Tuesday, September 28, 2010

Explaining the Inexiplicable

I first would like to apologize for my Post yesterday, where it seems that only I understood what I was talking about. There are many ways to figure medical costs, and lots of people estimate they are getting a good deal under the socialized system. What I was trying to describe was the fact that Americans before Medicare spent about 4% of their annual Income for medical services. Today after Medicare, most Americans pay their share of the deductible system, which adds up to about 4% of their annual Income. Many Americans will claim that they get Supplemental Insurance to handle the side Cost, which generally adds up to about 4% of the annual Income of the average American. Health Care Costs will generally rise more rapidly than the Operating Costs of the overall economy as long as the premiums for this Supplemental Insurance constitutes less than about 4% of the average annual Income. The interesting fact of the above data outlines the fact that the Government pays about 10% of the average American Income for health care Costs of only a limited membership of beneficiaries. This is the inflationary and artificial Price support system I was trying to describe.

Here is another direction for the Problem examined above. Americans are not optimistic about the economic future. No one believes it is going to get much worse, but no one thinks it will get any better. One of the very real dangers which will cripple the economic future of Us all comes from the misallocation of capital within the economy–consider the federal underwriting of the health care industry described above. We are talking about a misallocation which is equal to about 10% of annual GDP. Other well-meaning but adverse Government programs shift another 6% of total annual GDP to the wrong economic sectors in attempted Protection which is not accomplished. Economists will explain that any economic activity is better than no economic activity; even if it is Wrong in direction, and eventually shrinks the long-term growth of the economy. This entire Post is about What it does do, which has been described generally.

This is the Ocean of disaster on which the American economy floats. We must redirect that misplaced capital if We want the economy to grow. Will We be able to overcome the entrenched resistence in the political realm. I doubt it! Politicians have long ago learned you can sell even the worst policy, simply by convincing the Polity that they are gaining something from the Policy. It does not matter if the policy envisioned or in use is actually injurious to the Polity, if they can be made to believe that they gain from it. Politicians become quite adept at the practice of delusional expression, and Lobbyists possess even greater expertise at the flim-flam. The concept of the Judas Goat is alive and well, though the Herd may be dying. lgl

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