Good news is used to scare you

"Our current best estimates tell us that about ten percent of the global population may have been infected by this virus." -- Dr. Michael Ryan, Executive Director, WHO Health Emergencies Programme, October 5, 2020.

You will hear this statement at 2:57 in the following video:

You will also hear Dr. Ryan say this:

"What it does mean is that the vast majority of the world remains at risk."

Dr. Ryan does not tell you this:

The global population is approximately 7.8 billion, if 10% have been infected that is 780 million cases. The global death toll currently attributed to COVID-19 infections is 1,061,539.

That’s an infection fatality rate of roughly or 0.14%. Right in line with seasonal flu and the predictions of many experts from all around the world.

0.14% is over 24 times LOWER than the WHO’s “provisional figure” of 3.4% back in March. This figure was used in the models which were used to justify lockdowns and other draconian policies.

In fact, given the over-reporting of alleged COVID-19 deaths, the infection fatality rate is likely even lower than 0.14% and could show COVID-19 to be much less dangerous than flu.

More details are available at this link:

WHO admits COVID-19 is no more dangerous than flu

All government health organizations have a vested interest in keeping the pandemic mania alive.  This is a glaring example.  The Executive Director of the World Health Organization does not discuss the good news that his statistics provide he instead says that the vast majority of the world remains at risk.  The media is complicit in this subterfuge.  The following news article is an example:

Daily Mail Article

The second paragraph of the Daily Mail article correctly states that COVID-19’s death rate is comparable to the seasonal flu.  The article then goes on to say:

More than 5,400 people are dying around the world every 24 hours, according to calculations based on averages in September.

That equates to about 226 people an hour, or one person every 16 seconds. It means that, in the time it takes to watch a 90-minute football match, 340 people die on average.

 This news article then reaches the following conclusion:

Until a vaccine - expected for the vulnerable early next year and to be rolled out en masse by the end of 2021 - arrives, draconian social restrictions and increased testing are the only ways to curb the virus's spread.

Economies destroyed worldwide, hundreds of thousands on the brink of starvation, and all of this to combat a virus that is no deadlier than the seasonal flu.

A glimpse into the future of health care

The link below is for a Mises Institute article about rationing of health care in Pennsylvania during the current Coronavirus pandemic:

Pennsylvania Is Playing Politics with Drug Rationing

The future of healthcare is described by these paragraphs from the above article:

Just as a reminder of the kind of central planners we are dealing with, this is the same Pennsylvania Department of Health that decreed on May 12 that nursing homes "must continue to take new admissions, if appropriate beds are available, and a suspected or confirmed positive for COVID-19 is not a reason to deny admission." Months later, nearly 70 percent of coronavirus fatalities in the state have occurred in nursing homes.

Not being content with causing such a disaster, the state health department has issued guidance on how healthcare facilities should ration the limited supply of the new drug Remdesivir in the event that there are not enough doses to go around, but notes that the guidelines should apply to any scarce form of treatment. While certainly an unpleasant subject to address, it is true that in the face of scarcity the limited supply of Remdesivir or any other treatment will need to be rationed and that some kind of method of choosing will be needed. Scarcity is simply a fact of life that must be dealt with. However, because the distribution of Remdisivir has been taken over by the federal government, which distributes it to state governments, which in turn distribute it to healthcare providers, the process has unavoidably become political.

Putting all the jargon aside, the guideline is very clear about several points. First, it is not considered acceptable to distribute care via a random lottery, or on a first-come-first-served basis. Rather, healthcare providers must take into consideration "community-benefit" when rationing care and the department recommends the use of a weighted lottery system.

As you can see, the example lottery that the health department provides uses three different criteria to determine how a patient’s lottery chance is weighted: membership in a disadvantaged community, being an essential worker, and likelihood of death in the next year.

This is just the beginning.  As healthcare becomes more controlled by the State the more politics will be involved in decisions.  Scarcity is a fact of economic reality that can not be eliminated.  There will always be a need to ration drugs, procedures, equipment, and practitioners.  The rationing should be accomplished based on medical necessity and the attempt to provide the highest quality care to the largest number of patients at the lowest possible cost.  When the State makes the rationing decisions the results will always be subject to politics.  Pennsylvania is providing us with a glimpse into the practices that we will be subjected to under "Medicare for All".

