Single Payer Health Care?

[Starlight]

The point is if the US Government issued itself bonds the money has been spent and repayment of those bonds is dependent upon future taxes.
It is functionally no different than the government spending the money and putting an IOU in the Social Security fund.

Imagine you owned lots of companies. One of those was the Bank of Gerbil. The Bank of Gerbil is a normal bank and so does two things: Offers savings accounts, and makes loans. Lots of gerbils would put their savings in the Bank of Gerbil. In turn, the Bank of Gerbil would loan out that money to businesses, charging them interest on those loans, and using that interest to pay interest to the savings accounts of the gerbils who bank with them. That's (roughly) how any normal bank works.

One day another company you own called Gerbil Construction Inc decides to build a big gerbil wheel. It needs a loan to do so, so it rocks up to the Bank of Gerbil and says "hi, we're a well-established company with a very good credit history, can you loan us some money?" Bank of Gerbil looks over their application and approves the loan. A contract is drawn up regarding the loan that says that Gerbil Construction Inc will pay back the money with interest, and both parties sign it. Gerbil Construction Inc is thus able to go ahead with their big wheel-building project because they now have the money to do so. Bank of Gerbil is in turn able to pay interest to the savings accounts of its customers because of the interest it is getting from the loan to Gerbil Construction Inc. Everyone is happy.

But one day rumor spreads among the gerbil community. A few conspiracy-theory prone gerbils claim that something really really dodgy is going on here because both companies happen to be among the dozens of companies owned by Meh Gerbil. "He's lending money to himself!" they say. "He's stealing our savings and putting worthless IOU's in their place!" others say. The manager of Bank of Gerbil tries to calm the crowd, he reminds them that lending out money is what banks do, that of course they lend money out at interest, because that's how banks work. He reminds the crowd that Meh Gerbil owns two dozen companies, and the fact that two of the companies happen to have interacted is nothing particularly abnormal. He reminds the crowd that Gerbil Construction Inc has existed for more than a century and has a really really good credit history and thus Bank of Gerbil's loan to them is a safe one and much safer than a loan to Dodgy Gerbils Inc who were also trying to get a loan that day but who were denied.

That's what is going on here with the US government. The Social Security fund is essentially a bank who wants to pay interest to the customers who have savings accounts with it. To do that, it loans out that money in order to get paid interest on those loans. The US treasury is an entity who wanted to borrow money and pay it back with interest. So the one took out a loan from the other. That they both happened to be US government entities is largely beside the point since they each operate independently, and there's nothing strange or unusual about such behavior.

repayment of those bonds is dependent upon future taxes.

That's not true, taxation has nothing to do with it. Basically all US treasury bonds are 10-30 years in length. Existing bonds are "rolling over" on a regular basis, as old ones expire and new ones are created to replace them. As they expire the treasury just sells new bonds on the open market to repay the old ones. Effectively what happens is this: Say I am holding a US treasury bond that I bought 10 years ago and is now expiring, the US treasury creates enough new bonds to replace it and sells them on the open market, then they take the money they got from selling the new bonds and use that money to pay me.

The system is thus primarily dependent upon the willingness of the market to buy US treasury bonds. Basically the market penalizes countries that don't have a good credit history by charging them higher interest rates for their bonds. Let's say I'm an investor looking to buy bonds. Greece comes to me and says "we want to sell you bonds", and I say "sheesh, not sure if I can trust that you'll actually pay it back. So what I'll do is charge you a 20% interest rate on the bond, because I judge that that balances out the chance that you might never pay it back." The US comes to me and says "we want to sell you bonds", and I say "sure, you've basically never missed a payment in your history, I'll charge you 1% interest on the bond."

As the market gets less and less willing to buy US treasury bonds, the US treasury has to offer better and better deals (i.e. higher interest rates) to convince people to buy the bonds.

It is possible to get a situation where nobody is willing to buy bonds at almost any price, which is called a credit crunch and that is basically economic armageddon depending on how bad it is, because our whole modern global economic system relies on credit being available and bonds happily rolling over.

So far we've never had a credit crunch so bad that it's made the US treasury scream for mercy, but it's theoretically possible. At that point the US federal government would have to step in and come to the US treasury's rescue in some way. There are all sorts of ways they could do it, because remember at the end of the day the economic system works the way it does because the government says so, and if the government really wanted to they could say different. So their options would include things like: (a) simply choosing to have the US Treasury default on all its bonds (which would instantly reduce the amount of US federal debt to zero, and give the US a bad credit history, and the losers would be anyone on the globe who held US treasury bonds... which includes most banks in the world so you'd get a whole lot of banks immediately declaring bankruptcy as a result), (b) immediately trying to use current taxes to pay off the existing debt, (c) printing new money and paying off the debt with that new money. The printing money option would be most feasible, and various economists already think this would generally be a good thing for the US to do at least in part.

