Wednesday, March 31, 2010

State and Federal Debt

I was thinking about finding an Excuse not to write anything this morning, then I ran across this article. I feel that the Reader must evaluate this piece, which is all about State debt. One can take the sensible tradition, and suggest that contraction of debt is an idiocy in the first place. Debt is debt, and has to be repaid someday, and the medium of repayment here is by taxation. There is no realistic Expectation that State expenses will decline in the future, and higher taxation remains the only medium by which revenue can be raised. There has never been a clear indication that reduced current taxation will garner greater Productivity and higher tax revenues in the future; this meaning that current tax codes will likely never pay for themselves. The more realistic program may be higher taxes now, so that Interest on State debt can be deducted from the overall State expenses; saving most States an extreme amount of diverted revenue.

The countervailing argument states that higher taxation will lower Productivity from economic activity, and thereby increase Welfare Costs for the States. There is also the subsidiary argument that when the States are already in debt, they face both the higher Costs, reduced Tax revenues from lower Productivity, and Interest on what debt does already exist. It is the Scenario faced by almost all States, and includes the federal government by the way. The Question becomes What to Do under these conditions, and I remember an economic argument I had with a economics professor in graduate school; who would not budge from his position of simply selling more Treasuries. I think somewhere in the back of his mind, he believed in some concept of forced sale of Government debt; which would be a much trickier program than would be higher taxation, though Bernanke and Geithner seem to hold the same ideation.

I much prefer a Government enactment of some kind which would impel all Government Treasuries to issue a Taxation scale which outlined the level of taxation necessary to fully pay for Government expenditures, whenever they issued any information on proposed future or past debt. The anger against Taxation might be lessened if Taxpayers could understand the exact Costs to themselves from a program of sustainable Government activity. Statement of potential Tax rates would cancel a great amount of the Taxpayer anger, and produce high pressure to actually reduce Government expenditures. The demand for such information should insist on a standardization of information; I suggest a 10-year Tax schedule for total repayment of debt, with the Tax rate Schedules set over this Period. It should also include a potential impact to the average Household from taxation over the 10 years. It would be simple for Congress to pass this demand, and it would provide serious information necessary for realistic discussion of the issues of debt. lgl

Tuesday, March 30, 2010

The Value Added Tax

Every good Student of the ineptitude of leadership should read this outline of the dangers of the VAT. What is not defined clearly in the Post compels me to speak on the obvious; namely, that all that intricate detailing of the lives of small business is specifically for the purpose of hiding the VAT impact from the taxed Public. The Taxpayer, who is also most times a Voter, cannot define a Tax which he cannot see or explain; lack of definition brings on a lack of opposition. The VAT was designed to hide the magnitude of the Tax, inciting the Public to blame the economy rather than Government for their misfortune. Politicians enjoy the false Spring of being able to Spend great volumes of Taxpayers’ Income without complaints from Anyone; no one being able to precisely rant on the Costs to the Public.

One can read about the actual operation of a VAT here, where the theory is discussed. The article does not mention the near impossibility of maintaining neutrality of the VAT, and after imposition of the tax, the real impossibility of reordering that neutrality without dumping the entire system. The only method to pay the minimal tax when it is a VAT remains purchasing early in the chain–a near hopeless feat; while double taxation becomes the Standard for the common household. Every attempt to save discrete elements from the heavy taxation automatically vastly reduces the tax revenues; all Production has to be taxed in order to gain the immense benefit of high revenues. Remember that the VAT is an attempt to tax household consumption, and most of that consumption comes from lower Income households. The VAT faces the same restriction as all other Taxes; restriction of the tax base leads to lower revenues, and as the VAT is an accelerating compound taxation, quickly loses revenue from a constricted base of Taxpayers.

VAT administration is a huge and complex bureaucratic procedure, and fraud is always rampant within the system. There are no Checks and Balances within the administration, and Tax Evasion in the early stages bring huge losses in the final stages. All this is of little moment, though, as in the final outcome households pay a huge tax on their consumption. It is a tax system built by bureaucracy for bureaucracy, and has no empathy at all for the Taxpayers. Politicians love the system, because they can spend wildly, without fear of complaint from Taxpayers; the later not understanding how their Standard of Living dropped so drastically and rapidly. Small business likes the VAT, because they can devise methods to pay less Tax than they had previously in personal Income or Sales taxation. Large Business enterprise know they only have to corrupt small hidden bureaucratic elements to avoid rightful taxation with little chance of being caught. Only households are left to complain, and they cannot trace a Track of Taxation, which Accounting firms would have difficulty in following. It is one hell of a system, but if I were the Taxpayers; I would vote No on the VAT. lgl

Monday, March 29, 2010

Making Health Care Insurers breath hard!

