QE1 and QE2 may have been great ships, but it will be written of this economic crisis that those terms referred to Federal Reserve policies that created cheap money in unprecedented ways. QE2 ended this past June with mixed reviews, but now headlines abroad and confidence eroding measures mostly created by politicians here have contributed to a softening in the economy. The Fed has observed that no other branch of government seems able to make a positive contribution to the economy's dilemma at this time, and felt they had to follow on with a new program.
The Fed announced today a program to push down long term interest rates even further than the near record lows they are today. Look forward to a chance to refinance your mortgage and maybe other debts once again in the future.
Reason I it is important to you:
Are 2.5% 15 year mortgages a possibility? In this era of amazing events and unheard of numbers, probably.
Reason II:
America and Its Political Leaders Have to Fix the Economy From Here
This really marks about the limit of the Fed's abilities to substantially help the economy. The President and Congress control spending, taxes and policies that govern the economy. It is time to expect them to understand the problem and fix it.
Unfortunately, partisan slogans don't add up to substance and that is what is needed. This is going to take a while and in the meantime the USA is going to be held hostage, so to speak, by the political class who have shown themselves adept at only one thing. Getting Elected.
The Political Debate about Spending or Not Spending is Wasting Time.
Six Issues Only Congress and the President Can Fix.
-Health Care Costs in the US are about $1 Trillion higher than they should be killing job growth and public sector budgets.
-China has conspired and largely succeeded in stealing our industrial base and accumulating our wealth through unfair trade. Thanks for the incompetence Federal trade regulators and Congress.
- Tax policies have to be simplified and streamlined, closing loopholes, while tax breaks for the very wealthy have to be justified in terms of the national interest or closed now.
-Stock and Capital market activities have to be regulated so they benefit the small investor first the formation of capital for productive investment. Amazing how influence money has warped this issue.
- Public education in the US is the most highly funded in the world. The outcomes for that investment is pretty miserable with kids leaving high school with inadequate skills to find a job outside of retail services. Trade schools, discipline, expectations, behavior contracts, school uniforms, teacher merit evaluations and most of all parent accountability are going to have to be put in place.
- A new energy infrastructure will lower our fuel consumption, increase domestic production, create jobs and lower imports. Extremists and political cronies of the left and right, should be shown the door from policy making.
The US can do these things and would thrive if it did. Bernanke can't do it for us though, we have to demand it of our political leadership.
Showing posts with label US health care reform. Show all posts
Showing posts with label US health care reform. Show all posts
Wednesday, September 21, 2011
Thursday, July 14, 2011
US Policy Makers: Incompetent, Partisan and Compromised by Self Interest; Mishandle the Economy
1- Politicians serve the interests of the economic or ideological groups that finance their election campaigns before the interest or our nation. The result is bad policy, partisan sound bites and unqualified elected leaders. The solution for the economic crisis is at the mercy of this compromised body of leaders.
2-The economy is uncompetitive and mismanaged. The persistent joblessness points to how out of touch policy makers are with the deep problems in our country starting with we don't make stuff anymore.
3- Post WWII economic theories aren't showing us how to get out of this. After trillions dollars in stimulus and 3 years into a recovery interest rates, jobs and tax receipts should be rising and deficits falling. This is not in the range of normal and indicates how dire the situation really is.
4-Big business has every advantage in today's economy but they only created a net of 20,000 jobs this year. They are still outsourcing jobs overseas. Policy makers turn a blind eye. Not acceptable.
5-Health care costs in the US are $1 trillion too high. For profit health businesses milk Medicare and insured patients, trial attorneys exploit the system adding costs in malpractice insurance and forcing MD's to defend their own liability by prescribing excessive diagnostic procedures. Drug companies don't charge any country what they charge us for drugs.
6-Too many regulations or not enough regulation. Bureaucratic class have failed our economy but saved their careers. The mortgage/housing bubble is the showcase for this issue.
7-Short term business leaders. Short term policy makers.
8-China trade has been a disaster. Ross Perot thought Mexico would be the cause of a great big sucking sound as jobs left America. He was wrong. Trade with Mexico is two way. China is the jobs predator and our smug policy makers have turned a blind eye to their theft of our patents, refusal to buy our goods, pricing below cost to put our manufacturers out of business.
9- US big business is China's best ally. They have outsourced jobs and continue to do so to lower costs boost profit margins to record levels even as the real per capita of US households continue its 10 year long decline. Today's big business leader put themselves ahead of their shareholders and even their country. They are under taxed and overpaid.
