Answer to a Question

Prd2bnAmerican asked "What happens to the ppl who dont save? Who cant save for future HC?"
The answer to your question is long because I have to look at different populations. This post has four sections:

• The MS&L as an Alternative to Insurance
• The MS&L for the self employed
• The MS&L as Public Policy
• People in Desperate Need

The MS&L as an Alternative to Insurance

Most people these days work for an employer. So the primary market for the MS&L will be as an alternative to insurance. The employer makes the payments into the MS&L. The employees would be asked to sign contracts that they will only use the money for health care.
There are big questions about how ironclad one can make the contract and the tax status of the compensation.

The MS&L for the self employed

The second big group for the product is the self employed. The self employed are looking for an alternative to insurance and are generally motivated to save. The big problem with the self employed is that they suffer big ups and downs in their life.

The MS&L as Public Policy

The Medical Savings and Loan can be used in public policy. For example, if a person has no savings and requests medical care; you would give the person a loan for the care, assign the person a case worker then slam them into a structured savings program. The fact that you gave out a loan gives you a little bit more control than simply giving free health care.

People in Desperate Need

There are people who either have really high medical expenses or really low earning potential.
No matter how you go about financing health care, such people end up consuming more than they produce.
A person with a lifetime income of $400,000 might only have $20k to spend on health care. They don't have the income to pay for insurance. The Medical Savings and Loan gives such people direct control over the amount they have for care while providing substantial supplements.
Likewise, people with middle incomes and wicked nasty health care costs are unable to pay for their care. Again, the program gives such people direct control over some money while receiving supplements.

Conclusion

The Medical Savings and Loan is more flexible than insurance pools. By breaking an insurance pool into individual accounts, it is possible to create a system that can be customized to meet the different needs of different people.
The primary goal of the program is to help those people who can self fund their health care accomplish this goal. This is the bulk of health care in America. Helping working class Americans self-finance their care is empowering. It also reduces the stress on social services.
The Medical Savings and Loan exposes itself in an elegant way to social welfare. While the Medical Savings and Loan does not start with public policy, public policy can draw on the program to give incentives for good behavior. Notably, rather than giving free health care to the poor, the system would give loans and place people into structured savings plans to repay the loans.
No system provides a perfect solution to the problem of people who must consume more than they produce to survive.

Shifting Left

The debt crisis is a the result of multiple causes. What has happened is a general leftward shift in our financing.

Things that our parents would only buy with cash on hand, we now buy on debt. The things our parents used to save for, we now fund with insurance. Even worse, Americans in our progressive age feel a great sense of entitlement and demand that a great many services be handed to them by the community.

The way out of the debt crisis is to create a mechanism to shift things back to the right.

The goal of the Medical Savings and Loan is to reverse-engineer an insurance pool with a minimal amount of disruption.

The biggest challenge is that a large number of people are now dependent on insurance.

I almost used the phrase "heavily invested in insurance." But insurance is not an investment. You may be paying an insurance premium of $18,000 a year, but none of that money is going to build equity. Insurance is all pay-go.

A person in his sixties may have paid a half million dollars in insurance premiums. That money is all gone. Bye, Bye. Your insurance agent has a fancy car, and you now have dependency.

A dramatic shift from insurance back to savings is problematic because the people who've developed a dependency on insurance will get scrunched by the process.

We, as a society, do not like to see people getting schrunched.

The Medical Savings and Loan addresses this problem by looking at each person individually. Remember, the mantra of the program is "those who can self fund their care should self fund their care. Those who can't need assistance."

The MS&L uses a system of savings and loans to help those people who can self-fund their care do so, and a system of grants for those who cannot.

So, if you look at a person in his sixties, you will find that the person has relatively low income and relatively high medical expenses. A guy who makes $50k a year and is 4 years from retirement has only $200,000 to work with. A person near retirement does not have time to pay back any loans. So, a company switching from insurance to the Medical Savings and Loan, they would have to pay for this guy's medical expenses with grants.

The Medical Savings and Loan is all data driven. The program compiles, on a person by person basis, all of the information on income and expected health expenses. In the first years of the program, the company would have to top load the grant portion of the program.

As people build up savings, the amount of money needed for the grant program would decrease.

IMHO, insurance is a poisoned product. When I worked in insurance, I found that the system promised care that they never delivered. It is likely that many of the people who paid into insurance all their lives will get less health care by switching back to self funded care.

This is a fault of insurance, not the fault of the Medical Savings and Loan.

An alcoholic gets the shakes when he tries to sober up. The fact that sobriety hurts is not the result of sobriety being bad. Sobriety hurts because the drinking was bad.

