In a twitter conversation I was first instructed to "wake up" then to "elaborate." It's hard to elaborate in 140 characters.
In recent years "conservatives" have been waking up to tricks of the "progressives."
I put the words in quotes because I've discovered that terms have more than one meaning.
For that matter, I've learned that many of the tricks occur at a root level. People have been manipulating Americans for well over a century.
For example, progressives pulled the study of logic out of the curriculum over a century ago.
Progressives favor a system in which the elite manipulate the evolution of society through changes in language and style. Marx named his style of manipulation "Material Dialectics." His work was based largely on observations of the French Revolution. The idea of Hegel and Marx is that society evolves through a system of thesis/anti-thesis conflicts. Conflicts resolve in a catharsis then move on to the next conflict.
One of the fundamental believes of this "modern" style of thought is that every civilization lays the seeds of its own destruction.
This dialectical model is different from the logical (analytical) model of the Founders. The founders believed there was a truth and esteemed logic. They believed in a process where civilization built upon itself and improved with time.
The foundational thought system of the US Founders was never fully developed. The founders failed to see the entrenched party system. The Left/Right split that dominates modern politics came out of the French Revolution.
While American conservatives admire the American Revolution and disdain the French Revolution, the name for the "conservative" movement comes from the French Revolution.
Like American Conservatives, I admire the US Founders and believe the US Founders were on the right track.
A major problem of Conservatism is that self-described conservatives are often drawn into the culture war with the Progressives. When drawn into the culture wars, one runs the risk of assuming the underlying rational style of this modern dialectical process.
A great example can be found with the definition of "capitalism."
Marx wrote a big long book called "Das Kapital." He believed that society evolved through a scientifically predictable series of conflicts. Marx claimed that the modern period was dominated by a conflict between groups he called the bourgeoisie and proletariat. Marx predicted that the intelligentsia would unite with the proletariat in a revolution against the bourgeoisie. The catharsis would be a new thing called "Communism."
Marx wrote in German. Translated into English, the bourgeoisie became "capitalist" and proletariat translated to "worker."
The term "capitalism" and "capitalist" were rarely used before this period.
The US Founders were trying to establish a free society. They admired "The Wealth of Nations" which was published by Adam Smith in 1776. Many of the founders disliked the way the Europeans manipulated the financial system (a different, longer story). The US Founders did not use the term "capitalism" to describe their free market.
I really wish Conservatives would look at the terms they use, and use them with caution.
Marx hated the free market. He wanted it overthrown. He believed society evolved through conflict. Marx wrote a really long book called "Das Kapital" which highlighted and magnified every fault of the financial system. He then wrote a second short book called "The Manifesto" which showed revolutionaries how to use the false image he projected on the market to raise people in revolution. In the Manifesto, Marx promised that, after the revolution, a wondrous new world order called "Communism" will evolve.
Don’t you see the irony?
Marx never defined Communism beyond the vaguest of terms. What Marx did was to describe a perversion of the free market in minute detail. This perversion of the market is called "capitalism."
The term "Capitalism" was essentially defined by the enemies of capitalism. A central part of Marx's trick was that he over-emphasized the role of money, and de-emphasized the role of freedom in his description of the market.
The free market of Adam Smith was a description of how free people optimizing their individual resources tend to optimize the resources of the community at large.
Marx's perversion of the free market was a description about how a corrupt ruling class uses money (the financial system) to dominate society. Marx's goal in defining capitalism was to lay the seeds that would destroy the free market!
Apparently Marx was compelling to our intellectuals because it drew everyone into the conversation.
Today, we find ourselves in a strange situation where a group called "conservatives" defends a thing called "capitalism." The problem is that the etymology of terms undermines the cause.
Many conservatives use the term "capitalism" to describe the free market described by Adam Smith. The term also can refer to a perversion of the market in which a ruling class creates a corrupt financial system which empowers an elite.
As for the word "conservative," this word emerged as one side in the left/right split.
Patriotic conservatives in the United States are trying to preserve the thought system of the US founders. The problem is that their ideas are being defined as part of this dialectical split.
For example, the fact that the term "conservative" rose to describe a "left/right" split has the effect of making the split the center of discourse, rather than the underlying structure of society.
The enemies of the American experiment have laid before us a terrible series of traps. To restore the American system, we have to be wary of the origin of terms. When discussing ideas, we need to be wary of what people mean by "conservative," "capitalism," etc..
This post is getting too long. I wanted to give an example of how our terms are used against us.
A good example is ObamaCare. This system creates a centralized health exchange. An exchange could be described as "capitalism" because it uses the flow of capital through the health care system to control the behavior of people and to empower a ruling elite.
Wednesday, November 10, 2010
Health Care and Diabetes
This just in The Number of Type Two Diabetes Cases is Soaring.
The primary cause of type two diabetes is Americans are failing to draw the connection between their diet and long term health cause.
A primary reason for our failure to draw this connection is that our health care system shields people from the consequences of their actions.
Type Two Diabetes is the one disease that the Medical Savings and Loan could really can really help reduce. This system asks that its policy holders self-fund their health care.
The system confronts policy holders on a regular basis with the consequences of lifestyle choices.
