Friday afternoon the Republicans "pulled" the AHCA without a vote.
This is the common way that the party in power makes sure you never get a recorded answer these days as to who opposes and who supports some piece of legislation: If there is no majority to pass it, they never vote at all.
If you think about it for a bit you'll realize that's the exact antithesis of representative government. Representative government not only "works" when it passes something it works when it fails to pass something too, and the list of elected officials who did and did not support something that fails to pass is just as important and maybe more-so than those who supported (or not) passed legislation.
But, now you simply have claims -- not votes. And remember folks, claims are not votes; if they had been (according to the polls) we'd have President Hillary right now.
Now let's talk about health care and "health insurance."
Let us remember that insurance is simply a math problem. That is, insurance is always and everywhere simply the expression of the formula [sum(p * c) + cost(operation of insurance company]
p = probability of having to pay a claim on a specific event
c = cost of the event
And of course "sum" is the sum of all the "p * c" components that exist for all the things you bought the insurance against.
Given this fact I will now demolish a number of lies that you've been told.
Health insurance should cover routine and expected events. Nonsense. If p = 1.0 then it is always cheaper to simply pay cash because [cost(operation of the insurance company)] is never zero. For something where p = 1.0 for all, or nearly all of the population you should never buy insurance for same since p * c = c! Again, just in case you missed it: Putting such an expense through an insurance company will never cost less money; it is always cheaper to pay cash. The only reason to force such expected and certain events through any third party is to hide the cost from you and remove competitive pressure so that someone can jack up the price or collude with others to do so on a grand scale (which is illegal under 100+ year old law in 15 USC, by the way) and steal your money. Period.
Obamacare is so expensive because men -- and women who have gone through menopause -- have to buy insurance that includes maternity care. There are dozens of variations of this claim run by politicians and "policy wonks" on the TeeVee; they simply change the condition and population to suit their audience. It's maternity when they're talking to men and senior women, it's prostate cancer when in a room full of 20 year old women, it's IVF or abortion when talking to a bunch of evangelicals. This is a lie because "p" for such an event for such a person being spoken to at the time is (obviously) zero.
Zero times anything is zero.
So what is the purpose of requiring such "mandatory benefits"? Simple: It reduces "p" over the entire population of people with policies. But since the total of those "p * c" computations is the sum of all of them for each individual the purpose of such mandates is to force you to pay for someone else's treatment for a condition you cannot possibly suffer.
To put it more simply: It's theft from those who can't have that condition occur and it's intentional obfuscation of the cost of said insurance for those who can. In short it's a lie told to the entire population; the exact substance of the lie depends on whether you're in the "can happen" or "can't happen" group but in each and every case whenever someone is forced to buy a policy that covers an event that cannot occur both the can and cannot groups are being lied to and one of them is being robbed.
This lie is intended to and acts to shut down any discussion of the real problem: Why is "c" so damned high?
Obamacare is so expensive because the "high risk" people are in the same pool as everyone else; the AHCA would "fix this" by putting back in place High Risk Pools and insurance costs would drop substantially for health people. True, as far as it goes. But there's a problem: The ACA, or Obamacare if you prefer, was written and passed because those High Risk Pools were collapsing! They were collapsing because by definition everyone in them had "p = 1.0" for something; they had cancer, diabetes, HIV or some other serious and usually-chronic condition that had already happened.
When you get down to it for someone with a p=1.0 problem the cheapest way for them to be treated for that condition is to pay cash for it. The more hands the money goes through the more you spend in total. This is obvious to anyone who thinks about it for more than 20 or 30 seconds because nobody works for free. If you put the money through an insurance company with thousands of employees and big buildings all over the place then the total cost of such care goes up because the insurance company has to pay all of its employees and make a profit (no matter how tiny) or it is no longer in business! It would be far cheaper to simply stroke a check from Treasury instead of going through all sorts of convoluted arm-waving and cost-shifting such as Obamacare "subsidies" and insurance company mandates.
Here's the problem with simply stroking the check: As soon as you get rid of all the layers of obfuscation the cost is immediately exposed to everyone. I've already mentioned the lie told to both the people with the (possible) condition and not above when it comes to cost, so I'll focus here on a second lie: Let me remind you that right now the Treasury of the United States (that's everyone in the country, since we're all allegedly responsible for the debt and deficits accrued) spends $350-400 billion a year between Medicare and Medicaid on health services for people with just one condition: Diabetes. We can reduce that to nearly zero (that is, cut Medicare + Medicaid expense by roughly 25% instantly) by refusing to pay anything from public funds for those people who refuse to undertake a lifestyle change in the form of what they eat that has a proved track record of reducing the need for drugs to treat the far more-common form of that condition (Type II) to near-zero and at the same time dramatically reduces all of the complications (blindness, amputations, kidney disease and dialysis, etc) as well for both forms of the disease. In fact for most Type II diabetics making this change eliminates the condition entirely. Note that I did not say "cure" because if you go back to what you were doing you'll almost-certainly see the condition (poor blood sugar control) immediately come back -- but eliminating the condition eliminates all of the cost to the health system.
Remember, as I pointed out up above, that a big part of why Obamacare was written and passed was that the "High Risk Pools" were expanding in cost at an explosive rate. The states did not have the money to continue funding them and many people with some of these conditions were dying before they could get into the pools and thus access treatment due to delays in enrollment driven by lack of funds. So the lie here was twofold: Political debate on the cost of such treatments was refused as it was for everyone else up above and at the same time the fact that many of these conditions are not only due to voluntary action (e.g. IV drug abuse, unprotected anal sex or eating things once overweight that are known to exacerbate these conditions) in some cases, specifically those related to diabetes, the condition and its medical costs will disappear if the person in question changes what they eat -- in other words, they make a lifestyle change. In other words not only are we all having our money taken to pay for the voluntary decisions of others who "made a big mistake" (which is perhaps defensible on the grounds of compassion) we are also having our money stolen to pay for the ongoing voluntarily decisions of others who refuse to change and, if they did change, would see the condition and thus its cost disappear entirely. That is not compassion, it's pig-headed theft.
