The so-called "authorities" on health all admit that half of all adults are metabolically compromised (in terms of insulin resistance) with most of those over 65 being in this situation.
Being metabolically compromised places you at a materially higher risk of diabetes and heart disease. These are diseases that may kill you, but even if they don't they are debilitating. Obesity is a big part of that; you can't run, you can't move, you wind up with joint replacement surgery as you age (which has to be re-done every 10 or 20 years and is major surgery) and, if it gets out of control it can and will lead to amputations, blindness and ultimately kidney disease and dialysis.
This is a miserable way to live the last 20, 30 or 40 years of your life and it's not a pleasant way to die either.
Most people will say "well, I have no symptoms and my doctor is ok with what I'm doing", so they'll ignore the possibilities here. This is extraordinarily unwise as the damage that causes these diseases happens over years or even decades before clinical disease (that sends you to the doctor) presents itself.
It is easy and inexpensive, however, to know if that damage has accrued to the point that some detectable signs are present. You can do it at home, and you should because once these markers get into your medical chart they never go away and while people may think they're protected by Obamacare right now until and unless we deal with the medical monopoly situation in this nation you are risking financial ruin without cause if those markers get into your chart even if you reverse the damage.
What happened before Obamacare and will happen if and when it collapses? If those markers are in your chart you may become completely uninsurable at any rational cost. That means that any major medical emergency instantly bankrupts nearly anyone.
As an aside I'm going to make an assumption here: You're not diabetic today (diagnosed.) If you are diabetic then none of the below is news to you in terms of testing as you already have these results over time since they're part of what your doctor has you doing already. Nonetheless, you might be shocked at the improvement from the below eating pattern changes, so keep reading -- just ignore the testing thing, as you're already doing it.
This is a something you can do in the privacy of your own home with nobody but you having the results. You can then change your behavior, specifically, what you do and do not eat, if you have a deteriorating situation and see if it improves. There is little cost to this, essentially zero risk over the time involved and if it doesn't work for you or if you think I'm a crackpot (I don't have an "MD" after my name, after all) you will have lost nothing other than a few dollars that were spent on something you probably ought to own anyway, one of which is not consumed.
You're going to go buy two things:
1. An A1c test kit. WalMart has them and they're under $30. There are two tests in the box, so each is about $15. No, one isn't for your SO, spouse or kid -- they're both for you. If you have two people to check buy two. These are consumed and tossed when used up.
2. An inexpensive glucose meter and a box of lancets. Buy one of the models with inexpensive strips; the meters are all cheap (~$20 or so) but the strip cost varies widely, by as much as 500%! While you're not using this for diabetes monitoring this is a device that will last years if not a decade or more so strip cost does matter, although not nearly as much. Again, WalMart has a wide selection.
When you get home open up the A1c kit, read the instructions (yes, you have to follow them to the letter to get good results) and run one. Keep the second. Write down the result.
The ADA and "some" docs say any A1c number under 6.0 is ok. You want a number at or under 5.6%. Note that these kits as with all tests, including lab tests, have an error band to them which means that one test provides decent information but you need to check it as the actual number could be a few tenths to either side of the displayed result. Don't use the second test immediately (unless the first errors out due to a mistake on your part); you'll use that a month or two down the road to both check the error band (the odds of a random error going both ways is 1 in 4 instead of 1 in 2) and your outcome.
Be aware that there are some confounding factors with the A1c test. First, it "assumes" blood cells live three months. We know this is not always true; people with severe metabolic damage tend to have them live for less (which means the number reads low) and those without said damage tend to have them live longer (which means the number reads high) since what A1c measures is the percentage of glycated hemoglobin in the blood. Further, if you have some conditions, among them anemia (in particular) it will read low because in that case hemoglobin is below normal levels -- this is a particular risk for women who don't get enough iron in their diet although there are other causes. This probably won't change your test result enough to matter, but it is the reason that standing alone an A1c test, while good and in fact an essential checkpoint, isn't enough.
Next, you're going to do two different checks with the glucose meter. The first is a fasting test, which is done when you first wake up in the morning before eating or drinking anything other than water. Most meters will store some amount of history but again, write it down. If your number is under 90 but greater than 50 that's ok. If it's under 50 test it again -- a persistent result under 50 is an indication of hypoglycemia (low sugar) which is dangerous as levels below 40 can cause you to pass out (and if nobody finds you and deals with it you can die), so if you get a confirmed reading under 50 consider obtaining medical advice. Again, the ADA and some docs say anything under 100 is ok. Correct clinically but wrong for the purpose you're intending here. If you get a number over 90 do it again the next day; if you get a second reading over 90 you've got a potential problem.
The final thing you're going to do is wait until you eat a "normal" meal at home (whatever that is) but it should include a decent amount of carbohydrate. "Decent" doesn't mean carb overload, but it does mean roughly the equivalent of one cup (cooked) of rice. If you eat low-carb normally, this is your chance to eat something you usually don't. Test your blood sugar level before eating, then test again both one and two hours after eating. Write down the results; no relying on memory here. You should not get a result over 140 on either of the post-eating tests and ideally within two hours you should be back to where you were before consuming the meal. If you're not, take a third test at the three-hour point.
Now let's interpret.
If you are eating food containing carbs on a regular basis, your A1c is at or under 5.6 and your fasting glucose is under 90, neither of the one and two-hour post-meal readings exceed 140 and you are back to baseline within three hours you are probably ok metabolically at this point. This doesn't mean you don't have insulin resistance of some amount but at this point it is not manifesting in clinically-detectable harm to your cardiovascular system. If you are eating low-carb and have been for several months or longer your fasting glucose level may be a few points higher, anything under 100, and is ok provided the other two tests are both in-range. Note that if you are overweight you probably are metabolically compromised (an OGTT w/insulin assay would easily detect it) but the test is expensive and frankly, the mirror works just as well for anyone in this category: If you have a gut, you're metabolically compromised. Incidentally just because you eat low-carb you are not necessarily going to get a somewhat-higher fasting glucose level; I don't, for example, and I've been eating low-carb now for something like five years now but some people do.
