My Personal Health Insurance Comparison

The other day I posted about it making the most sense for young healthy people, under Obamacare, to choose the lowest premium plan possible, tied to a health savings account, looking strictly at the numbers involved, and not worrying about what plan had what coverage, and also asked how that might effect the stability of the insurance system in general.

I've since looked at the follow up information that BlueCross-BlueShield sent me regarding my plan options moving forward, so I figured I'd make the comparsion to my current plan.

My current plan is called Blue Edge HSA 100%.  Under this plan, I am given access to either BCBS's PPO network of doctors, or their BlueChoice network of doctors.  My individual deductible on this plan is $1,750, and my coinsurance is 100%, meaning I pay nothing after my deductible.  For this plan, my monthly premium has been $246.08.  This amount includes dental coverage that I tacked on, which if I remember correctly, is about $25/month of this amount.  So if we're comparing health insurance to health insurance, my premium just for health insurance is roughly $221/month.  This has been an individual insurance plan, and so I will compare this to the individual rates of the new plans being offered.  Rates in my article from the other day were quoted for both myself and my wife, and so differ from the rates in this post.

My current plan has been cancelled, and BCBS has sent me a letter indicating that the most similar plan to my current plan is the new Blue PPO Gold 001 plan.  This plan runs $376.40/month, and has a deductible of $3,250.  So for the most similar plan, the monthly premium has increased roughly 170%, and the deductible has also nearly doubled.  I am also limited to only the PPO network.  Even better news, this plan is also not eligible to be used with an HSA.   Here is what this plan offers:

I am also told that Blue PPO Bronze 005 is the most similar in price to what I have today.  This plan is $239.43/month, so they've managed to offer a plan at a similar price.  This plan has a $5,000 deductible, and a coinsurance of 80%, with an out of pocket max of $6,250.  This means that even after I've paid $5,000 in deductibles, I'm still paying 20% of the bills until I've hit $6,250.  This plan does qualify for use with an HSA, and here is what this plan offers, compared side-by-side with the plan above, so we can see how much worse it is on the surface.

There's really not a lot to like about that picture, since what it's really saying is that I might more or less count on coming out of pocket to the tune of $6,250 just about no matter what, because of the 80% coinsurance.  Basically with this policy I'd be cutting checks to BCBS to the tune of $2,873.16 a year for the right to have them tell me I'm paying for everything myself until I've spent $5,000, and then I'm also still paying 20% until I've shelled out another $1,250.  At least I get to have an HSA with this one.  Yay!

Bottom line is, for me, that I'm either paying almost double in premiums, with almost double the deductible, to get similar coverage to what I already have, but can't use an HSA, or I can buy much, much worse coverage for a similar price.

Given the fact that they have another plan called Blue Choice Bronze PPO 006, that turns that litany of 80% coverage into 100% coverages, with a $6,000 deductible and $6,000 out of pocket max, and for only $160.09/month, also HSA eligible, I'm not sure why anyone would bother with something like the Blue PPO 005 above.  At least not a young, healthy person in a big city like me anyway.  If my doctor isn't in the Blue Choice network, I can find one that is.

This obviously becomes much more problematic where people live more spread out.  If someone is stuck with the Blue PPO network of doctors, they're stuck with something like that awful Blue PPO 005, or else instead, for some terrible reason, double the premiums.

Another Market Force within Obamacare

It's been quite some time since I've had the time on my hands, or the ambition to write about any politics here.  I've recently started my own company, and so have a bit better outlook on life in general, and a bit more time on my hands now that I manage my own time as I please.  With that, I've been doing some thinking on this roll-out, or lack thereof, of Obamacare, and I've found something in all this that I'm interested to write about that I think happens to be an angle not many other people are seeing in it.

A great many commentators have been expounding on whether or not Obamacare will collapse under its own weight due to lack of people being able to sign up for it, or people just not signing up and taking the penalty instead.  This may very well end up being the case.  From what I can tell from researching rates over the past week or two, we're all either looking at incredibly high premiums compared to what we're used to, or else incredibly high deductibles compared to what we're used to.  I will note here that I make too much money to qualify for subsidies under the law, so I can't and won't bring those into my discussion of the rates, which works for me, as I wish to focus on this purely as a market analysis anyway, without the government distortion.  With such high premiums, accompanied by de facto poor service in the form of high deductibles, the number of "eff-you" types who will forego coverage for the penalty would seem to be high.

