Medical Freedom… More Money In Your Pocket!

One thing that most people don’t understand is that part of the reason our present health care system costs so much is because we lack the freedom to make choices for ourselves. Doubt this?  “Google” GoodRx. GoodRx gives you the prices charged by drugstores for various medications. You will note that these prices vary both by the drugstore and according to the type of medicine you are purchasing with your doctor’s prescription. Take for example of the cost of insulin for diabetics. The cost effectively varies from about $1000 a year (Novolin 70-30 at $25 a vial) to about twelve times ($12,000 for 40 vials of Humalog or Lantus). There is some variation among insulins, but they all reduce blood sugar for diabetics. Of course for those with health insurance, the insurance company will “pick up” some of the cost, with the rest being up to you to pay. Obviously controlling your blood sugar can result in considerable savings, especially for those dependent upon insulin. As diabetes is caused (type two) by excessive consumption of carbohydrates, it makes sense to do what you can to avoid becoming diabetic in the first place…  At least dependent upon insulin to control excess blood sugar.

The type of insulin the doctor will prescribe for you of course makes a big difference in costs. Unfortunately doctors do not usually consider “cost” as their first priority, and getting a doctor to start with the lowest cost and work up from there can be a problem. Part of the problem here is that the drug companies would “prefer” that your doctor only prescribe “brand name” medicines since these are what the drug companies make the most profit off. The doctor may “justify” to himself (or herself) that the drug prescribed is “better” than any of the lower cost generics available. Or simply figure you can “afford” it.

The real problem here is prescription laws that give your doctor a legal government enforced monopoly over access to medical drugs. Without these laws patients would likely decide for themselves how much they feel is worthwhile to pay more for medicine. This is one of the major advantages of life in a libertarian society over the “statist” society we now live in. Effectively, when you are allowed to make these decisions, your own decisions will be different in many cases from what your doctor is likely to suggest. It should be understood that with few exceptions, people generally prefer to make more than less money, even if the individual seeking their services would prefer to spend as little as possible. Of course someone with “first rate” employer paid health insurance is less likely to care because the cost of the more expensive medicine is coming out of his employer’s pocket, not his. Such a person is also much more likely to “go along” with whatever his or her doctor recommends than someone who has to watch every penny!

What about the insurance company? Do they care what the doctor prescribes? Not all that likely as they can “recover” the additional cost through higher premiums in most cases. So insurance companies really don’t worry that much about the cost of medical care. This is especially true today with Obamacare where people are forced to purchase health insurance (from a private provider in most cases) or pay a “fine” to the IRS.  Too, as with prescription laws you are “stuck” with what the doctor prescribes, you really do not have that much of a choice in the matter. You may be able to switch doctors, but for the most part, thanks to their professional organization, the AMA, you are dealing with people who for all practical purposes are as “unionized” as any labor union member is!*

*This is why the members of the “licensed professions and occupations” earn the money that they do. They have the power of “government” standing behind them, which gives them the power to extort more money from people than they could without government.

This is why as I have pointed out in previous posts, that “breaking the power” of the organized licensed professions and occupations would result in savings of over a trillion dollars a year if not more. Without the power of government behind them, they would have to “compete” in the free market like anyone else, which historically has always been one of the best ways to hold down the cost of goods and services to the general public. It would be necessary that people “educate” themselves about these things, but this isn’t all that difficult to anyone who is willing to take the time to “educate” themselves about these issues. Not much different than educating yourself to obtain a better position and income. Yes, it would take “time”, but the money you could save would certainly be worth it…

You will note in all this that neither of our two major political parties is willing to support anything like this. Most likely because a large number of elected officials are in fact members of the licensed professions and occupations.  Who naturally watch out for the interests of their own group. And oppose any idea that might reduce the incomes of their “group”. So we have a group of people, generally upper middle class and above, who are the ones regulating what we do. The laws that we are forced to obey. Unfortunately many of our own libertarian candidates have come from these groups, which is one very good reason (as I’ve discovered) that libertarian organization appear to have little if any interest in resolving these problems. One group which I corresponded with considered the “legalization” of marijuana to be of greater benefit than the repeal of prescription laws! So we have libertarians who believe it is more important that people are allowed to smoke or otherwise consume marijuana than it is to repeal laws that add hundreds of billions of dollars to our health care costs!