Have you ever sat in on an Argument where 3 lawyers discussed the Intent of specific legislation? Avoid it if possible, but if forced to attend, expect a real flow of BS. We are currently at that stage of health care description, and everyone is shocked about the purported lack of clarity. The language of the health care legislation is not confusing; lawyers simply claim that it is, a carrying capacity to get other lawyers, this time called Judges, to agree with the ambiguity. Everyone knows what is expected from the legislation, everyone knows what is wanted from the legislation, and everyone knows that the delays of implementation can mean huge Profits for the Insurance companies. Want to stop the Argument from even occurring? Simply pass a Codicil which states there is an ex post facto element to the new law, where Insurers must pay the health care costs of the five previous years for every insured Individual, with premiums set based upon the payment schedule of those 5 years. Threat of this Codicil will probably shut down this discussion within minutes of it’s proposal. By the way, the governance of future conduct nullifies any disagreement with the Constitution on the fact of such legislation; Insurers are not specifically ordered to pay past charges, only ordered to reimburse past charges if they seek to make a Profit off of ensuring Individuals for health care.

Did you hear the gasp of lawyers and their employers as they read this definition of the law? It is likely that even the judges are swallowing hard! Why? Because it immediately draws to the fore the Concept that health insurers who had previously denied Coverage to Individuals because of preexisting conditions might be forced to pay those Expenses anyway through the length of those existing conditions. Here is where lawyers will really begin to sputter! The Courts might have to define was health care insurance actually means, and entail the minimum conditions under which it might be issued. A scary Thought, where health care Insurers cannot utilize their organizational skills and Wealth to rewrite their policies anytime it gets too expensive to meet the residual guarantees of the policies.

Does it seem like We are getting in deep water here? We are, but there are simple solutions to the problem, which can be settled by Congress itself. I propose a 5-Step program of Health Insurance, based upon segments of Insurance. These Steps would simply be financial levels- say $10,000 per Step per Insurance year. Insurers must pay up to the level of the Step on which premiums were paid, if Medicare will pay for those procedures. Universal health care coverage will insist that everyone must get at least Step One, with all subsequent Steps being optional; the kicker here is that the Insured must be liable for the remainder of the Cost of the health care when the bills reach $60,000; lower if Step premiums are avoided. Now We come to the crux of the Argument, with All screaming that Everyone will be left without health insurance again. Not True, as medical facilities and Providers quickly shift away from Charging for Procedures, and settle in on Charging for overall care. It is much simpler, and incredibly cheaper, to charge for Standard Care rather than Procedural Health Care; every successful universal health care program in the World utilizes this system. The Question becomes Why doesn’t the United States? lgl

Friday, March 26, 2010

Cruel to be Kind

I credit Robert Reich for an excellent Message, even if I don’t quite agree with the desires. Robert places heavy emphasis on Stimulus and Tax Cuts, neither being the path of efficient government. The later is what I consider the next Step to be; whether it be by Obama, or Anyone else. I am considering a ‘Show-Cause’ administration, where no one get anything, especially Escape, from what law was originally imposed. Government Workers would be required to file a Job Responsibilities Report, outlining their duties; and a Proof of Fulfillment stating their past accomplishments in their Job. These Reports will go to an independent Employment Commission who must recuse themselves if they know the Employee, that will decide if the Employee is worth retention without recourse to supervisory comment, other than a general Statement about each of their subordinates; Supervisors themselves graded for efficiency. You don’t pass this Commission, you are no longer employed by the federal government, and the Commission is detailed by law to reduce federal employment by a set figure every Quarter.

Federal Taxes should be handled in the same manner. A Commission of Tax Assessments should be set up, which should be tasked by increasing Tax revenues by a set amount per Year. Every Taxpayer would have to file a Proof of Need to draw any form of Tax remission entitled under legal enactment. Each Taxpayer must prove that the Tax remissions are valid considering his financial position, his developmental plan for business expansion, and the level of fulfillment of the criteria for which the Tax loophole was created. In all cases, Commission members must recuse themselves if they know the Taxpayer personally. The entire Concept behind the Commissions consists of reducing benefits extended by the government to only Those who actually need them.