The long view of this idea that Obamacare will collapse under its own weight due to lack of participation, is that with the market unable to support the healthcare needs of the many sick and old, on the backs of the few healthy and young, the left wing will at some point execute the complete takeover of the healthcare system in the form of single payer.

I'm not immune to thinking this myself, and certainly feel that this would be the worst case scenario, resulting in rationing of healthcare, and DMV-like service in the hospitals themselves, not just on the website where you're supposed to be able to sign up for your coverage.

All of this said, I've been spending a good part of the last week or so researching the available plans, and I'm seeing something else happening, that may be more catastrophic both to insurance companies, and the government, than anyone has thought to this point.

YOU ARE REQUIRED TO BUY INSURANCE

Yes, the thought has been that most likely scenario in all of this is that a great many people will forego insurance for the penalty.  However, as Megan McArdle recently pointed out, this will not be so easy.  The penalty is a nominal $95, or 1% of your gross income.  This is next year's figure, and I am sure it will increase over time.

Now, if a person makes $100,000, then the $1,000 penalty tax that has to be paid is really a pittance compared to the amount this person would have to shell out in health insurance premiums, so let's go hypothetical and imagine that the penalty is made high enough to prod people into actually buying insurance, and every single person in the land has to buy insurance, and does.  This hypothetical leads us to examine what policies will be bought en masse across the country.

WHICH PLAN MAKES THE MOST SENSE?

For the purposes of this post, I am going to use information from Blue Cross-Blue Shield of Illinois, both because this is my insurance company and I am most familiar with them, and because when I compare estimates on healthcare.gov (sans subsidy), they are easily the most inexpensive across the board.

Here are the results for plans for my wife and me from Blue Cross-Blue Shield.

Looked at in this manner, we are seeing what the maximum outlay might be if shit really hit the fan and deductible payments were maxed out.  What I look at most closely, however, being a younger, healthy person, is how much money here remains in my own control.  This is where having an HSA kicks in.  Basically, if I am able to afford to stash away the maximum tax-deductible HSA contributions for two years, without having to dip in to the HSA account to pay deductible fees, I am basically no longer coming out of pocket on deductibles in the future.  Granted, of course, I will likely have some small amount of medical expense, so that not everything I pile away into the HSA will stay there over the course of two years, but let's even say in 2.5-3 years, my HSA has enough money in it that if I get hit by a car, I'm not diving into my checking account to cover deductible payments.

This being the case, the market force at play within Obamacare is one that should be driving all the young, healthy people onto low-premium, high deductible "Bronze" level plans, that they can tie to a Health Savings Account.

This is the arrangement I've had set up for myself for three years now, and only the deductible and premiums are really changing here for me.  I will be very interested to see what comes of this system over the course of the next year.  The mandate has the opportunity to force young, healthy people to actually think about their insurance coverage for the first time that I can recall.  From a personal standpoint, I've always had insurance, either through my parents, or through school, or through work.  Three years ago, I became an independent contractor, and had to buy my own insurance.  This was the first time I actually ever looked at any of these plans beyond what the deductible was and what the copay was.  Now millions of other people are going to be in that boat as well.  Unless somebody that is young is also sick with, perhaps, diabetes or some type of other length of life disease, where it will make sense to have more of a "maintenance plan" type of insurance, there really is no conceivable reason why a young person would choose anything but the low premium, high deductible, HSA combination.

And so my question is, what happens then to the structure of this program?

If everyone who is healthy enough to forego a "maintenance" insurance plan chooses to do so (and why wouldn't they?), my early assumption has to be that the insurance industry will be unable to support the older sicker people based on the lack of premium revenue.  The whole idea here was to force everyone to buy insurance, raise premiums, and use the higher premiums on healthy people to pay for sicker peoples' maintenance insurance.  But if younger people in general go the route of paying the bare minimum into the insurance pool as possible, instead contributing to their own HSA accounts, and the deductibles be damned, doesn't this eventually pull just as big of a Jenga piece out from the foundational levels of the scheme as people just not signing up anyway?