 

 

 

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What if there was no government regulation of people’s lives?

Let’s assume that we live in a society without a  government that is allowed to pass laws that favor some people over others…  There are no copyright or patent laws. Early in our history we didn’t pay attention to such things.  No licensing, regulation of business as now. Anyone is free to offer whatever services they feel able to provide. No drug laws, no prescription laws, no laws against importing things from other countries. No zoning laws that limit what people can do with their own property. “Minding your own business” is the rule of the day. There are traffic laws, but the only law is regarding harming others. There is a strong prohibition against the passage of any law where there is no “victim”. People are free to make their living any way that they wish, as long as they do not use force or fraud. Violence against others is prohibited except in cases of self defense.

Much of the legal system we have today dates back in history to when monarchs had the authority to grant legal rights to certain people regarding what could and what could not be done. Copyright and patent date from this era. The king (or queen) could give you a “royal monopoly” to do certain things that were denied to everyone else. Groups of skilled artisans would form a “guild” (like a professional organization) to prevent others from providing the same goods or services. The guild effectively reduced the supply of goods and services which allowed its members to earn higher incomes than before. The first labor unions were limited to skilled workers (craft unions) as “bargaining units”. Again the idea was to obtain a higher income through reduction of those allowed to provide the goods or services. Restriction of supply has always been a method to gain higher incomes, a policy that appears to go back some thousands of years with the formation of cartels, trusts, various economic monopolies over some needed substance.

All of these sort of things require the use of “force” in one way or another to function. One method is to hire “thugs” to beat up (or even kill) those who refuse to “go along”. Anti-union actions by business in the 19th Century sometimes even went to this point. Another “tactic” was to use law enforcement or if necessary the military to “break” the attempts to form labor unions. The owners of the big corporations of the era were often ruthless men willing to do whatever was necessary to prevent the unionization of their workers. It was a considerable “help” to have a national government that would agree to do most anything that “big business” of the day wanted done. This is also why there was a sometimes violent “anarchist” movement in reply, as many people understood that it was the combination of “big business with big government” that was the “problem”… In effect, it was understood that without the armed force of government, big business was limited in what it could do to prevent the organization of workers for an improvement in their pay and working conditions. As a matter of fact, throughout our national history, the US government has been more often on the side of business than the people. It has also been “on the side” of certain groups, assisting them through law and regulation to earn higher incomes than what they could ever earn without the power of government behind them. So reducing the power of government is one way to “balance the scales”.

The claim will be made that “government makes life better” for most people. The idea being that without government regulation, we would suffer from unsafe food, drugs, unlicensed medical providers, and every other problem government supposedly solves. The major problem with this is that government does a poor job of seeing to our safety. Also it creates more problems than it solves. It increases the cost of living by as much as $6,000 a year per capita. People are prohibited from using their skills and talents to employ themselves and serve their willing customers because of government laws and regulation. All in the name of “public safety”, where it fails more often than it succeeds. It deprives the sick of medicines proven safe in other countries. Our government has also made enemies out of those who were “collateral damage” from our drone attacks. Then there are laws like “civil forfeiture” where you have to “prove” your innocence of a crime instead of the other way around which is the way it should be in a free society. Our drug laws have given us the world’s largest prison population both in absolute numbers and upon a per capita basis. We have the world’s most expensive health care, but despite the fact we pay “more”, our health statistics hardly qualify us as a “first world nation”. As for “food safety”, we allow things that the rest of the developed world doesn’t allow in theirs. Which may be one reason that our health statistics are as bad they are today.