I have not been playing up the central character in the Medical Savings and Loan. The program creates a new position called the Health Care Advocate. The primary charge of the advocate is to educate participants on expected health care expenses.
It is a financial position, not a medical position, the advocate will use the language of money to explain basic things like if you get this preventive care, your health expenses will be like x. If you don't get preventive care, your expenses will look like y ... and you can't afford y.
I repeat, the HCA is a financial position, not a medical position.
The goal of the program is to engage participants in a multi-dimensional discussion of their health.
Insurance and these crazy health care exchanges treat people as if they live one dimensional lives (with speculators trading individual risks on the exchange).
The Medical Savings and Loan sees advantage of people owning their own risk as it forces people to take a multi-dimensional view of their health.
Here is an example of the type of financial questions I find beneficial. Share-A-Sale has a new advertiser called 360 Cooking. This company makes expensive stainless steel pots designed for a waterless cooking technique. These expensive pots have a multi-layered construction to evenly distribute heat. Their claim is that their design lets people cook with no oil and less water.
This increases the nutritional content of food and improves taste. They claim waterless cooking reduces energy consumption.
The company's claims may prove bogus. The pots are way outside my price range, and I am sure I could do "waterless" cooking with other pots.
However, I found that the expensives pots started an interesting line of inquiry. Could waterless cooking reduce my consumption of fat? Would it increase my consumption of veggies? What impact would such a decision have on my long term health?
Consulting a doctor about buying a pot would be ludicrous.
However, if we developed a system where people owned their own health care risk, then we would see people engaging in this type of decision making on a regular basis. It is through the repetition of this type of conversation that leads to quality life style choices.
By creating a system where people own their own risks and are directly confronted by these risks in a conversation with a health care advocate would create a paradigm where people engage in this type of discussion.
A system where traders speculate on people's health risk in a centralized exchange will result in conversations, but not conversations that help people.
The primary cause of type two diabetes is Americans are failing to draw the connection between their diet and long term health cause.
A primary reason for our failure to draw this connection is that our health care system shields people from the consequences of their actions.
Type Two Diabetes is the one disease that the Medical Savings and Loan could really can really help reduce. This system asks that its policy holders self-fund their health care.
The system confronts policy holders on a regular basis with the consequences of lifestyle choices.
I have not been playing up the central character in the Medical Savings and Loan. The program creates a new position called the Health Care Advocate. The primary charge of the advocate is to educate participants on expected health care expenses.
It is a financial position, not a medical position, the advocate will use the language of money to explain basic things like if you get this preventive care, your health expenses will be like x. If you don't get preventive care, your expenses will look like y ... and you can't afford y.
I repeat, the HCA is a financial position, not a medical position.
The goal of the program is to engage participants in a multi-dimensional discussion of their health.
Insurance and these crazy health care exchanges treat people as if they live one dimensional lives (with speculators trading individual risks on the exchange).
The Medical Savings and Loan sees advantage of people owning their own risk as it forces people to take a multi-dimensional view of their health.
Here is an example of the type of financial questions I find beneficial. Share-A-Sale has a new advertiser called 360 Cooking. This company makes expensive stainless steel pots designed for a waterless cooking technique. These expensive pots have a multi-layered construction to evenly distribute heat. Their claim is that their design lets people cook with no oil and less water.
This increases the nutritional content of food and improves taste. They claim waterless cooking reduces energy consumption.
The company's claims may prove bogus. The pots are way outside my price range, and I am sure I could do "waterless" cooking with other pots.
However, I found that the expensives pots started an interesting line of inquiry. Could waterless cooking reduce my consumption of fat? Would it increase my consumption of veggies? What impact would such a decision have on my long term health?
Consulting a doctor about buying a pot would be ludicrous.
However, if we developed a system where people owned their own health care risk, then we would see people engaging in this type of decision making on a regular basis. It is through the repetition of this type of conversation that leads to quality life style choices.
By creating a system where people own their own risks and are directly confronted by these risks in a conversation with a health care advocate would create a paradigm where people engage in this type of discussion.
A system where traders speculate on people's health risk in a centralized exchange will result in conversations, but not conversations that help people.
Tuesday, November 09, 2010
Debt Per Taxpayer
The Debt Clock tells me the national debt per citizen is over $44,000. It is over $126,000,000 per taxpayer. Total debt per citizen is about four times that. It is $176,000. Current unfunded liabilities are over a million dollars per person.
Our savings are a scant $9,703 per citizen. This is barely twice the interest we pay on the debt which is about $4,600 per person.
A devaluation of the dollar and higher interest rates could easily throw our economy into a tail spin.
This sad situation is not the result of a moral default of the American people, but is a result of the stupid way we've structured our financial world.
In efforts to buy power, our political and business leaders structured our economic system so that we use pay-as-you go schemes supplemented by debt financing for necessities that should be financed through savings.
What I want to do with the Medical Savings and Loan is to take the massive premiums we are paying for pay-go insurance and place it into a structured savings program.
The current savings to debt ratio is $9K/$176K.
Insurance premiums are over $10,000 per year. A student coming out of college is likely to pay over a half million in insurance premiums and deductibles over a working career. The structured savings program would put over half of that money in the savings accounts with the other half going to grants and loan defaults.