If your A1c is over 5.6 (but under 6.0) or your fasting glucose is over 90 (over 100 for low-carb eaters) or your first two-hour post-meal readings (either or both of them) go over 140 or you are not back to baseline within 3 hours you are accumulating metabolic damage that is doing material harm to your body. Your doctor will probably not detect this in his routine screen but if you ran the (expensive) OGTT w/insulin assay test, which your insurance will not cover in this instance since there is no clinical indication of disease, I'll lay a large wager it would show significant metabolic compromise with insulin levels perhaps as much as twice normal levels. You're at severe risk down the road even if you are not overweight and if you are overweight you're a walking heart attack or stroke unless you change what you're doing. More than half of all adults in the US and most people over 65 are in this category or one of the worse ones below.
If your A1c is over 6% or fasting glucose is over 100 (irrespective of what you eat) or either of the first two post-meal readings is over 160 (you almost-certainly won't be back to baseline within 3 hours in this instance) you're either diabetic now or shortly will be. Your doctor will be able to detect this in a routine screen; if he's honest he'll call it "pre-diabetes" and if he does your medical chart will be "branded" forever which, to the extent legal now or ever again, will trash your ability to obtain health insurance at a rational cost. You'll also get a whole raft of pills shoved at you, probably including metformin (to start) and a statin. That's the traditional thing for them to do but it may be both harmful and unnecessary.
If your A1c is over 6.5% or fasting glucose is over 130 or any of your post-meal readings are over 200 you are in trouble as you are almost-certainly clinically diabetic now. This pretty-much meets the "bright line" test in the medical establishment to call you diabetic. If this is the case your chart and impact on health insurance is irrelevant if you change nothing as it is a virtual certainty you will if not are suffering real, material and serious damage to your health. You're probably symptomatic too but denying it. It is your call what to do with that information but before you run to the doctor for a formal diagnosis and permanent branding on your medical chart, assuming you haven't previously been diagnosed, read the rest of this article.
If you're of both of normal weight and your results are in the first category then relax -- and in a year, or if you become overweight, do it again just to keep tabs on things.
But let's assume you are either (1) overweight or (2) your results are in any of the bottom three categories irrespective of your weight.
Try the following for a short period of time (4 weeks):
1. Stop eating sugars of any sort. If it says "sugar", "fructose", "sucrose", "corn syrup", "hfcs" or anything of the sort anywhere on the label do not eat it. No more cookies, no more chocolate, no more sugar in the coffee, no sugared sodas, etc. Just stop. No exceptions, no tapering down, stop.
2. Stop eating starches and grains. No more pastas or potatoes of any sort. No more bread irrespective of the type.
3. Stop eating anything containing machine-processed vegetable oils. No more corn oil, canola, rapeseed, etc. No cooking with any of these oils and yes, that includes peanut oil; the only exception is olive oil as a salad dressing (e.g. with vinegar.) This crap is in a lot of "food" and no amount of it is healthy. This means no more packaged foods in the general sense; no more boxed dinners, canned ravioli, "lunch pouches or easy-prepare things" and similar (those probably break all three constraints!), nothing that comes in a bag (other than frozen vegetables), etc. This also means no fried food of any sort prepared away from home since essentially nowhere fries anything in either tallow or lard any more (but they should.) If you like wings find a place that bakes them and order them with the dry rub instead of the HFCS-laden sauce.
These three rules above are absolutes. You'll be tempted to cheat, but we're talking about a month here. Just don't; you can do it, and you know it.
Now on to what you do eat.
4. Do eat all the green vegetables, whole, not canned or packaged, you want. Find something or a bunch of somethings you like such as broccoli, brussels sprouts, bell peppers, lettuce and similar. Whole, fresh or frozen (e.g. in a bag) are fine; canned or otherwise processed are not. Substitute these any time you would otherwise eat any sort of snack and keep eating them until you're not hungry any more. It's not impossible and it won't hurt you; in fact, they're all good for you. It is close to impossible to overeat if you're consuming green vegetables.
5. Do eat full-fat protein. Pork, chicken (skin-on, not trimmed), steak, hamburger (no bun; that's grains), fish, eggs, cheese, etc. No restrictions on any of these foods, but eat when hungry until you're not, not until "full."
6. Use spices, including pepper, cumin, etc. as much as you wish. Hot sauces typically contain zero sugar and are perfectly fine even in wild amounts (yes, Tobasco is ok.) This is a taste-based thing, of course, but anyone who thinks you can't toss on the Lowrey's or pepper the hell out of your steak is flat-out wrong. Not only can you use salt unless you are one of a very small percentage of the population that has a genetic intolerance to sodium restricting salt intake is worse than worthless in that electrolyte imbalances lead to cramps (especially if you exercise) and can be dangerous.
7. Be careful with legumes and nuts. These are generally ok but nuts are very high in caloric content and it's easy to wind up eating 3,000 calories worth of them in a few minutes! So if you want a few as a snack, go ahead; just don't eat them as a meal rather than as a snack. But do not generalize this to nut-based oils (such as peanut oil) or anything processed from nuts because you are then concentrating the bad without the balance of the good (see above in point #3.)
8. If you normally consume alcoholic beverages keep it to one per day on average and not more than two on any day.
9. Drink any time you're thirsty; water is of course ok, if you like coffee go right ahead. Cream is ok (not non-dairy creamer, actual cream that has to be in the fridge) but sugar is not. If you want sweetener use any of the non-sugar ones (we're not going to be a nazi about these for this purpose.) Diet sodas may be ok, but if you can avoid them do so.