In conclusion, it appears that we are losing more than we gain by allowing government to rule our lives as it does. And what applies to the federal government also applies to state and local government. The “harm” done seems to be greater than the “good” that it does. Part of the problem of course is politicians who fail to serve those who elected them to office. Many of them appear instead to serve those who financed their expensive political campaigns instead of the American people. We also have seen the consequences of the “cuts” in services to our veterans, some of whom have died waiting for medical treatment because Congress decided to cut the amount of money that was allocated to the VA for health care. Proof, I suppose, of the low value placed upon their lives by our politicians. Who live like the aristocrats of another era rather then serving the American people.

 

 

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Smoking… A question of personal freedom and social cost?

I will be 76 years old in October of this year, so you can see that I’ve been around for a while. I was born here in Muskegon, Michigan back when we were still living in the Great Depression back in 1938. At that time, most adults smoked cigarettes. My parents both smoked. My mother quit in the last few years of her life and died at the age of 87. My father smoked his entire life and died at the age of 82. You will note that both exceeded the average age at the time of death for Americans today, let alone what it was 23 years ago when my mother died. My father likely did die from smoking as he had a heart attack which had caused his death a few years earlier. My mother died of a disease that also did in her own mother back in the 1960′s, a disease (Alzheimer’s) which has no known relationship to smoking. I mention these facts to illustrate that the reality is actually quite different from the myths today told about smoking. Yes, people did die from the effects of smoking. It does damage your lungs, and in sufficient time, may kill you.  I had an uncle who died from smoking, although it is just as likely that it was exposure to lung damaging industrial smoke and vapors from working in a foundry that eventually killed him. We forget that in the past, workers were exposed to a number of hazards that are now prohibited by law. But for those who lived during the Great Depression, men did in fact take jobs that given time, could cripple or even eventually kill them decades later.

Today obesity is a major social problem. Oddly enough, it didn’t become a problem until relatively recently. Today there is a great deal of concern over the medical and social costs of obesity. It is really a late 20th, early 21st Century problem. It didn’t exist until about the time of the Reagan administration, which is when the anti-smoking campaigns got going. It is definitely a “growing problem” today, one that is of considerable concern. The obese not only die earlier, but they also often have expensive medical problems such as diabetes, which when you become “insulin dependent”, can also be extremely costly.*

* I used the cost of insulin as an example of high medical costs in my previous post.

One difference between the costs of smoking and obesity is that while smokers usually experience their problems towards the end of their lives, the obese experience problems sometimes as soon as they reach adulthood. Once insulin dependent, they are locked into expensive costs of medication, frequent lab tests and doctor visits. For those who are curious, I suggest a visit to “GoodRx”, which you will have to use Google to access until you can bookmark the url. You will see that the cost of a vial of insulin will cost from a low of about a hundred dollars to three times that. Granted, medical insurance will help, but the co-pay (all insulins are brand name, there is no generic) will be high. There is also the cost of the meter, test strips, needles, along with quarterly visits to the hospital or doctor’s office lab along with the cost of office visits to the doctor. Overall, the costs can easily run into the thousands of dollars a year. Which, especially for someone starting out in life, or paying off student loans, can be a heavy burden to carry. Plus, as a rule, diabetics will also suffer from high blood pressure and high cholesterol, adding to the costs of their medications. So the problem of obesity and type two diabetes (which is the type of diabetes the obese end up with) run up our health care costs considerably. In fact, the health care costs of obesity and diabetes are likely greater than those caused by smoking!  In effect we decided to eliminate one medical problem that usually affected those later in life and replaced it with one that now is effecting people much younger at higher lifetime costs! Not exactly the most intelligent thing we could have done, I’d say.

One of the driving forces behind today’s obesity is that we have more carbohydrate dense foods today than we had in the past. More access to fast food, more candy, sweets, etc.  A smoker has a lower appetite, can skip meals easier, diet much easier if needed (voice of experience) than can the non-smoker. In effect, cigarettes to some degree replace food. Despite government efforts, the media, Americans are becoming more obese. One of the major problems here is that those who sell food have much greater economic power than the tobacco companies ever had. Plus, the obese diabetic is a “money tree” to the medical profession, to the drug companies. So we have entire industries, the medical profession who profit off obesity. Plus all the “diet” companies, who are also highly profitable.  This is likely why resolving this problem is likely for all practical purposes to be impossible…