Obamacare Replacement Act

With all of the media coverage of the failed attempt by the House of Representatives to replace Obamacare you may not have noticed that there is a current bill in the Senate to do just that.  Senate bill 222 was introduced by Senator Rand Paul on January 24, 2017.  A summary of this bill is at this link:

https://www.paul.senate.gov/imo/media/doc/ObamacareReplacementActSections.pdf

The full text of this bill is at this link:

https://www.congress.gov/bill/115th-congress/senate-bill/222/text

ObamaCare-Lite

Michael F. Cannon of The Cato Institute published an article today that evaluates the House of Representatives ObamaCare reform legislation.  The entire article can be read at this link:

https://www.cato.org/blog/house-gop-leaderships-health-care-bill-obamacare-lite-or-worse

Below are some highlights from the conclusion of this article:

The House Republican leadership bill does not replace ObamaCare. It merely applies a new coat of paint to a building that Republicans themselves have already condemned. Since the most important asset health reformers have is unified Republican opposition to ObamaCare, at least in theory, it would set the cause of affordable health care back a decade or more if Republicans end up coalescing around this bill and putting a Republican imprimatur on ObamaCare’s core features. If this is the choice, it would be better if Congress simply did nothing.

Making health care better, more affordable, and more secure requires first repealing all of ObamaCare’s regulations, mandates, subsidies, and taxes. Next, Congress should block-grant the Medicaid program, giving each state a fixed sum of money that does not change from year to year, combined with full flexibility to target those funds to the truly needy.

Finally, and crucially, Congress needs to enact reforms that make health care more affordable, rather than just subsidize unaffordable care. To make health insurance more affordable, Congress should free consumers and employers to purchase health insurance licensed by states other than their own. To drive down health care prices, Congress should expand existing tax-free health savings accounts into “large” HSAs. Large HSAs would be a larger effective tax cut than the Reagan and Bush tax cuts combined, adding $13,000 to the wages of a typical worker with family coverage. Large HSAs would drive down prices by making consumers cost-conscious at every margin, and would reduce the problem of preexisting conditions by freeing consumers to buy portable coverage that stays with them between jobs. Sen. Jeff Flake (R-AZ) and Rep. Dave Brat (R-VA) have introduced legislation to create Large HSAs.

The extent of corruption in Europe is "breathtaking"

An article published by BBC News on 2/3/14 discusses corruption in Europe.  I find the "shocked" tone of the article ironic.  European nations have expansive governments that control all aspects of social and economic interaction.  The fact is that whenever government is large and intrusive corruption will flourish.  You can read the article at this link:

http://www.bbc.co.uk/news/world-europe-26014387#

This article is reporting on a study by the European Union to the European Parliament.  The entire study can be found at this link:

EU ANTI-CORRUPTION REPORT

The BBC News article contains the following paragraphs:

In some countries there was a relatively high number reporting personal experience of bribery.

In Croatia, the Czech Republic, Lithuania, Bulgaria, Romania and Greece, between 6% and 29% of respondents said they had been asked for a bribe, or had been expected to pay one, in the past 12 months.

There were also high levels of bribery in Poland (15%), Slovakia (14%) and Hungary (13%), where the most prevalent instances were in healthcare.

The last sentence could be a prediction for the future direction of healthcare in the USA.  As more government intervention occurs in the healthcare industry we will be subjected to more corruption.

CON Game

During a discussion with a friend of ours at lunch today, I realized that a group of tremendously economically destructive laws are relatively unknown.  The type of laws that require our examination are known as "Certificate of Necessity" (CON) statutes.  These laws have been enacted by legislatures in all 50 states to regulate a variety of industries.

The basic premise of CON statutes is that the free market is inefficient and that government planning can make better decisions concerning the allocation of capital.  CON laws require government approval for new companies to enter a market or for existing businesses to expand.

CON laws were originally applied to public utilities and transportation companies.  Unfortunately in 1964 the State of New York decided to apply this legal theory to hospitals and nursing homes.  In 1974 the Federal Government required all 50 states to "have structures involving the submission of proposals and obtaining approval from a state health planning agency before beginning any major capital projects such as building expansions or ordering new high-tech devices". Many states implemented CON programs in part because of the incentive of receiving CON federal funds.

The Federal mandate was repealed in 1987 but today 36 states still maintain CON laws for health care, and the states that have repealed their original CON statues have retained some aspects of them.  Effectively today the construction of any new medical facility or the installation of any new medical equipment requires the approval of a state governmental agency.  The anti-competitive  inflationary effects of the CON statutes on the cost of heath care are astronomical.

The following article by Timothy Sandefur of the Pacific Legal Foundation is an excellent historical perspective on CON legislation:

https://object.cato.org/sites/cato.org/files/serials/files/regulation/2011/8/regv34n2-1.pdf

Some of the highlights of this article:

CON laws were originally devised to regulate railroads and other public utilities. They first appeared in Massachusetts in the 1880s, and were soon taken up in other states, where they were often applied to streetcar lines.