As people tend to be healthy when they are younger and require medical attention when they are older, one would see a phenomena where a large number of people had a large amount of money in their medical savings account. If the system worked the average policy holder would have about $20K in savings with some people having upward to $100K in savings.
Were the entire US to switch to a Medical Savings and Loan paradigm (something which I am not demanding), we would see savings balloon and a more reasonable savings to debt ratio of $30K/$176K would emerge.
The Medical Savings and Loan is not totalitarian. It is not like silly health care exchange systems that must force everyone into a complex scheme for some perceived benefit. The Medical Savings and Loan simply provides financial tools that allows people who wish to self fund their care take a stab at the challenge.
People who switched to the MS&L for self-funding their care would increase their savings and decrease their personal contribution to the debt problem.
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Our savings are a scant $9,703 per citizen. This is barely twice the interest we pay on the debt which is about $4,600 per person.
A devaluation of the dollar and higher interest rates could easily throw our economy into a tail spin.
This sad situation is not the result of a moral default of the American people, but is a result of the stupid way we've structured our financial world.
In efforts to buy power, our political and business leaders structured our economic system so that we use pay-as-you go schemes supplemented by debt financing for necessities that should be financed through savings.
What I want to do with the Medical Savings and Loan is to take the massive premiums we are paying for pay-go insurance and place it into a structured savings program.
The current savings to debt ratio is $9K/$176K.
Insurance premiums are over $10,000 per year. A student coming out of college is likely to pay over a half million in insurance premiums and deductibles over a working career. The structured savings program would put over half of that money in the savings accounts with the other half going to grants and loan defaults.
As people tend to be healthy when they are younger and require medical attention when they are older, one would see a phenomena where a large number of people had a large amount of money in their medical savings account. If the system worked the average policy holder would have about $20K in savings with some people having upward to $100K in savings.
Were the entire US to switch to a Medical Savings and Loan paradigm (something which I am not demanding), we would see savings balloon and a more reasonable savings to debt ratio of $30K/$176K would emerge.
The Medical Savings and Loan is not totalitarian. It is not like silly health care exchange systems that must force everyone into a complex scheme for some perceived benefit. The Medical Savings and Loan simply provides financial tools that allows people who wish to self fund their care take a stab at the challenge.
People who switched to the MS&L for self-funding their care would increase their savings and decrease their personal contribution to the debt problem.
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Zarephath Health Center
Wow!
This is what I am looking for!
Zarephath Health Center is a faith based effort to provide health care to the poor and uninsured.
These are the people who would thrive with the Medical Savings and Loan.
I discovered the center through an article on Freedom Blogging. Doctor Alita Eck sees the Health Care Exchanges for corrupt fluff that they are. She gets right to bare knuckles of providing health care and explains that the best health care is a system with the doctors and administration focused directly on the patient.
This is what happens with the medical savings and loan!
If I could get the equations for the Medical Savings and Loan in front a pair of astute eyes like this; the system would pop.
The MS&L essentially takes the money that goes into insurance. It splits this money into a Savings and Loan component. This component empowers the people who can self-fund their care to self-fund their care. The system carves off a big chunk of cash to be distributed as grants. Anyone who takes a grant must agree to take part in the savings plan.
The people who self fund their care will spend their money on the care that best suits their needs.
When people cannot, the group administering the grants would be spending their resources in the best possible way.
(As mentioned earlier, a Medical Savings and loan with 10,000 policy holders would probably have about $800,000,000.00 for direct self-funded health care and $200,000,000.000 in grants over a ten year period. 10,000 * 10,000 * 10 = 1,000,000,000.)
I have more faith in a group Zarephath Health Center with a few hundred million bucks in grants than the Utah PAC with a totalitarian exchange and the unconstrained political power the Political Action Committe desires.
Unfortunately, the Zarephath Health Center is in New Jersey.
That's too far to travel.
What I need to start a Medical savings and Loan is a group of people who want to save the health care freedom (while cutting costs) and a network of faith based groups like Zarephath.
It would be so easy to start. The business model is ready. All I need is somevictims people to launch the plan.
This is what I am looking for!
Zarephath Health Center is a faith based effort to provide health care to the poor and uninsured.
These are the people who would thrive with the Medical Savings and Loan.
I discovered the center through an article on Freedom Blogging. Doctor Alita Eck sees the Health Care Exchanges for corrupt fluff that they are. She gets right to bare knuckles of providing health care and explains that the best health care is a system with the doctors and administration focused directly on the patient.
This is what happens with the medical savings and loan!
If I could get the equations for the Medical Savings and Loan in front a pair of astute eyes like this; the system would pop.
The MS&L essentially takes the money that goes into insurance. It splits this money into a Savings and Loan component. This component empowers the people who can self-fund their care to self-fund their care. The system carves off a big chunk of cash to be distributed as grants. Anyone who takes a grant must agree to take part in the savings plan.
The people who self fund their care will spend their money on the care that best suits their needs.
When people cannot, the group administering the grants would be spending their resources in the best possible way.