I just don't understand how you can call the USA terribly evil and corrupt and claim her citizens are unware of this corruption and then oppose those of us here who say, "I don't want the USA managing my healthcare because her politicians are corrupt." You are asking me to trust a government that you've claimed is untrustworthy, sinister, and lawless.

I see healthcare as one of the primary functions of government. Healthcare is the NZ government's single biggest expenditure, with 17% of government expenditure being on healthcare. I think US citizens should stand up and demand basic services from their government. Imagine you lived in a town with no police force, and crime was sky-high as a result, and you moaned about how much it was costing every person to hire their own bodyguards from the private security firms. I would come to you and say "dude, get yourself a government-run police force, it's just the sane thing to do". And you would reply "but I don't trust big government, they're so corrupt and bad!" And I would roll my eyes, because at the end of the day government being corrupt is a bad thing but not having a police force is a worse thing and everyone hiring bodyguards from private security is just the world's biggest waste of money.

I think the US citizens should reasonably expect that their government provides them with the basic services that governments elsewhere in the Western world do, and that includes things like roads, police, water, education, and healthcare.

I think that US citizens are naive as to how much power they have to actually fix corruption in their government if they set their minds to it. They moan and whinge about government corruption, but they take it for granted as part of the system and wrongly consider it to be an inherent flaw in government itself, rather than realizing it is fixable and very much optional, and that they ought to be doing something to fix it.

I think that US citizens in general are woefully under-informed about the historical and present actions of their country on the international stage. They seem to have a delusionally over-exaggerated view about how much "aid" and "help" the US gives to other countries, and an almost complete ignorance of the US's long history of supporting dictatorships, and overthrowing democracies, and using military force for commercial interests.

[demi-conservative]

I am on the fence.

1. When the insurance companies were "in charge" and had a free market, they screwed everyone with out of control prices.
2. When the Democrats tired to fix it they ended up making things worse and more expensive.
3. Now the Republicans are trying to fix it and it looks like in order to make it cheaper for some people who are young and dont need insurance they will screw over the people who actually need insurance, like the elderly or people with actual illnesses.

1. Health insurance is taking money of healthy people and giving to sick people (also insurance companies). This bound to fail when too expensive for healthy people, then some pull out making it even more expensive for everyone, then even sick people pull out because too expensive for them and vicious cycle until whole thing collapses.

Now, as far as I can tell, in simple terms:

2. Obama''''care'''' is (deliberately???) shortsighted, set up vicious cycle with sobstories, trying to jackup prices for healthy by making them cover pre-conditions of sick people. Also, they tried to force healthy people into system so more sick/poor people 'covered' which they blow trumpet about as 'big success!!!!'. In long term, of course, more expensive over time, so healthy people pull out, then even more expensive, so more people pull out until it crashes. We can already see crash starting to happen!

3. To save system, Reps need to keep healthy people paying. Which means to make it cheaper for them. Which means less sick/poor people get covered, and they also have to pay more for existing conditions and whatnot. So more sob stories!!!

Boohoo, it's only way to possibly not have big big incoming crash happen.

[Mountain Man]

1. Health insurance is taking money of healthy people and giving to sick people (also insurance companies). This bound to fail when too expensive for healthy people, then some pull out making it even more expensive for everyone, then even sick people pull out because too expensive for them and vicious cycle until whole thing collapses.

Now, as far as I can tell, in simple terms:

2. Obama''''care'''' is (deliberately???) shortsighted, set up vicious cycle with sobstories, trying to jackup prices for healthy by making them cover pre-conditions of sick people. Also, they tried to force healthy people into system so more sick/poor people 'covered' which they blow trumpet about as 'big success!!!!'. In long term, of course, more expensive over time, so healthy people pull out, then even more expensive, so more people pull out until it crashes. We can already see crash starting to happen!

3. To save system, Reps need to keep healthy people paying. Which means to make it cheaper for them. Which means less sick/poor people get covered, and they also have to pay more for existing conditions and whatnot. So more sob stories!!!

Boohoo, it's only way to possibly not have big big incoming crash happen.

It's like this:

* Increase quality of healthcare
* Increase number of people who are covered by health insurance
* Decrease costs

Pick two...

[Cow Poke]

It's like this:

* Increase quality of healthcare
* Increase number of people who are covered by health insurance
* Decrease costs

Pick two...

Reminds me of my mechanic....

I can work fast, cheap and good - pick 2.
If it's fast and cheap it won't be good, etc....