I do recognize that the more immediate problems with the system, such as not being able to sign up, and having no real financial reason to sign up due to the extremely low penalty, are likely to drive this train off the rails much sooner than my scenario.  However, I also think that my scenario is another one that dooms this system as well.  Ironically, however, taken to the next logical step in the long view, the market response would be to increase deductibles further, meaning that people would be much, much more inclined to begin actually shopping for their healthcare, rather than just showing up and expecting to be serviced for no charge, meaning that in the long run, prices to the consumer might actually come down as the healthcare industry would finally again be required to service the consumer rather than throw a fat bill at the insurance company's wall to see what sticks.  Over the long term, proponents might actually trumpet to the heavens that the program has worked!

But I wouldn't give our government the credit for such foresight or patience as to wait for all of that to come to fruition.  If they had the foresight or patience for that, they'd have simply written a program that majorly incentivized people to get onto HSA's, and opened up the insurance markets across state lines, giving people more freedom and choice.  But the government response to a market response of insurance prices going up will surely be one instead of further control, perhaps to put some kind of fiat cap on deductibles, and eliminate HSA eligible plans, putting us all on more expensive maintenance insurance, leading to the necessity to increase the subsidy to lower income citizens, or perhaps even broadening the criteria for acceptance onto Medicaid (which is already looming large as a major wrench in the works).

Ultimately, this would also mean the healthcare industry will continue to overcharge for services, since there will continue to be no price feedback from the actual consumer.

A Letter to Sam Harris on the Economy

Dear Mr. Harris-

You have requested that economists in particular contact you in regard to the 08-19-11 Addendum to your blog post "How Rich is Too Rich?"  I am not an economist, but I follow economics very closely.  I'm an engineer by degree and run a construction company, so it is perhaps in my nature, as well as required of my position, to know what's happening in the world, economically.  I hope you will take a few minutes to think about my take on your ideas, however, because admittedly this is long, I will not be surprised or disheartened if you do not.

First, I will assess your first idea:

Future breakthroughs in technology (e.g. robotics, nanotech) could eliminate millions of jobs very quickly, creating a serious problem of unemployment.


In a very broad sense, I think that the creation of a massive robotics industry causing large scale unemployment would perhaps be akin to the fear once upon a time that the rise of the automobile industry would have caused large-scale unemployment due to their replacing horse-drawn carriages.  To shamelessly steal from DeVito's speech in Other People's Money, there was once a company that made the world's best buggy whips, whose employees surely found themselves eventually unemployed due to the rise of the automobile.  But as those people lost their jobs due to the rise of an industry that made their profession nearly obsolete, so too did a new industry arise whose ability to employ massive numbers far surpassed the ability to employ of carriage-makers, horse farmers and buggy whip makers combined.  In the aggregate, employment rose.

Will robotics eliminate jobs?  Of course, it has already eliminated thousands upon thousands of jobs, from the automobile industry to the airplane manufacturing industry to the construction even of submarines.  Many welds on the newest submarines, for instance, require accuracy that only robotics can achieve.  This means that welders that worked on submarines are out of that particular work.  But they are still welders.  They just need to weld elsewhere.  Perhaps they might even go to work for the company that is manufacturing the robots.

If we look to the future of robotics, the scenario that kills millions and millions of jobs is the perhaps Asimov's Foundation series scenario, or more recently, the scenario in the movie, Surrogates, where robots become so commonplace, there is nearly one robot, or more, for every human being.

But who makes the robots?  Surely for the smaller components and the excessively detailed work, there are other robots.  But there are still going to be assembly line jobs.  There are going to be jobs for the people who need to supply the materials, all the way back to the original mines they came from.  Robots won't do everything.  All along the way there will need to be people to do the work.  Perhaps this is best explained easily in Leonard Read's pamphlet, "I, Pencil."  If the industry grows to such a magnitude as you suggest, then yes, surely it will create massive unemployment in other currently existing industries, but it will create massive employment in a new, growing industry.  Such is the nature of capitalism and economic progression.

But many of your readers responding to you have already covered this basic idea, and you are looking for something more.

I am suggesting, however, that there is nothing that rules out the possibility of vastly more powerful technologies creating a net loss of available jobs and concentrating wealth to an unprecedented degree.


