Trump: Yeah, I Mean It
The Market Ticker - Commentary on The Capital Markets
2017-03-15 21:57 by Karl Denninger
in Editorial , 2416 references Ignore this thread
Trump: Yeah, I Mean It
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Look, this is math.

I don't want credit.  I don't care if you never admit you talked with me.

Seriously -- I don't care.  This isn't about glory.

It's about the Republic and its survival.

The arithmetic is clear.  It's irrefutable.  There's no discussion to be had.  It's fact.

I called this in the 1990s when I ran MCSNet.  I called it again in 2011 in Leverage.  I've been raising Hell about it since 2007 on this blog.  It wasn't hard and I claim no special knowledge or insight.  All that was required was reading the MTS and either a $3 calculator or a piece of paper and a pencil.  An act, I remind you, that every CEO does every single month -- that is, reading the financial statements.

Look, I get it.  The political side of dealing with this is hard.  You're going to******off a lot of very powerful and wealthy people.  They're going to get very angry.

The bottom line is this: You have the ability to put a stop to all the medical scams now -- right now -- using existing law.

If you don't then the nation fiscally dies.  Ryan's bill or no bill; doesn't matter.

If you do it then "insurance" is something that 95% of Americans need only for catastrophic events because the cost of medical care will fall by at least 80% and for most items by 90% or more.  Said insurance will be cheap - under $100/month for a family, and about $25-50/month for a single person.

Nobody will need "insurance" for routine events because they will be able to pay cash.

Birth control will cost under $10/month.

Routine labor and delivery will cost under $1,000.

This isn't hyperbole -- it's fact.

We know this is true.

We know because The Surgery Center of Oklahoma performs cardiac bypass surgeries all day long for $10,700, complete, no surprises, no extras including complications that may arise -- done.  $10,700, period.

The hospital across town charges five to ten times as much.

But even the prices at The Surgery Center, nice as they are by comparison, are chock-full of monopolist price fixing. Why? Supplies, devices and equipment are all provided under monopolist, price-fixed schemes for starters.  We know this because the same bypass surgery is about $2,000 in India where there is no such collusion, the doctor was trained in the United States and the supplies and devices are the same as in the US but unlike in the US the suppliers have to compete for business.  The difference is that in India competition reins because there is no hiding the cost, there is no extortion via "explanation of benefit" statements from providers and thus price reflects competitive pressure not only on cost but quality of service between providers.  Not surprisingly the complication rates in India for that surgery are lower than they are here in the United States.

You can find bills for routine childbirth from the 1960s -- including epidural, doctor and nursing charges, charges for care of the baby, three nights in the hospital, soup-to-nuts.  Inflate them by the CPI to today's price.  You wind up right around $1,000.  Routine, vaginal childbirth certainly hasn't changed in the last 40 years in terms of what's required.  The only "change" is that the medical establishment has decided to ramp the price by a factor of ten and screw you out of the money.  It has been able to do so only because there is no competitive option available to you.

In Tokyo, Japan, you can have an MRI done for $200 or less on a walk-in basis -- cash.  How much does an MRI cost here in the US?  You can literally fly to Narita from any major city in the US, take the NEX to Tokyo, have the MRI done and read then get on the NEX again and fly back for less than it costs to have the scan done in the United States.  There is a person on my forum who was just quoted over $5,000 to have said scan done here in the US yet he can fly to Narita round trip and have the scan done for $1,200 -- $1,000 of which is his airfare!

He can fly to Japan four times and have four MRI s done for the cost of one here in the US including four intercontinental airplane rides!  If the price of the scan being 20 times higher here in the US doesn't meet the definition of a scam would you please explain what would?

The entire medical system in this nation is a massive fraud and scam.  It's not a mistake, it's not an error, it's not an aberration it's a scam, it's robbery and everyone involved ought to be in prison.

You're out of time Mr. President.

You either do the right thing with regard to medical care, now, or this nation dies.

We either do the right thing or we let Paul Ryan and his buddies in the Congress, along with the doctors, hospitals and lobbyists and others screw millions of Americans -- a crime for which all of them should be indicted, tried, convicted and hanged.

You choose.

The math is clear.

The facts are clear.

The acts by which these individuals and corporations screw America are illegal. These laws, which include both ruinous civil and felony criminal penalties barring said conduct were passed over 100 years ago and are embodied in 15 United States Code.  They were challenged in the 1970s, the case went to the Supreme Court and the insurance companies and their buddies lost.

