorry, but if you don’t take care of your health, how exactly will you have life?? Yes, I’m sure we could live free of health care, like in the romantic days of yore -when life expectancy was 40. Your insurance company rant is sheer fantasy, a conspiracy theory worthy of the Left. Healthcare costs have risen dramatically in past years because healthcare is a labor-intensive, technology-driven industry. Yes, healthcare used to be a lot cheaper. But we didn’t pay nurses $20-50 per hour, and we didn’t have CT/MRI machines, nor angioplasty, heart bypass machines, transplant capabilities, or chemotherapy. Millions are also spent in offsetting the costs of R&D and litigation (in the drug industry, for example). If you want to help bring down health care costs, talk to the lawyers. Litigation drives up healthcare costs directly as well as indirectly, as doctors send many “unnecessary tests” -to cover their backs.
“get insurance companies OUT of the business of driving up health care costs.” Wrong. Health insurance companies use their collective bargaining power on behalf of their customers (and themselves) to negotiate lower tariffs. The other day my wife had a privately-funded procedure. Had her insurance covered it, it would have paid $150. But because she did it out-of-pocket, it cost her $400. I’m sure they overcharged her, in part to cover the “charity” cases the institution performs as well.
“…we don’t insure ourselves against the need to purchase a new car .. What, then, is so “special” about health care?… We should plan for that just like anything else.” Wrong. The cost of replacing a car is predictable. Healthcare costs are not. Do you have an extra $40,000 lying around the house? That’s what cardiac bypass surgery costs -without complications. I work in the healthcare industry, and see such bills every day. Hell -I’ve seen people spend $300,000 in a single admission. Entire families go bankrupt covering unforeseen health care expenses. And charities alone can’t make up the cost. If it wasn’t for government intervention, many would simply die.
Of course, in your libertarian dram world, maybe that would just be a fact of life. No insurance? No cash? Charity ran out -sorry, you should have saved enough. But in this world, where many live paycheck-to-paycheck, most would prefer some government intervention. Do people make dumb decisions in their life, throwing away money on things they don’t need (like excess food and smoking)? Yes. Does this mean they should die for it? Well, does it? My point is government can’t let people simply die for lack of funding -but it can make those taking risks pay more up front to cover the costs (as in cigarette or snack taxes).
Social security was originally conceived as a form of forced retirement plan, because people were too poor or too dumb to save enough on their own for retirement. There were too many elderly living in poverty, dying miserable deaths. Yet, by your logic, the government has no authority to force us to have a retirement plan. Should we dismantle Social Security?
I don’t want to live in an excessively socialized society, like Europe. But complete libertarianism is anarchy. Too many fellow citizens would be left behind.
- “…the United States, government has no rights. Government has only authority.” Ok, I’ll agree to that statement. It still doesn’t change the spirit of what I said.
Wrong again. It changes almost everything you said. Absent ‘rights’, the government has only the authority assigned to it. That does not include defining who gets what health care, or when. It does not include redistributing wealth by way of robbing Peter to pay for Pauline’s abortions – or even her annual physical.
Based on that fact, pretty much all the rest of what you’ve written is moot. But let’s see where you tried to take this. We’ll take the biggest fantasy first…
- Health insurance companies use their collective bargaining power on behalf of their customers (and themselves) to negotiate lower tariffs.
Sorry, that’s just not supported by objective reality as we know it. Health care costs have risen at rates multiple times that of inflation for decades because comprehensive insurance companies have destroyed the economic relationship between health care providers and consumers. A similar relationship keeps all other commodity costs down. Only with health care do we have this utterly broken economic model – partly because people like you have been duped into believing it’s someone else’s responsibility to pay for it.
But this is only part of the problem.
As we’ll see, the insurance companies themselves are the biggest factor pushing health care costs higher and higher. In fact, an enormous portion of what we pay for “health care” is actually supporting the insurance companies, not the health care industry. I know. I have worked on the software that processes member payments as well as their medical claims. I’ve seen the numbers and run reports on them directly from the databases where your insurance statements and medical records are stored. You would be dumbstruck at how utterly, completely wrong you are on this.
Using your premiums (and, likely, those paid by your employer), along with those paid by tens of thousands of other members, insurance companies pay the claims submitted to them – which are few relative to the number of actual premium payers. They have to be few in order for companies the enormous size of CIGNA, Anthem, Wellpoint and others to even exist. Claims payment is, ostensibly, these companies’ primary function. But of course that’s not all there is to it.
Using your premiums, insurance companies ALSO pay tens of thousands of direct employees who process the claims, maintain the computer systems, write the software, produce the sales brochures and training materials, manage the hundreds of departments and sweep the floors of the offices in which they work. And relative to other industries, insurance companies pay quite well, overall. And they get consistent raises just like most other sectors. In addition to paying whatever claims you submit, your premiums are paying their salaries. And bonuses. And holiday parties. And flex spending allowances. And tuition reimbursement. And matching 401-K benefits. And their health benefits.
Using your premiums, insurance companies ALSO purchase real estate to develop the gargantuan campuses that house their operations. Here’s a shot of the enormous CIGNA campus in Bloomfield, CT. The golf course off to the upper-right was developed using premium payers’ dollars, and sold off at a profit – profit you didn’t see reflected in any premium reduction if you’re a CIGNA customer. If you scroll north across Rt. 218 you’ll see the rest of the property CIGNA bought with its customers’ premium payments. That property used to have offices but is now being converted to a neighborhood of condos, apartments and more golf courses – all of which will be sold at a profit to CIGNA, funded by your premium payments (if you’re a customer). So in addition to paying whatever claims you submit, your premiums are paying for mega-development real estate deals which profit the insurance companies and their stockholders – not their customers or those in the health care industry. Oh, and let’s not forget that your premiums are also paying the enormous property taxes on these facilities – money that’s going in this case to maintain Bloomfield’s town properties and pay its employees, rather than paying for the maintenance on your doctor’s aging EKG equipment.