The task of these Commissions will be efficiency, so failure to reach the goals set by Congress on these Commissions will automatically result in member dismissal, and reconstruction of the Commissions. There will always be a method of Redress from Commission decisions, but this will only be through the Courts, and likely to Cost more than any benefit is worth. The Commissions will be responsible for notifying the Justice Dept. about any malfeasance of office, or Tax evasion; all without more than simple notification of the specific Dept. or IRS function. The entire function of these Commissions, outlined in their very enactment, will be to both reduce Government size and Government intrusion into the Private Sector. They will fulfill these responsibilities only through increasing Tax revenues, and reduction of Government employment.

I know what Everyone will think of such enactments in the midst of a Recession, but the greater efficiency of government will benefit even in Recessionary times. One has to pick a Point, and state here We draw a Line, and it is a Line We will not violate. The Commissions themselves will probably employ about 60,000 people, and the first Quarter quota should be to reduce their own increase in federal employment. The first Year’s quota should be an increase of Tax revenues by a minimum of $100 billion in real terms. This later level should be continuous throughout operation of the Commissions, eventually eliminating American dependence on Tax Cuts of any type. lgl

Thursday, March 25, 2010


How does One properly bring down Communism; this could possibly be one of the Options. Conservatives have long ranted against Government regulation; in minutia, most of the criticism coming to the FDA and its regulations. This Country, though, has a relative trust for its eaten Products; noone fearing a purchase of Food from almost any Vender. We not only have dietary restrictions–so We do not have to eat horse meat unknowingly–but health inspectors ensure that We do not additional animal products embedded within the food. Recanted cooking oil is a problem even here, but no enterprise has made an industry out of it. It is done at the Vender level, and the people doing it must put up with the smell. They also witness their Customers abandon them as the Taste deserts their Product. There happens to be a very complicated Preference model which can be found somewhere–never studied it–with which you can determine the actual Business gain derived from each Nutrient regulation; it is actually a Profit, not loss, in Product Sales increase. The last was for Would-Be economists of the future.

The power of Polls shows that average Americans want better Regulation of Wall Street. The worst problem with Polls develops because of the ability of the Poll takers to derive the Answers through the method of framing the Questions. The trouble with Wall Street comes from average American ability to lose a huge amount investing in instruments which Wall Street promoters frame as safe products. It is really one of those areas where more intensive regulation could possibly make a difference; though it is an argument which is again adopted every Recession. Most Americans might be better protected by teaching them that the basic way to make Money is hard Work, and careful Planning. Can there be a great level of Safety in an industry dedicated to raising finance for endeavors which may or may not fail?

I decided that I would speak on Government regulation today; now, I ask myself How am I going to end it. I must say that Regulation has its place in the scheme of things, which inspires Trust of the Public and increases Profitability through higher Sales. Regulation, though, requires a relatively static market forum, with a relative Standard of high quality Production; trying to regulate systems with no real recognizable direction of responsibility can get nowhere. Any industry with too many potential Options for operations has no one to claim Fair or Foul. Choosing ad hoc Government regulators simply means that regulatory policy will change with personnel, and makes a bad situation even worse. There is no final Word on the Benefit or Cost of regulation, and even this strata will change with market conditions. I personally believe Less is Better, and the arena for regulation should be carefully chosen. lgl

Wednesday, March 24, 2010

The health care knot

Is this Scene truly outrageous? I have sincere doubts, yet We might examine it loosely. One has to have a lot of unearned Income in order to be heavily taxed in most defined cases. There is a fancy mathematical equation that defines the ratio of impact of Inflation on Income Classes, with higher Incomes finding it far easier to pass along Inflation pressures than their less successful competitors (don’t ask me the equation, I have forgotten it long ago). It is simply a known fact, which sometime should itself be contested, that Income Earners join Business in passing along the Costs of taxation; where and however they can. Everyone also knows that larger Incomes have a much easier time doing this, than will lower Incomes. There might be a slight Problem here, as higher Incomes change the Software Triggers which they utilize today to make Investment decisions; but this will be a minor problem of increasing destabilization of the markets. The only real Question which must be asked is: Will this minor taxation actually pay for any significant medical bills? The Answer is minimally within the Short-Run, nix on the Intermediate and Long terms.

The Congress which refuses to implants Controls on health care will never cut the health care bill. It is this bill which must be controlled to contain health care debt creation. This is true for both the privatized health care Consumer, as well as the public welfare Consumer. It takes a relatively short time to price major segments of Consumers out of the market, when an industry has Operating Costs growing significantly more rapidly than the industries supporting the Income levels of those Consumers. There has to be measures to ensure that medical treatments remain relatively static in relationship to Profits of other industries, in order for a self-sustaining medical payment program to survive. This is the major fight which has been going on in Congress, and one which adequate financing has been losing. We cannot afford to lose the fight too long!