In short in order to prevent discussion of both the cost of said treatments and the role that voluntary actions of the sufferers, both causative and continuing have on the expenditure of funds politicians drove the spending through "health insurance" firms and thus made it even more expensive simply due to the middle man being present.
If there was little or nothing we could do about cost then we might all be able to stop here and, at least, take the insurance company costs out of the picture for those with p = 1.0 for some medical problem. But that's simply not true, which is why the larger lie, and the one that I listed first, is run on everyone instead of simply focusing on those with already-existing medical problems.
Why would you need health insurance if this pricing was commonplace for the following routine medical things -- and remember to extend these representative samples to everything else in the medical field:
These are not fantasy prices -- they're real. They're what you could have today, or darn close to them if we had a conversation about competitive markets in medicine. I didn't pull these numbers out of my ass; they're on a "concierge" site for a "direct care" practice in Michigan and none of them are being provided at a loss.
Think about what you spend on "health insurance" today; whether you pay for it directly or you "get it" through employment. If you get it through your job then every penny of what your employer spends is money you could instead have in salary. Multiply the monthly amount your employer spends on health insurance for you by 12 and that's money you should receive in cash but don't because it's stolen and given to an industry that then charges you five to ten times the above through the so-called "insurance." In fact for most medications your co-pay is larger, often by ten times, the above prices!
Would you rather pay a $10 or $20 co-pay for that Plavix prescription or would you rather pay $2.76 cash?
If the answer is "cash" then can you please explain why you would then pay for said "coverage" at all?
So why are these medical procedures, drugs and similar so expensive now for most people? Why are you basically extorted into buying "insurance" either through your employer or directly? Why is now the law to run these charges through a company that has to make a profit and thus is guaranteed to drive up cost?
Simple: It prevents us from all having the two political discussions up above -- why are we being ripped off to the tune of 1,000%, that is 10x what we we ought to be paying for virtually everything health-care related and why should we pay anything for someone else's decision to continue a lifestyle choice that results in the expenditure of hundreds of thousands of dollars after they get the condition when they can change that lifestyle choice and eliminate not only the condition but nearly all of its expense?
We know that the pricing above, or similar to it, can exist for everyone in the United States right now. We know this because it does exist in the United States, right now.
We also know that health insurance companies and providers of health-related products and services are not immune from Anti-Trust law (15 USC Chapter 1.) We know this because that case went to the US Supreme Court in 1979 and the insurers and those conspiring with them lost. Specifically, it was ruled that "volume pricing" arrangements and similar were not "the business of insurance" and thus not entitled to protection from anti-trust enforcement under McCarran-Ferguson. We therefore know factually that the failure to bring said cases at the State and Federal levels from 1979 to today has been a political decision, not a matter of "not having" laws that could be applied. In other words both State and Federal law enforcement and the executive branches of government in both places have intentionally refused to enforce the law and by doing so have become willing partners in you being robbed out of $9 of $10, approximately, spent on health care.
We know that if the cost of health care came down by 90% almost everyone could and would simply pay cash for all routine expenses. Having a baby. Vaccinations. Annual checkups. An MRI for a sports injury. A CT scan for something serious that's suspected in your chest or head.
We know that if the cost of health care came down by 90% true insurance for serious catastrophes like cancer, a serious injury or a heart attack would cost pennies compared to what it costs today. If the cost of cancer treatment was $10,000 instead of $100,000+, and it would be if we locked up the monopolists that refused to stop playing their game of obfuscation and cost-shifting the cost of such insurance would be a fraction of what you spend today to insure your $10,000 automobile! After all, it's more-likely in a given year that you'll wreck your car than get cancer!
We also know that there would be circumstances under which costs would remain very high; "orphan" conditions are the prime example, simply because the number of sufferers is low and thus spreading the development cost of treatments becomes problematic. A condition that has 10,000 sufferers in the United States at any given time, for example, has a risk (probability) of 0.003% across the population. If the cost of treating that condition is $500,000 (because it costs billions to develop the drug and there are only 10,000 customers for it) then for $15 (plus a profit for the insurance company) you could buy insurance against that condition for life. Would you buy such "rare disease" insurance if, say, the "blended" cost was about $50/year to cover all such conditions? Some people would not, but if we had the political discussion on this point and decided that the choices were "buy the insurance personally, pay cash if it happens to you without it or suffer the consequences including your death for which there will be zero funds spent other than through private, consensual charity" would that not be a better system than we have today? It sure as hell would be a cheaper one and nearly everyone would fork up the $50! Hell, make that $50 something that is akin to the "Presidential Election Fund" checkbox on your 1040 except that it's an opt-out rather than an opt-in if you'd like; $50 for single or HOH, $100 for married and an additional $50 for each dependent. I'm ok with the mildly-coercive nature of that, considering the potential consequence of choosing "no."
We can surmise that the reason for the above political refusal to have this discussion is due to both lobbying and the fact that should the law be enforced Health Care would drop from its present ~19% of GDP to 3% (it's historical figure prior to the monopolists pulling this crap starting in the 1970s and 80s) almost immediately. That would be a rough reduction of 15% in GDP which, I remind you, exceeds the 10% drop that economists call "a Depression." It would not last long because all of the money currently spent through this scam that no longer was would be freed up to produce other goods and services in the economy and the impact on reduction of cost for businesses would be immediate and immense. Further, the salary increases that would result from the embedded "health insurance" expense in an employee being removed (allowing it to be paid directly to you) would lead to a huge increase in consumer consumption in other areas. But make no mistake -- there would be losers: Lobbyists, overpriced or overstaffed administrators in health care and similar, and during the adjustment period GDP would indeed fall before rebounding. Find the politician that is willing to accept this without being forced -- good luck.
Finally, let me remind you that these are not particularly-new ideas. I've been talking about them since the 1990s when I was the CEO of MCSNet. I've been writing on them since The Market Ticker began publication. There are two simple legislative agenda items here and here (note the dates of publication), never mind the entire section in Leverage, that would immediately address virtually all of the above.
I have had a standing offer out to several current House Leadership members since 2011 and to several Senate staffers since not long after to come to DC at my expense to testify before an open committee hearing on the math in this regard and resolution of these issues.
