Competition and Healthcare – Is Capitalism the Right Mechanism?

The government is the right institution to pay for and hold the healthcare industry accountable (single payer).  Competition is useful in many areas but not in who should collect and pay for health coverage which we all need.  A single payer system is the most streamlined and will provide the greatest simplicity and uniformity.

In any specialized or emergency healthcare sector the effectiveness of competition breaks down.  You are at the mercy of the provider when you get the bill.  It is absolutely necessary that the government educates itself and oversees those that provide these services.

Capitalism is not great with dealing with the elderly, the sick, the poor, preexisting conditions etc.  That’s one reason why the role of the state is important in our society.  Setting up a caste system around medical services is not who we are and goes against an industry built around compassion and helping others. 

Bureaucracy

A bureaucracy is a group of people communicating and working around a set of standards.  Its why your McDonalds burger is similar wherever you go.  It is also why we have clean air and water.  It is neither good or bad.  Communication, learning, and accountability can all be stressors.  You can work to improve the system, even then some will complain because problem solving effort is required in the change once they have one system down.

In time the bureaucracies get more efficient at enforcing and overseeing existing rules and the entities they govern get trained on what to do.  This can lead to decreasing funding for an agency and seeing not much immediate effect but it is the thought process and mentality that are important.  Crippling an enforcement agency can also lead to unpreparedness in a disaster and shortcuts gradually taken more and more by companies.

The Size of Government

The non-military part of the government is less than a quarter of what the government spends.  Most of the money goes to the military or seniors (which we would spend privately anyway if the government wasn’t).  It is not the fault of the government that the industrial revolution happened resulting in a much more urban/suburban culture and industrialization.  This required the government to greater plan cities, oversee worker safety, empower laborers with management, manage increased globalization, and rule on what we put into the sky, earth, and waterways.

We all want less stressors, but it is human innovation that has dictated the size of the government.  The more problem solving the government does the better it is, no shortcuts. 

A Proactive government is empowering. It means if you do your homework and propose a better way, it will be implemented.  Unfortunately, the burden of proof is always on the non-cynical caring person such as the safety net, taxes, helping other countries, and making peace.

Government Cynicism

If someone asks you what do you “really think” of this stressor?  You are supposed to be cynical but if you want to be anything in life, you will be the one putting stress on others.

If you buy into your family, your holidays will be better.  If you buy into a team, your team will exceed expectations.  If you buy into your government, you will have peace and be able to work positively on things that matter.

Many arguments against the government that take on a cynical tone involve cherry picking, twisting facts, taking things out of context, and making mountains out of molehills. Human beings within the government are as tempted and make mistakes as any of us, but the role of government as the conscience and guider of civilization is extremely important.

The stressor isn’t big government its innovation.  A proactive government is empowering.

How the Government Actually Does Budgeting

There is goodwill and homework type budgeting which includes doing homework on all the things the government does and understanding the more mental work put in by the top, the more efficient the government will run.  Resources are allocated according to need and understanding.  Appreciation is given to the necessary stress the government puts on society to ensure we are accountable to each other and the world.  It is not the government but human innovation and values that increase the size of government.

There is also emotional budgeting focusing on temptation….giving as much money to convenience (tax cuts), over funding pride, power, and security (military, other security) and defunding vulnerable diplomacy, and accountability and stress (regulators), and cynicism to any force of goodwill (safety net, foreign aid).  You score “wins” by taking money from these small entities and avoid large budget items that require courage.

Forward thinking companies make an extra effort to hear all ideas, accept risk and failure, and protect the pride of those that think different, but our congress is an institution of high pride fear with many seeking to take down anyone that may argue for change or resources or tell us what we need to hear.