Using your premiums, insurance companies ALSO pay what are known as “claims clearing houses”, which provide services that bundle and scan medical claims from thousands of providers so that each provider doesn’t have to go through the expense of testing and certification required to act as a direct electronic claims submitter. This is a cost they typically split with health care providers – with providers footing the larger part of the bill (thus, driving health care costs up further). Most health care providers of any size have had to add an entire department dedicated only to dealing with insurance companies and the constant changes to their submission rules, form changes and associated HIPAA regulations – regulations that were required, primarily, because of new risks inherent in the electronic processing and handling of your medical records required for insurance claim reimbursement. This further increases health care costs. In addition to paying whatever claims you submit, your premiums are also – either directly or indirectly – paying the employees of these clearing houses, as well as paying for the cost of their systems, networks and physical infrastructure required to process the claims electronically. And those in particular are no small potatoes: Most of these places maintain multiple redundant dedicated high-speed data networks rivaling many financial and internet data centers. Your health care insurance premiums are paying for that as well, which provides profit for companies like AT&T… instead of going to your doctor or remaining in your wallet.
Using your premiums, insurance companies ALSO pay hundreds of temporary contractors (I was once one of these) for projects that come and go. These contractors are typically paid through an agency whose rates vary from between $75/hr and $185/hr, depending upon the skill involved and the locale (New York and Stamford see rates billed as high as $210/hr – or did until a few years ago). Contractors, of course, only receive a portion of that. So in addition to paying whatever claims you submit, a huge chunk of your premiums are actually going directly into the pockets of the ‘pimps’ and ‘flesh-peddlers’ (as we contractors affectionately refer to them) who run temp. contracting outfits. Some of these outfits, which I’ve worked for, have openly bragged to me personally about how they can make a “killing” providing temp. workers to companies like CIGNA, Aetna, et al. Nice, huh?
Using your premiums, insurance companies ALSO hire thousands of foreign nationals who work here on H1-B visas for years – sometimes decades – replacing Americans who might otherwise do those jobs. They hire additional thousands of foreign nationals through consulting firms in India, outsourcing many more jobs (typically, customer service) that would happily be done by Americans here in the U.S. Most notably, these foreign nationals have direct access to all of YOUR medical records, in a country where HIPAA regulations have no jurisdiction whatsoever. In addition to paying whatever claims you submit, your premiums are also paying employees whose income is sent in large part outside the U.S., and whose employment replaces an individual here in America.
Finally, and perhaps most egregiously, using your premiums, insurance companies ALSO pay CEO salaries, incentives and bonuses that would make AIG’s famous derivative traders blush. While I worked for CIGNA, the CEO there was averaging well over $15,000,000.00 per year in total compensation. That’s Fifteen Million Dollars. Every year. His direct reports and their direct reports in the company’s organization received similarly outrageous compensation. And Caremark RX’ CEO had him beat by more than a factor of two. This is to say nothing of the outrageous dividends paid out to stockholders based on “profits” from their operations. Why outrageous? Why quote “profits”?? Because every single dollar of that compensation and those dividends came from money paid by a customer who is convinced they can’t afford health care any other way.
This is the wonderful system that has allowed health care costs to skyrocket, creating a situation where only the insurance companies benefit (see TheNewGuy‘s blockquoted comments below). Eliminate comprehensive health insurance companies and you will handily fix the problem of “affordable” health care without involving the government in areas where it has no Constitutional authority to act.
- You make it sound like we’re one legislation away from North Korea!
No. That’s your straw man. You’ll have to defend it yourself. After ten years of living under a government which has usurped control over your health – and, along with it, control over any liberty or behavior that “affects” the cost of maintaining your health – do get back to me on that “freest country on the planet” thing, m’kay?
So the government has the authority to force hospitals to work for free.
Surprise!!! Yes Chileno, they do. Ask any ER doc or primary care physician. You can start with the comments here. A sample…
- Our ERs are clogged with non-critical patints precisely because the uninsured use it like a primary care facility, driving up costs (which I will have to pay).
Yes, they are clogged. This is one of the points I’ve been beating on for years. And it’s worse than even you realize, because it’s not only the uninsured who do this – it’s the insured patients as well. In fact it’s MOSTLY the insured patients who do this.
That is a far bigger part of the problem, because that is a huge part of what causes overall health care costs to increase, and what causes your insurance premiums to constantly increase. And no, you won’t be paying anything toward other people’s care once the ER ceases to be the de facto service point for most minor health care issues (both insured and uninsured), and consumers begin paying for these services directly rather than through a proxy monopoly.
- When “the facility” covers a cost, it’s basically transferring it to me, the paying customer.
No, it’s not. Because the FACT is that YOU are NOT the “paying customer” any more. There is no significant economic relationship between the provider and the consumer any longer. That’s the whole point: There is no more ‘individual customer’. There is only the collective of insurance company customers, whom those companies exploit as I’ve outlined above.