As William K. Jones explains in his 1979 Columbia Law Review history of CON laws, Progressive Era proponents offered five main justifications for these restrictions, they would:

1. prevent “wasteful duplication” of services,

1. prevent “ruinous competition,”

1. ensure that regulated entities would continue to serve out-of-the-way customers,

1. promote private investments in public service industries,

1. forestall certain kinds of externalities.

Many economists and social theorists of the time believed competition was economically inefficient because it wasted resources on, say, multiple railroad lines between the same destinations.  Worse, they thought competition fostered the “boom-and-bust” cycle that drove out investment and ultimately left customers without the products and services they needed.

Possibly the most foolhardy CON requirements are laws that apply to hospitals. Originally adopted to prevent what economists saw as inefficient over-expansion of hospitals, the laws were soon captured by established interests that used them to raise the cost of medical services. In the 1970s, 49 states imposed CON requirements on hospitals, leading to higher costs and less innovation in medical care. Economist Thomas E. Getzen wrote in 1997 that “almost every well-established, wealthy, and politically connected hospital that applied for certification eventually got it, while denials fell disproportionately on outsiders that threatened the status quo or weaker institutions that lacked a constituency.”

Federal CON requirements were repealed in the 1980s, but many states still employ them. For example, Hawaii bureaucrats held up construction of a new $220 million private hospital on Maui for years, forcing the island’s 144,000 residents to depend on a single, state-run facility or on clinics. The State Health Planning Development Agency rejected a 2007 proposal to build a new, state-of-the-art facility, denying it a certificate of need because it would negatively affect the existing government-run hospital.

Occupational licensing laws are among the most common abridgments of economic liberty, but CON rules are more pernicious.  They do not even pretend to protect public safety by ensuring that practitioners are educated or skilled; they exist for the explicit purpose of preventing competition. Whatever merit that might have in the context of public utilities or natural monopolies, there is no reasonable foundation for applying such rules to moving companies, taxi companies, or hospitals. In these markets, CON restrictions unfairly favor entrenched private interests, increase the cost of living for consumers, destroy economic opportunity for the most vulnerable entrepreneurs, and in the case of hospitals, threaten Americans’ very lives. Certificate of necessity laws are arbitrary, discriminatory, and economically foolish.

The National Conference of State Legislatures has a brief description of CON laws along with a discussion of individual states statutes.  There is also a "pros and cons" chart:

http://www.ncsl.org/issues-research/health/con-certificate-of-need-state-laws.aspx

This passage from the "pros" section of the chart is interesting:

Advocates of CON programs say that health care cannot be considered as a “typical” economic product. They argue that many “market forces” do not obey the same rules for health care services as they do for other products. In support of this argument, it is often pointed out that, since most health services (like an x-ray) are “ordered” for patients by physicians, patients do not “shop” for these services the way they do for other commodities. This makes hospital, lab and other services insensitive to market effects on price, and suggests a regulatory approach based on public interest.

In the above defense of CON laws we find a government program (CON) is promoted to cure the unintended consequences of a previous government program (third party payer insurance coverage).  Obviously if the patient were paying for the cost of service (or a portion of the cost of service) they would "shop" for these services the way they do for other commodities.

For our friends who live in Hawaii you can find out how to apply for a Certificate of Necessity by studying this website:

http://hawaii.gov/shpda/certificate-of-need

If you are confused by the wording on the above page or you are frustrated that the application is 17 pages long, have no fear as the State of Hawaii has prepared a flowchart for this process (who would like to bet that it takes longer than 90days?):

And so that those of you who live in Illinois do not feel left out you can submit your application for a Certificate of Necessity after reading this page:

http://hfsrb.illinois.gov/conprocess.htm

Certificate of Necessity is an unnecessary and unconstitutional intervention into commerce by state governments.  It is perpetrated by existing businesses using the power of government to restrict competition.  We are all worse off because of these statutes.  The statutes must be repealed but more importantly we must explain to our fellow citizens why it is never better to let government make decisions that should be made by individuals.

After the verdict

And what shall we do after the Supreme Court rules on Patient Protection and Affordable Care Act (PPACA) (commonly referred to as Obama care).  I have heard many of our fellow citizens worrying that if the Supreme Court finds PPACA unconstitutional  we will be back to "square one".