Correcting for 40 Years of Under Taxing and War

To be blunt a correction needs to be made for what has happened over the last 40 years.  We need to deter this cycle from occurring for the next 40 years.  The promises of increased growth to pay for these tax cuts never came true and the fortunes created as a result of these tax cuts are not just.  The debt that has incurred never went to some foreign entity we now owe our labor too; it went to the top of the income ladder.  We have yet to seriously address tax issues to the increased efforts in the middle east which have cost $6.4 trillion according to the Watson Institute for International and Public Affairs “United States Budgetary Costs   and Obligations of Post-9/11 Wars through FY2020: $6.4        Trillion.” [8]

If for example if we took $5 Trillion of the $36 Trillion in net worth of the 1%, we wouldn’t force them to sell things and crash markets.  Their most liquid assets would just go to our treasury.  Their stocks, bonds, and real estate would be assets of the treasury.  US treasury bonds would obviously just be zeroed out.  The treasury can manage the assets as it sees fit from there. 

Invoice Coming Due

  • Reagan Tax Cuts $7.1 Trillion
  • Clinton Discount $-1.9 Trillion
  • Bush Tax Cuts $2.1 Trillion
  • Middle East Wars $6.4 Trillion
  • Wall Street Bailout $0.7 Trillion
  • Trump Corporate Tax Cuts: Tab Ongoing

US Debt Clock

  • $23 Trillion in January 2020 (prior to coronavirus)
  • $187k per taxpayer?
  • …depends on how much you think the 1% owe from their $36 trillion in assets

Alternatively, if we actually collected all the taxes owed to the treasury each year and the tax gap was 0 instead of ~2-3% of GDP, the debt would be near 0… 2-3% x 40 years is 80-120% of GDP.

Better rules need to be put in place for government borrowing at federal, state and local levels since it is an obvious temptation and laws and rules are meant to combat temptations.

References

8. Neta C. Crawford, Watson Institute, Brown University. United States Budgetary Costs and Obligations of Post 9/11 Wars through FY 2020: $6.4 Trillion. November 13, 2019.

Wrongs of the Last 10 Years in Budgeting

The problem with just cutting taxes is it’s a slow wealth transfer.  It takes time to take the government’s money so they got a little smarter in 2017 with cutting the corporate tax rates.  Just like selling a business or some revenue stream you get an instant pay out.  Where do rich people put their money? A lot of it in public or private companies. By taking a ~$200 Billion revenue stream away from the treasury companies are able to take home 79 cents on the dollar vs 65 cents, an increase of (79-65)/65 = 21.5% so now your company has 21.5% more profits without doing any work and they are all worth 21.5% more!

Everyone enjoyed the stock market going up over 30% in 2017 leading to Trillions in private profits. Unfortunately, the companies have already appreciated in value, the cake has been eaten and that cut doesn’t help stocks go up in the future.  Just a $200 Billion hole in tax revenue remains.  Trends in US Unemployment didn’t change after the tax cut.

Unemployment Trends Remained Unchanged After the Tax Cut.  The downward trend was mostly because interest rates were set near 0 after the housing crisis.

  • Donald Trump “I think we can go to 4,5, even 6%” (2017 comment on GDP Growth from the tax bill)

……2 Years Later……

  • Federal Open Market Committee projects 2% GDP Growth in 2020 and 1.9% in 2021 as of September 2019, below historical averages (before correction for the coronavirus).

The Story

It begins with holding America hostage during the last 6 years of a democratic president

  • Shutdown the government
  • Use debt ceiling to hold an enemy party president hostage
  • Convince the public both sides are to blame
  • Crank government cynacim up to 11
  • Courage/work to discuss pay fors
  • Honest discussion of where the debt came from

Then you need to change the congressional rules for taxing by implementing dynamic scoring which says the economy will grow (we will work harder) if corporations get tax cuts.