The Medical Savings and Loan is a mathematical model for transitioning from group funded to individually funded care. It is worth examination. The program, as designed, can help reduce the adverse affects of switching from a debtor society back to a saving society.

Definition of Medical Savings and Loan

I am interested in starting a dialogue about a thing I call The Medical Savings and Loan.

The Medical Savings and Loan is a free market alternative to insurance pools. The program argues that the problem in American health care is the use of group funding for individual consumption. I developed the program by reverse-engineering an insurance pool into individual accounts.

Here is my problem:

For a dialogue to exist, the people in the dialogue must agree to the definition of terms.

If no-one agrees to the definition of terms, then I'm just monologuing. Monologuing leads nowhere. With no-one agreeing to the definition of terms, the program itself simply degenerates into agitation.

There is a great deal of mathematics behind the plan.
People have asked me to give them links to more information on the plan.

But I don't want to put up any more pages until I have a chance to sit down and talk face to face with people to make sure they understand the definitions.

I have a presentation that takes an hour or so in which I introduce the basic plan. I really don't want to post anything more online until I give the presentation ... somewhere.

I live in Utah. I am not LDS. This is not a get-rich-quick scheme. It is a serious academic conversation about financing health care.

I can easily travel to Colorado, Arizona, Nevada or Idaho. If anyone is interested in hosting the discussion they can contact me. I am hesitant to write more on the plan prior to presenting it to a group for review.

Question and Answer

Here is a quick Question and Answer session to help clarify the difference between the Republican and Democratic approach to Health Care Reform:

What do you call a Health Exchange run by Democrats?

    Socialism

What do you call a Health Exchange run by Republicans?

    Capitalism

Splitting the Vote

During both the Bush and Nixon years, the Republican Party successfully silenced the freedom movement. In both cases, the Republicans set up big wins for the socialist left.


My calculus is as follows: If Romney wins the nomination, then America would have a choice between four more years of a weakened Obama or eight years of a progressive Republican who actively suppresses the freedom movement in the Republican Party.

Since Progressive Democrats are most likely to win in 2020 (after Romney's dominion), I see Romney's winning the presidency as the end of health freedom.

According to my calculus, four more years of Obama would be preferable to Romney.

Remember, despite the fact that we have an imperial president, what the people does is still more important than what the president does. People are reactionary creations and they react against on overbearing leader.

So, Imagine that a libertarian leaning third party candidate split the vote in 2012. In such a scenario, the Republicans would take the Senate and Obama would win with less than a majority vote.

If this happened, then we would have four shrill years of a split government followed by an election in which both parties vied to get approval of the freedom movement.

A split vote would give us a weak president facing an opposition party followed by an election in which both parties actively distanced themselves from their progressive past and wooed the freedom movement.

In converse, if a progressive Republican won, we would see the Republican establishment actively suppressing the freedom movement in harmony with the progressive left which will seek to project the failures on socialism onto the freedom movement.

If you consider the reaction of the people, then the best possible outcome for 2012 would be for a third party to split the vote and for America to suffer another four years of Obama.

Debt Financing Leads to Bad Business Models

There is good government and bad government.


The American experiment was a success until recently because the Founders had created a system that limited governance to a few areas where government does a good job.

There is good business and bad business. For example, the protection racket is a business. You pay me money, and I protect you from my friend Biff who breaks legs.

When we look at our financial system, we see that terrible things are going on. We simply have to be able to have a conversation about what distinguishes good and bad business models.

The Marxian left does its damage by encouraging the development of bad business models that attack and destroy good businesses. Marx's goal in defining Capitalism was to create a paradox-ridden top-heavy finance system that openly oppressed the people.

Marx, the father of Capitalism, created a bastard child that was doomed to collapse into ruin.

Foolish Marxists believe a socialist utopia will miraculously emerge from the ashes. They encourage and active work on developing destructive businesses. Notably, Joseph Kennedy made billions through stock manipulation, and George Soros made billions through currency manipulation.

The derivatives that crashed the economy came directly from progressive universities into Wall Street.

Nimrods on the right aid this effort by being unwilling acknowledge that many businesses today (especially in the financial sector) are doing a great deal of harm.

Our business world is dominated by corrupt financial firms that take on huge leveraged positions in efforts to dominate the market. These efforts systematically drive out good companies with easy money.

There is something wrong with our financial system.

Part of the problem is debt financing. The equity financing discussed by Adam Smith is a positive space.

