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.