An article was published in the Wall Street Journal on 4/3/12 which discusses this subject.  The author of the article is John H. Cochrane a professor of finance at the University of Chicago Booth School of Business and an adjunct scholar at the Cato Institute.  The complete article is available on the Cato Institute website at this link:

What to Do on the Day after ObamaCare

The following are some of the highlights of this article:

The country can have a vibrant market for individual health insurance. Insurance proper is what pays for unplanned large expenses, not for regular, predictable expenses. Insurance policies should be "guaranteed renewable": The policy should include a right to purchase insurance in the future, no matter if you get sick. And insurance should follow you from job to job, and if you move across state lines.

Why don't we have such markets? Because the government has regulated them out of existence.

Most pathologies in the current system are creatures of previous laws and regulations. Solicitor General Donald Verrilli explained as much in his opening statement to the Supreme Court: "The individual market does not provide affordable health insurance," he noted, "because the multibillion dollar subsidies that are available" for the "employer market are not available in the individual market."

Start with the tax deduction employers can take for their contributions to group health-insurance policies — but which they cannot take for making contributions to employees for individual, portable insurance policies. This is why you have insurance only so long as you stay with one employer, and why you face pre-existing conditions exclusions if you change jobs.

Continue with the endless mandates (both state and federal) on insurance companies to provide all sorts of benefits people would otherwise not choose to buy. It sounds great to "make insurance companies pay" for acupuncture. But that raises the premiums, and then people choose not to buy the insurance. Instead of these mandates, at least allow people to buy insurance that only covers the big expenses.

.....But the expenses of emergency room treatment for indigent uninsured people are not health-care's central cost problem. Costs are rising because people who do have insurance, and their doctors, overuse health services and don't shop on price, and because regulations have salted insurance with ever more coverage for them to overuse.

Meanwhile, staggeringly inefficient markets for health care itself need a thorough, competition-focused deregulation. Americans will know there's a healthy market when hospitals post prices on their websites, and when new hospital and health-care businesses routinely enter to challenge the old ones. Here too regulations keep competition at bay.

The number of new doctors is still restricted, thanks to Congress and the American Medical Association. Congress caps the number of residencies, the AMA has fought the expansion of medical schools, state tests make it difficult for foreign doctors to work here, and on and on.

There are hundreds of government impediments to competition. New hospitals? In my home state of Illinois {this is the case in Hawaii also}, every new hospital, expansion of an existing facility or major equipment purchase must obtain a "certificate of need" from the Illinois Health Facilities Planning Board. The board does a great job of insulating existing hospitals from competition if they are well connected politically. Imagine the joy United Airlines would feel if Southwest had to get a "certificate of need" before moving in to a new city — or the pleasure Sears would have if Wal-Mart had to do so — and all it took was a small contribution to a well-connected official.

Judicial activism and unintended consequences

President Obama's recent comments about the US Supreme Court's review of the Patient Protection and Affordable Care Act (PPACA) (commonly referred to as Obama care)  has led to what I assume are unintended consequences.  The highlight of his Rose Garden statement on 4/2/12 was:

“I’d just remind conservative commentators that for years what we’ve heard is, the biggest problem on the bench was judicial activism or a lack of judicial restraint — that an unelected group of people would somehow overturn a duly constituted and passed law,” Obama said during a Rose Garden news conference. “Well, this is a good example. And I’m pretty confident that this court will recognize that and not take that step.”

The initial consequence of this comment is to display this Presidential Administration's disdain for the separation of powers.  We are protected from imperial rule by the fact that our three branches of government hold each other in check.  The US Supreme Court has as it's most important function the ability to overturn laws passed by Congress and Signed by the President that are unconstitutional.  The fact the our current President finds this an act of "judicial activism" by "an unelected group of people" is an affront to our concept of limited government.

The unintended consequence of this statement is to draw attention to a little publicized section of PPACA.   There is currently a case before the U.S. 5th Circuit Court of Appeals contesting Section 6001 of PPACA.  This case has now received nationwide publicity as Judge Jerry Smith a member of the 5th Circuit Court of Appeals has brought President Obama's statement into the trial.  The details of Judge Smith's ruling are in this Associated Press article:

Judge upset by Obama's comments on health care law

What the Judge has to say about President Obama's comment means little in this discussion.  What is of great importance is the case before the 5th Circuit Court of Appeals.  The case before the appeals court was brought in part by a spine and joint hospital in East Texas that is challenging the constitutionality of a portion of the health care law that restricts physician-owned hospitals from expanding or building new facilities.

The full text of PPACA can be viewed at this link:

http://housedocs.house.gov/energycommerce/ppacacon.pdf

You will find the text of section 6001 by entering 639 as the page number in your pdf reader.