Do this for one full month.
Now repeat the above tests. Note that A1c typically measures average blood glucose levels over about a three month time frame, so the change there may not be dramatic and in addition the error rate on the test may obscure the results.
But remember the above table; if you drop a category or approach doing so you have hard proof that you required no medication whatsoever to improve your situation and these results are individual to you.
In other words you didn't read something on The Internet by some kook (like me), you didn't take blind advice from some doctor or nutritionist (irrespective of how many letters are after his name) you ran an individualized test with objective results on your particular genetic and metabolic make-up and have a set of numbers before you that document the outcome in your particular body.
If the results show no change (or get worse) then you've lost nothing other than a bit of time and a few dollars. Over this short of a period of time no harm is going to come to you; the harm that comes from bad metabolic markers in this regard requires years of accumulation before it "gets" you. But if the results are either dramatic or trend the right direction (and if you actually do the above it's a good bet they will) you now know that it is possible to change those objective metabolic markers through near zero-cost measures that are easily implemented in your daily life without spending one minute in a doctor's office or taking (and spending money on) one single pill.
Is that enough motivation to continue for another month or two and see if you can return your metabolic profile to the top, that is, "ok" category?
Further, you just prevented yourself from being "branded" in your medical chart and you didn't do it by cheating, you improved your actual metabolic profile.
That ought to be plenty of reason to continue on that path and make it a lifestyle, considering that the difference between said improvement to the top category and any of the others is a very material change in your risk of heart attack, stroke, blindness, amputation, dialysis and death! Further there's a very good chance that at the same time you're going to see a change on the scale if you're overweight, and I bet you'll like that change as well.
In 1940, entitlement payments, which include everything from disability payments to Social Security to Medicare, amounted to just over 20% of annual government spending in the United States.
Today, entitlement spending has swelled to nearly 70% of the annual federal budget.
Things are about to get a whole lot more complicated. The 20-year baby boom that took place after World War II is now beginning to result in a retiree boom.
For context, Druckenmiller points out that in 2030, the average age of an American citizen will be older than the average age of a resident of Florida today.
This demographic trend is going to create an entitlement spending catastrophe.
It doesn't have to, and the root of it isn't "entitlement spending", in the main.
Let's think this one through.
Social Security is funded by a "one in 8" tax, basically. That is, about one dollar of every $8 you earn up to a given cap is confiscated before you ever see it. You think it's half that, but it's not because the other half is paid "by your employer" and this fiction is maintained so you don't revolt.
However, your offered wage is reduced by that amount -- guaranteed.
So let's assume that we have a 2.5:1 ratio as is put forward. That sounds horrifying, except that it's a temporary problem (it lasts 20 years, roughly), and then everyone involved in "causing" it is dead. Further, there will be some that will "file late" for Social Security in an attempt to get more -- a strategy that only works if you live a very long time in terms of total funds, and lose their bet because they will die before the break-even is reached. In fact, actuaries don't care if you make this bet because they know that on balance while some will win, some will also lose and it will all even out.
No, the problem here is not the "one in 7.5" tax for Social Security. It is the one in 34 rate assessed for Medicare.
To put not too fine a point on it, Medicare and Medicaid (combined) are roughly double the outlay of Social Security and yet they are funded at a rate of less than 1/4 that of Social Security via taxation.
Further, Social Security outlays are indexed to alleged inflation, which is intentionally machined to show smaller than real figures, and thus there is a built in depression of Social Security obligations in real terms, especially over long (20, 30, 40+ year) timeframes.
Social Security itself is unlikely to go broke. If it does "run out of money" 30 years hence there will be some reduction in benefits, but remember that even a 1% inflation "miss" against reality over 30 years turns into a 35% reduction in real expense. In other words the "you'll only get 70% of your promised amounts" out of Social Security claims are probably dead wrong; you'll get the entire amount but it will be short in purchasing power by 30%.
The disability fund is another matter; that's bankrupt now and politicians have been stealing from the retirement fund for a while to cover it up.
On the other hand Medicare and Medicaid spending is going up at a radical rate compared to inflation, government-stated or not. How bad is this?
Fiscal Year 2005, for example, spent a total of $652 billion.
Fiscal Year 2015 spent a total of $1,297 billion, or close to a clean double in 10 years.
This was not mostly-centered in Medicare -- that is, retirees. Medicaid went from $182 billion to $349 billion, damn close to a double standing alone. In other words it was across-the-board in all age groups served.
That's a 7.2% growth rate which far exceeds alleged inflation -- inflation allegedly was up 20% over the same 10 years, or an annual rate of about 1.8%.
In other words that segment of the economy as spent by the government went up at a rate four times that of general prices.
Need I remind you what happens any time two exponential growth curves have a different growth rate? Go look at Leverage; there's a damn good reason that this is covered in the front of the book because if you don't understand and deal with it nothing else matters.
This, and only this, is the cause of all of the federal debt expansion, pension fund problems both private and public and the detonation that will occur in the federal budget and forward liabilities unless it is stopped and reversed.
Note carefully that we spend as a nation roughly double as a percentage of GDP what other developed, G20 nations spend on health care -- and virtually all of those other nations have socialized medical systems.
Socialism is always less-efficient than capitalism because there is no reward for innovation in a socialist system; you cannot take market share from someone else since market share is not a function of market success or failure.
This, in turn, means we're definitely overpaying by more than twice for medical care; we are in fact probably overpaying by as much as 80% across-the-board.
It is not hard at all to find examples of people being billed 10 or even 100x a price in another nation for a given thing. It is cheaper for me to fly to Narita, Japan, round-trip, and have an MRI done there by more than 50% than the average amount charged for the same scan here in the United States.