Then go for the cookie jar once in power

  • The central item of the tax cuts and jobs act is to take a $200 billion revenue stream (decrease corporate taxes from 35% to 21%) away from the treasury and into corporations (like selling a business you trade a revenue stream for a one time payout), artificially increasing their profits and delivering a massive 1 time bump in stock prices.
  • Corporate executive pay and buybacks skyrocket.  Economic growth not so much.  The federal open market committee predicted 2% GDP growth for 2020 and 1.9% for 2021 in the fall of 2019 (before correction for the coronavirus).

Try to pay for it by going after healthcare

  • The American Health Care Act Fails to Pass by One Vote (2017)

Don’t share anything with your base

  • Individual tax cuts fade out and become tax increases by 2027
  • Corporate tax cuts are permanent

Spite the blue states if possible

  • State and Local tax deduction capped at 10k hurting high tax (dense population) states

What do you do after raking in trillions you didn’t lift a finger for? Complain on the taxes on these gains of course

After your stocks/bonds/real estate go up from corporate tax cuts you pay capital gains tax on them when you sell them.

  • “To Keep the Economy Growing, Index Capital Gains to Inflation” – Article by Ted Cruz, Grover Norquist
  • “There is a sore spot” on capital gains – Ryan Ellis
  • “Tax Cuts 2.0”

Over 80% of capital gains tax cuts go to the 1%.

Try to get rid of estate taxes to ensure rich estates rule for generations to come

  • The Tax Cuts and Jobs Act doubled the exemption for large estates to over $20 million in untaxed estate income for couples

Put millionaires on the honor system for taxes

  • Audits of millionaires are down 80% since 2011 (tea party takes over congress) and in line with the audit rate of the poor

(from ProPublica analysis of IRS data)

  • The tax gap (uncollected taxes) is estimated to be over $500 Billion per year

(According the IRS analysis of 2008-2010 tax receipts in 2019 dollars)

Give mega corporations tax breaks on overseas cash hordes

“The Tax Cuts and Jobs Act creates a historic opportunity for American companies to bring capital back home from overseas to invest in our domestic economy and create jobs for hardworking Americans” – Steven Mnuchin (Treasury Secretary)

  • Tax on overseas earnings decreased to 15.5% on cash or cash equivalents and 8% on the remainder
  • In 2004 President George W. Bush allowed corporate cash hordes back with a low tax rate of around 5.25%
  • Corporations are well trained now to horde overseas cash and wait for the next republican takeover to cash out

Relish in the positive asset “Business News”

(For a year anyway)

Then decide you are going to grade yourself based on how the stock market does as a result of taking money from the treasury

Steve Mnuchin: We “absolutely” view the stock market as a report card (US Treasury Secretary)

A+

Priority List

  • Long Term Thinking
  • Middle Class Incomes
  • Increase Economic Output
  • Short term asset pumps ü
  • Take credit for existing unemployment trends ü

Ignore Reality

If you lose in 2020 Rinse and Repeat

References

U.S. Bureau of Labor Statistics. Databases, Tables & Calculators by Subject. (SEAS) Unemployment Rate. More Formatting Options. All years, All time periods. https://data.bls.gov/timeseries/LNS14000000. Accessed June 20, 2020. (Numbered 3 in figure above)

Image References

United States GDP and Unemployment History

The growth of the gross domestic product (GDP) minus inflation or Real GDP is a good indicator of the growth of the economy.  Asset prices are not the economy.  Debt is not the economy. The hard work of producing goods and services is.  The combined efforts of everyone’s physical labor and brains improve the quality of life year after year.  Does that mean it is always desirable to grow the economy at any cost? No, we may desire less work or different work for quality of life or refrain from some production due to environmental impact.

As safety net programs have been implemented, presidents have changed, environmental and safety regulations implemented, and healthcare improved, the economy has not changed drastically.  As long as the incentive to work hard the next day is still there the government has a lot of leverage and say on what our values are.

There is little evidence to say people work harder or less when taxes go up or down.  Tax laws pick winners and losers or we can add leverage to the national debt in exchange for higher individual net worth.