We all are now aware that PPACA Section 6001 prevents physician-owned hospitals from expanding or building new facilities.  This is an act of Congress that has been advertised as a means to expand health care availability and reduce its cost.  In reality the law restricts competition in the field of health care.  If the supply of a service is reduced or artificially prevented from increasing then the price for that service will increase.  There can be no other outcome.

Nancy Pelosi was not kidding when she said that we would have to pass the bill to find out what is in it.  It is turning out that we have to litigate the bill to find out what is in it.

An unprecedented expansion of federal power

The Institute for Justice (IJ) filed an amicus brief (friend of the court) in the State of Florida court case against the Patient Protection and Affordable Care Act (PPACA) (commonly referred to as Obamacare).  This brief will be considered during the US Supreme Court review this week.  The IJ brief makes an interesting and unique argument against the individual mandate.  The entire brief is at this link:

http://www.ij.org/images/pdf_folder/amicus_briefs/obamacareamicus.pdf

The IJ brief points out that the Affordable Care Act's individual mandate — the requirement to purchase insurance — is not only an unprecedented expansion of federal power, it also undermines several centuries of contract law.

From Hugo Grotius in the 17th century through William Story in the 19th and up to the present, legal doctrine has held that contracts are not valid unless they are entered into by mutual assent. If one party signs a contract as the result of fraud or under duress, it cannot be valid. But if Congress compels people to buy insurance policies — not as a precondition of exercising a privilege such as driving, but as a consequence of having been born — then, the institute argues, this would undermine centuries of contract law.

IJ has produced a short (2 min 24 sec) video in support of this brief which can be viewed at this link:

http://www.ij.org/freedomflix/65-individualmandatevid

These two paragraphs are from the IJ's brief:

Allowing Congress to compel individuals to enter into contracts against their will would destroy a fundamental precept of contract law and would have a devastating impact on individual liberty.

When combined with the Court’s highly deferential standard of review for exercises of the commerce power, extending that power to include the awesome power to compel would create the very Leviathan government the Founders spilled their blood to resist.

An immense decision.

Next week a case before the US Supreme Court will decide the constitutionality of the Patient Protection and Affordable Care Act (PPACA) (commonly referred to as Obama care).  Robert A. Levy chairman of the Cato Institute has published an article discussing this case.  The entire article can be found at this link:


http://www.cato.org/pubs/wtpapers/ObamaHealthCareReform-Levy.pdf

Robert A. Levy is correct in his statement "Soon the Supreme Court will be asked to weigh in on perhaps the most important question of the post–New Deal era: Are there any remaining limits on the breadth and scope of federal power?"

The highlights of executive summary from this article are as follows:

The PPACA includes a mandate that individuals either purchase a government-prescribed health insurance policy or pay a penalty.  The Department of Health and Human Services has asserted three constitutional provisions as sources of authority for the mandate — the Taxing Power, the Commerce Clause, and the Necessary and Proper Clause. Each of those purported sources is deficient.


First, the penalty for not buying health insurance is not a tax. Even if the penalty were a tax, it would fail the constitutional requirements for income, excise, or direct taxes. Second, the power to regulate interstate commerce extends only to economic activities; it does not permit Congress to compel such activities in order to regulate them. Third, the mandate is not necessary; indeed, it is merely a means to circumvent problems that would not exist if not for PPACA itself. Nor is the mandate proper; it cannot be reconciled with the Framers' original design for a limited federal government of enumerated powers.

An essential aspect of liberty is the freedom not to participate. PPACA's directive that Americans buy an unwanted product from a private company debases individual liberty. And it's unconstitutional.

An epic decision.

Sign a White House petition to repeal ObamaCare

Our friends at Verum Serum have alerted us to a interesting opportunity. The White House launched a new site last week allowing the public to petition the Administration on various public policy issues. No doubt they intend to use this to mobilize the OFA-MoveOn-Kos armies around various election issues next year, to demonstrate how “popular” the Administration’s positions are. But some enterprising American managed to create and post a petition which I found just a little more worthwhile: to repeal ObamaCare.  Click on the following link to read and sign this petition:

Petition

I assume that this slipped by the review process and that the Whitehouse will remove this petition soon.  Removing it will become news story of its own.  This will be a bigger story if there are a large number of signatures on the petition when it is removed, so sign it ASAP and send this information to all of your friends.  Unfortunately you have to register with the White House in order to vote – just a name and an email address.  You can opt out of any email lists when you register.  I think it’s worth it.

The food police

Here is a news story that will cause you to drop your donut:

http://www.wbaltv.com/r/25508790/detail.html

Your government is here to save you from yourself. Some of the highlights from this article are below:

The Baltimore City Health Department issued its first environmental citation for repeat violations of the city's trans fat ban.