(As mentioned earlier, a Medical Savings and loan with 10,000 policy holders would probably have about $800,000,000.00 for direct self-funded health care and $200,000,000.000 in grants over a ten year period. 10,000 * 10,000 * 10 = 1,000,000,000.)
I have more faith in a group Zarephath Health Center with a few hundred million bucks in grants than the Utah PAC with a totalitarian exchange and the unconstrained political power the Political Action Committe desires.
Unfortunately, the Zarephath Health Center is in New Jersey.
That's too far to travel.
What I need to start a Medical savings and Loan is a group of people who want to save the health care freedom (while cutting costs) and a network of faith based groups like Zarephath.
It would be so easy to start. The business model is ready. All I need is some
Sunday, November 07, 2010
Formula for Disaster
Anyone watching the Debt Clock knows that our nation is in a perilous state. I looked today. The National Debt is at $13 trillion, personal debt is at $16 trillion. Unfunded liabilities stand at $111 Trillion.
The reason for this sad state of affairs is the stupid way we fund things.
We do several stupid things: The first is that we adopted a fractional reserve banking system. Banks lend out multiple dollars for each dollar saved. Anyone familiar with math knows that fractions show up as multiples when looked at from a reciprocal perspective.
A fractional reserve banking system effectively multiplies the debt of the people.
Oddly, the fractional reserve devalues savings. It is the bank that gets to multiply savings, not the saver. The dollar I put in the bank is equal to all of the other dollars on the market. It has to compete with the dollars created when the bank uses it as a base for multiple loans.
The history of fractional reserve lending is bleak. Historically banks that create their own fractional reserve scheme have failed. They get rich and implode in a panic when investors realize the bank has inadequate reserves to pay investors.
A fractional reserve banking system depends on constant regulation to stave off panics.
One can argue that, by increasing debt, fractional reserve banking creates systemic risk. One can also argue that fractional reserve banking is counter to the free market. In the market described by Adam Smith, people re-invested the profit of real capital. Fractional reserve banking creates a multitude of paper money for each real dollar increase in capital.
A well regulated bad idea is simply a study in stupidity.
A second stupid mistake that we made was to move from save-and-pay systems for health care and retirement to ill conceived pay-go schemes.
The idea behind both Social Security and Insurance is that people can fund basic human needs through a stable Ponzi Scheme. A Ponzi Scheme is an investment scam where a con artist builds market credibility by paying higher than average returns from the investments from other schmucks in the system.
Ponzi schemes tend to implode when investors discover their investments are at excessive risks. Small insurance companies tend to fail because they develop inadequate reserves for their promised benefits.
Bernie Madoff had a Ponzi scheme that ran for several decades before investors realized their billions of dollars of savings were fluff.
Through the years, a large number of people have been hurt by insurance schemes that failed to maintain adequate reserves.
To maintain stability, insurance requires substantial regulation.
The need to regulate insurance is interesting in that the promise made by insurance is that insurance would help people regulate their health care expenses by placing their health care money in a pool.
The deregulation that took place in the Clinton years failed because we removed the political regulation away from financial schemes that were dependent on regulation. Bush failed because he did not figure out basic laws of finance.
Many people would like to transition away from the Federal Reserve and fractional reserve banking.
To do so requires a concurrent effort to increase savings.
Wouldn't it be wonderful if someone happened to have a plan to replace insurance with a system of structured savings?
Golly, if only there was someone who's been talking about the need to move from insurance to structured savings for the last several decades. Such a person might even have a ready made product that allowed companies to replace their insurance benefit with some sort of Medical Savings and Loan.
For progressive minds driven by wealth envy. I should point out that it's the fractional reserve system that created the disparity of income between the rich Wall Street bankers and middle class. Transitioning back to save and pay would have the reverse effect and decrease the gap between rich and poor.
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The reason for this sad state of affairs is the stupid way we fund things.
We do several stupid things: The first is that we adopted a fractional reserve banking system. Banks lend out multiple dollars for each dollar saved. Anyone familiar with math knows that fractions show up as multiples when looked at from a reciprocal perspective.
A fractional reserve banking system effectively multiplies the debt of the people.
Oddly, the fractional reserve devalues savings. It is the bank that gets to multiply savings, not the saver. The dollar I put in the bank is equal to all of the other dollars on the market. It has to compete with the dollars created when the bank uses it as a base for multiple loans.
The history of fractional reserve lending is bleak. Historically banks that create their own fractional reserve scheme have failed. They get rich and implode in a panic when investors realize the bank has inadequate reserves to pay investors.
A fractional reserve banking system depends on constant regulation to stave off panics.
One can argue that, by increasing debt, fractional reserve banking creates systemic risk. One can also argue that fractional reserve banking is counter to the free market. In the market described by Adam Smith, people re-invested the profit of real capital. Fractional reserve banking creates a multitude of paper money for each real dollar increase in capital.
A well regulated bad idea is simply a study in stupidity.
A second stupid mistake that we made was to move from save-and-pay systems for health care and retirement to ill conceived pay-go schemes.
The idea behind both Social Security and Insurance is that people can fund basic human needs through a stable Ponzi Scheme. A Ponzi Scheme is an investment scam where a con artist builds market credibility by paying higher than average returns from the investments from other schmucks in the system.
