Health Care Reform – 8-17-2009

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Most Americans seem to want to see some sort of change in the Health Care system of the United States. There is however a vast difference between the ways and means of seeing this get accomplished. Some have argued for a public government guarantee for health care benefits, while others indicate that a removal of many governmental obstacles and regulations would be the way to accomplish the desired changes.

The number of different ideas out there seems almost limitless, which is understandable seeing as virtually every citizen is impacted by the Health Care industry in a very personal way. Any industry that can account for approximately 17% of the GDP in 2008 or $2.4 Trillion, is a market that just by the nature and size of it would impact most if not all of the citizens.

Given it’s size and scope it is little wonder that individuals would be concerned about the way that it functions, and would want it to bend a little in a direction that would make life a little better for them. That being understood we may then want to ask ourselves, where is the proper source for changes to come from, and what is the scope that they should take.

There are currently several bills that are at various stages of development in the House and Senate seeking to find the best solution to the given problems that are seen in the system. Most have touted some pretty dramatic reforms that could drastically change the way that the current system operates. A system which for all it’s flaws currently takes care of the health care requirements of all the citizens and even some non-citizens. But people know what they can expect from the current system, a luxury that they do not have with the proposed bills. Accusations about the contents of the bills (which are currently in flux and changing) vary from the somewhat believable to the completely outlandish. Can anyone blame them, any time you change the rules of a game the players take time to adjust to the changes. Where this game impacts so many so intimately, they are understandably upset. Unfortunately for congress it seems that while most people want some kind of reform a good majority of them don’t like the new rules and don’t think that the game is as dysfunctional as congress has painted it.

Timing is just one thing that has made this a difficult move for congress. The President was pushing for a bill to be created and passed before the August Recess (Yea Right). But this is such a large piece of legislation, and encompasses so much of the economy that to try and orchestrate it’s transformation in that short of time would take a miracle to get right.

Let’s compare that with the passage of the constitution, this document changed the form of government and affected all of the citizens of the colonies. At that time the population is estimated to have been at under 4 million people, but yet that document in all it’s grandeur took several months to properly write, and then 3 years to ratify. During that process the states all had many debates and discussions about the document and the proper role of government, it was discussed well enough that the people were willing to accept it and abide by it’s precepts. And now we expect to pass meaningful and useful changes to a system that affects the lives of over 300 million people in less time than it took to write the constitution.

Unfortunately that sounds like a slippery slope to me. If legislation of this magnitude is passed this quickly, without thorough debate and analyzing all sides, I am afraid that the US will end up with reform, but not necessarily the right reform. The Congressmen and Senators will pat themselves on the back for helping the President achieve his goal, but after they have received the praise for passing the bill, it is the people who will suffer the adverse consequences that could be brought on by flawed legislation.

One possibility that may be pushing this legislation along, is the increased deficit spending that the previous and current administrations have used. These deficits are paid for by monetizing debt instruments through the use of Treasury Notes or Bonds. Some of the biggest buyers for these notes are foreign nations, many of which have found it less desirable to purchase our debt, seeing that our economy is having a tough time, the dollar is not as healthy as it once was, and that we are spending money like we’re on a binge.

If these countries don’t purchase our debt, we cannot continue to spend. This is a concern for this administration. What better way to ensure the stability of the economy, than to bring 17+% of the economy under the total taxable jurisdiction and control of the US Government. That along with Cap and Trade (think about that in reference to the debt as well) should provide enough leverage for the government to continue it’s spending binge with reckless abandon.

When faced with a choice between Freedom or Force, Choose Freedom, or the next one to lose their Freedoms might just be you.

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Additional Resources:

A British politicians perspective on the UK Health Care System

Obama Recants on the Public Option

Free Market Reform Proposals from John Mackey (CEO of Whole Foods Market)

Minimum Wage

With the new minimum wage law set to take effect on July 1st 2009, it will make for an interesting study into the effects of K’s Law.

Legislators love raising the “minimum” wage because it makes them look like they really care about the nations least skilled laborers. The intention of the minimum wage law is to make life better for the people on the bottom end of the wage scale. The theory is, if we force employers to pay their employees more, life will be better for the employees. Let’s discover if this is true.

There is a sandwich shop not far from here which serves out-of-the-ordinary tasty subs. The four young ladies working behind the counter earn minimum wage. When the wage increase hits next month, the manager will be faced with a tough decision. In order to maintain profitability and keep serving subs she will either have to raise her prices (and lose valuable customers) or let one or more of her workers go (increasing the workload of the others).

If she chooses to let someone go it will most likely be the least skilled worker. Life will definitely be worse for this young lady as she will be out of work. In addition, the remaining workers will be forced to pick up the slack making life worse for them.

“But won’t the remaining workers be getting more money?” I hear you say? True, but because of that they will have the incentive to stay working at minimum wage instead of increasing their skills and seeking a better paying job. What’s more, when they take their new earnings to buy pizza across the street they may find the owner has raised his prices rather than layoff workers. Their new money is worth less in the marketplace.

It is the intention of the law to make life better for the least skilled workers, but instead the law eliminates jobs and incentivises workers to stay at lower paid jobs instead of making their own lives better by increasing their skills and getting better jobs.

Minimum wage does the EXACT OPPOSITE of what it is intended to do making life worse for everyone.