The Health Department issued Healthy Choice, a food facility in the 400 block of Lexington Street, a $100 fine on Thursday.

"It was the second time they were found with a high trans fat level in their ingredients," said Health Department agent Juan Gutierrez.

They originally had a margarine that was above 3 grams, actually, which is very high compared to the .5 that is allowed. Then when we came back and they had replaced it, they replaced it with one that was 2 grams, so it still was too high, Gutierrez said.


Healthy Choice owner Ki Jeong said he will abide by the decision but said the new margarine will cost him double what the original type costs.

When we talk to proponents of big government they always scoff at the warnings we give about government controlling all aspects of society. This is another example of government confiscation of individual freedom. This story also exposes the costs of government interfering in free markets; when individual choice is eliminated from economic decisions prices increase.


The moral of this story is that government is a threat to our individual freedoms at the federal, state and local level. The battle for freedom must be waged on all fronts. Vote to remove incumbent politicians and replace them with new representatives who will reduce the size of government at all levels.

Another piece in the health care puzzle

This article describes the response by major health insurers to the new “no preexisting conditions” provision for children:

http://articles.latimes.com/2010/sep/21/business/la-fi-kids-health-insurance-20100921

The socialized medicine supports will use this as a spear to demonize the insurance companies.  You will see commercials and ads depicting the helpless children abandoned by the money grubbing insurance companies.  The next step will be to enact legislation that creates a Federal solution to this great social crisis.  This will be one more piece in place of the socialized medicine puzzle.

Zero Tolerance

Your federal government is here to help you once again. Recently the United States Department of Health and Human Services has begun a campaign to stamp out a threat to our society, free speech. The following letter was mailed by Health and Human Services Secretary Kathleen Sebelius to the executive director of America’s Health Insurance Plans (AHIP), (the national association of health insurers):

http://www.hhs.gov/news/press/2010pres/09/20100909a.html

Some of these statements are hard to believe but here is what her letter says:

It has come to my attention that several health insurer carriers are sending letters to their enrollees falsely blaming premium increases for 2011 on the patient protections in the Affordable Care Act. I urge you to inform your members that there will be zero tolerance for this type of misinformation and unjustified rate increases.

This is nothing more than a threat by a government agency to suppress criticism of the Obama administration’s programs.

According to our analysis and those of some industry and academic experts, any potential premium impact from the new consumer protections and increased quality provisions under the Affordable Care Act will be minimal.

What about the analysis of other experts? Are we now only allowed to view favorable studies?

Moreover, I want AHIP’s members to be put on notice: the Administration, in partnership with states, will not tolerate unjustified rate hikes in the name of consumer protections…… Later this fall, we will issue a regulation that will require state or federal review of all potentially unreasonable rate increases filed by health insurers, with the justification for increases posted publicly for consumers and employers. We will also keep track of insurers with a record of unjustified rate increases: those plans may be excluded from health insurance Exchanges in 2014.

I knew that this day would come but I am surprised at how quickly it arrived. The Federal Government is in the process of drafting a regulation that will effectively control the rate increases of private insurers. Over time the Government will force the private insurers out of business by preventing adequate rate increases and presto the United States Government will be the “insurer of last resort”. You will then be in a single payer government controlled health care system.

If you doubt the effectiveness of this process I suggest you study the history of public transportation. Street cars and buses were once owned and operated by private enterprise. Over time government regulation dictated what the private operators could charge their customers. By keeping the rate increases below the cost inflation of the service provided the government put the private operators out of business. Government then placed itself in charge of public transportation.

The following quotation is from Friedrich Hayek in his book The Road to Serfdom:

When the state has the final say on the economy, the political opposition needs the permission of the state to act, speak, and write. Economic control becomes political control.

Difficult sheep to shear

Alan Reynolds of the Cato Institute had the following article published in the Wall Street Journal on 3/30/10:


http://www.cato.org/pub_display.php?pub_id=11631

This article lists all of the health care tax increases that will affect individuals in the highest tax brackets. Alan has it exactly correct when he makes the following statements:

Add it up and the government is counting on squeezing an extra $1.2 trillion over 10 years from a tiny sliver of taxpayers who already pay more than half of all individual taxes.

It won't work. It never works.

Punitive tax rates on high-income individuals do not increase revenue. Successful people are not docile sheep just waiting to be shorn.