There have been no takers in the last six years.
Among political commentators on "the right" the following have also refused to take this on:
Oh, and this is not a complete list; it's just a list of people who, off the top of my head, have said zero despite, in many cases, my direct prodding. I will note that among the left there have no takers either; I simply don't have anywhere near as complete a list of them (there are far more left-leaning political commentators than right-leaning!)
So folks, when you get down to it, it's up to you.
You can look at the AHCA being pulled as "just another thing" and decide to ignore it.
You can try to ignore this too if you want, but it's truly stupid to do so:
That's from the US Treasury's own published MTS taken from September of each year (close of the US Government fiscal year) back to 1998. It is instructive to note that the blue line is an exponential series, and is expanding at about 8-9% a year, far beyond any rational projection for economic growth. It is also instructive to note that it is a mathematical fact that any two exponential expansion curves, where one is growing faster than the other, will eventually cause the destruction of the slower-growing one if the faster relies on the slower to pay for it. That's arithmetic and was the reason that I projected in the 1990s that this trend would bankrupt the United States.
Finally, it is worth noting that Obamacare, for all of its disruption and 2,000+ pages of obfuscation and horsecrap, managed to produce exactly one year of lower Medicare and Medicaid expenditures after which the former trend resumed almost-entirely unchanged. For those who claim it's all about people getting "older" that is the final lie I would like to demolish; the trend from FY 1998 to 2016 excluding the one-year decrease was 8.35% (all-in) and 8.64% (Medicaid), respectively. That is, Medicaid (poor people) spending expanded at a slightly-faster rate than Medicare (old people).
We either act on all of this as a nation now or it destroys the economy, it destroys the markets and it destroys both state and federal budgets.
My offer to both government and political commentators whether in the list above or not and irrespective of their political bent remains open: I will be happy to appear by voice, by video or in person to debate and discuss the facts in this regard.
If there's anyone willing to take it on, that is.
Let me make a few observations.
First, eight years ago, and again four years ago, America elected a President. Fully half, give or take a couple of percent, disagreed with the outcome.
There were exactly zero riots, fires, "mass protests" and similar following that outcome despite the fact that half the population vehemently disagreed with it.
This time around, not so much.
Now I want you think very carefully about the following.
Most of the land mass of this nation is owned and resided upon by people who are in "red" (that is, the winner this time) areas of the country. With the exception of certain urban centers and right along the Mexican/Texas border there are very few "solid" blue areas.
Those urban centers consume roughly 90% of the energy and food in this country yet they comprise 5-10% of the land mass. The "red" areas produce 95% of the food and energy this nation consumes and occupies 90-95% of the land mass.
Do you really think that doing something like eliminating the last pieces of the structure our founding fathers put in place to prevent tyranny of the majority from being able to take hold is a good idea?
A little history lesson: Prior to the 17th Amendment ratified in 1913 it was impossible for the Federal Government to shove any program down the throats of the 50 states. That's because the state legislatures had effective control of the Senate and could recall their Senators.
The House was elected by the people, the Senate was elected by The State Legislatures (and could be recalled by same) and The President was elected by the Electors, which were voted for in the popular vote.
The latter provides a modest but real increase in the representation of "flyover" states; that is, those with lower population counts. In other words it is a check and balance in the ultimate tyranny of democracy.
Yes, I said democracy is ultimately tyrannical -- because it is.
America is not a Democracy. It is a Constitutional Republic. This is very important; in a democracy 50%+1 can render the 50%-1 slaves by mere vote. Those who are in the minority in a democracy have no rights at all. Democracy is best represented by two wolves and a sheep voting on what's for dinner.
We are all minorities in some form or fashion. If you're gay, black, yellow, male, female, whatever -- all it takes is some other set of groups to get together and decide to oppress you, and in a democracy you're ****ed.
America's founding fathers put in place two systems to prevent this. The first was the bicameral legislature; a House elected by the people at large and a Senate elected by the State Legislators. This structure guaranteed that a landmass that amassed 50%+1 of the population (not even in the same state or states!) could not band together and shove down the throat of the States any policy measure because you needed the concurrence of more than half the state legislatures, where each were delegated but two votes to their Senators who were accountable to said legislature, to pass anything at all.
This evaporated with the passage of the 17th Amendment. Now you only needed 50%+1 of the people in a given state to pass anything you wanted and they could all live in a tiny percentage of the land mass -- such as is the case with Illinois where more than half the population lives in the immediate area of Chicago.
What came right after that? Prohibition, shoved down the throat of the States, less than 7 years later!
What also came after it was an unbridled expansion of the Federal Government into state affairs. Indeed, virtually everything became a "legitimate" federal matter. Why? Because it was impossible for the States to prevent it.
Do you think the founders were wrong to do what they did, and the 17th Amendment corrected that?
If you believe so then please consider this.
Ever drive through small town America?
Hell, how about "not-so-small-town" America?
Many of these towns look like something out of a WWI or WWII European war movie. There was one factory or maybe two, but now it sits empty, weeds growing out of the parking lot as high as your head, all the windows are broken out and the roof has caved in. Over on the outskirts there's a Walmart that pays $9/hour, but only offers 20 hours/week. The factory paid $30/hour, full-time, plus benefits and food, power, medicine and beer cost half of what it does now. 90% of what formerly were little diners and shops in the "center" of the town, which might have one actual traffic light, are gone -- boarded up and often literally falling apart. There might be one bank left, a branch of a big national chain, and maybe an antique store. Maybe. All the factory jobs left for China and Mexico and everything else died when the middle-class incomes to support them disappeared. We did that as a nation with our "progressive" and "global" agenda driven by the 50%+1 that live in the closest big city 200 miles away.
The locals who used to work in the fields within 10 or 20 miles from that town are all unemployed too. Why? Because the illegal Mexicans came and we refused to throw them out. They work for a few bucks a day in cash, no taxes, no unemployment, no nothing. No American can live on that; the embedded cost of just trying to stay alive would leave you with zero. But the Mexicans work hard and then sleep 10 to a single-room apartment, which incidentally is a total ****hole as you'd expect given that density of occupation. They don't care; it's better than what they had in Mexico, you see, and they can Western Union home some of the money. This is the face of "immigration", mostly illegal, that really exists in this country. They brought their third-world ****hole here and while it's a little bit better than what they had in the process of doing it they dragged us into the gutter with them.