Other than a possible co-pay, YOU don’t pay ANYTHING to the facility if your services are “covered” by comp. health insurance. The insurance company has already worked out a payment schedule for those services. The only direct cost you incur right now is the cost of your health insurance. So any loss the facility incurs – particularly given the sums insurance companies spend on everything but claims payment – has no direct effect on the cost of your health care. None.
- … “tax savings” means revenue lost for the government, which offsets this loss by using more of my tax dollars on its public endeavors.
Nonsense. This is precisely the foolish attitude that has allowed a professional political class to flourish.
The fact that our Congress sees business as nothing more than a “revenue source” is one thing that will have to change if our Republic is to survive. In a world where politicians were actually held accountable for their actions (and trust me, that’s coming, one way or another), “lost” tax revenue would result in lowered government spending. So, sorry, your assertion here is based on the myth that the government should be allowed to spend as much as it likes and that we have to simply keep pumping money into the Treasury to cover it. At some point (likely soon), that myth will make itself felt in very real, very ugly ways.
- Same goes for taxpayer subsidies.
As already stated, this is the only part that comes directly out of the taxpayer’s pocket.
- How do you define “welfare”? By your logic, isn’t that government intervention? You say the government has no right (sorry, authority) to cover basic necessities like food/shelter/medicine, and yet imply welfare programs should exist? What should they provide?
More straw man B.S. Do you live on a farm, by any chance? Read what I wrote, not what you wish I wrote.
I recognize that welfare programs exist. They’re the vestigial remains of FDR’s so-called New Deal – much of which was found unconstitutional and scrapped almost as soon as it was implemented – most notably, his “Recovery Act”. These programs will likely always exist whether or not they are Constitutional in the strictest sense. That’s not the point. The point is that you want to expand them; you and people just like you who think the government has “rights”, and who fail to understand how our government works… vs. how it’s supposed to work.
When you can figure out how to prevent welfare programs from being abused – like they are now – and from wasting billions of dollars due to fraud, corruption, ineptitude and bureaucratic inefficiency – like they do now – come back with your plan to expand them further. History, which you seem to have very selectively studied, shows clearly what happens when too much money, too much control and too much responsibility is concentrated into the hands of too few corrupt career politicians and career bureaucrats.
If you have tuberculosis…
Unbelievable. Please explain how socialized anything is going to STOP an epidemic. And study up on this topic if you’re going to try to swing it as a club. 1918 saw the worst epidemic in U.S. history – during the singular period in our past that most closely resembles the current administration’s liberal/fascist “vision” for America.
There’s no conceivable reason you can offer that absolves individuals of the responsibility for paying their own way for these things. None. Part of your responsibility as a citizen is to maintain your health to prevent exactly the sort of epidemics you’re trying to pretend are the issue. Government provides the information, helps to fund the necessary research and organizes the means. Individual citizens – at least in a free society – are responsible for taking the action and incurring the costs, individually.
- Sorry, but if you don’t take care of your health, how exactly will you have life??
This is my point exactly. Emphasis on the YOU taking care of YOUR health. It’s called individual responsibility.
- The cost of replacing a car is predictable. Healthcare costs are not.
Really? Do you know ahead of time precisely when you’re going to need a new car? Hardly. It’s just something you plan for. Conversely, you don’t have an annual physical? You don’t know you’ll probably need some basic health care during a given year? What planet do you live on?
And don’t confuse the issue by conflating day-to-day, commodity health care with specialized services like cardiac bypass. Those services are what catastrophic policies are intended to cover – and DID cover back when people paid for the vast majority of health care out-of-pocket. Cat’ plans are available today. IMHO, they’re all that should be legally available, because comprehensive insurance has created the fiasco we’re trying to solve. You can’t solve the problem by amplifying what caused the problem in the first place, and then turning it over to a corrupt, inept government. You have to bite the bullet and eliminate it. If you don’t, you’re doing the same as trying to eliminate the federal debt by multiplying it, as our marxist president and socialist Congress are currently doing.
- I don’t want to live in an excessively socialized society…
Sure you do. You just don’t want to openly admit it. Instead you accuse others – who don’t agree with your fantasies – of being anarchists. Insisting that people pull their own weight is not “libertarianism”, it’s simple common sense. You want individual liberty, exercise individual responsibility. You want welfare on the taxpayers’ dime – get a government job. Or move to Canada, if they’ll have you.
Wow! Fascinating arguments from both sides! Personally, I’d like to see the proposed solutions from both of you (in short form, not book form).
Mr GOY?
Chileno?
What I fear is that the gubmint will take healthcare over. The Dems/libs/leftists have been trying to do so since Truman. It seems that now they have the opportunity. It will be a huge calamity!
I’m not well-versed in the whole health care fiasco, but here’s what I think should happen: The insurance companies need to be made non-profit entities. Shareholders need to be paid off and their shares liquidated. There needs to be some sort of industry-wide oversight board to keep costs to consumers in line with actual expenses. The regulations that prevent people from going out-of-state for health insurance needs to be eliminated to free up competition among providers (I seem to remember something from the Pres. campaign about this being discussed). The exec compensation needs to be limited ($15 million/yr is absurd compensation.)
I’m sure I overlooked many things, but maybe some of these suggestions might help.
regards
@ goy: Interesting, spirited defense. But please spare me the arrogant, patronizing tone, and I’ll try to do the same. I was amused by being called a “socialist.” My left-leaning friends (who call me a conservative) would be surprised to hear that one. I enjoy the free market and some deregulation, but understand that lassie faire capitalism has its limits. You calling me a socialist speaks less about me, and more about how far off the libertarian scale you are.