While you can in some cases get that scan done for a few hundred bucks here they're all $200 or so in Japan, and most people grossly overpay here in the US. Why? Because of various practices that all amount to consumer deception, extortion, price-fixing or all of the above -- all acts that are supposed to be crimes.
Let's say you go to the ER "in-network" on your alleged health insurance. While there some doctor sees you. He isn't in your network and you get a bill for hundreds or thousands from him. The hospital administrator should be imprisoned for allowing this along with the doctor who did it; you neither consented to such a bill nor in many cases had any ability to refuse, but the administrator could have required that said doctor be "in network" to be there or if not that he take the same reimbursement rate as if he was. He didn't and thus they both took advantage of your "in extremis" situation to bilk you. That's supposed to be illegal as a matter of general consumer protection yet not one person has gone to prison for it -- ever -- that I can find a record of.
Drug companies set prices by nation based on various things, including GDP and what they think their drug is "worth" in terms of your life or health. It's illegal to restrain trade (15 USC, Sherman, Clayton and Robinson-Patman) yet that's exactly what they do, with the help of the Federal Government, in that if you get on a plane and buy a suitcase full of some drug at a much cheaper price to try to bring it back and both make a profit while dropping the cost here in the United States it is you rather than they who will go to prison.
It is virtually impossible to get a binding quote on a procedure from nearly all medical facilities in advance. The notable exception are places like The Surgery Center of Oklahoma, which posts "all-in" prices. I note that said prices are typically one third to one fifth of what is charged in hospitals that don't post prices, including hospitals in the same general area of the country. Gee, I wonder why, and then one wonders why there haven't been thousands of criminal indictments and lawsuits alleging racketeering and extortion filed against the administrators and doctors in all the other hospitals.
Here's the reality folks, and it's a matter of arithmetic, not politics:
If we stop this right now the Federal Government would immediately and permanently run a roughly $400 billion a year surplus. In other words your purchasing power would go up rather than down every year and the federal debt would slowly be retired at a rate of about a trillion dollars every three years.
In addition the "entitlement bomb" being discussed in the linked article would instantly and permanently disappear. It simply would not exist; the short-term stress on Social Security would be manageable without material changes to the program due to the inherent understatement of inflation in the CPI used to link benefits and over the longer, indefinite time horizon the program remains stable.
Finally, were we to stop this keeping the Medicare impact on Seniors as it is today would allow Medicare to almost entirely disappear. The reason is that Medicare is an 80/20 program; if the base cost of medical care decreases by 80% (and if we only equal the socialist nations it would fall by 50%; we can do better than that with capitalism) then exactly zero needs to be spent for the cost to an actual Senior to remain the same. However, since we did promise such an 80/20 program keeping that promise is not an irrational act and thus some spending (about 1/8th to 1/5th of what it is now) would remain. Likewise, Medicaid is currently basically-zero cost for beneficiaries; if the cost of care drops by the expected amount we might well be able to get rid of many of the beneficiaries entirely since they would be able to afford to pay cash.
FISCALLY SPEAKING THE ENTIRE PROBLEM RESTS HERE -- AND NOWHERE ELSE. IF WE FIX THIS WE NOT ONLY ARE OK AS A NATION FROM A FISCAL PERSPECTIVE WE PROSPER. IF WE DO NOT FIX THIS AS A NATION WE FISCALLY (AND PROBABLY POLITICALLY) DIE.
THIS IS NOT POLITICS, IT IS ARITHMETIC. ARGUING OVER OTHER MATTERS WHEN IT COMES TO OUR POLITICAL SYSTEM, UNTIL THIS IS ADDRESSED, IS STUPID AND SERVES ONLY TO PROTECT THOSE WHO ARE CURRENTLY ROBBING YOU BLIND -- LITERALLY.
INSTEAD WE SHOULD BE DRAWING UP LISTS OF PEOPLE AND FIRMS TO BE INDICTED AND IMPRISONED. AFTER JUST THE FIRST FEW WERE SERVED THIS ENTIRE EDIFICE OF FRAUD WOULD COLLAPSE IN UPON ITSELF AND PRICES WOULD FALL LIKE A STONE.
WE EITHER DEMAND AND ENFORCE THIS NOW OR NOTHING ELSE MATTERS.
Let's update one of my Tickers from a few years ago.
We're going to use official government figures here, ignoring, for now, the private sector.
The figures of note are the following (figures to the nearest billion), out of a total of $3,688 billion.
Military programs: $563 billion or 15%
Social Security Old Age: $741 billion or 20%
Social Security Disability: $146 billion or 4%
Medicare and Medicaid: $1,297 billion or 35% (Medicaid amounts to $350 billion granted to the States (no breakdown on what part is drugs), Medicare Part D (drugs) is $75 billion; the rest is clinical services for the most part -- hospitals, doctors and similar. S-CHIP, the children's portion, is $9 billion (insignificant) and administrative expenses are about $14 billion total, which is damned efficient -- only 0.4%. Incidentally I don't believe that figure, but even if it's three times as much it's still damned impressive.)
VA (Veterans Health) approximately $61 billion or 1.7%
SNAP - food stamps -- is $104 billion and is up from last year, despite so-called "improvements" in the job market. TANF is a separate line item, $16 billion. Together, 3.3%.
That's where the money goes. Conflating Social Security and Medicare/Medicaid is the common horsecrap line run by both parties, but it's intentionally dishonest. Disability is a fraud-riddled mess, but the "old age" part of Social Security is neither going to bankrupt the nation nor is it an immediate budgetary problem.
But the $1,297 billion in Medicare and Medicaid is.
Now let's look at what Trump is proposing against this.
Price transparency in the pharmaceutical area alone would be a monster. Let's assume that of the $350 in Medicaid 10% is drugs. That makes drugs a roughly $110 billion annual federal expense.