We have exchanged one “vice” for another. And food addiction is likely even harder to control than smoking. No doubt a Libertarian society could go back to smoking, which would save considerable amounts of money, but politically, it is likely to be “difficult”. Oddly enough, smoking did prevent auto most immune diseases according to the book on ulcerative colitis that I read recently. Ulcerative colitis is an auto immune disease that only non-smokers can get according to the gastroenterologist who wrote the book. And of course obesity wasn’t a major problem back when most adults smoked. So perhaps we aren’t as “smart” as we thought after all…

Jerome Bigge, writing as “muskegonlibertarian.wordpress.com”

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How much less would medicine cost without prescription laws?

Check out this website below… A prescription for medical freedom!

http://www.fatalblindness.com/FREEDOM001002/htm

Return to blog:

Assume prescription laws are repealed (like the proposals to repeal marijuana laws), how much money could you save by practicing “self care” (doable today with adequate study and internet access) for many of the things you now would have to pay a doctor for a prescription for? (There are things you ‘d still need to have a doctor do for you and you will still need to have lab tests for some things, although not as often as a doctor might recommend.) As a Libertarian, you are now taking responsibility for your own health…

You will find if you take the time to study (time will depend upon previous knowledge and locating the sources of information that you need) that for many conditions there is a choice of medicines. Often there is an expensive “brand name” drug and a less to much less expensive generic drug, both of which can be used to treat the same condition. As a “rule of thumb”, start with the lowest cost medicine used for your medical condition and work up from there. Doctors should be doing this, but the drug companies “encourage” them to prescribe brand name medications when a generic might work just as well.  This is one reason “why” US health care is so expensive. As the doctor is in control of your health care and access to medical drugs, the drug companies are well aware that that if they can get your doctor to prescribe brand name medicines instead of generics, then they will greatly benefit financially. Nor is it difficult to get doctors to do this as providing doctors with “benefits” for prescribing a certain drug over another is apparently quite legal. Plus, doctors are “businessmen” who practice medicine, and like any businessman, are in business to make money. In most cases, they practice medicine as it pays better and offers the benefits of being “your own boss” instead of working for someone else. Granted, they will rarely admit this, but you will note that many of them refuse to take Medicaid patients because Medicaid pays less than does Medicare with private insurance paying the most. This is no different than any business. If you have as much business as you can “handle”, and doctors are in this position, then you naturally take the business of those who are willing to pay the full price for your services “first”, with any lower cost services or charitable services coming second. Lets be honest about this: Very few if any people are willing to work for “free”, at least more than just upon some occasions perhaps as “volunteers”. And since the doctor incurs costs for every patient he or she sees, naturally the incentive is to put those who can pay your fee those you see first…

Too, in the case of primary care physicians, the “demand” for their medical services exceeds the supply of available physicians, so there is even less incentive to provide services without payment. It also appears that many of those now signing up for Medicaid under Obamacare will find at least some level of difficulty in finding a primary care doctor willing to take them as a regular patient. There is also the problem that the American Medical Association is strongly opposed to using physician assistants and nurse practitioners as independent providers of primary care services despite the fact that with today’s technology, the development of medical computer software, the task of diagnosis of disease is less difficult than it was in the past before these developments took place. I should also note that the ability of doctors to accurately diagnose disease is considerably less than thought. I speak here from personal experience. The problem is due to the amount of time necessary to deal with the research and checking your own diagnosis against the available data. Realistically, no doctor can afford to do this today!

A private individual on the other hand, given internet access and the knowledge to know what to look for, can do a more accurate diagnosis than a doctor is likely to do simply because the private individual can spend the necessary time (perhaps measured in hours) to actually determine the true diagnosis. The doctor probably could do this faster thanks to greater knowledge, but he or she simply cannot afford to spend the time doing the necessary research either in reference books or on internet websites such as WebMD or the Mayo’s website among others that provide much the same sort of data to search.