The other big statistic is jobs.  People don’t like threats to their jobs, but that threat is far greater from a dynamic capitalistic system than from government activity.  Most job losses are gained elsewhere as humanity developed better transportation, the electricity grid, more tourism, the computer, the internet and so on.  Unemployment has fluctuated very little with regulations, taxes, and safety net programs.

The .com, housing, and now the coronavirus have all spiked unemployment.  In the cases of .com and housing the economy was positioned around a certain asset and then that asset wasn’t what we thought it was.  In time the economy adapts.

The federal reserve has a lot of power over unemployment based on how it sets interest rates.  Though there is a lag as businesses have access to more money and then decide to hire.  The reason for higher interest rates is to control inflation.  Exceptions are usually asset bubbles like in 2000 and 2008.  The economy repositions naturally in time.

People will continue to want to trade each other for food, health care, housing, things etc…there is nothing to fear on the economy falling off some cliff as long as the government is empowered to save the day if needed.  The economy has transformed itself through many technological innovations, wars, infrastructure initiatives with maintaining consistent growth.  Economic growth mostly comes from productivity growth, improving processes, developing technology etc. Once a new technology is developed or a manufacturing process is improved, we don’t lose that ability, we work on the next one.  This is not to say asset bubbles can’t happen, but asset prices aren’t the economy.  When an asset isn’t worth what we thought it was (.com and housing bubbles) that industry loses jobs but in time the slack is picked up.

The economy is our ability to produce goods and services tomorrow to satisfy our needs.  Assets are things that can be traded in for goods and services.  In truth, if everyone owns a lot of assets, it puts a strain on labor that needs to work to support those trading in assets for labor.  They also have to do more work to buy anything.  There is always the temptation for us to create asset bubbles but it wouldn’t hinder our ability to take care of each other.  The government can always create demand, deficit spend or print money. 

Remembering the Great Depression

“With impressive proof on all sides of magnificent progress, no one can rightly deny the fundamental correctness of our economic system.”

Herbert Hoover

(Republican President during the Great Depression)

“No party ever accepted a more difficult task of reconstruction than did the republican party in 1921.  The record of these 7 ½ years constitutes a period of rare courage in leadership and constructive action.  Never has a political party been able to look back upon a similar period with more satisfaction.”

Herbert Hoover

Republicans continued to emphasize balanced budgets and protecting the rich after the economic collapse.  Unemployment continued to rise through the remainder of their time in power from 1929 to 1933.  The new deal programs helped recover employment but were argued by many not to be enough.  Ultimately the depression ended with world war II which included massive government spending, high taxes, wealth of the rich wiped out, and government dictating where production goes.

“Competition has been shown to be useful up to a certain point and no further, but cooperation, which is the thing we must strive for today, begins where competition leaves off.”

Franklin D. Roosevelt

References

  1. U.S. Bureau of Economic Analysis. Gross Domestic Product. Supplemental Information and Additional Information Tab. Current-Dollar and “real” GDP. https://www.bea.gov/data/gdp/gross-domestic-product. Accessed June 7, 2020.
  2. U.S. Bureau of Labor Statistics. Labor Force, Employment, and Unemployment 1929-39: Estimating Methods. Table 1 Total Labor Force Classified by Employment Status, 1929-1947. https://www.bls.gov/opub/mlr/1948/article/pdf/labor-force-employment-and-unemployment-1929-39-estimating-methods.pdf. Accessed April 7, 2020.
  3. U.S. Bureau of Labor Statistics. Databases, Tables & Calculators by Subject. (SEAS) Unemployment Rate. More Formatting Options. All years, All time periods. https://data.bls.gov/timeseries/LNS14000000. Accessed June 20, 2020.
  4. Macrotrends.net. Federal Funds Rate – 62 Year Historical Chart. https://www.macrotrends.net/2015/fed-funds-rate-historical-chart. Accessed April 7, 2020.