What happens if you ban the gouging that is done today across the entire medical industry?
Well, let's remember that Medicare is an 80/20 program. That is, the government pays 80%, you pay 20%. If you look at the cost of procedures at the Surgery Center of Oklahoma, which I have posted multiple times, you'll find that many of them are about 1/3rd to 1/5th the price of local hospitals.
In other words a very material percentage -- perhaps as much as 80% -- of Medicare's non-drug spending would disappear and your bill as a Senior would drop by the same amount.
That is, of the $872 billion spent now on non-drug services on Medicare, not Medicaid, and we manage only to cut the cost in half, which just takes us to where socialized medicine manages to get in other G8 nations, $436 billion of spending by the Federal Government would disappear each and every year.
In reality competitive markets outperform socialized ones in virtually every case where there are multiple and diverse providers of products and services. As a result that 50% decrease is ridiculously conservative; I expect we'd achieve 70%, leaving us with just over $600 billion less in Federal spending every year.
Now take the drug side, which is $110 billion and presume that by leveling prices on an international basis (by ripping down the barriers) we also get a 50% savings there. That's another $50 billion every year and again, that is probably conservative; the actual drop would likely be higher.
Now let's turn to Medicaid. If we save half under the same approach, and do not drop any of the poor from the rolls (which we should be able to do for the same reason; some currently on Medicaid with this very large drop in price would be able to pay cash) we'd save another $157 billion.
We just generated $800 billion, or $8 trillion over the usual "10 year" period that is quoted, in spending cuts and not one person had one benefit they currently enjoy from the Federal Government touched in real terms.
What's even better is that we did it in one literal day starting on the first day rather than some mythical Unicorn-style belief of savings a decade hence (that have never materialized, incidentally) that the GOP typically puts out in their "budget projections."
It gets better. The Federal Government, as noted, spent $1,300 billion last year on medical care (ex the VA.) The economy as a whole spent about $3,420 billion; the other $2,100 billion or so was spent by the private sector.
These same ratios would apply to the private sector and thus you, as a consumer, would see an approximate 10% immediate and permanent increase in your real purchasing power because you would no longer be spending it on health care, either through "insurance" or directly. If your "health insurance" is through your job you'd get that 10% in the form of a raise as the cost of said insurance to your employer would drop precipitously.
Even better, the benefit would skew wildly toward those in the lower income but insured income brackets (e.g. full-time middle-class workers) because the percentage of your pay that goes to health insurance is much higher than it is for someone who is making $300,000 a year.
Of course the medical, pharmaceutical and insurance industries will scream. But there's really nothing to scream about; the claim of "charity care" is nonsense in a world where Obamacare and expanded Medicaid exists; you either have one or the other, right? As for pharmaceutical companies if they charge $2,000 everywhere for Sovaldi or $1,000 in Pakistan and $80,000 here in the United States they make the same money; what they can't do any more, nor can other nations, is soak the United States, effectively forcing our citizens to fund 100% of the development costs for drugs they then get to use.
If you're middle class these changes would mean you would be able to pay cash for anything routine and normal, and catastrophic insurance against the unthinkable (e.g. cancer, etc) will now cost a tiny fraction, 10-20%, of what it does now. That in turn means you can afford to buy it on the open (cross-state, in Trump's case) market so if Obamacare is repealed even the modest-income household can pay for said catastrophic coverage and cover the rest in cash.
Even having done so you will still be ahead on purchasing power by about 10% if you're in the middle class and quite-possibly materially more if you're in the lower income brackets and have a chronic illness. If you're wealthy you'll see a benefit too, but on a percentage basis it will be quite a bit less.
And that's just the direct impact on your personal budget that you will see immediately.
The real benefit is the long-term macro-economic benefit that comes from getting rid of federal deficit spending on an immediate and permanent basis.
Because the United States will now be running a roughly $350 billion a year surplus instead of a deficit we will start to retire the national debt. Yes, it will take decades; four or five to be exact. But that $350 billion in debt reduction every year means your purchasing power goes up even more; that is, there are fewer dollars in circulation and so each is worth more in goods and services.
This is the invisible benefit but it will accrue to everyone in the United States equally. Rich, poor, white, black, yellow, green, young, old, doesn't matter -- everyone will see an exactly identical percentage benefit.
How much? About 2% a year, every year, until the debt is retired.
That's right -- instead of you suffering inflation of the mythical 2% a year and your purchasing power being destroyed you will instead be able to save for retirement and see a 2% compounded improvement in what that money buys without taking any risk in the stock market or even being paid interest at the bank!
Finally, at the same time all of these really good things happen to you personally and the federal budget, state and local budgets, which are under severe pressure due to these spiraling costs embedded in their pension expenses, will all be immediately and permanently returned to a stable state as well.
Now this is, admittedly, assuming that Trump is actually able to implement his proposal and you can bet that there will be a lot of corporations and pressure groups that are going to do everything they can to derail it, especially when it comes to anything that has to pass through Congress.
But I will remind you that while the Executive (which is the part of the government the President controls) cannot make laws it is the Executive's job to enforce laws and there is a large body of law, specifically 15 USC, that makes felonious any attempt to monopolize a market or fix prices.
The executive is empowered to enforce existing laws without any act of Congress whatsoever.
In fact, barring passing a new law there is absolutely nothing Congress -- or the lobbyists -- can do to stop him or any other President from doing so.
The reason none of the recent Presidents have done so ought to be obvious; they, along with Congress, have all been bought and paid for.
The we must ban guns meme is of course cranked up once again in the wake of California's terrorist attack.
I am willing to and in fact claim we must as a society have a public and open debate about what we should do in regards to terrorism, the Second Amendment, immigration and all other facets of what happened in California -- and in the other incidents across this land.