Returning to the issue of prescription level medical drugs, the number of such drugs and their effects has grown to such levels today that expecting your doctor to know what all the side effects of the drug of choice actually are. You can obtain a list of these from sites such as WebMD and Mayo’s, as well as from “Drugs.com”. Again, this is time consuming, enough that while you may be willing to spend the time, it is unrealistic to expect your doctor to do so. All this indicates that “prescribing for yourself” might well be “safer” than having your doctor do it. Especially as your doctor is very unlikely to be able to give you a list of all of the possible side effects and warnings any drug may cause you.

In conclusion, it may be concluded that patient safety is likely to be higher without our prescription laws because the patient is far more likely to take the time to research the effects of the drug in question than the doctor. Of course there are those who do stupid things, and no doubt they would do so too with medicine, but prescription laws really cannot protect people from their own stupidity. Just as no law can prevent a drunk driver from speeding down the freeway at 100 mph to crash against a bridge abutment with the result that the wreck will have to be torn apart to collect what remains after the crash…

So what about cost?  I refer the reader to check out “GoodRx.com.” Here you will find the various retail prices of medical drugs. You will also note that the cost of drugs even in the same “medical family” varies quite a bit, depending upon the source and type of drug. Let’s take “insulins” for example: You will see that there is about a 3 to 1 variation in the costs of insulins. The “novolins” appear to be the cheapest of the insulins available and for a cost conscious diabetic who is “insulin dependent”, would likely be their first choice. However, a doctor might have other opinions, especially if he or she is being “influenced” by the drug companies, who would of course prefer that he prescribes one of the more “profitable” drugs. Today you hardly have a choice except to either go along with the doctor’s prescription, or find a different doctor more willing to prescribe what you want. However, without prescription laws, the choice is yours to make, not the doctor’s. That is one of the major advantages of libertarianism. You, the patient, are the one who makes the decisions, not some MD who might be overly influenced by the drug company. Don’t forget here, US drug companies earn one of the highest return on investment of any class of business, and this is doubtlessly one good reason “why”!

However, unlike with Democrats or Republicans, who are both “statists” when you come down to it, libertarians of all types oppose giving government this sort of power over you. Realistically, only libertarians can reduce the cost of health care without introducing some sort of “rationing” of services or choice of medicines. No other political party can claim this. Not the Democrats, not the Republicans, not the Greens, only Libertarians!

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“Progressivism, the long term enemy of personal freedom”.

Progressivism dates back to the beginning of the 20th Century and perhaps a few years further back into the 19th Century. The basic concept of “progressivism” is that it is the proper duty of government to protect people from their own mistaken harmful activities. Thus, progressives believe in restrictive controls over access to drugs, restrictions on the consumption of alcoholic beverages. They are opposed to the use of tobacco, eating too much, not getting enough exercise, being overweight, doing anything that “might” cause you harm. They believe that businesses should be closely regulated by government as to what is produced and the amount paid to their workers. They also believe that any activity one might do has an effect for good or bad on society. Under their rule, even if you grow food for your own consumption, you are still conducting interstate trade in that by growing your own food, you are affecting interstate trade. Virtually no human activity is thus “private” in the eyes of the “progressives”. You could consider “progressives” to be benevolent totalitarians who act for the “betterment” of all citizens.

What can confuse people is that “progressives” come in different “flavors”. Not all of them are modern day liberals. You can find “conservatives” who also share the belief that government must act to prevent people from harming themselves. Nixon’s own “War on Drugs” is a good example of conservatives acting to reduce individual freedom on the basis of “protecting” people from harming themselves. Opposition to activities that do not harm others, but are harmful to the individual are good examples of the philosophy of “progressivism” regardless of whether or not those advocating such things are members of the Democratic Party or the Republican Party.  Like today’s “liberals”, the “conservative” of today is also a supporter of statism, of “big government” and its rules.