“Absent ‘rights’, the government has only the authority assigned to it.” Your semantic quibbling belies the point I was making (i.e., the “spirit” I was referring to): The people gave the government the power to enact tax laws (e.g. cigarettes, snacks, etc.). Yes, the people could take that power away, but unfortunately, the way things look with our new government, that’s not going to happen any time soon, so the point is moot.
“Health care costs have risen at rates multiple times that of inflation for decades because comprehensive insurance companies” You rant on how insurance companies use my money to pay for executive pay raises, employees and their benefits, as well as countless properties and subcontracted services. Surprise! You’ve just described any of a number of large US companies. The Big Three auto makers, for example, must cover the cost of large CEO salaries (and their famous corporate jets), unionized employees and their benefits, including health benefits and pensions, as well as a large array of subcontractors, all with the cost of selling YOU a car. The subcontractors you demean, including those overseas, are usually contracted because they are cheaper/more efficient, so it costs LESS to employ them than to do the work “in house.”
You go off on how many properties CIGNA owns, and how much its CEO earns, using your personal anecdotes to prove how health insurance companies waste money.
How odd you single out CIGNA’s and Caremark’s CEOs, who happen to be two of the top three highest paid CEOs in the health insurance industry. The CEO of industry giant Humana averaged less than one-fifth this compensation, at 2.7 million. It still sounds like much, but it’s called BIG BUSINESS in America. This is a quote from Forbes:
“After a 38% collective pay raise in 2006, chief executives of the 500 biggest companies in the U.S.… took a pay cut of 15% last year. …In total, these 500 executives earned $6.4 billion in 2007, an average of $12.8 million apiece. (My emphasis) By the way, Safeway’s and Marriott’s CEOs each averaged 20 million over the past 5 years.
Your personal experience, seeing CIGNA’s vast properties (which you claim were paid with my premiums) is uninformed. Here’s a quote from Wikinvest, which may enlighten you on CIGNA:
“… three-quarters of Cigna’s health insurance business isn’t really insurance – Cigna manages health plans for companies who self-insure, agreeing to pay employee’s health care costs. Employees get Cigna cards and access to Cigna’s negotiated rates with doctors, and Cigna handles billing, but the employer bears the risk of paying for care when employees get sick. … Over 75% of CIGNA’s 2007 enrollment consisted of self-funded administrative-only plans… Cigna also differs from its competitors in that over 68% of the company’s pretax operating income came from investment income … almost four times that of other large national health account providers.” (my emphasis)..
CIGNA receives more than it pays out because 75% of it’s “affiliates really aren’t. It is a company, which in order to stay afloat, must generate profit. It does so in part by INVESTING (e.g. in properties you yourself say it later sells “for profit”).
The beauty of the free market is that you (or your employer) have a choice of dozens of different insurance carriers Don’t like CIGNA? Don’t buy their insurance!
Oh, and regarding those nasty “clearinghouses” you also finger in your rant, this is a quote from Claim Tek, a company specializing in medical billing:
” Clearinghouses receive rebates paid by the insurance companies for every claim that’s submitted electronically to them. Insurance companies do this to encourage electronic billing and cut the cost of manual processing. Most clearinghouses make additional income by charging consumers (doctors and billing services) a small fee as well. … In recent years, several reputable clearinghouses decided to offer this service FREE to the consumer side in order to attract higher volume of claims submissions and capitalize only on the handsome rebates paid by insurance companies.”
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I’m having difficulty posting this, so if appears multiple times, my apoloties.
@ goy: Interesting, spirited defense. But please spare me the arrogant, patronizing tone, and I’ll try to do the same. I was amused by being called a “socialist.” My left-leaning friends (who call me a conservative) would be surprised to hear that one. I enjoy the free market and some deregulation, but understand that lassie faire capitalism has its limits. You calling me a socialist speaks less about me, and more about how far off the libertarian scale you are.
“Absent ‘rights’, the government has only the authority assigned to it.” Your semantic quibbling belies the point I was making (i.e., the “spirit” I was referring to): The people gave the government the power to enact tax laws (e.g. cigarettes, snacks, etc.). Yes, the people could take that power away, but unfortunately, the way things look with our new government, that’s not going to happen any time soon, so the point is moot.
“Health care costs have risen at rates multiple times inflation for decades because comprehensive insurance companies” You rant on how insurance companies use my money to pay for executive pay raises, employees and their benefits, as well as countless properties and subcontracted services. Surprise! You’ve just described any of a number of large US companies. The Big Three auto makers, for example, must cover the cost of large CEO salaries (and their famous corporate jets), unionized employees and their benefits, including health benefits and pensions, as well as a large array of subcontractors, all with the cost of selling YOU a car. The subcontractors you demean, including those overseas, are usually contracted because they are cheaper/more efficient, so it costs LESS to employ them than to do the work “in house.”
You go off on how many properties CIGNA owns, and how much its CEO earns, using your personal anecdotes to prove how health insurance companies waste money.
How odd you single out CIGNA’s and Caremark’s CEOs, who happen to be two of the top three highest paid CEOs in the health insurance industry. The CEO of industry giant Humana averaged less than one-fifth this compensation, at 2.7 million. It still sounds like much, but it’s called BIG BUSINESS in America. This is a quote from Forbes:
“After a 38% collective pay raise in 2006, chief executives of the 500 biggest companies in the U.S.… took a pay cut of 15% last year. …In total, these 500 executives earned $6.4 billion in 2007, an average of $12.8 million apiece. (My emphasis) By the way, Safeway’s and Marriott’s CEOs each averaged 20 million over the past 5 years.
