Health Reform Timeline

It may be premature to do this analysis, but the folks at The Heritage Foundation have done a detailed analysis of the Senate Bill and constructed a timeline for all the changes (which stretch out for years). The overview is a little biased, so it’s worth downloading the PDF to see for yourself.

What happens first? Several changes occur immediately upon enactment. They include prohibition of insurance denial for pre-existing conditions and a tax on prescription drugs. In other words, pharmaceuticals will get more expensive for everyone and the self-employed will spend more for health insurance or else be forced to drop their existing coverage.

Next up (July 1) is a tax on tanning services, followed by a big decrease in Medicare reimbursements. Medical practices, which generally limit the number of Medicare patients they see in order to remain solvent, will be forced to further restrict services for Medicare patients. Oh, there are also new restrictions on group coverage which will make employer provided insurance more expensive. This will mean smaller paychecks.

My my: something for everyone. Not a single person will get any new health care benefits, but many will get less. Most people will also get some combination of higher expenses and smaller paychecks.

If you like this change, just wait until 2011, where everything gets seriously worse. Unless, of course, the Republicans sweep Congress and can repeal this turkey.

Thirteenth Century Man

We think our political and economic issues are oh so modern. That view comes from an ignorance of history. Many of today’s issues have a long and storied history. I found this piece to be an interesting example.

Holiday Blogging

My blogging will be minimal or even non-existent over the holidays. One thing I’m contemplating is cutting back on new blog entries and spending more time updating old ones. WordPress.com, my gracious blogging host, generates a lot of statistics about which blog entries are popular. I may spend more time updating some of my more popular older works (which people actually read) and less time adding new material. I’ll decide soon. In the meantime, I hope my faithful readers all enjoy a Merry Christmas and a Happy New Year.

Unorganized Knowledge

Another holiday party and one conversation turns toward the obtuse nature of local government regarding a local problem. It seems everyone has a tale to tell concerning the stupid intransigence of the local zoning commission, public works department, park departments, police department, etc. I didn’t want to engage in a lot of economics talk (it so depresses people at festive moments), but I wanted to point out that such results were inevitable. This realization can only be appreciated by understanding Hayek’s huge breakthrough of what he called “the Knowledge Problem”. The nature of distributed and unorganized knowledge makes idiotic results an inevitable consequence of attempts to plan centrally with a “one size fits all” approach.

Devils In The Detail

Polls show that most people do not favor the health care “reform” moving through Congress. My guess is that most people reach their opinion through some high level understanding of the general ideas and general principles involved. Yet the devil is in the details, and the current Reid bill has lots of devils. Richard Epstein has documented some of the detailed problems and implications. It’s worse than I had imagined. I can only conclude that this will be a major setback for health care in this country.

Depression?

This article makes a very strong and cogent case: we are in a depression and will be for some time to come. The underlying problem is debt. But I’m not totally convinced. Not every relevant fact is included in Mr. Harrison’s brilliant analysis.

First, the standard definition of “savings” (as opposed to the common sense definition) does not include money set aside in pension funds, 401Ks, or ordinary investments. Assets have bearing on what constitutes a reasonable debt level. I am less concerned about savings rates than asset levels. With the collapse of housing prices, homeowner assets have shrunk. It is also true that the collapse of the stock market hurt investments, another blow to asset levels. But the stock market has been recovering and house prices are starting to stabilize. Is our debt overhang still too large? I simply don’t know, but I haven’t seen evidence one way or another.

Second, the idea that public debt is needed to offset the liquidation of private debt is true, but only so long as there are lenders. Ever increasing debt is sustainable only if there is growth in underlying assets and the ability to service debts. It’s not clear that government can tax itself out of debt, especially since higher taxes will lead to increased unemployment and social unrest. It is not clear that the government can continue borrowing for too much longer.

In the end, we either have manageable debt levels (public+private) or we don’t. If we don’t, then liquidation is the inevitable response. This can occur indirectly through inflation, taxation, or massive decreases in government spending. It can also occur directly as we see Chicago doing by selling it’s parking garages, highways, and (maybe) an airport. The feds could liquidate as well. It’s not unthinkable – other national governments have sold their postal service, air traffic control, port authorities, etc.

All in all, I think it likely that we won’t see significant economic growth for quite some time, that unemployment will remain high, and that government will not be able to do much to help short of shrinking itself – which is politically unlikely.

Checking Accounts

British banks are moving toward eliminating paper checks. Checks are already rare in Sweden and Norway. They seem to be disappearing from my life as well – a box of checks seems to last forever. Checks undoubtedly will go away. But what will they call “checking accounts”?

Employers and Health Insurance

Conventional wisdom has it that one big problem with our health care “system” is the fact that employers provide health insurance. But there is another side to the argument. Things are never as simple and straightforward as they seem.

Left vs Right? Wrong Choice!

Long time readers will know that I’ve often pondered the question of political left vs right. I may have been trying to solve a false question. This essay proposes a different way of looking at it via “The Political Spectrum for Dummies”. Very insightful.

Hope for the Future

When a top futurist with a good track record reveals some of what he sees coming, it’s worth paying attention. If he’s right, our policy makers are working on all the wrong issues and ignoring the important ones. That gives me hope.