In short, the belief that higher tax rates on the rich could eventually raise significant sums over the next decade is a dangerous delusion, because it means the already horrific estimates of long-term deficits are seriously understated. The cost of new health-insurance subsidies and Medicaid enrollees are projected to grow by at least 7% a year, which means the cost doubles every decade — to $432 billion a year by 2029, $864 billion by 2039, and more than $1.72 trillion by 2049. If anyone thinks taxing the rich will cover any significant portion of such expenses, think again.

The federal government has embarked on an unprecedented spending spree, granting new entitlements in the guise of refundable tax credits while drawing false comfort from phantom revenue projections that will never materialize.

The basic economic principle of lower tax revenue generated by higher tax rates was explained by Economist Arthur Laffer. For a brief explanation of the “Laffer Curve” see the following:

http://www.conservapedia.com/Laffer_curve

The new public enemies

Unintended consequences

The debate and passage of the federal health care legislation has already produced 2 unintended consequences.


The first consequence is a grassroots revolt by enraged citizens. This revolt will manifest itself in the vote totals during the midterm election in November. Supporters of this health care legislation will find that they have drunk from a poisoned chalice.

The second consequence is of far greater significance. State legislatures are passing laws banning the enforcement of the federal health care act. Virginia and Idaho have passed laws that expressly prevent the enforcement of federal health care penalties. The Virginia law is as follows:

Be it enacted by the General Assembly of Virginia:

1. That the Code of Virginia is amended by adding a section numbered 38.2-3430.1:1 as follows:

§ 38.2-3430.1:1. Health insurance coverage not required.

No resident of this Commonwealth, regardless of whether he has or is eligible for health insurance coverage under any policy or program provided by or through his employer, or a plan sponsored by the Commonwealth or the federal government, shall be required to obtain or maintain a policy of individual insurance coverage. No provision of this title shall render a resident of this Commonwealth liable for any penalty, assessment, fee, or fine as a result of his failure to procure or obtain health insurance coverage.

The Idaho law is longer and may be read at the following page:

http://legislature.idaho.gov/legislation/2010/H0391.pdf

The most important sections of the Idaho law are these:

LEGISLATURE OF THE STATE OF IDAHO

HOUSE BILL NO. 391

STATEMENT OF PUBLIC POLICY. (1) The power to require or regulate a person’s choice in the mode of securing health care services, or to impose a penalty related thereto, is not found in the Constitution of the United States of America, and is therefore a power reserved to the people pursuant to the Ninth Amendment, and to the several states pursuant to the Tenth Amendment. The state of Idaho hereby exercises its sovereign power to declare the public policy of the state of Idaho regarding the right of all persons residing in the state of Idaho in choosing the mode of securing health care services.

(2) It is hereby declared that the public policy of the state of Idaho, consistent with our constitutionally recognized and inalienable rights of liberty, is that every person within the state of Idaho is and shall be free to choose or decline to choose any mode of securing health care services without penalty or threat of penalty.

This second consequence can be summarized as the States Rights Movement. The foundation for this movement is expressed in the Idaho legislation paragraph 1.

10 amendments were added to the U.S. Constitution on 12/5/1791. Collectively these amendments have become known as the Bill of Rights. The first and second amendments are well known to most citizens and are constantly discussed in the media. The ninth and tenth amendments are less well known and rarely discussed. These two amendments set the fundamental ground rules for the federal government’s activity.

Amendment 9:

The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.

Amendment 10:

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

The States Rights movement is in its infancy. According to the American Legislative Exchange Council, 37 states currently have legislation under consideration that is similar to those listed above. You can learn much more about this movement at the following websites:
 
http://www.alec.org/

http://www.tenthamendmentcenter.com/

Irredeemable

Charles Krauthammer’s latest column cuts through all of the disinformation in the health care reform debate with laser accuracy:

http://article.nationalreview.com/?q=ODFkNjliY2FkMGNmNDU5NmNlZjE3YmE4MjQzOTI1NmQ=

He highlights a few of the irrational regulations written into the Senate bill:

• You’ll find mandates with financial penalties — the amounts picked out of a hat.

• You’ll find insurance companies (who live and die by their actuarial skills) told exactly what weight to give risk factors, such as age. Currently, insurance premiums for 20-somethings are about one-sixth the premiums for 60-somethings. The House bill dictates the young shall now pay at minimum one-half; the Senate bill, one-third — numbers picked out of a hat.

• You’ll find sliding scales for health-insurance subsidies — percentages picked out of a hat — that will radically raise marginal income tax rates for middle-class recipients, among other crazy unintended consequences.

His conclusion:

• The bill is irredeemable. It should not only be defeated. It should be immolated, its ashes scattered over the Senate swimming pool.