Your personal experience, seeing CIGNA’s vast properties (which you claim were paid with my premiums) is uninformed. Here’s a quote from Wikinvest, which may enlighten you on CIGNA:
“… three-quarters of Cigna’s health insurance business isn’t really insurance – Cigna manages health plans for companies who self-insure, agreeing to pay employee’s health care costs. Employees get Cigna cards and access to Cigna’s negotiated rates with doctors, and Cigna handles billing, but the employer bears the risk of paying for care when employees get sick. … Over 75% of CIGNA’s 2007 enrollment consisted of self-funded administrative-only plans… Cigna also differs from its competitors in that over 68% of the company’s pretax operating income came from investment income … almost four times that of other large national health account providers.” (my emphasis)..
CIGNA receives more than it pays out because 75% of it’s “affiliates really aren’t. It is a company, which in order to stay afloat, must generate profit. It does so in part by INVESTING (e.g. in properties you yourself say it later sells “for profit”).
The beauty of the free market is that you (or your employer) have a choice of dozens of different insurance carriers Don’t like CIGNA? Don’t buy their insurance!
Oh, and regarding those nasty “clearinghouses” you also finger in your rant, this is a quote from Claim Tek, a company specializing in medical billing:
” Clearinghouses receive rebates paid by the insurance companies for every claim that’s submitted electronically to them. Insurance companies do this to encourage electronic billing and cut the cost of manual processing. Most clearinghouses make additional income by charging consumers (doctors and billing services) a small fee as well. … In recent years, several reputable clearinghouses decided to offer this service FREE to the consumer side in order to attract higher volume of claims submissions and capitalize only on the handsome rebates paid by insurance companies.”
Your basic premise is that health care in America is expensive because health insurance carriers waste money on themselves, not on you. If this were true, then the rise in health costs would be primarily attributable to rising premiums, not actual rising health COSTS. Yet the Congressional Budget Office declared in 2008 that Hospital and physician costs are the largest proportion of cost, and “most of the long-term growth in total health
care spending has resulted from growth in either or both of these categories.” Why the rise in hospital/provider costs? “About half of all growth in health care spending in the past several decades was associated with changes in medical care made possible by advances in technology.” And your damning rise in health insurance costs by wasteful administration? There has been a rise in costs, but the CBO also reported in 2008 that administrative costs for private insurance only represent about 12% of premiums, i.e., 88% was NOT. Here’s the CBO report if you’re interested: http://www.cbo.gov/ftpdocs/89xx/doc8947/01-31-TechHealth.pdf
Even if there were some form of giant industry-wide conspiracy to raise the cost of medicine, U.S. government programs (Medicare/Medicaid/SCHIP/VA) accounted for over 45% of health care expenditures. So unless you’re willing to assume America’s largest insurer, the US government, is part of the conspiracy, your argument falls flat.
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Would you abolish government intervention in healthcare? Government programs directly cover 27.8% of the population (83 million), including the elderly, disabled, children, veterans, and some of the poor. If you won’t, then you agree some of your tax dollars will continue to subsidize someone else’s healthcare. If you want to give them a “free ride,” go ahead. I’d like to see those engaging in risky behavior pay their part.
“do get back to me on that “freest country on the planet” thing.” Umm, “freest” is meant to be relative to all OTHER nations, not to your interpretation of free. What other country is freer? France? UK? China? Costa Rica? Name one. Please! And as you warmly invited me to move to Canada (if they’d have me), I’ll extend you the same courtesy to wherever you believe you’ll actually enjoy more freedoms than in the US.
“So the government has the authority to force hospitals to work for free.
Surprise!!! Yes Chileno…” I was being sarcastic. I’m well aware of EMTALA and what it means to ER physicians. Why do doctors have to work for free? Is that true in any other profession? I guess healthcare IS something “special” after all, no?
“YOU are NOT the “paying customer” any more.” When I go to the hospital, my insurance is “overcharged” to offset the cost of non-paying customers. Guess who the insurance company is going to pass on that charge to, as higher yearly premiums? From Wikipedia: “The costs of treating the uninsured must often be absorbed by providers as charity care, passed on to the insured via cost shifting and higher health insurance premiums, or paid by taxpayers through higher taxes.”
“I recognize that welfare programs exist…These programs will likely always exist … That’s not the point. The point is that you want to expand them” When, oh great “goy” who thinks I live on a farm, did I say I wanted to EXPAND any social program? The only thing I’ve said to support is an increase in the smoking tax or a snack tax, specifically to cover the rising cost of medicine, given that those who engage in these behaviors will be more apt to use the healthcare system. I’ve been asking you if you’d repeal existing programs, and you grudgingly admit you would not. Well, at least you wouldn’t starve the poor. Good for you.
“There’s no conceivable reason you can offer that absolves individuals of the responsibility for paying their own way for these things… Part of your responsibility as a citizen is to maintain your health.” Yes! I agree it is your responsibility to maintain your health! But some are unable or unwilling to do so. That’s my point with smoking/obesity! If many in the underclass are going to benefit from the welfare system (that includes Medicaid) which you yourself would not abolish, shouldn’t we find a way they put in a little more into the collective pot? In terms of epidemics, wow, you had to go all the way back to 1918 to support your case -to an epidemic for which doctors had no cure, and little understanding. Why not talk about government-sponsored free STD clinics to stop the spread of syphilis? Or government clinics for DOT therapy for TB -to make sure patients actually take their meds and stop spreading the disease? Or government sponsored vaccines, like the flu shot for the elderly, or the nationwide campaigns to vaccinate kids for polio, or measles in the 1950s (some funded with private money)? What about the Ryan White funds for low-income AIDS patients? (The latter will not be cured, but can greatly reduce their risk of transmission if on treatment) And you have the gall to say I’m selective, and have to read up on MY history?