Globalism / Protectionism / Diplomacy / Peace

Peace is hard work.  It is great to say you want peace but what does it take?  There are naturally discussions among countries and disputes over resources, territory, religion, economic systems that make it hard to have peace.

The Internal Struggle

It is often not the external part of diplomacy that is the hardest but the internal struggle.  The ability of each country to sell caring about the world, vulnerability and effort, to its own people and against those that would try to usurp them internally using “us first” and “winning” type language.  The art of diplomacy, having frank discussions and maintaining respect is an art that is somewhat well understood, but can fall apart from internal pressure.

Value Diplomacy or Tribal (Us vs Them)?

Value diplomacy is creating a culture of agreed upon values upon which the players or tribes agree to.  Combating aggression, helping those that need help, global sustainability are some of the values countries come together on. 

Tribal diplomacy is about the pride of the tribe.  You want to protect the pride of your tribe from any insecurity or shame and you want to win for your tribe by imperialism, winning every deal, and creating a need for spite around every disagreement.  In any resource disagreement the other side is on its own.

There is a temptation to use nationalism, racism, religion, economic system etc. to divide and make another tribe the enemy.  To ascend the hierarchy in your tribe by putting your identity in vilifying the different and unfamiliar.  You unite your tribe around the enemy.

Value diplomacy is central to peace but it requires brainwork and courage.  Other countries might call you a hypocrite and point out wrongs in your history.  You might get trolled from the insecure.

Globalism / Protectionism

We are all part of groups or tribes from your family, to your work, to your community, to sports teams you cheer for.  In politics we can visualize our political reality as groups within groups.

#1 >>> Family >>> Community >>> Region >>> Country (where armies are) >>> Earth / Humanity

Protectionism – doing whatever is self-serving for your group and ignoring the at large collective.  A culture of self-serving doesn’t stop at the smaller group, it stops at everyone looking out for #1.

Globalism / Collectivismeach smaller group is a supporter of the larger group.  The larger group is expected to both help the smaller groups when they are in need as well as ask of the smaller group when the larger group or others are in need.

What kind of world does each mentality lead to?  Do we want to create a culture of coming together in the face of fear or splintering?  What kind of unity is it really to bond with another group over a common enemy but if there is any resource dispute with that group you go for each other’s heads?

Some use the term globalist as slander, but in truth most of those willing to give for earth / humanity are of the same mind as those willing to give for country or community. 

In moral conflicts globalists are the aggressor.  Standing up to aggression, environmental causes, human rights, refugees.  In pride, tribal, or resource conflicts protectionists are the aggressor such as wars over religious/economic beliefs, oil, or revenge.  The American protectionists during WWII were strictly isolationists (no desire to save the world from aggression) until the United States was attacked at pearl harbor.

In a true hour of need we should not look to the allies we have made that push up our pride and play to our fears with us.  It is those countries telling us to behave ourselves and that stand for hard values that may be there.

Globalism begets globalism, protectionism begets protectionism.

This is not to say a country shouldn’t stand for its own interests, just like in your family you stand for yourself of course, but it is a culture of mental engagement and goodwill.

Countries with transparency into their decision making with active debates and elections will be trusted more than those with a concentration of power, a one-party system, a dictatorship that doesn’t expose itself to the vulnerability of public discourse.

Image Reference

Shutterstock: ChristianChan

Giving Hope to What We Can’t See

We all interact and see interactions of people willing to act in goodwill with people they can see.  If you know somebody’s story, see their face, you are more apt to help them.  If they look familiar to you, worship the same religion, abide by the culture you will be more giving.  A service industry worker will do better receiving tips than a flat pay.  If someone in your life is struggling you may help them based on their needs and abilities.

But in society we also need to give hope to those we can’t see.  Humanity is generally good at helping those within its own village but when natural economic conditions segregate society, dealing with forced goodwill (taxes), or dealing with goodwill outside the circle of the army (other countries) goodwill is not as easy to come by but it is still important.