Ponzi schemes tend to implode when investors discover their investments are at excessive risks. Small insurance companies tend to fail because they develop inadequate reserves for their promised benefits.
Bernie Madoff had a Ponzi scheme that ran for several decades before investors realized their billions of dollars of savings were fluff.
Through the years, a large number of people have been hurt by insurance schemes that failed to maintain adequate reserves.
To maintain stability, insurance requires substantial regulation.
The need to regulate insurance is interesting in that the promise made by insurance is that insurance would help people regulate their health care expenses by placing their health care money in a pool.
The deregulation that took place in the Clinton years failed because we removed the political regulation away from financial schemes that were dependent on regulation. Bush failed because he did not figure out basic laws of finance.
Many people would like to transition away from the Federal Reserve and fractional reserve banking.
To do so requires a concurrent effort to increase savings.
Wouldn't it be wonderful if someone happened to have a plan to replace insurance with a system of structured savings?
Golly, if only there was someone who's been talking about the need to move from insurance to structured savings for the last several decades. Such a person might even have a ready made product that allowed companies to replace their insurance benefit with some sort of Medical Savings and Loan.
For progressive minds driven by wealth envy. I should point out that it's the fractional reserve system that created the disparity of income between the rich Wall Street bankers and middle class. Transitioning back to save and pay would have the reverse effect and decrease the gap between rich and poor.
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Thursday, November 04, 2010
Not A Compelling Business Model
I present the Medical Savings and Loan as a business model. The primary reason for this is that I want people to see how they would interact with the system.
The system, however, is not as compelling a business model as insurance.
A group of 10,000 people paying $10,000 a year in health premiums for ten years would pipe a billion dollars through the system.
Insurance has people paying this money into a group pool that the insurance company controls. This is a compelling business model as it gives people controlling the insurance pool enormous power.
The Medical Savings and Loan has people putting their money into investments that they control.
Suddenly, this enormous wealth that the insurance company gets to control is controlled by the policy holders. The business owners of the Medical Savings and Loan reduces the rich financiers to middle class stooges.
Yes, the people doing business with the Medical Savings and Loan are better off. The people running the shop are no longer enormously rich and powerful.
Investors, Wall Street Bankers, and power brokers and the country club all dispise the idea.
My decision to present the Medical Savings and Loan as a business has the problem that progressives seeking government ownership of healthcare can frame the program as some sort of evil capitalist contraption.
The fact that the system can be attacked from left and right might be a sign that the system is on the right track.
Afterall, the long term determination of the quality of a business model is not the amount of wealth it consolidates in the hands of the few, but how well the business model serves the society as a whole.
The system, however, is not as compelling a business model as insurance.
A group of 10,000 people paying $10,000 a year in health premiums for ten years would pipe a billion dollars through the system.
Insurance has people paying this money into a group pool that the insurance company controls. This is a compelling business model as it gives people controlling the insurance pool enormous power.
The Medical Savings and Loan has people putting their money into investments that they control.
Suddenly, this enormous wealth that the insurance company gets to control is controlled by the policy holders. The business owners of the Medical Savings and Loan reduces the rich financiers to middle class stooges.
Yes, the people doing business with the Medical Savings and Loan are better off. The people running the shop are no longer enormously rich and powerful.
Investors, Wall Street Bankers, and power brokers and the country club all dispise the idea.
My decision to present the Medical Savings and Loan as a business has the problem that progressives seeking government ownership of healthcare can frame the program as some sort of evil capitalist contraption.
The fact that the system can be attacked from left and right might be a sign that the system is on the right track.
Afterall, the long term determination of the quality of a business model is not the amount of wealth it consolidates in the hands of the few, but how well the business model serves the society as a whole.
Wednesday, November 03, 2010
Should I Do Any Thing With the Medical Savings and Loan?
I started a poll: "Should I do anything with the Medical Savings and Loan?"
The goal of the project was to show that it is possible to fund health care in other ways than pooled insurance.
The Medical Savings and Loan simply breaks apart a group insurance pool into individual savings and lending accounts. Sam Granato said his insurance costs were $18,000 per employee per year. The MS&L would put half this amount in a savings account. A quarter in a loan reserve and the rest in a grant program. The loan reserve would go into the savings accounts if unused.
The system simply takes the money that goes into an insurance pool and gives the bulk of the money directly to the policy holder with the rest going into a combination of loan reserve and grant programs.
This mathematical model lets people directly contrast the merits of individual and pooled funding of health care.
People could take this model apply it directly to real world data and ask the question: Are people better off with pooled financing of health care or individual financing of health care?
My goal during the last two years was simply to find a group to discuss the model.
I failed to achieve my goal. Hundreds of letters, blog posts and tweets have received nothing but cold shoulders.
The Medical Savings and Loan is a real model. It is very easy to implement. I believe in the scientific method. It would be very easy to put together a Medical Savings and Loan program.
Health care financing is an interesting business because a program can underwrite itself. Lets say you had a group of 3000 policy holders paying $10,000 a year in premiums. Well, you have a starting point of $30,000,000.00 of yearly income.
The ideal experiment would have 10,000victims policy holders. That would give a yearly base of $100,000,000.00. Over a ten year period, one would process a billion dollars through the program.