Libertarianism on the other hand allows the individual complete freedom to live his or her life as he or she sees fit. Like Wiccans, Libertarians believe in “If it harms none, do as you will.” Libertarians however add in the rejection of force against others except in self defense. Thus if Libertarians were to support the creation of a park, they would much prefer that the park was created through donations instead of taxing everyone for the benefit of those using the park. This is similar to the way that the State of Michigan now finances its state parks. Those who wise to use the state parks have to buy a park sticker, either a one day pass or a year pass, the latter being paid when you renew your license plate. A similar system is in place for hunting and fishing where only those who wish to participate in the activity pay for the necessary upkeep of the fish and animals sought. This is a much better way to handle such issues than imposing taxes on everyone…

Obamacare is another example of “progressivism”. People are forced to purchase health insurance from an “authorized provider” (who must meet federal requirements) or pay a fine to the IRS. If the objective is to reduce the cost of health care, this is certainly not a good way to do it. The money to pay for the private health insurance companies has to come from the money that people earn. The supposed “subsidies” come from tax money. The system is a seriously flawed “one size fits all” system that is not very cost effective. As I’ve pointed out in previous posts, a far better system is to repeal those laws that have turned our health care system into a legal monopoly. Without prescription laws, people would be free to purchase whatever medicine they felt best suited their medical problem. Given today’s computer technology, there is little doubt that a computer program would tend to be more accurate than most doctors, especially as the doctors of today have little time to actually consider all the issues. Nor are the wishes of the patient paramount as they should be. Some may wish to do everything “possible”, while others may not wish to exhaust their monetary resources in a futile battle to extend their lives by a few months.

The problem here is created by the alliance of certain groups with the law enforcement powers of the government, usually for their own economic gain at the expense of others. The economic term for this is called “rent seeking”. It is similar to the establishment of any monopoly where the consumer ends up being forced to pay a higher price because there is no “competition” to encourage a lowering of prices. For example, governmental “protectionism” is a major reason why the prices of medical drugs are so high in the US. There are also examples of where US drug companies have actually “bribed” generic drug makers not to make lower cost counterparts of their more expensive brand name drugs. No doubt this sort of is “illegal”, but given the amount of money the companies have to spend on getting “friendly” politicians elected, they have little worry about “legalities”.

It is rather obvious from all this that the proper solution is two fold. First, the establishment of a Demarchy (selection of representatives by lottery) to put a stop to the level of “legal political corruption” we have today. The second is to simply reduce the size and scope of government to a level where it is no longer capable of carrying out the sort of “progressive ideas” that have now bought us to the state we find ourselves in today!

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“Protectionism” More common than you think!

There are many forms of “protectionism” besides tariffs on imported goods. The consequence of any form of protectionism is higher prices to the consumer. The objective of protectionism is to increase incomes above that of the free market. A labor union for example is a form of “protectionism” as the objective is higher pay and benefits for workers which can only be obtained if the employer is forced to deal with the union. However in many cases the “employer” is not a “business”, but the American people. So instead of forcing an employer to pay higher wages and benefits, the taxpayers as a whole end up being forced to pay higher taxes so that government workers are able to enjoy higher wages and better benefits.

Another group that has “organized” itself against “everyone else” consists of the licensed professions and occupations. Effectively these groups create “price floors” below which no one is allowed to go, thus preventing the operation of the free market in bringing supply and demand into balance. Effectively “price competition” has been rendered “illegal”. Historically this rather parallels the guilds of the European Middle Ages. It is a form of “price fixing” which is of doubtful legality today. However at one time this sort of thing was rather commonplace in the form of “minimum prices” that effectively made it a form of “protectionism” for “Main Street” small business. It appears that the concept of a “free market” price based upon supply and demand is not really desired by many today. Of course if you can control supply to manipulate demand, you can earn higher profits.  The US health care industry has been doing this now for the past 75 years since the federal government first handed the industry a legal monopoly over medical drugs.

We also have a number of businesses that have made “agreements” with each other to maintain prices at a desired level (their desired level, not ours). This appears to be the case with the pharmaceutical industry, with one of the highest profit to investment ratios of almost any large businesses. Of course it helps when you can always “buy” the sort of legislation you want from what is increasingly perhaps the most corrupt government of any developed country. Effectively the US federal government only “represents” the wealthy and big business. To whom favorable legislation is now truly a fact of life.

