Most important part of healthcare in this blog

In the past I have written blogs about our healthcare system while also laying out some alternatives that I believe would make our system cheaper, more efficient, and more productive. Yet last night I believe I had a revelation on why so few have embraced a conservative libertarian view of healthcare while that view has so helped America be prosperous in other economic activity throughout Her history. I will now attempt to explain this revelation:

Barack Obama used the example of a child having Leukemia and not having the insurance to pay for the proper procedures in dealing with this awful disease. Besides the fact that an emergency room is not allowed to turn away any emergency in this country it is true that without proper insurance people will not have available to them some of the procedures that can save a person's life. It is an emotional situation to say the least. Economics is not about emotion or compassion but the study of the efficient allocation of scarce resources which have alternative uses. In other words, it studies the best way to make available to the most people resources that are valuable to human beings. Does this mean all resources? No but the study of the BEST way of allocating these resources. While some still will not have access to those benefits.. it guarantees that MORE people will have it with correct economic decisions than do under other ways of making those decisions such as using Obama's plan-GOVERNMENT to allocate those resources.

There will always be stories of those who are not helped by this system but it is impossible to count the amount of people who would be affected under a system that we don't currently use. That is unless we study the systems of other countries. Far more people do not have access to basic services and extreme procedures in countries where the government to whatever extent runs the healthcare system. But I have seen conservatives use this argument before and yet it seems to not work. So last night this revelation appeared to me. Our lack of history knowledge does not allow Americans to be happy with the advances our society has made. Who cares that 100 years or 50 and in some cases just a couple decades ago these procedures that are available now were not even known of then. But yet today we expect every human to have a right to those procedures. The problem with people having a right to anything is that it takes away the profit motive of developing newer and better procedures. This is why the United States invents over 85% of all new medicines and procedures. Our companies have a profit motive to make better things and more efficient. In other government ran places those motives do not exist. Today we want more and more and more and to a point that a very good politician can make speeches and possible persuade us into believing that government can do a better job. But in countries where government does this there is not innovation motive.

As sad as it is that some people do not have healthcare and that costs are rising and hurting people. Our system while having many problems is the only reason that these current procedures that some people can not get... are available to begin with. When will conservatives rise up and explain to people that there are other ways to help these people and that destroying the system that has created these wonderful things is not the correct way.

The Worst Thing to do Right Now!

The American GDP (Gross Domestic Product) which is the sum of all products produced and sold in a given year is large. Only 10% of this GDP is kept as profits by companies. That is of all the trillions of dollars spent on goods (11-12 trillion) only 1 dollar for every 10 spent is kept as profit. I believe this is Gross Profit (profits before paying wages and variable costs such as electric bills) but it might very will be Net Profits which is the profit after those payment. Either way while we hear about the millions and billions of profits companies make in reality their profit margin is quite small. When costs go up they have one of three options. They can reduce dividend pay outs to stock holders which hurts their future investments, they can cut technology investment (this makes production more productive, efficient, and thus cheaper for the future by using machines, or finally they can cut workers or as we hear it - lay workers off.

Now, over 60 percent of costs and in fact for most companies well over 70% of costs to companies are paid in wages to workers. This is the largest cost to a employer. Thus when the economy slows guess what is the most efficient cut to make? If you said worker cuts then you can head to the front of the class as Professor Walter Williams use to say to his students when sitting in the front of the class was in fact a privilege to students. Well guess what happens on July 24 while businesses are struggling (meaning mostly having trouble paying wages and already laying workers off)? If you said oh wait that is the date set for Minimum wage to rise to $7.25 then once again move to the front of the class. Now for you usual blog readers of mine who should be amateur economist by now... what do you think that means for the future? I hope you said more layoffs of workers. Yes even if jobs are eventually created as the economy revives, fewer jobs will be created due to this major hike in minimum wage. I predict more jobs continue to be loss and unemployment could rise to as high as 11% or more.

For you minimum wage workers, good luck on keeping your job

Unexpected Consequences

Unexpected Consequences are serious bi-products of decisions made that are not only unexpected but in many cases tied unseeingly to those decisions. In other words its hard to link those consequences to the decision and thus easier to make more bad decisions. If politicians create these consequences but the public does not see the link... they are not more likely to vote him or her out of office.

One of the most common argument made by people who favor bailouts for individuals that are going to lose their home if government (meaning tax payer) does not pitch in and help is that their loss will cause property values to dwindle and thus it is to your benefit that we bail those people out who made bad decisions. So in practical use it looks like this: You rent an apartment because you believed that you did not have the money to buy your dream house thus conserving for your future. However someone your age in the same situation does buy that house and come to find out they cannot afford that house so the government wants to use your tax dollars to help that person so that it does not hurt your property value in the future. This probably now seems immoral to be put that way but beyond that it also creates unintended consequences. In the future more people will make dumb decisions because they A) feel cheated to have had to bail out the person the last time this happened and B) I know if I can't afford it there is a good chance government will bail me out this time. Therefore the amount of people making bad decisions rises. This once shorterm problem is now gigantic and affects many million in the country. We are currently going through this in our present day economy. If no bailout in the first place... probably better decision making in the future by all people.