Debt financing is a strange negative space.
When you take out a thousand dollar loan, that loan is debit on your accounts, but it is an asset on the bank's books. If you took out a million dollar loan, your books look would look horrible, but the bank's books would look great.

Debt begets debt.
Let's say a friend owed you ten thousand dollars. You might just borrow against that asset.  Your creditor might borrow against your loan and so on.

Because a debt based financial system works in a negative space, it lends itself to horrific abuse.

Our progressive universities teach business leaders that they must dominate or perish. The business leaders go into the market and take out absurd debt positions to dominate a market.

As bad money chases out good, these business drones will flood the market with easy money. However, the majority of them fail ... bringing down the good businesses that use equity financing.
To recover from the collapse, free market loving Americans must be willing to discuss the difference between destructive and constructive financial models.

I love the discussion about whether or not Bain Capital was a vulture or venture capital firm.

What is good and what is bad venture capital?

There is clearly something wrong with the current venture capital system as it gives a disproportionate amount of the reward to the financiers, when it is the innovators that actually created the wealth.

The enemies of the free market have engaged in discussions on how to corrupt the financial system

Did I mention, Karl Marx was the father of Capitalism?
Unfortunately, blathering fools, like Sean Hannity, who defend the Marx's version of capitalism bring us all down by preventing a much needed discussion of good versus bad business models.

We need to have a discussion of good versus bad business models, even if the discussion doesn't fit within the political objectives of Mr. Hannity.

Centrism Becomes Irrational in a Progressive World

Ideas are fun. I love playing with them.

I've discovered that it is possible to find a compromise position between any two given ideas. Likewise, it is possible to frame any given idea as the compromise between two extremes.

I love to find compromises that resolve conflicts. It makes me feel good.

I used to think that centrism was a rational position. The centrist would look at the conflicts of the day, weigh both sides and seek to find a middle ground. You can't get more rational than that?

The sad truth is that the centrist is that centrists come to their conclusion by reacting to conflicts. Skilled manipulators can contrive conflicts that would drive the centrist's compromises.


Progressivism is a strategy that seeks to impose socialism through a progression of compromises. The progressive presents a conflict, often by projecting false images on the right.

The centrist seeks a compromise. This compromise, however, simply sets up the next conflict.

In this progressive system, the people who actually commit to a given compromise get framed as conservative. In many cases, one finds that the original position of the progressive gets projected on to the conservative.

The most dramatic example is racism. Prior to the Civil Rights movement, the left used the call for segregation to expand government. The media now routinely projects racism on the right.

In our modern progressive landscape, the centrists are the irrational reactionaries as they react to the never ending progression of conflicts presented by the radicals.

One can only achieve compromise when both parties involved are willing to commit to the compromise. Demanding compromise in a fluid environment just leads to chaos.

Prosperity Measures

Government, as the name implies, is a system for limiting the activities of people.


The Founders of the United States realized that, by limiting government, they removed constraints from the people.

Removing constraints led to widespread prosperity.

It is paradoxical that, by limiting the government, one releases the potential of the people.

To unravel the paradox, one need simply realize that the people are the positive space and government a negative space.

Our public discourse, however, focuses almost exclusively on government.

The left, which seeks to restore the feudal system of an unlimited government and constrained people, uses the paradoxical discourse to its advantage. They frame any attempts to limit government as austerity measures.

They call attempts to limit the constraints on the people "austerity measures."

Breaking this spell is a simple matter of creating a dialog in which the lives of the people are presented as the primary space and politics as an artificial constraining force that needs to be limited.

This was my goal in the Medical Savings and Loan.

The Medical Savings and Loan is a business model for funding health care. The model creates thousands of small businesses designed to help people optimize their health care resources. The program replaces big centralized insurance companies with thousands of small distributed financial service firms.

Yes, the model has political implications. The heart of the model is small business. Thousands of small businesses.

Implementing the Medical Savings and Loan would involve the creation of thousands of vibrant businesses. The owners of the businesses would live middle class lifestyles. Some would become millionaires. It wouldn't create any billionaires.

The Medical Savings and Loan would move billions of dollars from control of the ruling class back into the hands of the people. (Both the Republican and Democratic ruling elite want to stifle discussion of this plan).

The Medical Savings and Loan is not crony capitalism. It is not a government program implemented through politically connected businesses.

It is the exact opposite. The program replaces crony capitalism with a network of small businesses. Best of all, it empowers individuals by letting them retain control of their health care resources.

The Medical Savings and Loan could be used in the current political debates to overturn ObamaCare and the oppressive centralized health exchanges created by ObamaCare.