Do you know ahead of time precisely when you’re going to need a new car? I may not know the date, but I know the cost. Replacing a car is predictable in the sense that unless you’re well off, you know it will NOT be more than $50,000.It’s essentially capped. If you’re uninsured, health care costs could be 50k, but they could quickly balloon to 300k or more. Add to this lost wages, particularly if you’re in the hospital for weeks on end. And during your convalescence, your spouse may need to help you at home, so he/she may have to take time off work as well. Healthcare is NOT like replacing a car, it’s more like replacing a house. Do you have homeowners insurance? I bet you do, because you know that, though unlikely, if your home were ever to burn down you’d be hard pressed to replace it. Same goes with health care. The fact is, in 2001, medical causes were cited by about half of bankruptcy filers in the US. I bet replacing a car didn’t even make the top ten.
“Insisting that people pull their own weight is not “libertarianism”, it’s simple common sense.” Yes, I’d agree! If you can, you should! The point is, some CANNOT (the elderly, the disabled), and others have simply made dumb decisions in their lives (I’d like to see this group taxed more, but you think that’s wrong. What would you do? Leave them to die with their disease? Oh, that’s much better.) Given the staggering costs, which have NOT risen because of insurance company schemes, the government is the only institution that can help these people.
Why have costs gone up so fast? Technological advances, high cost of labor, high cost of litigation (or fear of litigation), as well as the high cost of end-of-life care. I’d add perhaps overuse as well. We’ve become accustomed to having “free” medicine (e.g., the ER, ) or seek treatments that benefit our lives, but perhaps are not essential (Viagra?). The pharmaceutical industry pushes new drugs that are slightly better than the old ones, but cost triple (in part to cover R&D, litigation, but also to increase their bottom lines). Ultimately we get into the law of diminishing returns: progressively smaller increments in benefit vs. large increments in cost.
Despite your apocalyptic vision of the future, you admit some form of welfare will continue to exist. So you admit your tax dollars will continue to be spent on someone else’s healthcare. You can choose to either A) have everyone foot the bill equally, even though some disproportionately consume more resources, or B) have those who consume more healthcare dollars pay a little more. Well, you could settle for a third choice: to grow a beard and move off to that mythical “freer” nation you claim exists. Please! Send me a postcard!
@ Goy – PLEASE NOT THE ABOVE MESSAGE WAS CHOPPED INTO 4 PIECES! T’was the only way I could post it. Be sure to enjoy it in its entirety.
@ HonestJon – Interesting point, making all insurance carriers non-profit. Don’t know if legally the government can force them to do so, and don’t think the government could force companies to pay their CEOs less either…unless it were through major tax hikes on bonuses or high salaries (and “goy” wouldn’t like that, would you?) Don’t take CIGNA and it’s CEO as the norm. As I stated above, it’s quite the outlier in the business, in terms of CEO pay and property investments. Curious why if “goy” is so informed on the subject, he/she neglected to mention that…
So how do we cut costs? Evidently some savings could come from streamlining the insurance industry. There are hundreds of carriers in the US, many using their own forms and codes. Streamlining the billing/claim process by standardizing forms/payment rules/codifications, and making the entire process electronic (vs. paper) would save millions. Tort reform to reduce the direct and indirect legal costs (including unnecessary tests ordered more for lawyers’, not patients’ benefit) could do the same. More competition (from out-of-state carriers) could drive down premium prices. I personally would advocate higher sin taxes, including snacks, to make those who incur greater risk pay a higher premium. And no, despite what “goy” says, I would not socialize all of medicine. The resulting bureaucracy would make costs only rise faster.
But ultimately, the cost of healthcare will still be expensive. You can’t get world-class healthcare on a shoe string. Cost-cutting measures, at least in the public domain, would have to start cutting benefits. One approach was the so-called Oregon Plan, whereby funds were distributed in a utilitarian fashion. Programs that served the “greatest good” (e.g. vaccines) were funded first. Expensive programs that benefited the few (e.g. a heart transplant, which costs hundreds of thousands, and helps only one person) were left at the bottom of the list. At some point on the list, the funds would be estimated to run out, and anything below that point would NOT be funded. It’s a draconian measure, whereby some would not receive public funds for expensive procedures. But then again, while the government should provide basic healthcare, it’s arguable things like transplants would qualify as “basic.”
Perhaps there are other solutions (love to hear “goy’s” input, if it were anything other than “get rid of the insurance companies”).
We will have to face difficult choices. The current left-leaning government will likely make things more, not less expensive for all of us. My advice? Get the best insurance you can afford, and get it while you’re young. It may mean having less cash for other personal endeavors, but in the end, health insurance should be a priority -your life may literally depend on it.
Thanks for the response, chileno. Sure, the government can force anybody to do anything. A little legislation and a few signatures and…Presto! A new law! One of the ways to cut costs is to make the insurance companies non-profit. As far as the execs are concerned, I feel quite confident that the gubmint could impose some form of pay cap in the interest of the businesses that buy the insurance for their employees. Where are the execs going to go? Wall Street? NOT!
And yes, alas, with a sigh, I’m now firmly in the populist column. I strongly believe that anybody making more than $1 million/yr should be taxed at 50% or greater. You say you make 10 million a year? Ha! 75% for you! (That having been said, $500,000 or $2.5 million isn’t such a bad year, now is it?)