He then submits three recommendations for improving the efficiency of our existing health care system:

• First, tort reform. This is money — the low-end estimate is about half a trillion per decade — wasted in two ways. Part is simply hemorrhaged into the legal system to benefit a few jackpot lawsuit winners and an army of extravagantly rich malpractice lawyers such as John Edwards.

• Second, even more simple and simplifying, abolish the prohibition against buying health insurance across state lines.

• Third, tax employer-provided health insurance. This is an accrued inefficiency of 65 years, an accident of World War II wage controls. It creates a $250 billion annual loss of federal revenues — the largest tax break for individuals in the entire federal budget.

These three suggestions would repeal or correct inefficiencies in our health care system that exists today due to government policies. The results of these three suggestions would be as follows:

Tort reform will eliminate or reduce the use of unnecessary medical procedures undertaken to avoid future malpractice claims.

Allowing the purchase of health insurance across state lines will open a competitive marketplace for health insurance policies.

Repeal of the corporate tax loophole that allows employee health insurance to be tax deductable to corporations and also tax free to individuals will place health insurance on the same footing as all other employee benefits. Over time individuals will decide to purchase their own health care insurance just as they purchase their own auto insurance or homeowners insurance. When individuals own their health care insurance they will not fear loss of coverage due to changing jobs.

Blatantly contradictory objectives

In the following Washington Post article Robert J. Samuelson examines the contradictions in the health care reform bill:

http://www.washingtonpost.com/wp-dyn/content/article/2009/11/15/AR2009111502212.html

The following paragraph leads us to one of my favorite topics:

• The disconnect between what President Obama says and what he's doing is so glaring that most people could not abide it. The president, his advisers and allies have no trouble. But reconciling blatantly contradictory objectives requires them to engage in willful self-deception, public dishonesty, or both.
  

What Robert Samuelson is trying to tell us is that the health care debate and the Obama administration’s proposals are a classic example of George Orwell’s concept of doublethink from his novel 1984. Doublethink is defined as Reality Control. The power to hold two completely contradictory beliefs in one's mind simultaneously, and accept both of them.

Redistributing Health

Alan Reynolds of the Cato Institute has written the following article which was published in the New York Post on 10/12/09:

http://www.cato.org/pub_display.php?pub_id=10623

Alan Reynolds exposes one of the goals of the current health care legislation:

• The fundamental Proponents of compulsory, government-designed health insurance can't seem to understand why others disagree. Perhaps the public is realizing that these proposals are fundamentally about redistributing health?
• The major proposals, the AARP Bulletin explains, "include around $500 billion in savings carved from future growth in Medicare spending over a 10-year period. "Even in the Obama era, $500 billion is a lot. Yet we're supposed to believe that less is somehow more — that seniors will benefit from these spending cuts. "The Obama administration and congressional leaders," intones a recent New York Times editorial, "are hoping to save hundreds of billions of dollars by slowing the growth of spending in the vast and inefficient Medicare system that serves 45 million older and disabled Americans. The savings would be used to help offset the costs of covering tens of millions of uninsured people."
  
• President Obama, in an Aug. 16 Times op ed, made such redistribution seem easy and painless: "We'll cut hundreds of billions of dollars in waste and inefficiency in federal health programs like Medicare and Medicaid," he said.
  
• Such efforts to appease seniors are not working because they are transparently dishonest.
  First of all, the Congressional Budget Office figures that cutting "waste, fraud and abuse" might save $200 million a year — that's millions, not billions.
  
• Second, the hundreds of billions in "savings" are to be carved out of the hides of Medicare providers and Medicare Advantage benefits, not Medicaid. In the Senate Finance Committee proposal, Medicaid gets $345 billion more money from 2014 to 2019.
  
• The Times claims the cuts should actually make Medicare better "for most beneficiaries," partly by "helping keep Medicare solvent." That is either a hoax or fraud. If "the savings would be used to help offset the costs of covering tens of millions of uninsured people," as the Times says, then the same savings can't also be used to shore up the Medicare trust fund.
  
• The president and his allies in Congress believe they can use deep cuts in Medicare — plus steep new taxes on health insurance, drug and medical device companies — to pay for a vast expansion of Medicaid and new health-insurance subsidies.
  
• These grandiose redistribution schemes are grounded in lethal economics and suicidal politics. Because bad ideas are hard to sell, politicians and journalists have been peddling health redistribution with the rhetorical and statistical equivalent of waste, fraud and abuse.
  
• American voters, particularly seniors, don't like to be lied to. They are just as leery of the political redistribution of health as they are of the redistribution of wealth.