The plan makes the private sector the positive space and exposes government as the limiting factor in growth.
Once the political debate is done, the Medical Savings and Loan would be entirely about small businesses helping other small businesses solve the health care puzzle.

The Medical Savings and Loan is an extremely beautiful plan that gets executed in the private sector.

Don’t you see how the vision of the US Founders works? The whole point of limiting government is to release the creativity of the private sector.

The vision of the founders was contingent on a robust private sector. The way to defend that vision is to present arguments in which the private sector is in the foreground.

Limiting government is not an austerity measure, it is a prosperity measure.

Unfortunately, the program needs a small amount of support to get off the ground. It needs a dozen people physically gathered in a room to talk about the idea.

The Medical Savings and Loan is about human to human interaction. It is not a computer program. Yes, it involves a mathematical model, but it is about people physically working with other people. Anyway, here is my contact form again. Yes, the program will create several millionaires. I can't guarantee that you will be one of the millionaires.

You Can't Repeal, You Can Replace

The Founders realized that their Constitution was far from perfect and designed the document for change.

The interesting thing is that they created a mechanism to amend the Constitution, but did not create a mechanism to directly repeal parts of the document.

There is wisdom to this structure.

It is in our nature to want to change the past. But it is physically impossible for humans to change the past.

By one definition, a conservative is a person who wants to return to a given state of things. In politics 101, a conservative is a person who reacts to progressive change.



Regardless of the definition, Conservatives have a long history of trying to repeal legislation passed by progressives and they have a dismal fail rate to show for the effort.

Notice the failure of financial deregulation. Derivatives and short selling were created as regulatory tools. These tools depend on regulation. Removing the regulations regarding these regulatory devices led to economic chaos.

Conservatives would be wise to listen to the wisdom of the Founders: You can amend, but you can't repeal.

Rather than trying to repeal laws they don't like, advocates of the free market need to think through the foundations of free market economics and devise replacements for bad laws.

I dislike ObamaCare. But ObamaCare has already changed the state of things.

One cannot simple repeal this bad law. This anti-market "health exchanges" are already being implemented at the state level.

The only way to get rid of this thing is to come up with a free market alternative to state run health care.

Unfortunately, Conservatives are so caught up in their rhetoric of nullification that they have ignored the wisdom of the founders. You cannot repeal, you can only ammend.

Any changes we make must take into account the current state of existence.

If we don't like socialized medicine, then we must come up with a proactive mechanism for unrolling a group health pool (socialized medicine) into individual accounts.

I've been working on this problem for thirty years and could contribute to an effort to restore health freedom. That would involve something radical like holding a meeting somewhere. If anyone is interested in restoring health freedom, they could contact me.

Doves To The Rescue

America would be safer with a Republican Dove at the helm than a Republican Hawk.

The greatest strategic threat to the United States is not Iran. Our greatest threat is internal division.

Look at this country. America is more divided at this moment than at any time during my life.

The OWS movement shows that the United States is a powderkeg looking for a spark.

If a Republican Hawk was president and we were drawn into a war with Iran, the anti-American forces of the world would frame the war as the creation of the United States. We could actually see rioting in the street.

Does anyone remember the Iraq War?

There were good reasons for George Bush's decision to invade Iraq. In the lead up to the war, both the International Community and the US Democrats were giving support to regime change in the rogue state.

As soon as George Bush was mired in the conflict, the International Left turned on Bush with a vengeance.

The reaction was so strong that it moved the entire world dramatically to the left.

On the international scene, we saw a number of countries elect in Communist dictators. At home, the reaction to the war gave a supermajority to a radical left wing Congress.

The left had so much success with its reactionary politics against Bush that we are guaranteed to see a repeat of this reaction if another hawkish Republican is drawn into a war.

I believe that the world would be much safer if we had a Republican Dove in the executive office. The only dove in the Republican line up is Ron Paul.

I have no doubt that Ron Paul would defend the United States to the bitter end. His history as a dove would help counter the reactionary forces that escalated the troubles during the Iraq War.

A war is a system ruled by action and reaction. Although there was justification for Bush's decision to invade Iraq, the decision led to an extremely ugly chain of action and reaction that greatly damaged the United States.

Those who engage in foreign affairs must consider the whole chain of action and reaction. Bush clearly was not prepared for the reaction that set in after the Iraq invasion.

A Republican Hawk taking unilateral action against Iran will spark a similar if not worse reaction than we saw in Iraq.
I am dismayed that Republican candidates keep pushing the hawk position, when Amerca's best interests would be preserved by a dove.