The thing is that capitalism has gotten so far out-of-control that now there are uber-rich and uber-poor. Eventually there’s going to be a tremendous uprising of the poor folks against the rich folks (who will be greatly outnumbered and therefore outgunned). And that’s gonna really screw up our economic future. I’m not speaking of equality of outcomes, just less inequality of outcomes.
Chileno, you ought to check out Mr. GOY’s blog. He’s a pretty sharp cookie. Utterly heartless, but a smart guy let there be no doubt.
regards
HonestJon:
I’m still skeptical whether the government could force the Insurance industry to become wholly non-profit, or create salary caps for CEOs. I’d have to agree with goy here that even if they were to pass a law, it could be challenged in court as government overstepping its regulatory authority. I guess we’ll have to see what those wonderful men/women up in Congress come up with.
In terms of populism, you should be careful about following your gut reaction. Check out Hauser’s law ( http://online.wsj.com/article/SB121124460502305693.html ). It essentially states that historically, federal government revenue rises and falls independently of what the highest tax brackets have been. This is because increased income taxes promote a decrease in productivity and an increase in shifting or hiding income. Government revenues do correlate with the rise in GDP. Hence, if you want to increase federal government revenue, you want to foster changes that promote growth in the economy. Raising income taxes could do the opposite, as they tend to dampen production/investment.
Despite being considered regressive, I do support some taxes like sales tax and sin taxes. They penalize people who consume/risk the most, vs. income tax/capital gains tax, which penalize people who save or invest. It may help that I’m a thin non-smoker who likes to invest…
Let’s put it another way: Corporations and the rich aren’t self-regenerating piñatas that shower candy every time you whack them with taxes. It’s been shown that states with higher tax rates (like NY, CT, NJ) are the ones whose economies are struggling the most, while states with lower tax rates (like AZ, NM) have enjoyed greater economic success. Corporations (and the rich) can move in search for a better tax deal. Faced with the higher cost of business in America, more companies will go overseas. The ones enjoying “living wages” will be the Chinese, the Mexicans, etc.
And the whole uber-poor thing… If you want to see uber-poor, go to Haiti, where kids are literally eating mud pies (with a little sugar) to control their hunger pangs. THAT’s uber-poor. Yes, there are uber-rich (which should pay a share of what they earn). But the whole “rich are getting richer while poor are getting poorer,” isn’t quite true. When you look at population income distribution over time it SEEMS this is the case, as the amount of people at the bottom gets larger, while those few at the top go higher and higher. The problem with those charts is they assume a STATIC population. That is, those at the bottom are the same ones year after year, only more than before as they are joined by those in the middle that have slipped down. The IRS made an interesting study, where they tracked income tax filers from all ranges OVER TIME for 20 years. Turns out those on the bottom 20% were the most upwardly mobile, moving into the 4th or even 3rd quintile over the 20 years studied. The ones at the top were actually more likely to move down a quintile. Thus, long term there is still upward mobility in America. Many of those who were in the bottom 20% 20 years ago have actually moved up. So why is the bottom 20% getting larger? Yes, there’s still poverty in America (which needs to be addressed), and people in the middle quintiles who have had a bad rap (who should be helped). But there is also a large number of poor immigrants moving INTO the chart (which weren’t there before). The Left implies that somehow those on top took it from those in the middle, pushing them down with those in the bottom. But this is not a sand pyramid where most grains are rolling down, rather a sand pyramid where more sand is continually being added at the bottom.
I do believe in capitalism, though some regulation, and some taxation is necessary to keep things fair, and help those who cannot compete (elderly, disabled, etc.) in the free market. I do worry that we will make it out of this nasty recession (as the business cycle always does), and the government will take the credit (even if what it did was negligible) and will then push towards a greater socialist agenda, over the next 8 years…
In terms of goy, I’m still waiting for his reply to my last onslaught. Rather than smart, I’d call him crafty, well versed in his selective right-wing review of data to support his agenda. But deceptive information (like the whole CIGNA spiel) and the arrogant attitude make him lose credibility.
I’ll leave you with one more thing I found on the blogosphere (pretty funny, but true): Our Tax System Explained: Bar Stool Economics
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that’s what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. ‘Since you are all such good customers,’ he said, ‘I’m going to reduce the cost of your daily beer by $20.’ Drinks for the ten now cost just $80.
The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free.
But what about the other six men – the paying customers? How could they divide the $20 windfall so that everyone would get his ‘fair share?’ So, the bar owner suggested that it would be fair to reduce each man’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.
‘I only got a dollar out of the $20,’declared the sixth man. He pointed to the tenth man,’ but he got $10!’
‘Yeah, that’s right,’ exclaimed the fifth man. ‘I only saved a dollar, too. It’s unfair that he got ten times more than I got’
‘That’s true!!’ shouted the seventh man. ‘Why should he get $10 back when I got only two? The wealthy get all the breaks!’
‘Wait a minute,’ yelled the first four men in unison. ‘We didn’t get anything at all. The system exploits the poor!’
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn’t show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they suddenly realized they didn’t have enough money! They couldn’t even pay for half of the bill!
From then on, the nine men resigned themselves to drink much cheaper beer, and were all the more miserable for it. The tenth man found a new bar to drink at, with nine new men who were more than happy to welcome someone willing to pay over half their drinking bill.