Part of the reason we have such a large national debt as we do is due to the amount of taxpayer money that went for “bail outs” of the “crooks” there on Wall Street. A much better choice would have been prosecution to the full extent of the law, but given “who” really controls the US government, this is for all practical purposes now “impossible”.

Our “overregulated” society adds to our cost of living. One study that I’ve recently seen gave a figure of $1.86 trillion dollars, or $5580 per capita!  This is more than what it would cost to give every American adult citizen $10,000 a year as some have proposed. Throughout this blog from the first I’ve been pointing out that we are paying a very high price for “protectionism” or “government regulation” that benefits the few at the expense of the many. That allowing the licensed professions and occupations to create regulation that benefits them while it costs the rest of us more for every service we get doesn’t make any sense. The only reason this sort of thing can exist in the first place is because of the design of our political systems effectively creates a government that is “for sale” to the highest bidder. We have forgotten what the Greeks of Classical Athens found, that if you have an elective government, eventually it will become an oligarchy that answers only to those who have the economic resources to support expensive political campaigns. For a time we thought we could control the political process so such couldn’t happen, but the recent Supreme Court decisions have effectively given us a political system that serves “the highest bidder”. Which is obviously very unlikely anyone who is reading this blog!

The best efforts of the Libertarian Party has resulted in the election of an occasional libertarian leaning Republican. Ron Paul of course is well known to most of us. His son, Rand Paul, is a Senator from the State of Kentucky. There is Justin Amash of Michigan in the House of Representatives. Two out of 538. Neither man so far as I know really is truly libertarian. In any case, one junior Senator and one Michigan Representative isn’t likely to have much influence there in Washington, D.C. Nor did it help when the Libertarian Party came out and said that the Supreme Court decisions were “correct”. That money = speech. True in theory, people can still choose who they want to vote for, but if one candidate has ten times the campaign funds of his opponent, it is more likely that he will win the election. Also, the winner is not likely to “forget” who supplied the money for his campaign. You can also be sure that his “sponsor” favors legislation favorable to his own interests. For a drug company, extension of a patent or copyright. There is no doubt of course that our newly elected legislator will consider the interests of his sponsor as being of far more importance than the interests of the voters who elected him. This is probably why a lot of American citizens don’t bother voting, as they are not likely to be able to elect someone who actually represents their interests as a general rule. Not that it doesn’t happen from time to time, but for the most part, the people we elect do not tend to represent anyone’s interests except those who sponsored their political campaigns. However, on the state and local level, it is possible for a libertarian candidate to actually win an election from time to time. Not that they will have that much power, but it is always helpful to have a “friend” in “high places”….

 

 

 

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Looking into the Future…

What will happen to the American people and their country in the next decade or so? The future is not very “bright” if we continue on the way that we are now going. We now have a national debt equal to about our yearly GNP. Our health care costs are by far the world’s highest and are expected to reach $3 trillion dollars ($3,000.000,000,000) by 2016. Because of our ultra high health care costs, Medicare is expected to be in “trouble” by about that date and will have to start drawing from “general revenues” when it does. Social Security on the other hand is apparently OK until about 2036 or there about… I believe we will eventually have to make “adjustments” in what Social Security pays out. Most likely it will become more like a “welfare” program, perhaps paying a “flat rate”.

We could of course reduce our health care costs considerably by stripping the medical industry of all of its government enforced monopolies that it now enjoys. Doing the same to all the rest of the professions and licensed occupations would greatly reduce the costs incurred when people have to deal with these professions and businesses. At the least we could reduce our health care costs by a trillion dollars a year, just by elimination of waste, fraud, and “overbilling”. There is also a lot of “waste” in the private health insurance industry. All of this contributes to the excessively high costs we experience. We also do a great deal of “rationing” as it is, but this is generally hidden from public view. The way it is done is through insurance companies refusing to pay for services.