The other day there was two police chases that ended in car crashes in which people were severely injured and taken to the hospital. There was some news stations debating whether police should even pursue such thieves since they can result in other people being hurt on the highways due to these high speed chases. That is ridiculous on surface but lets look at the unintended consequences that could be caused by this. If a thief knows he or she will not be pursued after a hit and run or stealing a vehicle or committing some other crime then more theives will be willing to go into this practice as the chances of them getting away with it grows. What I would recommend is that if a person commits a crime like this they should take him or her out as soon as possible. yes there is a chance that the criminal might be hurt and possibly an innocent bystander although less likely than when the chase has reached well over a hundred mph. However if a criminal knows that within minutes of being pursued they are going to be taken out automatically.. they are probably going to be fewer criminals in the future taking those risks.

There are many many more examples that I have mentioned in past posts. I also recommend reading some of Thomas Sowell's writings on this. But remember costs are not just present. Costs of decisions made by politicians and individuals grow in the future if they create unintended consequences even if those consequences are unforeseen

I can get everyone a job that wants one... just read and find out

Here is my recommendation for creating a job for every single American that wants a job. Actually I have several options. Congress should pass a law outlawing all machine use. That way to make up for what machines do, people will be needed. Here is another one. Lets just bring back the draft and draft everyone that does not have a job and force them to serve in the military whether they are all needed or not. Or better yet not to put them in danger (plus I'd rather many people who are jobless not to be in our wonderful military) we can simply have the government pay for people to do what my dad use to warn he would have me do if I was a smart-elic to my mother... We could pay people to dig holes and then re-fill them in.

You might think I'm an idiot but I'm really not. I'm just acting like the Obama administration. You say how? There are two ways government can get GDP to rise and thus create jobs according to basic economic text books. We can increase government spending or lower taxes. Now all your basic economic books will tell you that government spending will raise GDP faster than lowering taxes because a percentage of that tax break will be saved by the American individual getting the tax break thus not being used in our economy. This while every dollar of the government spending will be spent in the economy. There is only one problem...

How do we know if government is spending money on things that Americans want and need? Government might build a bridge and put hundreds to work but if that bridge is going to be used by 100 people a day and employ lets say 100 people to build, it might not be worth the cost of 200 million dollars to build that bridge. That means 2 million dollars was spent on each job. Is that really helping the economy other than those 100 people? Government can spend money and create "Green" jobs but if those jobs are not efficient jobs that help create "WEALTH" then it is a waste of resources.

Do you trust millions of Americans who know exactly what they need to improve their lives using their money the way they want to. Or do you trust some government official or "czar" spending that money on what he or she thinks the economy needs? A supermarket has 60,000 items in it that tens of millions of people had a part in getting there when you take into account every single job that is needed to get those items to the store. Do you think a government official could run our supermarkets? It would be impossible for one individual or a group of government officials to have all the information needed to do so.

I would much rather spend my own money!

The Do Nothing Approach

With Americans lack of history knowledge and especially economic illiteracy, it is political suicide for an American President or Congressman to get elected on the promise of doing nothing. We believe that these representatives are suppose to vote and make laws that benefit their constituents. Yet their job is to abide by the Constitution and make laws that are the framework for our nation. Yet today over 60 percent of what congress does is unconstitutional. Doing nothing would be much better.

If Congress and the President did nothing we would not be having the current housing crisis. We would not have a massive debt that is held by foreign countries. We would not have billions spent on pork barrel projects. Lobbyist would be out of a job. Inflation would be much lower, housing would be cheaper with less regulation, credit wold be easier to get right now, and thus the stock market would be in better shape. With a do nothing congress taxes would be less than one half of what they are, a man could start a small business in one day not work on it for half a year and pay enormous costs to do so. Electricity and gas prices would be much lower because of the use of Nuclear Energy and the increased production of oil.

So why is it political suicide for politicians to go to office and promise all these things? The reason is simple but yet complex. Years of brainwashing in colleges and by politicians with the help of the media and more importantly the Judicial Branch has programmed our minds to be very dependent human beings. I was hanging out with some friends and one of them said "I can't wait to get my free health insurance." What he was saying is "ha ha ha your going to pay for my health insurance." He loves the fact that he does not have to pay for it. Wouldn't anyone? Yes unless that person understood what government healthcare is like in other countries and understands the economics about it and the fact that it is unconstitutional. These things take time to teach and in a school system ran by politicians and unions that would prefer us NOT to know these things, they do not get taught.

Its sad but it all goes back to the failure of our education system. Well failure to us not to the politicians and unions running our education system.