The people who lived in that town did and most who are still there do go to church every weekend, and some go again during the week, usually on Wednesday. There's usually one, sometimes two churches. Every one of them has the word "God" or "Christ" in the name on the front. They mean it when it comes to their faith and in addition that's where all the local people shake hands, exchange chit-chat on the last week and, for younger people, it's where they meet one another. You know, girls and boys. Yeah. Faith is real there, you see, and it's Christian. But from your point of view that's deplorable and that "those people" don't like the idea of making a wedding cake for a gay marriage is deserving of a federal lawsuit and loss of the bakery (which is, as a result, now closed -- putting yet more people out of work.) The people who live in these towns don't see your point of view as a civil rights matter but rather as attacking God.
What was left after the factory was displaced isn't enough to run a "service economy", which is why it never showed up there and the old business buildings are all boarded up. Nobody can afford $8 lattes on a $9/hour wage for 20 hours a week and nobody would want them if they could. There's probably a McDonalds on the outskirts, and a couple of self-serve gas stations with a convenience store. It sells cheap beer and lots of it to the locals who have nothing to do but drink and then go to church and pray for forgiveness for last night's 12 pack. None of the jobs at any of these places, except maybe the store manager, makes more than $9/hour and Obamacare has forced all the regular workers down to 20 hours a week on top of it. Try living on $180/week gross sometime -- before FICA and Medicare is taken out, never mind gas for the car and the rapidly-escalating car insurance bill -- and you might understand. Yes, I know the car is 15 years old and runs like crap. What do you expect on under $1,000/month of income?
This is what 40 years of sending jobs overseas with "trade deals" did. It's what Amazon did. It's what Walmart and its Chinese supply line did. It's what "progressive America" did, and then to add insult to injury the teachers in the public schools tell all the kids that Mommy and Daddy are bad people and hate both the planet and their own kids because they don't drive a $30,000 Prius or a $60,000 Tesla.
This is everywhere in rural America. Get in your car and out of your comfort zone some time and you'll see it. It's not far from wherever you are. I've driven through dozens of these formerly-alive places in the last six months -- every one of them dead today, but full of real people. I never met one such person that was a racist, xenophobic *******, but they're not very happy, and the people they're unhappy with are those very same folks you wanted to keep in office in Washington DC.
If you think the destruction of small town America is confined to farms you forget the other half -- energy. Would you like your lights to work? Many of those small towns are dead because of the insanity of our energy policy -- or lack thereof, tied to left-wing whackjob nonsense.
Now you want to add insult to injury when they show up to vote, exactly as civics tells them we have a right to do, and a large number of you in the cities did not show up.
They bought into the message of bringing American jobs back to America and ejecting those who have no right to be here. You call them xenophobic, racist and small-minded -- they call it a shot at decent employment for the first time in 30 years.
They believe in the Henry Ford model of American business, and they're not wrong to do so. Make the product here, pay the people well enough to be able to afford it, and you'll do just fine.
They win the election, in short, and you lose.
Then you decide to be a sore loser and loot, burn, beat people, issue threats, cry, whine on social media and try to obstruct everything by any means possible -- legal or not. You bus people in to "protest" and riot, you "petition", you raise hell in short -- oh, and all this after you implored the other side to "respect the outcome of the election" and lambasted them for suggesting they might want to merely count the ballots twice!
Note again, as I pointed out above, that eight years ago, and four years ago, these very same people were on the losing end of your stick exactly as they had been for the previous three decades yet they did none of the above. They understand duplicity and your double-standard quite well, seeing as they did the honorable thing and respected the outcome twice in a row despite getting screwed sequentially both times. The only thing your brand of government offered them in the end was Medicaid or worthless "health insurance" through the exchange; the former has no doctors that accept it within 20 miles and the latter has a $5,000 deductible before it pays anything, which is utterly laughable when you consider these folks have a gross wage of under $1,000 a month.
Now the question: Are you prepared for the possibility they might decide en-masse that they're done with this crap -- and with you? That they're not going to take it any more?
What if the people who live in the "red" areas, that is, those who produce the food and energy that are consumed to the 90th percentile in the "blue" areas, decide they're not going to do that for the blue areas any more? What if their middle finger goes up, in short?
Remember, we allegedly do not permit slavery in this country any more -- which means that which someone owns they have the right to sell - or not sell. They have the right to produce - or, more to the point, not produce.
What if the people who peacefully conceded the result of two elections over the last eight years despite vehemently opposing the outcome decide that if the "blue" folks can riot, loot, beat people who vote the "wrong way" and similar they will not accept any further election result that doesn't go their way, and instead of rioting or burning things they will simply shut off the flow of food and energy to said "blue" areas? After all, you don't value them at all -- you consider them subhuman, racist, xenophobic, deplorable and irredeemable -- all at once.
I'll tell you what happens if they take that decision: Every major city in the country would go feral within hours.
Within days those cities would not be blue, they'd be blackened and reduced to ash as those very same "protesters" you like so much loot, burn and shoot at each other trying to get the last scraps of food and fuel remaining. They would then probably try to come out of the cities and take by force what had been denied them, only to run into a major problem - the "red guys" have more guns, they know the land because they live there, and more importantly they actually hit what they aim at, having had plenty of practice feeding their families with deer, wild boar and similar. Mr. Gang Banger against Mr. Deer Hunter isn't a very fair fight, when you get down to it.
Oh by the way there's a phrase for what this would mean, if you haven't figured it out by now: Civil War.
Is that what you want?
It's where your actions are headed, if you keep doing what you're doing -- and nobody knows exactly where the tipping point is.
Better think long and hard, those of you in the "blue" places who are running this crap. You do not have a snowball's chance in Hell of being able to grow enough in the way of crops on the landmass you control to feed a tenth of your population and every squirrel in your trees would be shot dead and eaten within an hour after this began. Silent spring indeed. Never mind the fact that most of you "wonderful snowflakes" couldn't shoot, skin, butcher and cook a deer -- or even a squirrel -- if you had to. Never mind that a good 80% of you couldn't manage to run one mile if you were being chased by someone interested in eating you.