[Starlight]

They seem to have a delusionally over-exaggerated view about how much "aid" and "help" the US gives to other countries, and an almost complete ignorance of the US's long history of supporting dictatorships, and overthrowing democracies, and using military force for commercial interests.

It's getting off topic from the OP, but I happened across this 11 minute youtube video today which gives a reasonably complete list of US international crimes since WWII, for anyone who's interested.

[Joel]

However our taxes here aren't any higher than America's.

U.S.: "The overall tax burden equals 26.0 percent of total domestic income. Government spending at all levels has amounted to 38.3 percent of total output (GDP) over the past three years"

New Zealand: "The overall tax burden equals 32.4 percent of total domestic income. Government spending has amounted to 42.2 percent of total output (GDP) over the past three years"

http://www.heritage.org/index/country/unitedstates
http://www.heritage.org/index/country/newzealand

So New Zealand pays somewhat more taxes.
Also note that Heritage's Index of Economic Freedom (measuring how free-market countries are) ranks New Zealand the 3rd most free country in the world, and ranks the U.S. 17th. The Fraser Institute index also has similar rankings. It may very well be the case that New Zealand is better able to bear the higher taxation and spending because of their more free markets. E.g. because they have lower burden of regulatory costs.

(Mountain Man pointed out that another large difference is in the burden of military spending.)

So it isn't an all-else-being-equal comparison.

[Sparko]

So here is how New Zealand's healthcare works....

A guy has afib (spotty heartbeat) and needs a shock to get it back in rhythm. He ends up going home and using an electric fence to kickstart his heart because the ER told him he was not a priority and he would have to wait 6 hours for treatment. A bad heart is not high priority? 6 hours to get a defibrillator treatment?

http://m.nzherald.co.nz/nz/news/arti...ectid=11846000

During the first two hours, he had scans and tests, before being told it would be another six hour wait.

He didn't mind the wait, as he knew he wasn't a priority patient, but knew he had to take more medication to get him through the next six hours.

"I asked the nurse if I could go home and come back in say three hours but was refused as she said I would be wiped off the list and would have to start again."

He suggested that instead, he pop home and pick up more medication. But again she told him he would be put to the back of the queue, he claimed.

He then asked if the hospital could supply him with medication but was told no and warned again.

Griffin then swore at the nurse, who he then claimed told him, "I won't stand for that." He went home, took his medicine and, daunted by a trip to a hospital in Auckland, noticed his neighbour's fence.

Kicking off his boots, he put the back of his hand on the fence to give himself an electric shock.

He described the DIY method as feeling like he had received a "decent belt" through his body, but added it worked "straight away, virtually. I just walked away."

"It gave me a decent belt and [my heart] came right."

Dr John Bonning, Waikato Hospital's clinical director, did not recommend people use an electric fence that way as it was "dangerous and ill-advised".

As for the incident at the hospital, he couldn't talk about Griffin's case as it was being investigated after he lodged a complaint.

"Unfortunately incidents of verbal and physical aggression is an increasing problem confronting healthcare workers every day. We have adopted a zero tolerance policy that refers to specific actions or behaviours that will not be tolerated."

====

So basically this guy is in trouble because he verbally abused the medical staff who wouldn't give him treatment for a freaking bad heart.

[Joel]

1. Health insurance is taking money of healthy people and giving to sick people (also insurance companies). This bound to fail when too expensive for healthy people, then some pull out making it even more expensive for everyone, then even sick people pull out because too expensive for them and vicious cycle until whole thing collapses.

That is true for systematic wealth redistribution, that we deceptively still call "insurance". It is not true of actual insurance.

Let's say we have 1000 people who each have a 1 out of 100 chance of incurring a particular $10,000 cost in the next year. So they decide to form an insurance pool together, with each putting in $100 (1/100 of their potential cost) for the year. Statistically we expect about 10 of them to get "sick" and receive the pooled money (contributions 1000*$100 = expected payout 10*$10,000). There's no reason for anyone to pull out because everyone has the same risk, and no one knows ahead of time who are the ones going to incur the cost, so the people who don't get sick cannot identify themselves ahead of time and pull out.

It's also not true that more people makes it cheaper (or vice versa). Suppose instead we have 2000 people. Sure the number of people contributing doubled, but so did the expected number of people who get sick (to 20). Everyone still contributes $100 for the year.

Now what if they don't have all the same risk? Those who have a 1/200 risk would contribute 1/200 (i.e., $50 for the year). Those who have a 2/100 risk would contribute 2/100 (or $200). So again, there is no particular motivation for low risk people to pull out. Nor does the overall size of the pool affect premiums. And even if all of the lower-risk people pulled out, the remaining pool of 2/100 risk people would still expect to pay the same, $200.