The administrative cost of the Medical Savings and Loan is significantly lower than insurance. Insurance companies have to have a big claims approval process, expensive actuaries and massive legal departments.
The Medical Savings and Loan puts the savings accounts in a local bank. Policy holders pay their medical expenses directly from their accounts. This eliminates the costly claims approval process.
Legal costs would be lower as well. Insurance companies have lawyers who sue doctors and defend against lawsuits from policy holders. The Medical Savings and Loan steps out of legal picture. Patients would still need to sue doctors, employers, etc.. The Medical Savings and Loan, itself, simply moves money between accounts.
The administrative cost of a Medical Savings and Loan would probably come out to around 1% of the premium. An experiment with 10,000 people over ten years would have about $10,000,000.00 to pay for the work of a half dozen middle class employee/owners. (The best corporate structure for the Medical Savings and Loan is the buyer's co-op with employee ownership).
Did anyone hear that? Administrative costs for The Medical Savings and Loan might be as low as one percent.
Assuming that people are more careful with their money than they are with other people's money, the Medical Savings and Loan could realize up to a twenty percent decrease in health care expenses than insurance.
It is unlikely that the medical savings and loan would cost more than insurance. So, it would be a good experiment for a company wanting to control its health care expenses.
Although my goal of the last two years was simply to find a group to simply discuss the idea ... a group that experimented with the idea just might find giving people direct control over their health care dollars is a fun experiment.
The Medical Savings and Loan would be a great paradigm for discussing health care. One can also use it as an experiment to compare pool funded health care with individually funded health care.
I have tried for two years to get anyone*, anywhere to discuss the idea. I have enough money to drive as far as Arizona, Colorado, Nevada, Idaho, or even Texas.
(*By anyone, I mean a group committed to sound rational thinking. It would be a waste time to discuss an idea with a group seeking to project false images on the idea.)
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The goal of the project was to show that it is possible to fund health care in other ways than pooled insurance.
The Medical Savings and Loan simply breaks apart a group insurance pool into individual savings and lending accounts. Sam Granato said his insurance costs were $18,000 per employee per year. The MS&L would put half this amount in a savings account. A quarter in a loan reserve and the rest in a grant program. The loan reserve would go into the savings accounts if unused.
The system simply takes the money that goes into an insurance pool and gives the bulk of the money directly to the policy holder with the rest going into a combination of loan reserve and grant programs.
This mathematical model lets people directly contrast the merits of individual and pooled funding of health care.
People could take this model apply it directly to real world data and ask the question: Are people better off with pooled financing of health care or individual financing of health care?
My goal during the last two years was simply to find a group to discuss the model.
I failed to achieve my goal. Hundreds of letters, blog posts and tweets have received nothing but cold shoulders.
The Medical Savings and Loan is a real model. It is very easy to implement. I believe in the scientific method. It would be very easy to put together a Medical Savings and Loan program.
Health care financing is an interesting business because a program can underwrite itself. Lets say you had a group of 3000 policy holders paying $10,000 a year in premiums. Well, you have a starting point of $30,000,000.00 of yearly income.
The ideal experiment would have 10,000
The administrative cost of the Medical Savings and Loan is significantly lower than insurance. Insurance companies have to have a big claims approval process, expensive actuaries and massive legal departments.
The Medical Savings and Loan puts the savings accounts in a local bank. Policy holders pay their medical expenses directly from their accounts. This eliminates the costly claims approval process.
Legal costs would be lower as well. Insurance companies have lawyers who sue doctors and defend against lawsuits from policy holders. The Medical Savings and Loan steps out of legal picture. Patients would still need to sue doctors, employers, etc.. The Medical Savings and Loan, itself, simply moves money between accounts.
The administrative cost of a Medical Savings and Loan would probably come out to around 1% of the premium. An experiment with 10,000 people over ten years would have about $10,000,000.00 to pay for the work of a half dozen middle class employee/owners. (The best corporate structure for the Medical Savings and Loan is the buyer's co-op with employee ownership).
Did anyone hear that? Administrative costs for The Medical Savings and Loan might be as low as one percent.
Assuming that people are more careful with their money than they are with other people's money, the Medical Savings and Loan could realize up to a twenty percent decrease in health care expenses than insurance.
It is unlikely that the medical savings and loan would cost more than insurance. So, it would be a good experiment for a company wanting to control its health care expenses.
Although my goal of the last two years was simply to find a group to simply discuss the idea ... a group that experimented with the idea just might find giving people direct control over their health care dollars is a fun experiment.
The Medical Savings and Loan would be a great paradigm for discussing health care. One can also use it as an experiment to compare pool funded health care with individually funded health care.
I have tried for two years to get anyone*, anywhere to discuss the idea. I have enough money to drive as far as Arizona, Colorado, Nevada, Idaho, or even Texas.
(*By anyone, I mean a group committed to sound rational thinking. It would be a waste time to discuss an idea with a group seeking to project false images on the idea.)
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Tuesday, November 02, 2010
Lime Slurpee
President Obama, who's visited all 57 states, is a keen observer of human nature. One of his most profound observation is that Republicans drink Slurpees.
