Wednesday, July 18, 2012
Obamacare is basically a variation of a sliding scale Medicare tax -- those above a certain amount pay more than the cost of the coverage, and that money collected is shifted to help pay for those who pay less than the actual coverage's value. This tax/premium is collected by and managed directly by the insurance companies according to the rules set down by the Obamacare bureaucracy. This bureaucracy has be granted the power to increase this tax/premium as well as modify the coverage provided without consultation with Congress.
For example, assume that the basic coverage might actually cost 12k for a family -- the actual cost put forth for those in higher incomes might be 20k. The eight thousand extra charged those over 100k is used to subsidized the coverage for average families of 50k who can't be expected to pay the $12,000 tax for their coverage -- that would be a 24% tax bill on middle class working families. Instead, middle class families may be expected to pay perhaps $6,000 (or 12%) in income taxes to carriers for their Obamacare coverage, with premium subsidies from those with higher incomes and various other taxes used to make up the rest of their coverage. Never mind that this is a huge 20% health care tax increase on those with 100k incomes... There aren't enough of those folks to bend the vote in other directions.
Clear as mud? Yep -- it's way too complicated for left wing CongressCritters or the PRESSSSident to explain without upsetting middle class families -- many families may only wake up to this huge Obamacare tax when they are formally drowned in Obamacare's first round of taxes/premiums.
To simplify this just think of Obamacare as a sliding scale Medicare tax for working age folks to pay for working class coverage, on top of paying Medicare taxes. How much your "tax" is depends upon your income.
Never mind that little of this is Constitutional as a tax or not...
Saturday, July 14, 2012
Instead of defining the various social marketplaces (education, health care, housing, pensions, etc) to be individually driven according to marketplace rules, with prudent self adjusting accommodations for those of limited means, politicians have tried to play Santa Claus buying votes for this or that Social Marketplace program, generally at the expense of future generations as well as the general prosperity of today’s economy.
Any solution that doesn’t address taking the centralized and special interest politics out of these various social marketplaces is doomed to be little more than a temporary fix on a long downhill slide into some sort of economic abyss.
There are plenty of options, as well as examples, of how the various social marketplaces can be redefined toward individually driven social marketplaces. Chile provides an example of how personalized retirement plans work. There are others. There are pockets of HSA health care coverage that are working fine in the US even given the straightjackets politicians have encumbered them with — if they’re not killed by Obamacare. There are other examples around the world such as Singapore. Similar sorts of models can be applied to education and other social marketplaces.
What is needed is recognition that government’s proper role isn’t to provide these various Social Marketplaces via some central command and control system. Government’s proper role is to define and implement individually driven, Social Marketplaces that are sensitive to marketplace whims, while also providing structures for those of limited means — with a natural unassailable check and balance against perverse expansion of ‘limited means’ to larger and larger populations via politicians buying votes as Santa Claus.
How the US got here is simple — During FDRs days, politicians determined that the Preamble to the Constitution was irrelevant and started to ignore the guidelines it provides for how the powers of the Federal Government are to be used. As a result, instead of promoting the general welfare, politicians have pushed providing special interest welfare over promoting the general welfare — this buys votes… They also ignore preserving liberty for our posterity (future generations) by buy votes today for goodies that future generations will have to pay back. Then there’s the shadow government of federal bureaucracies that basically write law without regards to Congress or the Constitution and the Preamble — taking liberty away one regulation at a time, many regulations each day…
Judges, politicians and many of the population have bought into this extra-Constitutional fantasy of a cradle to grave worship of big government that will solve all problems, big and small. It does no such thing — government is the problem, not solution. The solution isn’t smaller government, it’s developing and implementing individually driven compassionate social marketplaces. Individually driven social marketplaces will result in a smaller government that also provides access to a vibrant and healthy set of social marketplaces for all.
There are many forms of centrally controlled Social Marketplaces that don’t fit the classical definition of Socialism — Obamacare, for example, isn’t strictly socialized health care because the private sector carriers administer the programs the centralized federal bureaucracies largely define. The taxation/cost shifting to support coverage of those with lower incomes is in part paid for by redistributing overpriced premiums paid by those with middle to higher incomes. The overpriced premiums are basically a hidden tax on middle income folks on up, collected and managed outside of ‘normal’ government revenue and spending channels. Socialism it’s not, but a centralized social marketplace it is. At least it’s not the Mandated Employer Subsidized Socialism (MESS) that HillaryCare was all about.
Home financing via Fanny and Freddie are similar examples of federally centralized Social Marketplaces that have run amuck with a mix of private and public sector financial enterprises being puppeteered by federal bureaucracies and politics. The fiscal malaise we are currently stuck is in directly related to the failure of this Social Marketplace AND the continuing denial of the federal government playing the key role in it's bubble bursting.
There are plenty of other examples of centralized Social Marketplaces in the US and around the world that don’t fit classical Socialism but should be treated with equal distain. Then there’s public schools — they are basically socialized education save for how the funding is mixed between local and federal sources — trending towards more federal control, at least until the feds figure out they don’t have the money…