There is no vicious cycle.


But now consider if we replace insurance with systematic wealth redistribution (and perhaps deceptively still call it "insurance"), the situation changes. Suppose you have everyone pay the same amount (say $120 for the year) and even include people whose risk is 100% who would have had to contribute the full $10,000 for the year under insurance. Then those who would have paid $50 under insurance are paying an extra $70. That extra $70 is pure systematic wealth redistribution to the others in the pool. Those who have 100% risk are receiving a pure systematic wealth redistribution of $9,880. Now you have the motivation for a vicious cycle of people pulling out. The 1/200-risk people will want to pull out and instead obtain insurance, costing $50. Those people pulling out will then raise the total cost for the remaining people, etc.
Obamacare, in an attempt to ward off the vicious cycle, thus banned the remaining vestiges of insurance and forced everyone to be in the systematic wealth redistribution system.

(It is logically possible that low-risk people could voluntarily choose to participate in the wealth-redistribution system, consenting to pay extra. To that extent, they would be engaging in charity, not insurance. And the higher-risk people would, to that extent, be recipients of charity, not insurance.)

The crazy thing is that the systematic wealth distribution seems to be the goal (the "Affordable Care Act" was all about that, and not about making medical care more affordable), and yet it could be done without the state meddling in, deforming, and/or banning insurance or medical care. The wealth distribution program could just be its own separate thing without it being confused with and damaging other things.

[Sparko]

The insurance market are nothing more than fancy bookies. They are taking bets that you will be healthy and you are betting that you will get sick. If you "win" they pay you more money than you put in. If they win they collect more money from you than they pay you. Multiply that by millions of people. The odds are that the insurance company is right more than not, meaning while they have to pay out some to sick people, they are stuffing their pockets from the money of the well patients.

Just like a casino, they only want to take a sure bet. So when they already know you are sick and will need to be paid, they want nothing to do with you. They only want well people so they can make profit. If they could dump you completely after you get sick under their watch they would, just like your car insurance skyrockets or they dump you after you have an accident.

It has nothing to do with making well people pay for sick people. It has to do with everyone making the insurance companies rich at the expense of everyone. If you are well, you are just paying them for nothing. And they are hoping it stays that way and can dump you when you become too high of a risk.

[seer]

It has nothing to do with making well people pay for sick people. It has to do with everyone making the insurance companies rich at the expense of everyone. If you are well, you are just paying them for nothing. And they are hoping it stays that way and can dump you when you become too high of a risk.

Yep, my girlfriend was a Commercial Lines supervisor (For commercial insurance policies). So I got to go to a lot of their functions - they do live and party well!

[Joel]

The insurance market are nothing more than fancy bookies. They are taking bets that you will be healthy and you are betting that you will get sick. If you "win" they pay you more money than you put in. If they win they collect more money from you than they pay you. Multiply that by millions of people. The odds are that the insurance company is right more than not, meaning while they have to pay out some to sick people, they are stuffing their pockets from the money of the well patients.

Just like a casino, they only want to take a sure bet. So when they already know you are sick and will need to be paid, they want nothing to do with you. They only want well people so they can make profit. If they could dump you completely after you get sick under their watch they would, just like your car insurance skyrockets or they dump you after you have an accident.

It has nothing to do with making well people pay for sick people. It has to do with everyone making the insurance companies rich at the expense of everyone. If you are well, you are just paying them for nothing. And they are hoping it stays that way and can dump you when you become too high of a risk.

Sure, insurance is similar to betting but the market for risk has a useful function. In a way it's the opposite function of gambling. Gambling involves taking on additional risk for a chance at a gain. Purchasing insurance is about reducing your risk by paying someone else to take on that risk, and/or making your budget less potentially fluctuating, more predictable. In both cases, the "house" itself averages out the risk by statistical diversification (they aren't taking sure individual bets). You can't actually "win" with insurance; rather, you are hedging against the risk of loss. And people should be free to decide whether/how much they want to do that or how much they are willing to pay for that.

It makes no sense to purchase insurance for a 100% "risk". It would cost more than it's worth. Insurance is not a tool suitable for such a problem. If you try to shoehorn insurance to be suitable for it, then it becomes no longer insurance. So you necessarily need a different tool to deal with such a problem. But that doesn't mean insurance itself should be destroyed or distorted in the process. It's like people were to complain that screwdrivers aren't suitable for pounding nails, so let's get rid of all screwdrivers. No, insurance, like screwdrivers, has a useful function, even if that's not pounding in nails.

It has nothing to do with making well people pay for sick people.

Right. It has to do with managing risk.