When I started working in 1959, I was paid $1 an hour. Some of the things that I could buy then for a dime are now a dollar here in 2014, an indication of the fall in value of the US dollar to one tenth of its original value. For example, the Hershey candy bar that sold for a dime back then costs a dollar today. Gasoline was around $.27. Currently it is $3.70 today. Today’s minimum wage converted back to 1959 levels would be about $.75, not the dollar that I was actually paid back then. And here is where the problem is: Wages are not 10 times what they were back then. The proposed $10 minimum wage would bring us up to what I earned per hour back in 1959, even though the government has been downplaying the true rate of inflation. And this is “where” one of our problems is.

Effectively the average American is falling behind so far as the value of the dollar is concerned here. This also affects government revenues. Since people are in effect earning only about three fourths (3/4ths) of what they earned 55 years ago, our total federal revenue, including the money that pays for Social Security and Medicare is less by 25% of what we would have today had wages stayed up with the level of inflation… This is one reason “why” we can no longer afford to do what we used to be able to.

How did this happen? In 1981 the federal minimum wage was $3.35 an hour when Ronald Reagan was sworn in as President of the United States of America. It was still $3.35 an hour when he left office in January of 1989. However, the value of the dollar was now only three fourths at the best of what it had been in 1981. Effectively “labor” became progressively cheaper with time.  Ronald Reagan also set into operation the destruction of organized labor. Union membership fell. Business profits on the other hand were up. It was a good time to be an employer. Unemployment was high enough that you could get all the workers you wanted and they were glad to work for $3.35. Unfortunately their “buying power” had fallen over the decade and in turn they were paying less in taxes. Reagan made up the “difference” by borrowing money, increasing the national debt. President George Bush tried to govern without raising taxes or the minimum wage, but he eventually had to give in on both. Not that it did a lot of good.

The problem is really simple enough.  A country, like an individual, cannot continue to spend more than what it gets in revenue. Additionally, when a country imports goods, it also has to balance these out with also exporting an equal value of goods or whatever in return. Just as none of us for very long can spend more money than what we receive. Unfortunately, we haven’t been doing that.  We import about half a trillion dollars worth “more” than what we export. Long term, countries that do that go “bankrupt” like Greece has done.  We are of course a lot larger a country with a much bigger economy, so it takes longer, but in the long run, the results will still be the same. That half a trillion dollars trade imbalance is really effectively an export of jobs as someone still has to make the things that we buy. Depending upon the value of the job lost, we have lost between five and ten million jobs. Note that these are mostly “production” jobs, although we also do export some “services” in the form of computer software, medical technology, and so forth. Just not enough to make up for the value of what we import. We also import goods made by American owned businesses who exploit the low cost labor available in these low wage countries. However these businesses have learned that they can avoid paying taxes on their earnings as long as they don’t bring the money back here to the USA.*

* This is easy to solve.  Stop taxing business. Businesses only pass the tax on to the consumer anyway. As we only get about 1/8th of our current revenues from taxing business, it really doesn’t make sense to continue to do these non-productive acts.

The basic concept of free trade as developed back in the 18th Century applied to trade between European countries with relatively similar labor costs and living standards. When trade takes place between countries with large differences in labor costs and living standards, the consequence is that there is a flow of wealth from the more wealthy to the less wealthy. We have in effect created tens of millions of jobs outside the US, but at the cost of destroying jobs here in the US. Not as many as we created, of course, since the cost of creating a job here is far higher than the cost of creating a job elsewhere. Nor can we survive as a “service economy” since most services are not “exportable” as goods are. And while Russia can do quite well exporting oil and gas, this is not an option for us.*

*We may be able to exploit the trillions of cubic feet of natural gas now trapped in the form of methane hydrates, an energy source so large that it could met our needs for a very long time. Unlike coal and oil, methane (natural gas) is much “cleaner” and also releases less carbon into the atmosphere when burned than does coal and petroleum. There are “risks” in using this source of almost boundless energy, but it is there waiting to be tapped. Compressed natural gas automobiles are already on the market, and it is possible to convert natural gas to the liquid fuel methanol if so desired. Additionally natural gas is the source of much of the fertilizer we use in growing food today…

 

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