Republicans like to hang around a work site like union laborers on break--sipping slurpees--while Democrats toil away like small business owners trying to pay the bills.
While I watch the election returns. I thought I would impart my favorite frozen drink recipe.
I am a bit lazy. I like to start with a can of frozen sweeten limeade. I add only two cups of water then squeeze in a fresh lime and the lime zest along with a jigger of Triple Sec.
This serves as the base.
To make the drink, I add the base, ice and shot of tequila into the blender to crush the ice.
Some people like to salt the rim of the glass and serve with a slice of lime and one of those funky cocktail umbrellas. Me I am happy with a plain cocktail glass.
Anyway, I thought I would share my "lime slurpee" recipe as I sit like a union worker on break and watch the election returns.
Republicans like to hang around a work site like union laborers on break--sipping slurpees--while Democrats toil away like small business owners trying to pay the bills.
While I watch the election returns. I thought I would impart my favorite frozen drink recipe.
I am a bit lazy. I like to start with a can of frozen sweeten limeade. I add only two cups of water then squeeze in a fresh lime and the lime zest along with a jigger of Triple Sec.
This serves as the base.
To make the drink, I add the base, ice and shot of tequila into the blender to crush the ice.
Some people like to salt the rim of the glass and serve with a slice of lime and one of those funky cocktail umbrellas. Me I am happy with a plain cocktail glass.
Anyway, I thought I would share my "lime slurpee" recipe as I sit like a union worker on break and watch the election returns.
Dialectics and the Center
Most people want to be part of the reasonable center.
Marx's uses this desire. His theory is called Dialectical Materialism. In dialectics the philosopher defines two contradictory positions. As the philosopher argues the contradictory points people begin to imagine a position as the rational center.
Now, here's the deal: By choosing the extremes, one can make any position on any issue appear to be the center by defining the extremes.
Marx never explained how a communist utopia would work. All he did was to create a left/right dichotomy in an effort to create a new center.
In progressivism, the radical left will define a new extreme. The reactionary right will react in defense of the status quo. The dialectical argument will form a new status quo. After which the radical left will choose another radical position leaving reactionary conservatives defending the new status quo.
When one studies the history of our financial mess, one finds that the financial tools at the center of the mess were created by progressives of yesteryear. Insurance, Credit Default Swaps, Mortgage Backed Securities, Hedge Funds, CDOs, short selling, etc., were all created by progressives. Yet the elite is able to project ownership of this toxic mix of derivatives onto Conservatives.
The funky derivatives that crashed the market were created with the idea that they would regulate the market. Rather than excepting that they don't regulate the market, progressives are able to use the failure of their creations to justify a new layer of regulation.
Go figure?
With dialectics progressives change society through illusion.
Many of the things we consider the rational center today were considered dangerous extremes in the past. Conversely, we see the rational center of yesteryear as a dangerous extreme.
Have you ever noticed how the elite spend so much time trying to define the position of their opposition? They do this to make their radical position appear the rational center.
In this last election we saw everything from racism and teabagging to excessive slurpee drinking projected on the tea party.
[slurp, slurp, slurp]
The arguments put forward by members of the movement were systematically ignored.
With this free floating system, the ruling elite can yank the people about by their nose rings.
Unfortunately, this method of gaining power by shifting the center has the long term effect of eroding the foundations of a nation and eventually reducing the people to poverty.
The founders were living in a day when the elite under King George was trying to centralize power by changing the foundations of the colonies. They saw the dangers of these tactics. Their solution was to set the center with a Constitution.
Today we find that the Fundamental Change of FDR and Obama has created a dangerous world where the Constitution of our founders is seen as a dangerous extreme.
I hold with the tea party that the Constitution was a good thing, and that this game of trying to move the center through dialectics is an inherently bad thing.
Through 2009 and 2010, the tea party worked heavily on the Republicans and convinced many in the party to return to their forgotten principles of this great nation. I hope that Republicans do well in the midterm.
Altough I am currently rooting for the Republicans, I don't see this as a Republican thing.
It's a Constitution thing. For this reason, I am rooting for the independent Tancredo in Colorado because he is an independent with a chance of winning.
The worst thing that can happen to this country would be to develop a two party system where the minority Republican Party favors the Constitution and the majority Democratic Party wants a socialist utopia and the center is simply societal decay.
My biggest hope is that the tea party stays independent and that we see a number of tea party candidates on the Democratic side in the 2012 election.
Marx's uses this desire. His theory is called Dialectical Materialism. In dialectics the philosopher defines two contradictory positions. As the philosopher argues the contradictory points people begin to imagine a position as the rational center.
Now, here's the deal: By choosing the extremes, one can make any position on any issue appear to be the center by defining the extremes.
Marx never explained how a communist utopia would work. All he did was to create a left/right dichotomy in an effort to create a new center.
In progressivism, the radical left will define a new extreme. The reactionary right will react in defense of the status quo. The dialectical argument will form a new status quo. After which the radical left will choose another radical position leaving reactionary conservatives defending the new status quo.
When one studies the history of our financial mess, one finds that the financial tools at the center of the mess were created by progressives of yesteryear. Insurance, Credit Default Swaps, Mortgage Backed Securities, Hedge Funds, CDOs, short selling, etc., were all created by progressives. Yet the elite is able to project ownership of this toxic mix of derivatives onto Conservatives.