The day that cellophane-wrapped chicken stops showing up in the grocery store is literally the day 90% of Blue America starves.
Nobody in their right mind wants such an outcome. But where do you think this all goes if you keep it up, eh?
Every bit of it has been enabled by the 17th Amendment and tyranny of the majority -- a tyranny you wish to increase by doing things such as abolishing the Electoral College.
There's a very good reason our founding fathers designed a Constitutional Republic instead of a Democracy. They understand the problem with democracy: It doesn't work. Democracy always ends up leading to riots and civil war, because exactly what the blue folks are doing now escalates until everyone starts shooting everyone.
A Constitutional Republic avoids this outcome because even a very large majority cannot infringe the rights of everyone else -- even when the majority lives in big, concentrated places like cities.
That was the magic sauce of the original design in our legislature and Presidency. It's why we have an Electoral College -- to provide a bit of "overweighting" to those places that are utterly crucial to the cohesiveness and survival of the nation as a functional republic -- that is, a bit more balance against tyranny of the majority of 50%+1.
We got rid of the biggest check and balance with the 17th Amendment and I have, for decades, maintained that whenever America finally is declared dead and done, and the book is closed, that will be written in as the reason our nation's political system failed. It's the only Amendment we cannot reasonably repeal, because to do so would require the sitting Senate to vote itself out of a job. I'm sure you can figure out how likely that is.
But we can avoid doing more violence to our Constitution -- and we had better, or the outcome, given the annals of history available to anyone who cares to look, is quite certain. If you want to see how this turns out should you keep pressing the issue go have a look at the map of how many states Trump won .vs. Clinton, or how the county-by-county map looks. You'll see a lot more red of various shades than you will blue.
The bottom line? Go ahead and be a sore loser. Go ahead and whine. Go ahead and try to change what our representative process led to. Go ahead and decide to loot, burn and beat. Refuse to accept the result of the election, if you insist. Hell, go ahead and try to threaten or even bribe the electors! Make sure you tear down the last little bit of foundation and structure inherent in the design of the legislature and executive of the United States. Who needs it; it's all in the name of being "progressive", right -- even if when counted by landmass, counties or states the election was a landslide for Trump.
Just don't be surprised, if you keep it up, that at some point, given that you're utterly reliant on those you're abusing for the basics of life -- the loaf of bread, the gallon of gasoline, the electricity that powers your lights -- they decide they've had enough. That day your supply of cellophane-wrapped meat and plastic bag full of bread disappears like a fart in the wind. There comes a time when those who you've put the boot to for so long, and then try to deny the ability to change things peacefully through the representative process our founding fathers gave us, decide that despite their religious beliefs and good manners they're not going to service you on their knees any more.
Don't be dumb enough to think you can keep doing what you've been doing forever because you can't and if you go too far there will be no warning, no second chances and no saying you're sorry. It'll just happen starting with one final stupid act -- and then we all lose.
The budget deficit was in fact $1.4 trillion -- not the claimed $587 billion (which is bad enough, incidentally.)
Last year the Federal Government spent $1,417 billion dollars out of $3,854 billion, or 37% of every dollar it spent, on Medicare and Medicaid. This was a 9.3% increase over last year's expenditure of $1,296,731 (million), all-in.
But inside this figure are even-more damning numbers.
Payments to the health care trust funds were up 13.4% (!)
Spending on CHIP, the plan for poor kids, rose last year by an astounding 56%. While the total spent was only $14.3 billion that rate of rise is utterly astronomical by anyone's measure.
Don't believe for a second that administrative expenses are under control, which is a claim often made for Medicare and Medicaid: They were up 32% last year for the primary hospital insurance trust fund. No, that's not a misprint.
Hospital benefit payments for Medicare? Up 8.4% -- the bright spot, believe it or not.
Medicare Part "D" (drugs)? Sit down: Up 26.2% to a total of $95.2 billion.
Folks, at this rate of change within the next four years Medicare and Medicaid will consume just over $2,000 billion a year, or $2 trillion -- an increase of $600 billion a year in spending.
Let me remind you that last year taxes (receipts) rose by a paltry 0.55%, and at this rate of increase over the next four years government revenue will absorb only $72.9 billion of that $600 billion in additional spending -- and this assumes that absolutely nothing else in the budget increases in cost at the same time, an utterly fanciful notion.
In other words there will be at least another $500 billion of additional annual deficit, and likely far more than the $600 billion denoted here, bringing the total to more than $2 trillion in actual deficit being run per year.
If this pattern were to continue for 10 years then Medicare and Medicaid would rise to $3,448 billion, or for all intents and purposes all of the $3,854 billion the government spends now! Worse, increased tax revenue would absorb only $184 billion of that additional cost -- for all intents and purposes ZERO.
For those politicians and others who claim Social Security is going to blow at roughly the same time, no it won't. Social Security payments (for retirees and disability) rose 3.2% last year while for both retiree and disability tax receipts rose at a 5.2% rate. Yes, on a cash basis Social Security ran a deficit last year but the rate of increased tax revenue was higher than the rate of spending growth and Social Security has a $2.8 trillion dollar Treasury security cache it can redeem to cover the shortfall. At present rates Social Security may have issues in the future, but for right now it is stable.
MEDICARE AND MEDICAID ARE NOT AND THEY ARE WHERE THE ENTIRE PROBLEM RESIDES.
We will not manage to get through the next 10 years at this rate and in fact will not get through the next President's term. If we do not put a stop to this right now the stock market will collapse and lose up to 90% of its value, all pensions will collapse and at best be able to pay 50% of what was promised (are you a teacher, firefighter or police officer? Bend over because law or no law you are screwed.) The bond market will collapse as the spiral of debt will be clear to everyone and nobody will be willing to buy a bond from anyone at any reasonable interest rate, which will instantly destroy the value of all outstanding long-term Treasury debt by as much as 50-70%, government entitlements will collapse (to put that in plain language they will go to zero or effectively so) and real estate values will collapse as demanded interest rates on mortgages will make the 1980s look like a Girl Scout Party.
