The Economics of Obamacare

As many of you should know by now, a sweeping overhaul of our healthcare system was signed into law by President Obama just yesterday.

The question many people are asking now is, "What does this mean for me?"

The true answer right now is "No one knows for sure". Here's why.

This bill is currently over 2300 pages long. It is also written in extremely dense technical language that can only be understood by a handful of people in Washington.

I can't tell you what this bill will mean for you personally, but I can assure you it will not be good in the long run.

Here are some issues I have with the economics of "Obamacare".

1- Government

Basically, our government doesn't do anything efficiently. History is full of cost over-runs, budget deficits, and mismanagement of resources. Don't believe me? Check out these examples, and keep in mind that the only money the government spends is OUR money

-How about the Department of Treasury's Report in 2003 Financial Report of the United States Government? This study released some interesting news: the government lost around $25 billion dollars. No one knows where it went. Auditors know that someone spent $25 billion somewhere, on something, at sometime, but have no idea how to account for it. But hey, what's a couple billion bucks here and there?

-Between 1997 and 2003, the Defense Department bought a whole bunch of airline tickets. Of these, they failed to use 270,000 of them. This cost them roughly $100 million dollars. Apparently no one thought about returning fully-refundable tickets. Also, auditors found that the Defense department managed to pay for about 27,000 tickets twice shortly after that. Nice

-Medicare wastes huge amounts of money every single year. The entire system is riddled with waste and overspending, yet we just passed a bill that is going to expand medicare? A Department of Health and Human Services Report was issued several years ago that looked into purchasing prices for basic medical equipment. Veterans Affairs paid about $1.02 for each bag of saline solution. Medicare paid $8.26 for the same bag. Problem?

-I am including this just for fun. In 2002 the Department of Education certified student aid for students to study at the Y'Hica Institute in London. One problem: this university doesn't actually exist. It was a test by a few senators to test quality control.

As you can hopefully begin to see, the government does not handle money well.

So let's look at what President Obama is doing with this health care bill:

1- Initial Price Tag= $940 Billion Dollars

This is a LOT of money. You may be used to seeing large numbers thrown back and forth (especially when Obama is doing the spending) but I want you to sit back and think about that number. $940,000,000,000 dollars. To put that in perspective, please follow this link. This it the new Royal Caribbean cruise ship Oasis of the Seas. The largest cruise ship ever built, it's basically a floating city of entertainment and luxury. Price tag: $1.4 Billion.

Go check it out here

As extravagant as that ship is, this latest bill from Obama could have built about 670 of those

cruise ships.

670 of those ships could hold about 7,000 people each, so about 4.7 million people. Wow.

Please not that I did not include any stimulus, bailout, TARP, or other money already spent by this

administration.

Also remember that this is money that we DON"T HAVE. As national debt skyrockets and the deficit

grows more and more quickly, we are faced with the reality that we are passing this debt onto our

grandchildren.

2- Mandated Coverage.

This new bill will force you to buy health insurance. Ok, well "technically" it doesn't. You are

perfectly free to not buy it, but you will be fined for it, and I believe jail time is also a possibility.

In addition, health insurance companies will not be able to charge you for pre-existing conditions.

On the one hand, I believe this is unconstitutional.

On the other hand, let's look at what this will do to the health insurance industry. I am a young,

healthy American guy. When the time comes, I may decide to pay the penalty of 2.5% of my income

instead of health insurance. I may buy the cheapest health insurance I can find. I will then try to pay

the lowest amount possible until something goes very wrong (heart attack, diabetes, cancer, etc). At

this point I will drag my tired, sick body to the DMV (where they may start selling insurance, never

know)

And they will give me the same consideration they did when I was young and healthy? No extra

charges or denial of service because I now have cancer?

I don't understand how this is feasible.

Sadly I must end this post here. If you have any questions please comment or message me.

In coming posts I intend to lay out my own strategy for reform and pick apart some other issues

I have with this reform.

Adios!

PS: The formatting tool on Blogger was being very weird today, so I apologize for any errors in

the layout of this post.

In Defense of Freedom

While returning to my dorm this evening, I saw the live coverage of the health care bill "passage" in the House. While I understand this was almost inevitable, I am still disappointed and feel the need to explain the very simple reasons why I do NOT support this reform.

Let me first explain my concept of freedom. Freedom is an opportunity for success. Freedom is NOT a guarantee of success or protection against failure, merely the chance to do your best in life.

This poses an inherent risk, obviously. If you have the opportunity to do something, there is a chance you can fail. Things may not go well, and you will be responsible for your actions. Personal responsibility is hugely important, and often lacking today.

It is also important to note that health insurance DOES NOT INSURE YOUR HEALTH! Health insurance is like fire, earthquake, or life insurance. Think of it as balancing or managing risk. Example: You balance the risk of your house burning down with fire insurance. By agreeing to pay monthly premiums, you have some risk protection in case your house burns down. It's totally fine to NOT have this insurance, but it is more risky. Same thing with health insurance. You pay money to balance the risk that you will be hit by a bus, diagnosed with cancer, or something else that will cause large medical bills. It's perfectly acceptable not to have it (and many people choose not to. That's fine, it's their decision).