The funky derivatives that crashed the market were created with the idea that they would regulate the market. Rather than excepting that they don't regulate the market, progressives are able to use the failure of their creations to justify a new layer of regulation.
Go figure?
With dialectics progressives change society through illusion.
Many of the things we consider the rational center today were considered dangerous extremes in the past. Conversely, we see the rational center of yesteryear as a dangerous extreme.
Have you ever noticed how the elite spend so much time trying to define the position of their opposition? They do this to make their radical position appear the rational center.
In this last election we saw everything from racism and teabagging to excessive slurpee drinking projected on the tea party.
[slurp, slurp, slurp]
The arguments put forward by members of the movement were systematically ignored.
With this free floating system, the ruling elite can yank the people about by their nose rings.
Unfortunately, this method of gaining power by shifting the center has the long term effect of eroding the foundations of a nation and eventually reducing the people to poverty.
The founders were living in a day when the elite under King George was trying to centralize power by changing the foundations of the colonies. They saw the dangers of these tactics. Their solution was to set the center with a Constitution.
Today we find that the Fundamental Change of FDR and Obama has created a dangerous world where the Constitution of our founders is seen as a dangerous extreme.
I hold with the tea party that the Constitution was a good thing, and that this game of trying to move the center through dialectics is an inherently bad thing.
Through 2009 and 2010, the tea party worked heavily on the Republicans and convinced many in the party to return to their forgotten principles of this great nation. I hope that Republicans do well in the midterm.
Altough I am currently rooting for the Republicans, I don't see this as a Republican thing.
It's a Constitution thing. For this reason, I am rooting for the independent Tancredo in Colorado because he is an independent with a chance of winning.
The worst thing that can happen to this country would be to develop a two party system where the minority Republican Party favors the Constitution and the majority Democratic Party wants a socialist utopia and the center is simply societal decay.
My biggest hope is that the tea party stays independent and that we see a number of tea party candidates on the Democratic side in the 2012 election.
Monday, November 01, 2010
Production v. Manipulation
There are two sources of income: production and manipulation.
When the income of the rich comes from production, we shouldn't tax it heavily for we all benefit from the production.
When the income is from manipulation, our attempts to tax and redistribute the income tend to fail because the people good at manipulation will find ways to game the system.
Every economy includes both production and manipulation.
Attempts to achieve social justice through taxation and redistribution usually results in a society that places onerous taxes on production while increasing the amount of manipulation.
The fact that it is difficult to achieve income redistribution does not mean that we should not worry about income inequality. It means that we have to think about the problem differently.
If we find our society that generates great fortunes without producing wealth for the society at large, then we clearly have a society where the forces of manipulation have taken root.
Correcting this society is not a matter of taxing the wealth but a matter of examining the sources of the wealth.
If we find sources of wealth which are primarily manipulative, then we need to eliminate the source of the manipulation.
Most of the sources of manipulation are intrinsically anti-market. Hedge funds were created to protect the ruling elite from changes in the market (hence the name hedge fund). Short selling is a violation of property rights. Government backed re-insurance is a scheme to protect insiders from changes in the market.
As these tools are inherently anti-market, removing them would be pro-market. N'est-ce-pas?
Sadly, rather than looking at the roots of the matter, our political class has an unfortunate history creating additional manipulative tools to overcome the manipulative tools of the last generation.
The call for onerous new tax policies to redistribute the incomes made from market manipulation is but the latest of such fallacious thinking. The new tax burden will fall heaviest on the productive segment of the market and concentrate even more power in the hands of the manipulators.
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When the income of the rich comes from production, we shouldn't tax it heavily for we all benefit from the production.
When the income is from manipulation, our attempts to tax and redistribute the income tend to fail because the people good at manipulation will find ways to game the system.
Every economy includes both production and manipulation.
Attempts to achieve social justice through taxation and redistribution usually results in a society that places onerous taxes on production while increasing the amount of manipulation.
The fact that it is difficult to achieve income redistribution does not mean that we should not worry about income inequality. It means that we have to think about the problem differently.
If we find our society that generates great fortunes without producing wealth for the society at large, then we clearly have a society where the forces of manipulation have taken root.
Correcting this society is not a matter of taxing the wealth but a matter of examining the sources of the wealth.
If we find sources of wealth which are primarily manipulative, then we need to eliminate the source of the manipulation.
Most of the sources of manipulation are intrinsically anti-market. Hedge funds were created to protect the ruling elite from changes in the market (hence the name hedge fund). Short selling is a violation of property rights. Government backed re-insurance is a scheme to protect insiders from changes in the market.
As these tools are inherently anti-market, removing them would be pro-market. N'est-ce-pas?
Sadly, rather than looking at the roots of the matter, our political class has an unfortunate history creating additional manipulative tools to overcome the manipulative tools of the last generation.
The call for onerous new tax policies to redistribute the incomes made from market manipulation is but the latest of such fallacious thinking. The new tax burden will fall heaviest on the productive segment of the market and concentrate even more power in the hands of the manipulators.
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