And by the way it is not possible to tax our way out of this and certainly we cannot do so by "taxing the rich", as is often claimed. If you confiscated all of the money made by those who make more than $500,000 a year you would not even close the deficit gap for one year. Of course if you did that the amount of money those who make over $500,000 a year would choose to make next year, and thus be subject to said tax, would be no more than $499,999, and thus you'd get zero in tax from them via this approach in year #2. Anyone running a "pay your fair share" claim is lying and they know it; again, that's the math.
We must -- and can -- stop this crap with existing law. Specifically, by applying 15 USC Chapter 1 to all parts of the health care industry. This will collapse the cost of care for both the government and private parties by as much as 80% and permanently end and reverse the budget problems it is causing -- for the federal government, for state and local pensions, and for private firms and individuals.
I have been writing and speaking on this since I ran MCSNet in the 1990s. It has been a focus of this column since it was formed in 2007, including in this column written in 2012. We have willfully and intentionally, as a nation, ignored this issue for the last decade and we are now facing the destruction of our economy, our markets, our government, our society and our way of life if we do not put a stop to the pillaging of our economy and people NOW.
You didn't see this in the debate as it failed to garner enough votes.
Oh, and by the way, despite Trump's tape not having any votes (it was too late to be included) it got what was darn close to first billing. So much for democracy and the people's voice, which the commission claimed was going to be responsible for the order of questions and which questions got included at all.
You see, according to the media and Hillary Clinton the most-important thing to talk about is whether someone made lewd comments 10 years in the past. We cannot, of course, have the first question in the debate be about a 12 year old******victim that was sewed up after being violated, and yet Hillary Clinton, in defending the rapist, filed a motion in court alleging that she liked older men, had filed false allegations of sexual assault in the past and was taken to fantasies. I've read that motion (it's available at the above link) and it was filed without presenting any objective evidence for those assertions in Hillary's bid to argue for a psych evaluation of the victim -- despite knowing that the original report of the******came about as a result of a call from the hospital where the victim was sewn up after being physically injured from being violated (to an extent sufficient to preclude her from ever being able to have children!) and the presence of forensic evidence linking her client to the offense (which she managed to argue had been compromised.)
But leaving both sides of the "ethics when it comes to women" aside -- a topic that, if given full exposure, I believe Hillary would lose badly -- there is the fact that the media utterly refuses to talk about the issues that are actually before this nation and this goes all the way back to 2008 and the financial crisis!
In point of fact I believe a clean case can be made that my question is the top issue when it comes to both the economy and health care in this election, simply on the arithmetic.
As I pointed out in my post on the budget deficit we ran a $1.4 trillion dollar deficit last fiscal year. In a few days I will have the MTS and be able to break it down, but I already know what it's going to show me -- continued outrageous acceleration in spending on both Medicare and Medicaid, putting the lie to any claim that the spending acceleration is all about "people getting older."
No, it's not, and no, whether a candidate made lewd comments (even if there were lots of them) is immaterial to the inevitable outcome if we do not address this issue in the here and now.
The most-important issue in this campaign and in fact in our nation today is people getting screwed blind by the medical industry. It will shortly, if not stopped, become not just about the millions of Americans who are bankrupted by this outrage but will expand to include the destruction of our government's funding model, the economy, the markets, and our way of life that will happen, with mathematical certainty, in the next few years -- almost certainly during the next President's first term.
There is exactly one way to stop it, and that is to start prosecuting and thus break up all of the price-fixing and monopoly practice in said industry, which will cause medical costs to fall through the floor -- a reduction of as much as 80% or even more.
If we do not do this, and do it today, the rest literally does not matter. We cannot sustain $1.4 trillion deficits in a time of alleged economic expansion for long. The markets will not allow it and the screwing you take as an individual in your cost of living will not bear it.
We either stop this, here and now, or we lose our nation.
You don't understand why The Ticker has faded to black?
Let me start with this: Why do drug dealers shoot each other on street corners?
Answer: Joe the drug dealer cannot call the cops and tell them that Jack the drug dealer ripped him off and sold him a bag of oregano instead of weed. Joe also can't sue Jack. Thus, when the threshold of his tolerance is crossed Joe has only the use of direct force available to him because he has no recourse to the law to settle his dispute with Jack.
The FIRST foundation of civil society is The Rule of Law. Without it there is literally nothing other than the Law of the Jungle, commonly known as "he who has the biggest teeth (or the most guns) and is willing to use them first wins."
Let me remind you that Han Solo, who is widely regarded through the Star Wars series as a hero, shot first at Mos Eisley. George Lucas edited that in the second release of the film (and later had to put it back after fan outrage) but it is a fact that Han shot first in the original theatrical release. Why did Han shoot first and kill Greedo? Because he knew there was no Rule of Law and he had no recourse to the law, which incidentally was later proved to be an exactly correct expectation when he was made an ornament in Jabba's castle.
Now I want you to stop reading, go get an adult beverage or a cup of coffee, and think long and hard before you continue reading about the above.
BECAUSE THE ABOVE IS THE ISSUE THAT, IF WE FAIL TO ADDRESS IT IN THE PRESENT TENSE, RUNS THE RISK OF RESULTING IN AN IRREVOCABLE SERIES OF EVENTS IN THIS COUNTRY UP TO AND INCLUDING POSSIBLE CIVIL WAR.
Did you go get your drink, consume it, and think?
Good -- you may now continue.
This site was founded back in the early part of the financial crisis, spring of 2007 to be exact, because the Rule of Law was being blatantly disregarded -- specifically, with regard to "Prompt Corrective Action" and banks that were paying out dividends with fictitious earnings.
Did anyone go to prison for doing that? No.
Did anyone go to prison for selling "good investments" to clients that they described in their own internal emails and on recorded internal conference calls as "vomit" and "dog squeeze"? NO.
