- the source for market opinions


July 18, 2017 | The Evil Genius of Obamacare

Is an American author of books and articles on economic and financial subjects. He is the founder and president of Agora Publishing, and author of the daily financial column, Diary of a Rogue Economist.

POITOU, FRANCE – “GOP reeling after healthcare collapse,” reads a headline on a political website.

From The Hill:

Republicans offered competing ideas for what to do next on healthcare Monday night, now that the current ObamaCare replacement effort has fallen apart.

Senate Majority Leader Mitch McConnell acknowledged late Monday that the chamber’s current approach would fail after two more senators announced opposition to the current healthcare draft.

Sacred Work

Yes, the Senate took up its sacred work this week: getting re-elected. In the camera or out of it, the pols face two great threats.

On one side are the zombies, folks dependent on the feds who trade their votes for small handouts. Within the next 10 years, there will be more than 200 million of these people – if they ever rise up, there will be more than enough to unhorse every senator in Washington.

On the other side are the Deep State cronies. Fewer in number but vastly better supplied with cash and connections, cronies are dangerous.

If they don’t get what they want, they could unleash their attack dogs and throw a little red meat (indiscretions… uncovered and traded for favors by America’s 17 different “security” agencies) to the ravenous press.

They could bankroll another candidate back home… or withdraw invitations to speak, lobby, and join cushy boards and think tanks.

Cronies and zombies have more or less the same objective: to keep the medical care bamboozle – which is programmed to double in size in the next 10 years – in business.

Many senators rightly saw that the proposal to tinker with it wouldn’t have made much difference in the big scheme of things. It would only trim spending over the decade from $8.2 trillion to $7.7 trillion.

The system will go broke even with the proposed changes. Better not to touch it at all, they reason, rather than risk the ire of voters or insiders.

Zero for Six

As we get older, we become more sympathetic to the aches and pains of others.

Neck bone to ankle bone, and everything in between, yearns for a solution for what ails it. Surely, spending 18% of GDP on medical care ought to yield some miracle salve.

But it doesn’t work that way. As we showed in our book Hormegeddon, more is only better… to a point. Then the law of declining marginal utility comes into play.

You eat your first cream puff dessert. It is delicious. So you have another. It is okay. By the time you are on your fifth, you are feeling a little sick.

Spending more on medical care doesn’t necessarily make people healthier. On the contrary, it may squander resources, leaving them poorer… and more vulnerable.

Or you may be carried away by one of the estimated 1 million medical errors per year.

That’s at least part of the reason why the U.S. now spends more than any other nation on medical care but has the worst health statistics.

Donald J. Trump won the White House, proposing six changes to the way the empire does business:

  1. Stop America’s losing wars in the Middle East.
  2. Cut back the bureaucracy.
  3. Reduce taxes.
  4. Repeal and replace Obamacare.
  5. Build a wall to keep the Mexicans out.
  6. Negotiate “better” trade deals.

So far, he is zero for six. But it is still early in his administration.

We didn’t think he would do any of these things. His focus was too indistinct, vainglorious, and fleeting. And besides, the Deep State has too firm a grip on Washington. It probably has him by the cojones, too.

Too bad. Because the foreign wars are an expensive disaster. It would have been a pleasure to see the looks on Raytheon lobbyists’ faces had “The Donald” brought them to an end.

Bringing the bureaucracy to heel was another worthy goal. A shame the president couldn’t follow through on it.

And who wouldn’t like to see taxes reduced?

Quack Cure

If we had our druthers, we’d repeal Obamacare, too. Tinkering is not enough.

Because the real problem won’t be solved by turning a few screws and tightening a few bolts. Better to throw it on the scrap pile.

The program is badly designed. It suffers from the same flaw as all the feds’ win-lose deals: The one who benefits (or thinks he does) is not the one who pays.

Naturally, the beneficiary wants as many miracle drugs and quack cures as the medical-pharmaceutical industry can invent. At someone else’s expense, of course.

Costs rise. Administrators multiply. Consumers are insatiable. And cronies become richer and more powerful.

The evil genius of Obamacare was to move the bulk of the expense from individuals, businesses, and state governments… where they are subject to more restraint… to the feds.

There, expenses are almost impossible to control because the feds can borrow (and print) all the money they need – thanks to their fake-money system. As far as the zombies are concerned, the drugs and treatments are free.

Expenses can rise almost indefinitely… until the whole system goes broke.

Win-Win or Lose

Which brings us to our simple remedy: Eliminate the win-lose deals.

In medical care, that means abolishing Obamacare… with no replacement.

Let people spend their own money. If they want, they can work out deals with insurance companies or with care providers on whatever terms they choose.

No tax breaks. No restrictions. No mandates. No cronies. No zombies.

Liberate the insurance providers, the medical industry, and consumers, too. Abolish all federal agencies with “health,” “food,” or “drug” in their names.

The federal government has no more business meddling in the medical industry than it does meddling in Afghanistan.

Except for security (the only essential business of government is the protection of its citizens, along with their rights and their property), this approach would work for everything.

Want better schools?

Get the feds out of the classrooms.

Want a better trade deal?

Keep the feds away from the negotiating table.

Want a better economy?

Tell the feds and their central bankers to butt out.

Without the feds to boss people around, consumers and producers would be on their own. They would have to work out their own deals on a win-win basis. No force or violence involved.

Win-win works because both sides must cooperate.

The medical industry, for example, would provide the best service it could, hoping to score as much of the consumers’ money as possible.

The householder, wracked by pain and worry, would surrender his money as he pleased in return for services rendered.

Either side could walk away from the deal as it chooses. Neither may get exactly what it was hoping for. But at least it would get what it deserves.




STAY INFORMED! Receive our Weekly Recap of thought provoking articles, podcasts, and radio delivered to your inbox for FREE! Sign up here for the Weekly Recap.

July 18th, 2017

Posted In: Bill Bonner's Diary

Post a Comment:

Your email address will not be published. Required fields are marked *

All Comments are moderated before appearing on the site


This site uses Akismet to reduce spam. Learn how your comment data is processed.