Anthem rate hike
February 12, 2010 16:17
Anthem's recent rate hike has made big news lately. That's a bit surprising because Kaiser's much steeper rate hike went completely unnoticed. Now you know where journalists get their health insurance, I suppose.
I decided to comment on this, not because it is outrageous, or because I was a bit surprised to find people use this piece of news as a way to back the idea that healthcare is not enough of a free market, but because this is a sign of things to come if we do not change course.
The reason given for the rate hike is that healthy, younger customers dropped out, leaving less customers--the less profitable ones--to pay for expenses. So the rate hike is necessary to protect Anthem's profits.
That's a gross simplification. It's not just the younger customers that dropped out but also those who can no longer afford health insurance, lost their jobs, etc.
So the way healthcare is delivered is going to have to change. The rich will be able to continue on paying for health insurance, but with fewer and fewer young, healthy people to drive their cost down. What seems inevitable is the the current healthcare providers and healthcare insurance providers will begin to shrink due to a loss of customers, and an alternative will surface.
I don't know what that alternative is. I just hope it is not called: "just do without."
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anthem rate hike
2011 budget proposal
February 01, 2010 22:48
Today the 2011 budget proposal was released. In a nutshell, we are going to spend 3.8 trillion dollars, 1.6 trillion of which we are not going to collect in taxes. Or, to put it another way. Next year we are not going to be able to afford 42% of the things our government is going to spend money on.
Translated in terms of a family budget, this is the equivalent of saying: "this year we don't have money to spend on the mortgage and the car payment. But that's ok, we're going to borrow the money for those expenses and our discretionary spending will be unaffected."
I understand the situation in which we are in, and I think, having studied our economic history, that I understand why we are in the situation we're in. When I look at our economic cycles and political decisions over the last 30 years, I came to a conclusion, which I hope is not too simplistic.
When Reagan began his first term, the country was suffering from unemployment. The solution was deficit spending, and the genial Supply Side idea: cut marginal tax rates (i.e. the tax rates that are paid by the super rich) so that the super rich will work even harder... iada iada iada... trickle down economics. The result of such massive deficit? Economic growth that lasted until the early nineties.
What gives? The fact that we had a recovery without budget surpluses to cover the deficits that were justified during the recessionary years. The cause? Tax cuts for the rich.
When Clinton became president, he also experienced both recessionary and recovery years. By not cutting taxes for the rich, the budget turned positive.
Then Bush came to power and got hit by a recession, followed by 9/11. The response was to help the economy by cutting interest rates and cutting taxes, especially for the rich. This helped the economy come out of the recession but never allowed any budget surpluses to emerge. Partially because of the increased spending caused by 2 wars and the medicare expansion.
Perhaps Clinton got lucky and his recession really wasn't as severe to begin with as the other ones mentioned. But I do believe that the difference here comes from the Republican agenda of making the government borrow from foreign countries and transfer the money to its constituents--the super rich.
Do I agree with the 1.6 trillion deficit? Well, convince me that we can stimulate job growth in the near term without it, and I will say no. Until then, the answer is: regretfully, yes.
What I wonder is this: what will need to happen for us to experience a trillion dollar surplus?
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Inevitable deficit spending continues
2010 State of the Union Address
January 27, 2010 23:07
Tonight Barack Obama addressed the nation after a year in office. Two recent events dealt huge blows to his efforts. First, the loss of the supermajority put passage of the healthcare bill in serious question. Second, the supreme court ruling that allows unlimited political contributions by corporations, including foreign ones, thus making Lincoln's "...Government of the people, by the people, for the people, shall not perish from the Earth" a thing of the past caused a lot of confusion. President Obama must feel what a great setback this is when trying to make progress rectifying all the things that got messed up over the last 10 years.
So the President spoke of jobs first. That is because he realizes that the healthcare fight is now secondary to fighting unemployment. Of course he did make jobs his first priority: the stimulus bill was signed within a month from his inauguration date.
I often congratulate the Republican party on their 41-59 majority (in fact they even had a 40-60 majority). The blind opposition to anything proposed has worked. Nothing of importance has passed last year (except the stimulus bill). The President tried to expose that, but exposing it is not enough. Every day in which the status quo remains unchanged is a victory for the Republican party.
So what I saw tonight was a President that is actually busy rethinking how to accomplish his plan amid some serious setbacks. He is seeking to get the voters behind him again by curbing unemployment to have the public support necessary to pass a more modest healthcare reform than he initially envisioned.
I get the feeling that the President will continue to struggle to make progress on his agenda for as long as the Republicans oppose him as they do now. But I do sense that a turning point is on the horizon: as the next elections approach, the opportunity to portray Republican candidates as happy with the status quo is going to be real. If that begins to take hold and Republicans return to the bargaining table, we might get some progress in the coming years.
We need some major changes and Democrats need to drop their "my way or the highway" attitude that got them absolutely nowhere. If that happens, next year will be very interesting, and, perhaps, coming out of this abyss will look possible.
Until then, invest in gold and silver.
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The Union is struggling to change direction