Did anyone go to prison for claiming to Congress (and all testimony to Congress is under oath) that they were "adding liquidity" to the system during the meltdown when I found, in public records, that in fact over $60 billion was pulled from the system into the maw of Lehman's collapse? That facially appears to be perjury, incidentally. The answer is again NO, and one of the people directly responsible (at the time the head of the NY Fed) was actually rewarded for this act (among others) by being appointed to head the Treasury Department (Tim Geithner.)
Did anyone get prosecuted for the felony of perjury in filing literally hundreds of thousands of knowingly false documents in foreclosure actions across the country? NO.
How many hundreds of thousands of Americans lost jobs and homes as a direct result of this? How many lives were ruined? Now ask this: How many people were made whole on the damage they suffered as a result of these acts, all of which were facial violations of the law?
It is broadly illegal to price-fix via any mechanism where market power exists. So says 15 United States Code, Chapter 1. Go read it. Virtually the entire US Medical System operates on business models that are facially in violation of that section of law. The latest outrage is an off-patent device called an "Epipen" used for severe allergic reactions; if you need one and don't have it you have a very good chance of dying. They cost about $60 10 years ago, and are about $100 today anywhere else in the world. Except here in the United States -- where they're $400, and if you get on a plane, buy a bunch and bring them back to sell (to make a profit and undercut the price) you go to prison. The exact same sort of price-fixing with the direct support of the US government and FDA is present in virtually every area of medical practice -- from drugs to devices to hospitals. All of this facially appears to be illegal; were I to even have had a discussion with a competitor on fixing pricing when I ran my Internet company that would have been a federal offense.
How many people are dead -- broke -- or both as a direct result of these practices? There is an entire industry that accounts for nearly one dollar in five spent on all items in our economy and it has multiplied its share of spending by a factor of roughly six through the use of these tactics. You, I and everyone else in the country are being overcharged by a factor of five times as a result, it's destroying the Federal budget and has or will destroy state and local budgets also. You can't run a car repair shop without quoting prices before you start turning wrenches and yet it is essentially impossible to get a price, nor to bind the hospital to any figure they give you, for a procedure before it is done.
What did you see James Comey do in regards to Hillary Clinton and her "private" email server, on which she knowingly stored and transmitted classified information? The head of the FBI - the nation's top police officer - stood at the podium and described, facially, a felony violation of the law, which I remind you does not require intent, and then said "no prosecutor would bring the case." Then, one business day later, he sat in Congress and described knowing that a second felony violation of the law, perjury, had taken place in that he admitted he knew she had lied before Congress about 'never' having done so and yet he insisted that he needed a "referral" to "investigate" said act.
If you were being interviewed because the FBI thought you robbed a bank and on your kitchen table was a bale of marijuana do you think they'd need a "referral" to bust you for the weed? You know damn well the handcuffs would be on you in seconds, so why weren't they on Hillary?
Next, if there was no intent as Comey claimed he could not find why did she lie repeatedly, both to the public and Congress, about the presence of classified information on her server? You don't lie about something you aren't trying to hide and you don't hide something that doesn't incriminate you! Prosecutors argue this every single day before juries and get thousands of convictions every year on exactly that basis -- the accused lied about something they did and that lie is evidence that they knew what they were doing was wrong as that's the only reason to lie about it!
Another section of the same law attaches liability to anyone who is involved in these acts and fails to report them. That facially involves Bill and Chelsea Clinton as well as Hillary's entire senior staff! This issue is, again, not just limited to Hillary's conduct. As persons with security clearances (with the possible exception of Chelsea) they all were aware of the law and their positive obligation to immediately report any breach of security of classified information, and failure to do so is a criminal offense.
Finally, contrary to Comey's assertions (which were also a lie, and since they were made to Congress were also Perjury, a felony violation of the law) there indeed are people who not only have been but are being prosecuted for quite-similar violations of the law with regard to classified data. Specifically there are service members who have been arrested, not just demoted or had their security clearances revoked, for putting classified information on unauthorized devices. One, Kristian Saucier, faces 20 years in prison; there is no apparent public evidence that this individual ever allowed anyone outside of trusted Navy circles to see the images. Comey made the blanket statement that the government does not prosecute people who do not give said information intentionally to our enemies; his statement before Congress was a lie.
If you believe this is a singular instance you have your head firmly planted somewhere that the sun never shines. As yet another example out of literally hundreds I cite the recent shooting at Pulse; 50 people died. The wife of the shooter has disappeared and the FBI has pointedly refused to answer as to where she is, despite the fact that it has been disclosed that she drove the shooter to the club and knew he was going to do it. That makes her an accessory just as you or I would be charged with murder if we drove our girlfriend or boyfriend to a bank to rob it and he or she shot dead a teller. There are now reports circulating that this woman was allowed to flee the country and is in the Middle East where she cannot be extradited nor has she been indicted. Before you say one more word about how "blue lives matter" you first have to account for and subtract back off the 50 murders that didn't matter when we had someone who we could charge with them that was both alive and able to be arrested, indicted and prosecuted.
If I, as an ordinary person, fire a gun I own every single round that comes out of the barrel until it comes to rest. Even if I am perfectly justified in drawing and firing that weapon if I shoot an innocent person I remain responsible for the round that did not go where I intended it to and the results of same. Now contrast this with the police of any stripe, who may fire indiscriminately, emptying weapons containing dozens of rounds even into targets that are facially wrong such as a pair of women in a truck when they are seeking a man in California, and yet they are never held accountable for the damage those rounds do to either person or property.
How many people are dead in Orlando not as a result of a terrorist but rather due to the rounds fired by police, along with their intentional 3+ hour delay in entering the building? Where are the manslaugher (or felonious assault) charges for the persons who were hit with wildly-sprayed rounds from police weapons during that breach? Why has there been no accounting for those rounds and the persons killed by them? Why is there never any accounting for said rounds fired by the police wildly and with outrageous disregard for innocent persons in the vicinity? You or I would be charged immediately for such a flagrant display of gross negligence, likely with multiple felonies.
Now consider all of the above flagrant violations of the law, all of which were observed by many officers of the law of all stripes -- federal, state, county and local. Exactly how many of said officers made an arrest and processing of said suspects (including other police officers, CEOs or politicians) for behavior they personally witnessed that was (and is) a facial violation of the law, turning over same to a prosecutor?