62. Chileno: Thanks for the response. I’ll betcha an ALE8-1 that the gubmint can write any law it wants. You’re probably right about any new laws of the aforementioned variety being challenged in court, but the outcome is unpredictable.
I had a look at the WSJ article. I think one has to keep in mind the middle two words of that newspaper’s title: “The WALL STREET Journal.” (I read many of the online articles from WSJ daily.) It seems that they are almost always for the wealthy/rich/free market/unrestrained and unregulated capitalism/etc. I’m also familiar with the Laffer curve. Like previously stated, I’m no economist (just a dumb ‘ol hillbilly actually) but the excessive pay schemes that have recently come to light are just ridiculous (in my own personal moral opinion). I saw an article (dang I wish I had bookmarked that one) that showed how fast executive pay had climbed over the last 25 or so years. It showed that during the ’80s exec. compensation averaged about 40 times what the average worker made. But now it’s grown to over 400 times what the average worker makes. We were doing alright in the ’80s, weren’t we?
I agree to an extent with Obama’s desire to spread the wealth around. I do not agree with how he articulated the argument, though. Personally, I’d much prefer for executive compensation to be regulated within each business (or possibly industry) by how much the lowest-paid worker gets paid. For example execs can only make 20 times what the lowest worker gets. Richy Rich makes $10 million a year, you say? His secretary then makes $500,000/yr! CHA CHING! Sure, there’s going to be an MBA from Harvard sweeping the floor at Goldman Sachs, but he’s making good money. I also believe that all “bonuses” within a company should be equal. Like I said above, I’m not for equality of outcome, just for less inequality of outcome. It’s just gotten completely unfair and out-of-whack.
Mr. GOY and I had a very spirited debate concerning this matter a couple of months ago. I came to the conclusion that: although the middle class is increasing its wealth it is not increasing that wealth at the speed of the upper class. It’s just going too slow for my personal taste. I look at it like this: In a fictional company if the CEO is making $2 million and everybody else is making $20,000 then there is only going to be one Cadillac Escalade bought by anybody working there. On the other hand, if the CEO is making $2 million and everybody else is making $100,000 there might be a few more Escalades bought. Somebody (smarter than me) needs to come up with “The Law of Hoarding” or somesuch which shows that if one kid has almost all the Easter eggs then the other kids not only don’t get many eggs to eat, but they are unhappy, too.
I saw what you mentioned (about the bar stool economics) too, but it failed to convince me then and has failed to convince me now.
I feel confident that Mr. GOY is busy whacking out a response (a very lengthy one) and will respond pretty soon I bet he had plans for Easter. He’s got his argument down, without doubt. But everybody cherry-picks. At least a little, anyway.
If you want to see uber-poor, then you don’t even have to leave the country. Just go to eastern Kentucky (where I’m from). You’ll see plenty enough poverty there without having to go to Haiti.
regards
HonestJon:
) . Perhaps the government should place exorbitant taxes on bonuses, though I’m afraid that would only lead to star CEOs asking for even more money. Or perhaps there could be regulations asserting all bonuses be tied to performance (i.e. merit-based). No merit, no bonus. And no golden parachute either.
“the excessive pay schemes that have recently come to light are just ridiculous” I agree, morally, CEO compensation is disgusting. Yet is it wrong business-wise? Don’t get me wrong, I don’t like these guys making millions while I slave away to earn my two bits. Top CEOs enjoy what I’d call the “sports star effect.” You know how certain sports teams pay millions to get the most coveted athletes. Heck, the fans demand it, as a guarantee to win. Similarly, corporations chase after certain successful CEOs and lure them with hefty bonuses, as an “investment,” to guarantee success. I can just hear the stockholders cheering them on to higher profits. And given that an extra 10% profit could translate into $200 million for a large company, paying out $20 million to the CEO may make some sense. But ultimately, we have too many corporations chasing too few top CEOs, and it becomes a bidding war with no end. Sports teams regulate athlete salaries with pay caps mediated by collective bargaining. I don’t know how that could be applied to business (a Fortune 500 “union” bargaining with a CEO “union”??
“although the middle class is increasing its wealth it is not increasing that wealth at the speed of the upper class.” Unfortunately, money begets money. If you have more, it’s easy to make more. It’s growth is not linear, but proportionate. Consider this: Rich man deposits 1 million bucks in a savings account, Poor man deposits $1,000. They both earn 4% interest. By the end of the year, Rich man earned $40,000, enough to get him a down payment on a Porche. Poor man earned $40, enough to take his family out to Denny’s. Is this unfair? They both got the same deal from the bank. The flip side is that, out of $40,000 Rich man made, Uncle Sam takes $5-10,000 and some of this money ends up (as food stamps/Medicaid) supporting Poor man. So yes, there is inequality, but there is method in the madness. Personally I sometimes do feel upset (envious?) at the uber-rich. But then I try to focus on how my life has improved over what my parents had to suffer. We live healthier, longer lives, we travel farther than any of our ancestors, our homes/vehicles/work places are safer and more comfortable than ever before, and best of all, we are free. We take the latter for granted, ignoring that for millennia many of our ancestors lived as landed serfs or slaves (some around the world still do).
I’ll leave you with a couple quotes from Calvin Coolidge:
Don’t expect to build up the weak by pulling down the strong.
Collecting more taxes than is absolutely necessary is legalized robbery. (I bet Mr. Goy would love that one)
BHO tells us the high tax is to make us quit smoking, but in reality it’s his moto “trickle up poverty and trickle down stupidity”. Unless you don’t eat, smoke, drink soda, use lights, etc.. BHO raised your taxes.