I have only one rule: All points of debate must be grounded in and resort to logic; those that do not must be discarded and those who refuse to debate on that basis must be ignored.
This is a serious time for serious people. Getting shot or blown up is serious. But our Constitutional Republic is also serious; it is a unique political experiment among the various governments of the world, and to dilute or worse lose it over an un-thinking overreaction not only risks destroying our way of life it is likely to make our lives more dangerous rather than less.
Now let's look at the alleged "reasonable" response that the NY Times ran this morning.
It is not necessary to debate the peculiar wording of the Second Amendment. No right is unlimited and immune from reasonable regulation.
False. A right is immune from prior restraint. The First Amendment is absolute. This does not absolve you from responsibility should you exercise that right in a blatantly and grossly irresponsible manner. This is the infamous "fire in a crowded theater" example so often cited. But what is being intentionally mis-characterized is that you cannot be forced to wear a muzzle when entering a theater because you might utter the word "Fire" when there isn't one.
There is nothing wrong with punishing someone who falsely claims there is a fire in a crowded theater when there is not, just as there is nothing wrong with punishing someone who brandishes or otherwise uses a firearm for an impermissible purpose.
However, the mere possession of firearms is a right just as is free speech and until and unless it is misused and by doing so one harms others you cannot inhibit a right.
Certain kinds of weapons, like the slightly modified combat rifles used in California, and certain kinds of ammunition, must be outlawed for civilian ownership. It is possible to define those guns in a clear and effective way and, yes, it would require Americans who own those kinds of weapons to give them up for the good of their fellow citizens.
First, let's talk about the ammunition. Here are two actual bullets next to each other just so nobody can claim that games are being played with scale to make one "scarier" than the other. Incidentally, the picture is scaled to be of approximately actual size on most monitors.
One of them is the "evil" type that the NY Times is referring to, and is probably identical to the ones used by the San Bernardino shooters -- if it's not identical, it's damn close.
You probably would say that you'd ban the one on the right; it's bigger and scarier. You would probably also be shocked to discover that the bullet on the right is commonly used to hunt deer and, if it's not obvious by its size and mass, you definitely would prefer to be shot with the one the San Bernardino shooters used if someone is going to give you a choice!
Now let's talk about weapons for a minute. The firearms used by the San Bernardino shooters are no more dangerous to the person or animal shot than any other. In fact they're less dangerous than many other common rifles simply because the bullet they shoot is of .22 caliber -- less than a quarter of an inch across. They are also autoloaders, which means that they fire one round for each depression of the trigger. There are probably a hundred million said autoloading weapons in the United States today and they are not "weapons of war"; those typically have the capability of "select fire", which means they can shoot more than one bullet for each press of the trigger, the common settings available being three (a "burst") or until you let go (the latter is usually called a "machine gun" but the legal definition includes any weapon that fires more than one round per trigger press.)
It is currently unlawful for any civilian to posses a select-fire weapon manufactured after 1986, and for those made earlier you must first apply with the BATFE, submit a full set of fingerprints and a (relatively large) tax payment and then wait for them to approve the sale before you can take possession. This typically takes six months to a year or more.
There are a decent number of select-fire weapons in civilians hands; people are willing to go to that much trouble to buy and keep them. Due to their scarcity and legal restrictions they're very expensive and shooting one is extremely expensive as well simply because of the quantity of ammunition they consume (cartridges are not cheap!) Of the lawfully-owned machine guns in civilian hands I believe the count used in a crime since that law was passed number two, with one being committed by a former police officer. These actual "weapons of war" have never been involved in any amount of criminal activity that one can actually find in the statistics.
That doesn't mean machine guns haven't been used in crimes; they have. In fact the San Bernardino shooters were reported to have attempted to convert one of their civilian rifles to select fire (there was apparently evidence of that found in the weapon) but failed at doing so. It is quite difficult to successfully do this, with success being defined as "it shoots bang-bang-bang when you pull the trigger and doesn't blow up in your face" -- a very real risk if you do it wrong.
Civilian semi-automatic 22 caliber weapons, including the type used by the shooters in San Bernardino, are extremely popular in America. They're popular because they have myriad legal and proper uses, including depredation (that is, the taking of small invasive animals that damage crops and similar), target shooting and smaller-animal hunting. They are in fact illegal to use in the hunting of deer and other larger animals in many states because they are not lethal enough to be reasonably certain of a humane kill and no sportsman wants to see an animal suffer unnecessarily.
What the NY Times is talking about is the appearance of weapons. That is, a gun that looks scary. The idiocy of this sort of "regulation" has been tried and found wanting, specifically during the "assault weapons ban" of the Clinton Presidency.
That ban failed to produce any verifiable positive effect. This should not surprise given that only about 2% of all crimes committed with firearms use these sorts of weapons in the first place. Never mind the impossibility of "removing" them from America -- or anywhere else. Note France flat-out bans civilian ownership of pistols, any automatic weapon and requires strict licensing of semi-automatic firearms of any sort. All gun sales and transfers must be documented and are subject to license and registration there.
Of course this didn't bother the terrorists that shot up Paris despite them not having lawful firearms. It did, however, prevent any of the Parisians there, who obey the law, from having a usable defensive firearm on their person so they could attempt to defend their own lives.
They were slaughtered, just as occurred in San Bernardino where again, nobody in the room was armed.
In fact despite Obama's and other claims the United States is not the "mass shooting" capital of the world. You've probably heard that enough that you take it as truth, but it isn't. Adjusted for population we're somewhere between 8th and 10th depending on what you exclude (e.g. does some sort of civil insurrection count?) But just in raw numbers, not adjusting for population, France has had more people killed in mass-shootings this year than has the United States during the entirety of Obama's Presidency and yet they have some of the strictest gun laws in the Western Hemisphere.