10-Education spending in the US per student is almost the highest in the world. What a terrible return on our investment we have received. Is it our culture, self serving education professionals or our families that are at fault? It needs to be addressed or expect our future generation to suffer stagnation under the weight of unproductive, unskilled people mired in real poverty.
2-The economy is uncompetitive and mismanaged. The persistent joblessness points to how out of touch policy makers are with the deep problems in our country starting with we don't make stuff anymore.
3- Post WWII economic theories aren't showing us how to get out of this. After trillions dollars in stimulus and 3 years into a recovery interest rates, jobs and tax receipts should be rising and deficits falling. This is not in the range of normal and indicates how dire the situation really is.
4-Big business has every advantage in today's economy but they only created a net of 20,000 jobs this year. They are still outsourcing jobs overseas. Policy makers turn a blind eye. Not acceptable.
5-Health care costs in the US are $1 trillion too high. For profit health businesses milk Medicare and insured patients, trial attorneys exploit the system adding costs in malpractice insurance and forcing MD's to defend their own liability by prescribing excessive diagnostic procedures. Drug companies don't charge any country what they charge us for drugs.
6-Too many regulations or not enough regulation. Bureaucratic class have failed our economy but saved their careers. The mortgage/housing bubble is the showcase for this issue.
7-Short term business leaders. Short term policy makers.
8-China trade has been a disaster. Ross Perot thought Mexico would be the cause of a great big sucking sound as jobs left America. He was wrong. Trade with Mexico is two way. China is the jobs predator and our smug policy makers have turned a blind eye to their theft of our patents, refusal to buy our goods, pricing below cost to put our manufacturers out of business.
9- US big business is China's best ally. They have outsourced jobs and continue to do so to lower costs boost profit margins to record levels even as the real per capita of US households continue its 10 year long decline. Today's big business leader put themselves ahead of their shareholders and even their country. They are under taxed and overpaid.
10-Education spending in the US per student is almost the highest in the world. What a terrible return on our investment we have received. Is it our culture, self serving education professionals or our families that are at fault? It needs to be addressed or expect our future generation to suffer stagnation under the weight of unproductive, unskilled people mired in real poverty.
Friday, April 8, 2011
US Excess Health Care Costs Are $1 Trillion. Could Savings Fill the Budget Gap?
You go to the store and if the price is too high, you try another store. You shop for the best value for your money. On the other hand, if your child gets sick you go to the quickest and best health care provider you can. You don't ever ask what the price will be and shop around and if you did, probably no one could tell you what it really would be and even if they did, you wouldn't have any idea if that was a good deal. Heck it doesn't matter if it is a good deal. Your child is ill and you need to see a reliable doctor now. Besides that, the price probably doesn't matter to you if you have health insurance, medicare, a military health plan or medicaid.
The Republicans who advocate a market structure for health care services that will lead to competition on price and quality are either dreaming or spinning a yarn to cover up the agenda of special interests that financially support them. The evidence shows our health care system IS NOT competitive or a good value for amount of money spent on it by any measure. No, actually it is arguably the most expensive and overpriced system in the world. On top of that, we rank low in terms of health outcomes vs. other developed countries. We are below average in health and yet spend almost twice as much on it as pretty much the other developed counrtries.
Spending Per Capita Health Care in Dollars
Germany $3100
Japan $2900
Canada $3300
USA $6900
Democrats, you are next. You want to extend coverage? Do you consider for one moment that we can't afford the entitlements we already have? Have you considered the effects of your polciies on hiring? Furthermore, do you think it is in the nation's interest or our health care system to block tort reform at every opportunity. We know it is in your interest, trial attorneys are among your biggest financial backers. Why don't you admit to the public your conflict of interest and stop enabling trial attorneys' pillaging of the medical liability insurance golden goose?
Germany has a good health care system and people have confidence in it. They spend 10% of their annual economic output (GDP) on it. Our health care system may be known for the most amazing cures and procedures, but for the masses of people, the outcomes are at best average. Americans don't believe we have a good health care system. People sense it is too expensive but actually it is extraordinarily expensive. Health care spending takes up 17% of our annual GDP. What if we copied Germany and spent 10% of our GDP? What if we saved 7% of our economy's spending for other purposes?
I am simplifying to get to the point. If we spent 10% instead of 17%, we would save 7% or $980 billion dollars a year. Our national deficit this year is at about $1400 billion. Wow! If we saved $980 million wouldn't that help fund our deficit? How could that much wasteful spending have got by us?
A Little Story
This waste of money is also killing our job market and businesses. Big companies send jobs to Asia to lower their costs including health care costs. A friend of mine has a cheaper health insurance plan at his small firm. He employs six people and is still going even though many of his competitors have been driven out of business over the last three years. He is doing whatever it takes to stay in business and take care of his people.