If that's not enough the shooter in Dallas was cornered -- "treed" if you will, isolated in a parking garage from which he could not escape. Rather than wait him out and arrest him, then go through this entire pesky "due process" thing including a trial and sentence even though he was not presently shooting at anyone the police instead mounted a bomb on a robot and blew him up. You got that folks? Yeah, he was obviously guilty as hell but if you catch someone having just killed your daughter and he's cornered in your shed, either out of ammo or choosing not to shoot at that time, you cannot blow the shed up rather than arrest him! Due process of law? What's that?
Boobus Americanus cheered that on too and yet what you just invited the next guy to do is throw a grenade or make damn sure he has a really BIG bomb with him instead of surrendering when cornered! If one person has no right to due process of law THEN NEITHER DOES ANYONE ELSE -- including the cops.
Folks, all of what has gone on of late is traceable and chargeable to the destruction of The Rule of Law. The destruction of millions of American's financial status, their wealth, their freedom, their health and frequently their very lives are destroyed because CERTAIN PEOPLE, namely the rich, politically powerful, those wearing a "blue" costume of some sort or those who happen to run big corporations can and do whatever they wish and are simply not prosecuted for violations of the law that you, I, or anyone else would be and are.
When you back a bear into a corner it will attack you because it perceives that as the only remaining course of action that it has available to it other than death.
We created the conditions under which drug dealers resort to shooting each other because we made the consensual act of trade in and consumption of certain substances a crime, and by doing so denied them any other recourse under the law for disputes among themselves.
They are at fault for shooting at one another but it is our responsibility because we intentionally removed their recourse to the law.
We created the conditions under which millions of Americans, most of whom are not drug dealers, believe they have no recourse to the law through our willful and intentional acts and then we sit still, swill beer and post on Facebook when the fact that ordinary Americans have no recourse to the law as soon as someone rich, powerful or wearing a costume who wants to screw them is shoved in our faces instead of demanding that all of this crap stop. That message - "you have no recourse" - has been driven in day after day as every "important person", cop or company you care to name pulls some stunt that would result in anyone else facing down an immediate felony indictment and walks away laughing or, equally as bad, collects hugs, donuts and, for corporate executives, million dollar bonuses.
Specifically, and in reference to recent events, it is our refusal to demand that police officers be held accountable for every round they fire just as is any other person.
It is our refusal to demand that those in political power who perjure themselves are prosecuted while if you lie you go to prison for obstruction of justice.
It is our refusal to demand that "law enforcement officers" who aid and abet someone who can facially be indicted for multiple counts of murder "disappearing" be held accountable as accessories after the fact and indicted themselves, never mind refusing to demand that our former Attorney General and current President who between them, along with dozens of other "sworn officers", knowingly armed drug dealers also face indictment for their acts.
It is our refusal to demand that the cops who claimed they had video footage of an innocent man shooting and plastered same all over the media when they knew they did not be prosecuted for intentionally causing him to be subjected to death threats and have his reputation destroyed while if he had told the slightest untruth to said cops he would have been charged with obstruction, lying to investigators or both. Worse, instead of tendering that demand and sticking to it we bring the cops donuts, pay for their lunches and post all sorts of laudatory crap on social media, cheering on the lies!
It is our refusal to demand that an officer who claims to pull over a car for a broken tail-light when both lights are clearly illuminated on the dashcam video and then shoots said motorist be immediately brought up on murder charges and as prime evidence of his guilt we use his intentionally false statement that he was stopping the car for a broken taillight.
It is our refusal to demand that police officers who steal property under so-called "civil forfeiture" when they have no actual offense they can charge the owner with be prosecuted and imprisoned for grand theft and the entire department so-involved dismantled for Racketeering, exactly as you or I would be if we all got together and held people up at gunpoint claiming that they had committed some crime, stealing everything they owned.
It is our refusal to demand that executives in the medical and pharmaceutical industries face the music for conduct that facially appears to violate hundred-year old anti-trust laws that not only mandate a decade long prison sentence for said executives they come with company-ruining fines big enough on a per-count basis to destroy any corporation that pulls this crap.
It is our refusal to demand that all of the "finance professionals" who sold mathematically impossible schemes in the pension and insurance space to teachers, police officers, firemen and others go to prison and have their firms confiscated for promising that which is impossible.
And it is our refusal to hold accountable all in a given role who are aware of this rank corruption, have taken an oath to uphold the law and have violated that oath by either not doing their job directly or sitting silently while others refuse to do so. It is illegal for a person to be associated with Daesh even if they do not personally commit a terrorist act. Given that fact why can any member of a police force or other government agency, whether federal, state or local, cover up or refuse to investigate blatantly unlawful behavior without everyone involved in same being charged as co-conspirators when the law clearly defines that someone who acts as an accessory before or after the fact is equally liable.
If this issue -- the utter destruction of The Rule of Law -- is not addressed now there is a very real risk that the spiral of events that has been growing, first slowly and now exponentially, could erupt into literal war within our own nation.
If it does you had better get up and look in the damned mirror because it is the collective inaction and refusal to demand the restoration of the Rule of Law by the American people that has and will lead to this outcome. There is no violent repression -- by police or anyone else -- that can stop it.
Only restoring the Rule of Law so everyone has equal recourse to the law will stop and reverse what is otherwise inevitable.
It is for this reason that I have decided that for the present I am going to go enjoy whatever time is left in a reasonably-peaceful society here in America instead of writing for your consumption, for I neither believe that this relatively-peaceful state of affairs will persist for long nor do I believe any material number of people will lift a single finger to do anything about it other than whining on so-called "social media."
Eight years is enough time to see whether or not there is any indication that any material percentage of the public gives a good damn and absent a marked change in the evidence my verdict is in.
Han was not wrong in his assessment of the state of Rule of Law in the Star Wars Universe. We must not, as a society, allow that assessment among people in this nation to continue on the path it is on here in the United States or the outcome will be the same.
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Submissions or tips on matters of economic or political interest may be sent "over the transom" to The Editor at any time. To be considered for publication your submission must include full and correct contact information and be related to an economic or political matter of the day. All submissions become the property of The Market Ticker.