Indeed, it's quite idiotic for anyone to argue that we could actually ban guns and get rid of them in the hands of anyone other than law-abiding citizens when we have banned a huge number of drugs since the 1920s and yet you can buy damn near any illegal drug you want on virtually any street corner of any city in America.
And this is where we come back to logic and the truth.
There is evil in this world.
There always has been and there always will be.
The Second Amendment exists because in The Declaration the founders declared that you have a natural right to life; that is, you have a right to live simply because you are human.
No right is real unless you can defend it for yourself and those who you love (such as your children.)
The Second Amendment codifies a pre-existing right to defend your life, and the life of your loved ones, against any evil individual or group that would attempt to take life by unlawful means. That right is absolute and thus so is the Second Amendment. It is only when that right is abused by criminal action with said firearm(s) that one may be sanctioned.
The security of a free state does not only require that an invading army be able to be repelled.
Security also includes internal threats within a nation whether individual or collective.
The Security of a Free State was violated in San Bernardino just as certainly as it is when a thug breaks into your home in the middle of the night.
There are those who argue that we should have a list of prohibited guns, persons and the like. What those people are arguing is that those persons have no right to either their life or that of their loved ones.
Think about what you're saying if you hold those beliefs very, very carefully:
You are declaring some people to be so much lesser than you that they do not have the right to live and further, you are declaring that someone else gets to make and update that list -- which could quite-easily wind up with your name on it. Further, you have managed to collectively get some fifty thousand gun laws on the books of this nation and every one of them, and thus every one of you, has directly contributed to the lack of security of a free state exhibited in San Bernardino and elsewhere.
If that is truly your position then you are not an American. It's that simple.
I understand the argument on the other side when it comes to persons who have committed a crime. However, the problem with a former criminal having guns does not come from them having committed a crime because a criminal by definition does not obey the law. Rather the problem lies in our refusal to keep dangerous people who we identify as dangerous by their criminal activity locked up until they're not dangerous any more. Since a criminal by definition doesn't give a damn about the law whether it's legal for him or her to buy and have a gun is immaterial; either he or she is not going to do something criminal with that gun (in which case they can only contribute to the Security of a Free State by owning one) or they're going to acquire said weapon anyway to commit their next criminal act. The only means by which we can deal with that problem is that once we identify someone as a criminal dangerous to others through our judicial process we do not let him or her out until he or she isn't dangerous any more. This is logic, not politics and if we wish to solve problems we must apply logic to them.
As an example of why so-called "gun control" doesn't work and can't Tashfeen Malik and Sayed Farook obviously did not give a damn about the law; they not only committed murder but they apparently constructed and amassed a number of bombs, every one of which was very illegal to make and possess. In fact they had roughly four times as many bombs as they did guns. The only saving grace in that regard is that they were piss-poor bomb-makers and their instruments of destruction failed to explode. Neither of these individuals appears to have been known to be dangerous beforehand, although again as usual we seem to be ignoring the negligence of our government, just as we did after 9/11, after Boston's bombing and in myriad other cases, a few of which I've documented such as the three-time jackass in central Florida who killed a Marshal that was attempting to serve papers on him.
In this case there are allegations that Malik at least misled the government about where she lived when she applied for her Visa to enter the US. It appears probable that she not only was the radical intent on jihad and stoked its fire she may have come to the United States for the explicit purpose of committing jihad and her "marriage" may have been nothing more than a vehicle to accomplish that. That we do not yet know and may never find out with certainty, but the timelines and acts involved certainly appear to support such a belief.
Who will be held accountable for that? Nobody. They never are, just like we've never held anyone accountable for the hundreds if not thousands of guns our government knowingly trafficked to drug lords in Mexico (including at least one that was used to kill a border agent), the former Florida Governor Bush (now Presidential contender) who gave Driver Licenses to people here in the state who were neither citizens or permanent residents (who continued on to kill 3,000 Americans in part facilitated by that state-issued ID), and of course the Boston Bombers who we had explicit warning on from foreign governments and ignored same.
But leave that aside, because even if we closed all those loopholes, even if we punished everyone involved in all of these "oversights" or even went to the degree of charging them as accessories before the fact to terrorism (which in my view we ought to do) it doesn't matter because you can't detect them all.
In short not all evil presents itself before you in a way you can determine before the fact. Most of the time it does, but not always.
And this, inevitably, comes back to the Second Amendment.
You see, at San Bernardino they had a nice "gun free" zone -- an office party for government employees at which nobody was armed -- except, of course, the two shooters. The assault wound up being terminated before everyone was murdered only because one of the shooters either got unlucky with a ricochet or was a crappy shot and hit a fire sprinkler, setting off the fire alarm, and then their lack of skill at bomb-making kept others from death as their IEDs failed to explode despite the remote for them allegedly being found in their rented SUV.
There is of course no guarantee that if some or all of the people at that party had been armed the outcome would have been different. It might have meant nothing. But then again when faced with evil it is not a question of guarantees, it is a question of time before an effective response can take place.
Watch an MMA fight or boxing match for one 2-minute round. That's the minimum amount of time you can expect to pass before the police can show up if something bad happens right here, right now wherever you are.
Contemplate the pounding that you would take from mere fists during that intervening time; as an untrained individual would you be alive? Now consider that the person doing the pounding isn't using fists, they have acquired a gun -- whether legally or not.
What is the only thing you can do to improve your odds?
There is only one thing you can do and you know damn well what it is. Carry a gun yourself as a means of attempting to deter evil should the quite unlikely but possible gravest extreme arise.
If you do not support and are not willing to stand and demand a literal, word-for-word recognition of the Second Amendment as written it is your responsibility to explain why in the comments, using only arguments that can be validly addressed and either confirmed or refuted through logic.
There are few more self-destructive things a human can undertake than denying provable facts.