He became ill recently for about a month. There was a pill he could take once a day that would give him relief so he could live and keep on working. The cheapest price he could find for that pill was $175 each and after five days his insurance company cut him off. $175 a day was more than he could pay but he found some relief. A Canadian online pharmacist offered the very same pill in quantities of 10 for only $27 a day. My friend was saved by Canada's health care system. Our own country's health system failed him in favor of apparent profiteering.
From these examples, we can see how the the cost of health care is out of all proportion in America. It is wrong. We also can see that a small businesses, that have to struggle mightily to stay in business, are having a hard time employing people and providing health insurance. How many more people would be working today if health care was affordable?. How much would they be paying in taxes or at least not drawing in support from the government and how much better would our deficit problem be?
At some point we will confront this issue. Employment, deficits and our health are all at risk. The profiteering of special interests (those MD's who seek riches, pharmas, trial attorneys, medicare cheats and scammers) and who are protected by their sponsored politicians are at the heart of the problem. It is time to make our system over. Germany and several other countries have decades experience sorting this out. We can learn from them.
Investment Implication: Health care business models generally are going to feel increasing pressure on profit margins as the US has hit a ceiling on what it is able to pay. Generally, it seems health care will become a stagnant industry in the US, even as demand grows ever stronger.
The Republicans who advocate a market structure for health care services that will lead to competition on price and quality are either dreaming or spinning a yarn to cover up the agenda of special interests that financially support them. The evidence shows our health care system IS NOT competitive or a good value for amount of money spent on it by any measure. No, actually it is arguably the most expensive and overpriced system in the world. On top of that, we rank low in terms of health outcomes vs. other developed countries. We are below average in health and yet spend almost twice as much on it as pretty much the other developed counrtries.
Spending Per Capita Health Care in Dollars
Germany $3100
Japan $2900
Canada $3300
USA $6900
Democrats, you are next. You want to extend coverage? Do you consider for one moment that we can't afford the entitlements we already have? Have you considered the effects of your polciies on hiring? Furthermore, do you think it is in the nation's interest or our health care system to block tort reform at every opportunity. We know it is in your interest, trial attorneys are among your biggest financial backers. Why don't you admit to the public your conflict of interest and stop enabling trial attorneys' pillaging of the medical liability insurance golden goose?
Germany has a good health care system and people have confidence in it. They spend 10% of their annual economic output (GDP) on it. Our health care system may be known for the most amazing cures and procedures, but for the masses of people, the outcomes are at best average. Americans don't believe we have a good health care system. People sense it is too expensive but actually it is extraordinarily expensive. Health care spending takes up 17% of our annual GDP. What if we copied Germany and spent 10% of our GDP? What if we saved 7% of our economy's spending for other purposes?
I am simplifying to get to the point. If we spent 10% instead of 17%, we would save 7% or $980 billion dollars a year. Our national deficit this year is at about $1400 billion. Wow! If we saved $980 million wouldn't that help fund our deficit? How could that much wasteful spending have got by us?
A Little Story
This waste of money is also killing our job market and businesses. Big companies send jobs to Asia to lower their costs including health care costs. A friend of mine has a cheaper health insurance plan at his small firm. He employs six people and is still going even though many of his competitors have been driven out of business over the last three years. He is doing whatever it takes to stay in business and take care of his people.
He became ill recently for about a month. There was a pill he could take once a day that would give him relief so he could live and keep on working. The cheapest price he could find for that pill was $175 each and after five days his insurance company cut him off. $175 a day was more than he could pay but he found some relief. A Canadian online pharmacist offered the very same pill in quantities of 10 for only $27 a day. My friend was saved by Canada's health care system. Our own country's health system failed him in favor of apparent profiteering.
From these examples, we can see how the the cost of health care is out of all proportion in America. It is wrong. We also can see that a small businesses, that have to struggle mightily to stay in business, are having a hard time employing people and providing health insurance. How many more people would be working today if health care was affordable?. How much would they be paying in taxes or at least not drawing in support from the government and how much better would our deficit problem be?
At some point we will confront this issue. Employment, deficits and our health are all at risk. The profiteering of special interests (those MD's who seek riches, pharmas, trial attorneys, medicare cheats and scammers) and who are protected by their sponsored politicians are at the heart of the problem. It is time to make our system over. Germany and several other countries have decades experience sorting this out. We can learn from them.
Investment Implication: Health care business models generally are going to feel increasing pressure on profit margins as the US has hit a ceiling on what it is able to pay. Generally, it seems health care will become a stagnant industry in the US, even as demand grows ever stronger.
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