It's not a close call.

It's not a matter of opinion.

It's settled law.

You, as President, are able to direct the AG to enforce said 100+ year old law.  In fact, as head of the Executive branch of government, which is responsible for enforcement of the law, it is your job to do so.

Or not.

As Barack Obama didn't.

As Bush didn't.

As Clinton didn't.

As Bush before him didn't.

Four Presidents willfully, intentionally and knowingly refused to enforce 100+ year old law that would have immediately and permanently put a stop to the medical scams and the escalation of cost.

I get it.  This expansion from 3% to 19% of GDP over the last 30ish years has put a half-percent a year on GDP expansion that would not otherwise have taken place.  It has made "growth" look better.  It has wildly expanded the "market cap" of various public companies and their stock prices, including pharmaceutical firms and other health-related conglomerates, along with insurance companies.  It is politically enticing to continue doing it, except for one small problem: 10% expansion annually at 3% of GDP is 0.3% of GDP, a relatively small number both percentage wise and in terms of dollars.  At 19% it's 1.9% of GDP -- a much larger percentage and dollar amount, more than six times as much.

Oh, and this exponential growth, which your predecessors and now you have allowed, is also responsible for more than half of the Federal Debt, all-in, as that same expansion has added to Medicare and Medicaid spending.

I understand that collapsing health care from the current 19% to 3-4% of GDP will produce a huge recession.  It will produce a monstrous movement downward in the stock market.  That freed-up spending will go somewhere else in the economy and the recession produced will be quickly recovered from -- probably like 1920/21, in fact when the entire drop and recovery took less than two years.  The cost of operating a business will drop like a stone; not only will employee costs drop so will any firm's and individual's liability insurance where injury is a risk insured against.  From car insurance to business liability to trucking firms these costs will drop tremendously -- and be reflected in the competitiveness of American business.

This is not a matter of choice any more Mr. President -- other than on time.  We can either do it now, take the adjustment and become the most-competitive place to do business in the Western World or we can keep playing this game right up until our economy and budget collapses -- and collapse it will if you do not put a stop to this crap now.

Last fiscal year the Federal Government spent $1.417 trillion on Medicare and Medicaid, 9.3% more than the $1.297 trillion it spent the previous year. Last year was not an aberration; it was in fact very close to the historical expansion rate from the 1990s forward.  Spending has almost quadrupled on these programs since FY 1998.  Total outlays in 1998 were $1.651 trillion of which Medicare and Medicaid comprised 23%. Last fiscal year 37% of all fiscal expenditures were made on these two programs.  The ACA (Obamacare), for all of its warts, only managed to dampen that rate of expansion in spending for two years, after which it returned to trend.  At this rate of spending expansion within the next four years the government will attempt to spend $2.02 trillion on these two programs combined which will blow an approximately $600 billion additional hole, per year, in the deficit.  That will not be able to be financed since if it you ignore this issue it will be clear that within 10 years the government would try to spend $3.4 trillion per year on the same two programs -- an utter impossibility under any rational expectation for economic expansion.  The impact on private health spending has been even larger on a percentage-of-increase basis due to the blatant cost-shifting that is well-documented in myriad reports and is responsible for a large portion of the stunting of economic progress in America that has occurred over the previous two decades.

We can't keep doing what we've been doing Mr. President.  We cannot continue to allow the monopolists in the medical and health-insurance industries to continue to expand their influence -- and consumption of GDP.  Not for long.  Not for the rest of your first term, and certainly not into the second.  That's the math, like it or not.

Further, that math was either known to you or you would have known if you looked before you ran for President, which means you took the job without any ability to claim "surprise."  Thus, it is not only reasonable to expect you to resolve this problem now, in the present time (particularly given that you have tools as the head of the Executive to do so) it is also quite reasonable for the people to hold you personally to account as President if you don't.

We either admit to what we've been doing and stop the scam or it will overtake the economy and our ability to pay -- both in the government and otherwise, within the next 4-5 years.

We either stop it now or it destroys the economy, asset prices and the nation.

This isn't politics.  It's math.

The facts are what they are.  Demonstrating them is easy and irrefutable.

I'm a (long) day's drive from DC and about the same from Mar-a-Largo.

You name the place and time.

I'll be there -- with the laptop, charts and figures.

I have only one "ask" -- you listen and then act predicated on that which is obvious given the numbers -- politics be damned.

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