Only a few things qualify as "provable facts", and it is important to separate out hypothesis, theory and opinion from fact. Mathematics and physics are two areas of discipline that have massive amounts of their subject matter within the realm of provable facts.
Honest people call the parts of these disciplines that are within the ability to prove laws. Unlike laws made by men that are often ignored these are simply inviolate -- period. The laws of thermodynamics prohibit a "free lunch", basically; they state that while energy may be transformed from one type to another, and other parts of physics make clear that matter and energy can also be transformed you never get out everything you put in; there is always loss to the environment that you can neither use or avoid. Newton's laws of motion tell us how momentum, mass, force and velocity interact; how energy, in short, is carried and dissipated in an object that moves or is contacted by one that is moving.
Likewise the laws of mathematics tell us that 2 + 2 = 4, that 2(x + 3) = 2x + 6, that the square root of 9 is 3 and more. These are called laws because every single time the same result will be obtained -- here, there, on Mars or somewhere in Interstellar space.
Here's the reality of money:
Money is only valuable because it is, in relative terms, scarce. Money is really nothing more than a unit of accounting that's convenient in the physical world.
We could (and perhaps should) account for production in the physical world, and its value, in some invariant physical unit. I happen to like BTUs (or Joules) of energy required to produce a thing or contained within a thing, because it is an invariant and therefore not subject to tampering. Accounting for it under production rather than the recoverable (e.g. "stored") energy in a good or service means that improvements in productivity (e.g. discovery of a new, "cheaper" way to make gasoline, for example) makes the value of each unit (a gallon, for example) less and accessibility greater. This is what productivity improvement is supposed to do -- it advances the common benefit to everyone because it makes useful goods and services more accessible to everyone.
So let us assume that among everything in the economy there is 100,000 Joules of energy represented in a given period of time. Yes, I know this is a ridiculously small number, but adding more zeros doesn't change anything other than scale, and 100,000 is a nice convenient number.
We will also assume that there is $100,000 -- that is, one hundred thousand dollars, in said economy.
It would be reasonable to assume that the average cost of transacting for one Joule of represented production of a good or service would be one dollar. There would be items in the economy that are of relatively more value in terms of dollars-per-Joule, and some with less, but on average that would be the expected clearing price.
Now let's remember that money is fungible (that is, exchangeable) with credit (which is just another word for "debt"); that is, a promise to make something tomorrow. They both are accepted in the economy as exactly the same thing, even though they demonstrably are not.
Now here's the problem: Bill and some others (e.g. the MMT charlatans) assert that the government can simply create money.
But that's not true. The "creation" he refers to is in fact credit because the government did not first produce anything.
Consider what happens if you double the amount of "money" in the system from $100,000 to $200,000, given that 100,000 Joules of production takes place.
The average clearing price of a good or service produced with those Joules will double from $1 to $2. It cannot be otherwise because equations always balance; this is what the laws of mathematics tell us.
Now does it matter whether you borrow or "create" in this regard? Only in one respect: The prospect of having to repay (potentially with interest) is a check and balance on borrowing that is utterly absent if you "create."
But in terms of the economic impact today, at the point in which you put the new "money" into the system the two acts are exactly identical.
Both do immediate violence to the purchasing power of every unit of currency or credit that exists in the system at that instant in time.
It cannot be otherwise because the laws of mathematics, which state that equations always balance, are not suggestions!
As a consequence there is no possible way for the government to spend more than it takes in via taxes without distorting the economy and destroying the purchasing power of the people.
"Creating" is exactly the same thing as shaving coins -- it is counterfeiting and is economically indistinguishable at the moment of the act from borrowing by emitting unbacked credit.
Borrowing, in point of fact, other than the interest, actually has a benefit in that when the amount borrowed unbacked is repaid it is destroyed and thus the inflationary impact is reversed. Of course in today's world we don't repay government debt ever and so that reversal never takes place, but that someone cheats doesn't mean that the underlying premise is wrong -- it just means you cheated.
Further, when rates are near zero there is no difference economically between "creating" and "borrowing"; it is only when rates rise that the difference shows up. For this reason if "creating" would work we'd already have proof since we've "created" more than $8 trillion by the Federal Government alone since 2008 and yet there has been no strong, positive economic recovery impact.
The mathematical facts are that the only way to stop the destruction of purchasing power and thus economic damage is for the government at all levels to stop spending more than it takes in -- period.
Denying the laws of mathematics makes you either a fool or a charlatan.
The content on this site is provided without any warranty, express or implied. All opinions expressed on this site are those of the author and may contain errors or omissions.
NO MATERIAL HERE CONSTITUTES "INVESTMENT ADVICE" NOR IS IT A RECOMMENDATION TO BUY OR SELL ANY FINANCIAL INSTRUMENT, INCLUDING BUT NOT LIMITED TO STOCKS, OPTIONS, BONDS OR FUTURES.
The author may have a position in any company or security mentioned herein. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility. Market charts, when present, used with permission of TD Ameritrade/ThinkOrSwim Inc. Neither TD Ameritrade or ThinkOrSwim have reviewed, approved or disapproved any content herein. The Market Ticker content may be excerpted online for non-commercial purposes provided full attribution is given and the original article source is linked to. Please contact Karl Denninger for reprint permission in other media, to republish full articles, or for any commercial use (which includes any site where advertising is displayed.)
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.
Market charts, when present, used with permission of TD Ameritrade/ThinkOrSwim Inc. Neither TD Ameritrade or ThinkOrSwim have reviewed, approved or disapproved any content herein.
The Market Ticker content may be excerpted online for non-commercial purposes provided full attribution is given and the original article source is linked to. Please contact Karl Denninger for reprint permission in other media, to republish full articles, or for any commercial use (which includes any site where advertising is displayed.)
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.