To this I would suggest that there is and always has been this possibility, however the missing piece of the equation is necessarily the rate of population growth.  It did not used to be uncommon for families to have 4, 6, 8 or even 10 or 12 kids.  When our economy was largely driven by agrarian life, it was economically necessary for a family to have as many workers as possible to work the farm.  Given the rise of mechanical farming equipment, the farm family has gotten smaller over the years.  In the early-to-mid 20th century boom in manufacturing, we saw our population skyrocket as we had an economy that we were comfortable still having several children per family, as factory workers would have assumed that their kids could eventually go to work in the factory, if nothing else.  I would suggest to you that as many manufacturing jobs have moved overseas, families have trended to get smaller as a response, with families focusing on grooming their children for white collar work, whether as engineers, academics, or businessmen.

The moving of blue collar manufacturing positions overseas has also been a response to the market.  Union contracts in the United States grew to the point that the manufacturing of goods locally has in large part become untenable.  I would put this largely on the unsustainable nature of a pension model for retirement, moreso than the wage rates themselves, but this is another topic altogether.  So if we are talking about a "serious problem of unemployment" I assume we are talking about it locally in the United States, because technically speaking, the jobs haven't disappeared, they have gone elsewhere, where the labor can be had for significantly less money.

I make this point because, if we were to see such a significant rise in robotics, it would be not only because the manufacture, sale and maintenance of the robots was that much cheaper than American labor, but also that much cheaper than rock-bottom foreign labor.  Looking at it macro-economically, taking the world market as a whole, and taking employment to be a worldwide phenomenon, because it is a worldwide phenomenon, I feel the possibility of a rise in robotics to replace employment of human labor to such an extent that all levels of human employment are made economically obsolete to be something that is probably a few hundred years down the line, should it ever happen.  There's an entire world's worth of cheap labor to exploit before a saturation of robotics seems likely to even begin to take place.

Now, on to your next idea:

The federal government should levy a one-time wealth tax (perhaps 10 percent for estates above $10 million, rising to 50 percent for estates above $1 billion) and use these assets to fund an infrastructure bank.


You do, strangely, caveat this by ultimately saying "Leaving aside fears of government ineptitude, please tell me why it would be a bad idea for the rich to fund such a bank voluntarily."

Let me first point out that these are two wildly different things.  The federal government descending upon the rich and absconding with 10-50% of everything they own from behind the barrel of a gun is not the same thing as our country's 400-something billionaires voluntarily pooling their money together to charter a new bank that would be used to fund infrastructure projects.  To insinuate anything of the kind is disingenuous.

The latter would most certainly not be a bad thing, though let's remember that the structure of such an entity would be as a bank, loaning money out to municipalities and states and the federal government to fund infrastructure projects.  This money would have to be paid back with interest, and that this is really not any different than how this already happens, except for the fact that this bank would be something like another Federal Reserve style central bank dedicated solely to infrastructure, though, I would assume and hope, not allowed to print money.  To that effect, I guess I don't really understand the point of it, other than that it's an accounting trick to move debt out of treasuries and into another entity.  The debt still grows, only it doesn't affect the country's balance sheet.  At some point it becomes another Fannie/Freddie-type of entity, with so much debt that it doesn't even know how much of it is even good anymore.

This is to say nothing of the point, also, that if the super-rich are the ones funding this bank, they are getting even richer because of it, thereby increasing the wealth gap you are hoping to close.

If you have taken the time to read through all of this, thank you.

Sincerely,
Paul Kroenke

A Would-Be Nobel Laureate

That's what I am.  If only someone would nominate me for my prescience.  Two-and-a-half years ago I wrote the following:

Why is it that these people think that if they do the exact same things wrong, only bigger and bigger, somehow in the end it will ever turn out right? 

After a world-wide house of cards collapses, what will they do then? 

Their only hope for another 30 years down the road will be to have imperialized space to the same extent as they have this planet, so they can ruin economies at a universal level as well!

Now, Nobel Prize Winner in Economics and "economic journalist" for the New York Times Paul Krugman has jumped on my bandwagon of crazy.



Ladies and gentleman, stand in awe of the intellect of a Nobel Laureate!

Illinois Pension Reform Begins

It's sure to be a major battle.  This video from the Illinois Policy Institute outlines the prominent aspects of House Bill 149, a bill to bring reform to the pension system of public employees in Illinois.

The major questions over the bill that are tackled here are:

What will current employees keep?

How will the bill affect the public sector employee retirement age, currently 55, as opposed to private sector retirement age, currently 65?

What is the State Constitutional protection of pension benefits?