Some of you may be thinking, "Hey...I have to have car insurance when I drive. What's all that about?" That is liability insurance. You are required to have that in case you hit someone else and hurt them or damage their car. Totally and completely different than health insurance.

Therefore, health insurance is NOT a right. There is no reason that everyone needs it. There is also not a reason that the government should require it or regulate it as they plan to. Here's why.

In America, we are supposed to have an economic system called capitalism, which depends on the open transfer of goods and services between businesses and consumers. There is a lot of freedom in this system, and naturally potential for success or failure. No economic system is perfect, but I am willing to stack up the American model of the last 200 years against any system in history.

This model depends on the exchange of goods and services in the market. Of course, this is assuming that there is a level playing field. That would be the governments job. Anti-trust laws protect against monopolies. Agencies enforce property rights and protect ideas with patents. Ideally, the government acts as a referee and keeps the system honest and fair.

This bill introduces the government as a player in the field. The "government option" is supposed to be "competition" for other insurance agencies. A referee can't judge fairly and compete at the same time; the two roles are opposed to each other. Referees can't and are never fair competition.

The same holds true for the government. They don't compete, they win. They don't need to make a profit. They don't have shareholders or people to hold them accountable. They have plenty of practice wasting our money. Nobody can actually compete with the government. Corporations have to do silly things like make profit and generate income for next year.

Time is running short on me here, so I will cut to the chase and summarize my other points quickly here.

1- Obama claims this bill isn't about politics. I disagree. This whole thing is politics. Why were there zero Republican votes? Why is CNN covering the entire House of Reps at nearly midnight Washington time? Why was Obama telling Democrats that if they don't vote for this bill he won't campaign for them this fall? This is straight up politics.

2- Obama promised that he bring "transparency" to Washington. After attempting to ram this bill down our throats in August, legislation has occurred behind close doors and with zero bipartisanship. Finally, when the bill wasn't able to be passed via normal procedures, the whole reconciliation thing sealed the deal. Congress essentially passed a vote that a majority of Americans don't want through a back door parliamentary procedure trick.

3- Deficits. This is not good for our economy. Yes the CBO said it will save money. Yes that's bull crap. When does the government ever save money or do anything efficiently? Never! As this bill plays out, we will see that it hurts small businesses and the "average" American far more than it helps them.

Finally, my last point for the night. I don't want this bill for myself as a matter of pride.

As I make my way through life, I understand that success is not promised to me, and I embrace that. When hard times come rolling my way (which they will) I want to work through it with God and make the best of it. I believe most of America is like that. When the government gets involved, they tend to make things more complicated. As a side note, the best way to end a recession if you are Barack Obama is to get the heck out of the way and let America pull itself up by its bootstraps. We've done that a few times, you know. Little times like Pearl Harbor and 9-11. Times when it really mattered, Americans have stepped up to bat and will do it again.

Am I against giving people better health care? Absolutely not. I believe we have the greatest health care system in the world. As much as the Clinton family rails on our system, when our good friend Bill had a heart attack and needed help, where did he go? Not Canada, if you were wondering.

I am fundamentally opposed to the government becoming more involved in our lives and taking control from us, the people, into their own hands.

I am opposed to this specific legislation through many of its specific applications, as well as the general principles behind it.

And finally, I am against basically anything that Nancy Pelosi thinks is a good idea.

Really.

Just kidding ;)

But seriously.

Time to call it a night. More to come later, I am sure.

Adios

Adventure

While most everyone is either enjoying spring break at this moment or looking forward to it in the coming weeks, students at my university are back on campus and buckling down for the last two months of school. That's right, our spring break is over. I had a great one, for sure, but I still wish it could have lasted longer.

What did you do on spring break? The most asked question on campus this week will get one of these obligatory responses.

Yes, spring break was awesome. I...

a) Stayed home and worked, but I needed the money

b) Went to _____ and it was so cool.

c) Partied and go totally wasted and it was sweet!!!!!

d) Stayed at home and slept a lot....yup.

e) Some combination of the above

These responses represent about 85% of what I have heard since getting back to campus.

So what did I do on my spring break? I went to Mexico. On a missions trip. And it was a blast.

Really, it was more fun than any vacation I've ever been on, and I have been on quite a few trips. What was so cool about this trip? Well...that would be kinda hard to explain on here in this short time period that I have right now, but maybe some day.

What this trip did do was ignite a fire inside of me. Before this trip it was definitely there, like a pilot light or spark. I don't know what has caused it, but I just want to go and explore. Anywhere. It doesn't even really matter why either.

I have found myself looking at Google Earth and figuring out driving distances to places like Vancouver, North Dakota, Montana, Florida, and everywhere else that I want to go at that particular moment.

Of course I have neither the time or money for adventures like this right now. I am lucky to make ends meet, as it were, and can't afford a cross country trek any time soon...

But someday I may have that ability. I hope that when that day comes I haven't lost this desire. I don't want to look back in 20 years and say "I wish I could have done x, y, and z....now I never will". If an opportunity arises, I want to be able to take it! Let's go somewhere!!

God did a pretty awesome job creating the earth, and I want to see more of it. Maybe not now...but someday....