Every year the United States government spends more than charities do on goodwill including Medicaid, food stamps, unemployment, housing etc.  It also subsidizes charitable giving.  This doesn’t include Social Security or Medicare because those are just more dignified ways of taking for our seniors than everyone doing it privately and everyone may benefit from these programs. 

It is impossible to tell everyone’s story and it can be easy to create cynicism about forced goodwill but what kind of culture and society does hope to the bottom create or cynicism to the bottom?  How meaningful is cherry-picking or otherwise creating cynical stories about government goodwill?  Is it realistic that voluntary goodwill can plug all the needed holes alone?

The government does a lot of heavy lifting on goodwill and charities fill in the cracks, together this goodwill is an important part of who we are, our soul, and what we wish the country to stand for.

For alongside our famous individualism, there’s another ingredient in the American saga. A belief that we’re all connected as one people.

If there is a child on the south side of Chicago who can’t read, that matters to me, even if it’s not my child. If there’s a senior citizen somewhere who can’t pay for their prescription drugs, and has to choose between medicine and the rent, that makes my life poorer, even if it’s not my grandparent. If there’s an Arab American family being rounded up without benefit of an attorney or due process, that threatens my civil liberties.

It is that fundamental belief, it is that fundamental belief, I am my brother’s keeper, I am my sister’s keeper that makes this country work. It’s what allows us to pursue our individual dreams and yet still come together as one American family.

For alongside our famous individualism, there’s another ingredient in the American saga. A belief that we’re all connected as one people.

E pluribus unum. Out of many, one.

President Barack Obama (2004 Convention Speech)

Image Reference

Adobe Stock / Ipopba

Pulling Society Toward Goodwill

Getting people to use their brains to associate positive aspects of society with doing the right thing.

Humility – looking past the initial dagger to one’s pride and seeing the bigger picture.

Caring / Love – don’t exist without accepting others and ourselves own faults.  A judgeless relationship.

Hope – taking the vulnerable or hard work position when faced with unknowns such as doing something new, relationships, dreaming, safety net.

Joy – a group putting in work or giving into hope and having it come to fruition.  Accepting one another.

Engaging – doing brainwork to understand where each other is coming from and acting in goodwill.

Sportsmanship – we like to compete for earned pride but we also protect the opponent’s pride.  Games of pride make us feel alive but they should all exist under some moral fabric.

Working Pride – pride that comes from hard work, accomplishing something over time.

Education – putting in brainwork to accept the right answer over the temptation.

Respect / Manners – putting in work to raise society up and away from crudeness, grumpiness, boys club etc.

Courage / Honor / Integrity – facing fear for the collective, overcome convenience and toward doing the right thing.  Honor doesn’t exist in a society that refuses to accept shame.

General Work – putting ourselves to work (viewed as attractive) to avoid making hell at the expense of others, unattractive laziness, gossip, judging.  Even in biblical times there are warnings of undesirable outcomes from idleness and gossiping.  With communication now at hyper speed, news everywhere and social media everywhere it doesn’t lead us to putting our best foot forward always.

Energy – The end of slavery, the environmental movement, civil rights, women’s right to vote, 40 hour work weeks, worker safety, a progressive tax system, food stamps etc. do not happen by themselves.  They are made to happen.  It takes both energy in the form of activism, free speech, political movements and a good clear message and educating others on what you want to change.

“Things don’t happen, they are made to happen”

John F. Kennedy

The key to a successful society is to not let our emotions control us.  In many cases we have to use our own moral compass to overwrite an initial fear, convenient answer, or desire to avoid a problem.  Like a defiant child maturing and realizing some of the joys that can be had in buying into the work needed to be a contributing member of the family or team, there is no reason we can’t move past this phase into something more hopeful, more joyful.  A group united in its enemies of compassion and foreignness is not a group worth existing in.

Image Reference

Shutterstock: STILLFX