Damn These Elites

From the humble, proletarian pen of a hard-working man of the people Nobel Prize Winning Professor of Economics at Princeton and the London School of Economics, to the lowly pages of a little known newspaper with small circulation New York Times comes a damning of the elites that run our lives yet another tired blaming of the Bush Administration for our economic woes.

Paul Krugman must receive a per-word raise every time he finds a way to write something less coherent than his last piece.

So it was the bad judgment of the elite, not the greediness of the common man, that caused America’s deficit. And much the same is true of the European crisis.

Needless to say, that’s not what you hear from European policy makers. The official story in Europe these days is that governments of troubled nations catered too much to the masses, promising too much to voters while collecting too little in taxes. And that is, to be fair, a reasonably accurate story for Greece. But it’s not at all what happened in Ireland and Spain, both of which had low debt and budget surpluses on the eve of the crisis. 

The real story of Europe’s crisis is that leaders created a single currency, the euro, without creating the institutions that were needed to cope with booms and busts within the euro zone. And the drive for a single European currency was the ultimate top-down project, an elite vision imposed on highly reluctant voters. 

Does any of this matter? Why should we be concerned about the effort to shift the blame for bad policies onto the general public? 

One answer is simple accountability. People who advocated budget-busting policies during the Bush years shouldn’t be allowed to pass themselves off as deficit hawks; people whopraised Ireland as a role model shouldn’t be giving lectures on responsible government. 

But the larger answer, I’d argue, is that by making up stories about our current predicament that absolve the people who put us here there, we cut off any chance to learn from the crisis. We need to place the blame where it belongs, to chasten our policy elites. Otherwise, they’ll do even more damage in the years ahead.

While the general point that we shouldn't be listening to most of the now-reformed "fiscal hawks" telling us what to do now is a good one to take from this article, the fact that Krugman couches that same argument in a finger pointing tirade at some shadowy elites (read: EVIL REPUBLICANS) is not only purely irresponsible, it's also hypocritical, particularly his shot across the bow at Alan Greenspan.

Let me give a particular shout-out to Alan Greenspan, who played a crucial role both in financial deregulation and in the passage of the Bush tax cuts — and who is now, of course, among those hectoring us about the deficit.

Apparently Krugman has forgotten, or maybe wishes all of the rest of us had forgotten, about his own prodding of Greenspan to do exactly what led us into the housing bubble and eventual crisis in the first place.

KRUGMAN: I think frankly it’s got to be — business investment is not going to be the driving force in this recovery. It has to come from things like housing, things that have not been (UNINTELLIGIBLE). 

DOBBS: We see, Paul, housing at near record levels, we see automobile purchases near record levels. The consumer is still very much in this economy. Can he or she — or I should say he and she, can they bring back this economy? 

KRUGMAN: Well, as far as the arithmetic goes, yes, it is possible. Will the Fed cut interest rates enough? Will long-term rates fall enough to get the consumer, get the housing sector there in time? We don’t know

That particular exchange took place back in 2001, prior to 9/11, where Krugman surveyed the post-internet recession and proclaimed that the Fed had to pump up the housing sector.  The Nobel Prize Winning, New York Times Contributing, Princeton and LSE Economics-Teaching ELITE Krugman, was one of those people pushing us further down the Keynesian Road to Serfdom to the point we find ourselves at now.

I remember some lowly prole writing something pretty smart recently...

But the larger answer, I’d argue, is that by making up stories about our current predicament that absolve the people who put us here there, we cut off any chance to learn from the crisis. We need to place the blame where it belongs, to chasten our policy elites. Otherwise, they’ll do even more damage in the years ahead.

Fight of the Century

In January 2010, Econstories.tv launched a now infamous campaign to bring the story of the Hayek vs. Keynes economic debate to the masses via the rap battle.  "Fear the Boom and Bust" went viral, and has since garnered over 2.1 million views.

Five days ago, they released their follow up, a spectacularly deep video, both musically and visually.  The video presents the debate between Keynes and Hayek, beginning with a dual grilling before a Congressional panel, and moving to the boxing ring as they trade economic theory blows.  We end with Keynes being patted on the back by the Fed Chairman, Wall Street types, and the media at large, while Hayek is shunned, but suddenly embraced in full by a crowd of Regular People.

The message is fantastic throughout, and is an excellent continuation of the debate.  It's already gotten over 450,000 views.  Why not give it a few more?  Enjoy "Fight of the Century!"



BONUS:  Lyrics with hyperlinked relevant articles and posts from Mises.org

Chart Fu: Fisking Rachel Maddow

So there's a chart floating around the Leftosphere, that looks like it originated on Queen Maddow's blog - originally submitted by one of her loyal subjects, naturally - that is meant to set forth the idea that mean, evil Republicans are the ones responsible for our debt woes, rather than Democrats.  First thing's first, to hell with all of them.  Nobody has stopped spending or growing this government in my lifetime.  They've all just been spending on different things.

However, I do have to point out that the chart is horribly misleading (from a Liberal, no less...I know, unbelievable right?), as is the assertion by the chart-maker (Dick Seaman!) that "If voters don't understand this, the media has failed them."  Well, here is the chart...

First of all, this is an obvious shot at getting Obama off the hook for the enormous growth in spending under his watch by comparing it to past spending that took place under Republican presidents.  There is a glaring omission about this chart  that has Dick Seaman spraying his results blindly all over Queen Maddow's inbox.

TIME AND RATE OF DEBT INCREASE

By putting the presidents and their debt in a meaningful order, we can see that things are far different than Maddow's Seaman Chart would have people think.

First, we see that over the course of 8 years, Reagan increased the debt by about $1.75 trillion, or 288%, an average rate of 36% per year.

Bush I increased the debt by about $1.5 trillion, or 155%, in four years, an average rate of 39% per year.

Clinton slowed things down slightly, increasing the debt about $1.6 trillion over 8 years, an average rate of 17.3% per year.

Things ramped up again under Bush II, nearly doubling in 8 years by $4.89 trillion, but still a slower overall rate of increase than Reagan or Bush I, averaging just over 23% per year.

The chart also shows that the debt under Obama has increased by nearly 134% since taking office, about 2.25 years into his first term as President, for an average rate of 59.44% per year.  While it would seem to me to be unlikely that this rate will continue through to the end of his first term, if it did, we would expect the debt to top $25 trillion.

The resulting percentages in Maddow's Seaman Chart would burst forth with much different excitement.  We would see that the debt occurring under Reagan and the Bushes, totaling $8.14 trillion, would amount to 32% of the total debt, and that all by itself, the debt under Obama would total $14.67 trillion, or 57.8% of the total debt.

If voters don't understand this, the media has failed them.

Quantitative Easing for Dummies

The Fed's printing press, explained by a cartoon.  Awesome.

Goolsbee Goes Down

Dan Mitchell of the Cato Institute takes apart Austan Goolsbee's ludicrous pro-tax increase video from a week or two ago.  As is the norm for these Center for Freedom and Prosperity videos, take the time to pause and backtrack when necessary to keep up with the statistics and studies that back up what Mitchell is talking about.  He's got a lot more than just some dots on a whiteboard, after all.  Enjoy, and pass it along!

Hayek vs. Keynes Part Deux

Back in January, Econstories.tv released a now famous video of a rap battle between FA Hayek and John Maynard Keynes.  The video, "Fear the Boom and Bust" set the Austrian vs. Keynesian theories on the economy to a brilliant rap battle, and was a great video to boot.  Econstories.tv is following that release up with another sometime in the near future and a live sneak peak was on display at The Economist Buttonwood Gathering.  Both videos are below, for those of you that may not have seen the first one.  Enjoy!

Fear the Boom and Bust





The Economist Buttonwood Gathering

That Damn Rand Paul

I came across this video on a liberal acquaintance's Facebook page.  The clip is of Rand Paul discussing economic interconnectivity in a post-election interview.  My acquaintance's comment was "easy words coming from a middle aged white man with money, power and legacy."  A friend of her's commented that this was a "damning video."  I hope they, and you, will allow me to explain why there is nothing damning about this at all.



First of all, even from a Liberal's standpoint, I'm not understanding how it's damning that he doesn't believe taxes should be raised on anybody.  We are in a position economically that raising taxes at any level will, not might, will, hurt the economy.  Beyond that, a discussion on interconnectivity is warranted.

Economically speaking the idea of interconnectivity is more true than untrue.  If interconnectivity has decreased over time it's because the government has gotten in the way of it, becoming the primary source of income for many of the poor, rather than incentivizing them to go to work.  Ideas like interconnectivity are economic arguments of efficiency.  Is it more efficient for a poor or middle class person to receive money for services rendered in the private market, or for the government first to tax the higher income person more, collect that money, then distribute back out to the poor person?

The answer to that question is answered within the question.  Of course it's faster for someone to have a job in the private market where he or she is paid every week.  The problem has become that government programs assume by default that the poor cannot rise on their own within the private market, when in many cases, history bears out that the inefficiency created by said government intervention has made it worse for the poor, rather than better.  The Chicago Housing Authority for instance, segregated black poor into the south and west sides, and cut them off almost entirely from the city's normal flow of economic activity, forcing them eventually to rely on government subsidy.  It was not the intended consequence, but it was the consequence, nonetheless.  Now the CHA is rehousing everyone, and is insisting that their tenants be spread all throughout the city, in order that they be more likely to be within the normal flows of economic activity.  They are requiring interconnectivity and promoting efficiency.

Contrary to what the folks at Kos may believe, Rand Paul does not believe that there are no poor people.  There are poor people.  Always have been, always will be.  His intent is to move us away from thinking in terms of the status quo of class warfare.  His intent is to move us away from thinking in terms that the government is the only entity that can possibly be responsible for aiding the poor.  It's an idea of economic efficiency, and an idea of promoting more self reliance within our culture, generally speaking.  And both of these are good ideas.

Explaining Free Trade in Three Minutes

There is a rash of subdued protectionism talk circulating around these days. The economy is in the tank, and the usual murmurs that buying goods from other countries are costing Americans jobs are growing into a restless rumble. Now, for your short attention span, not to mention the remote possibility of reaching even the economically illiterate Liberal out there, comes an explanation of the benefits of Free Trade in under three minutes.



Thanks to Tom Palmer at Cato

Mesirow Financial Backs Bernanke

(Link if video won't play: http://www.chicagobusiness.com/cgi-bin/multiMedia.pl?mmId=978)

In an argument that amounts to, "well, what was he supposed to do?" Chief Economist at Mesirow Financial, Diane Swonk, discusses why she thinks anybody deriding Ben Bernanke is simply trying to use him as a scapegoat.

An interesting little interview with Crain's Chicago Business here, that gives us a glimpse into the mindset of those interested in rolling with the status quo. Henry Bee would be proud.

What Wins You Person of the Year

It's obviously not one's ability at being forward thinking, or even a basis in reality for that matter. In any case, here's a fantastic compilation of Ben Bernanke moments that really, more than anything, goes to show just how out of touch Time Magazine is.


Hat Tip: Malkin

Public Option Lemonade

The reality of the Public Option, explained in 41 seconds.

OR

How the Government makes little girls cry.



HT: Cato Twitter

Peter Schiff vs. David Epstein

David Epstein with Columbia University takes to the podium to attempt to explain to us all just exactly how President Obama's policies are saving the economy. Unfortunately for him, his opponent in this forum debate format is Peter Schiff. This is essentially a tour de force in the superiority of Austrian Economics vs. Keynesian Economics. If you've got friends that still aren't convinced, or you think need to be educated, this is the one to do it. Enjoy, and pass it along!

Free Market Healthcare

"We have this insane system now, where you need healthcare, you're the buyer. I'm the doctor, I'm the seller of healthcare, and someone else pays the bill. Who the heck is gonna shop for price when somebody else is payin' the bill?"

That's the money quote to start off this fantastic clip from Reason.tv, that implores us to follow the Lasik model for the rest of healthcare. Enjoy!

It's Costing the World a Fortune

Yesterday, I posted a video of Peter Schiff lambasting Ben Bernanke for never getting anything right. In and of itself, this is nothing new. What made it fun, however, was the fact that he was part of a panel discussion with St. Louis Fed President James Bullard and Fed Vice Chair Alan Blinder, who both attempted, quite weakly, to defend Bernanke.

Today, a new clip from the same roundtable, as Schiff gets technical and dismantles Bullard's weak sauce theory that other countries will for some unknown reason return to the dollar during times of crisis. Schiff also goes on to make a strong bet with Blinder on the continued reserve status of the US Dollar. As prescient as the man is, his forecast is nonetheless chilling.

A Red-Ink Train Wreck

The Cato Institute's Dan Mitchell appears once again for the Center for Freedom & Prosperity, this time to discuss the true fiscal costs of government run healthcare. Two main points here. First, that fiscal responsibility is achieved through smaller government, and second, that no matter what, a new entitlement program always means higher defecits. Enjoy, and share!