Here is the special case of the Amish. Do not think they should get an automatic exemption, as these religious personnel spend approx. 3 Days of hospital care whenever there is injury to themselves off Amish territory; an increasingly high and growing Cost, as more travel off the traditional reservations. People should understand that We need a consistent, uniform method of universal health care, and the concentration on Exemptions is bad for the final Product devised. The worst Outcome will be a massive increase in the Paperwork incited by health care, already swamped with filled-out forms. lgl

Tuesday, March 23, 2010

Be Kind amid the Slaughter

The Readers should truly read this Post to get a handle to what is happening to Us. The Recession is bad enough without the confusion as to the cause of it. The outstanding comment I would like to make consists of the idea that the percentage of the Whole which was bound to fail was discoverable from the outset within boundary parameters, and these boundaries were ignored by both authors and purchasers of the derivatives; to the point almost all exceeded the width of the parameters over development of the derivative. It is not that these things are bad, though they do stink a lot; it is the fact that idiots began using and trading in them. Combined with the almost total leverage utilized in the run-up to the Recession; it was bound to happen!

Mark Thoma presents a good article describing the various forms of Tax which may be instituted to pay for all the Government adventures into Spending. Taxes will have to increase, or Government expenditures will have to decrease; current US Treasuries are beginning to take on the form and nature of CDOs, as even the Governments start to leverage heavily. The element most hidden by all activity remains that the sheer amount of Credit is still on the Rise, though now it is simply being assumed by Governments. Taxes will come when the other Shoe drops on Someone’s toe. Know that the non-renewable mass of the debt has been growing from the Start of the excess Spending, mainly governed by the Age of the Purchasers, and the maturity of the businesses generating the initial funds to subscribe the debt. Ten-year securities which were purchased by Someone at Age 55, are now owned and cashed out by Retirees; if the funds cannot be replaced by Someone less than 45 now ten year hence, then We are in trouble. Business which did not need the Cash today, will find Need of the capital if there is viable expansion of the industry. The Concept of ready Subscribers for Government debt stands as an illusionary item.

Government could do with a necessary Uplift of peoples’ perception about Taxes. Americans think of Taxes as simply highway robbery, stealing the Profits from their hard labor. There need be direct presentation of the tax liability presented with every benefit granted to the individual citizen. Schools must have budgets which state the assumption of Property taxes which is required. Property taxes should be assessed with a base rate, and with a progressive tax based upon the Income gain deriving from the Property use. Medicaid and Medicare benefits should be presented with Statement of what percentage of total Taxes is required to pay for those benefits. Likewise, Unemployment benefits and Welfare benefits should be posted by percentage of total Taxes paid. The Average Cost per Employee for every level of Government should accompany every attempt to conscript Taxes. Government needs to explain How Much it costs to pay for Government to the Taxpayer, and hope his rage does not burn out the system. lgl

Monday, March 22, 2010

Background Noise

Bloggers are wild with discussion of the new health care bill passage. We are still hearing the wild claims from all sides, and expectations are way too high. Administration of any program formed by the legislation will be bureaucratic in the extreme, wrap immense resources into Accounting Costs, and probably do nothing to reduce medical costs within the Country. I am not cognizant of the basic stipulations of the bill, and may have to eventually concede that it’s passage was a Step forward; though I very much doubt I will have to do so.

The basic trouble, as I see it, will be transference of all those Pages to the medical receptionists at Doctor, Clinic, and Hospital. It is a whole different world down there. They insist on placing the Patient into a specific slot, before one can even reach a Nurse, let alone a Doctor. I am quite sure that it will require a 20-minute Interview before entrance into even emergency surgery. It is all something which I do not look forward to with desire. I do not believe that the bureaucratization of health care is the Solution.

The Cost of health administration has obviously been vastly increased, with the sincere judgement that it will take the average physician at least 3 years to simply read the entirety of medical restrictions implanted by the legislation. Medical administrators will assert restrictions in a much shorter period, possibly within 3 months. There will be a paralysis period in the interim, with no one to say Yes or No to any medical treatment, with No the preferred statement with any reference to potential financial loss. We might not have eased the treatment of health problems, but introduced an epileptic disturbance to the practice of medicine. We can only hope for the Best, and expect the Worst. lgl

Sunday, March 21, 2010

Bonus Tax

I read this article shortly after reading this article. I happen to think there is much rationale for both arguments, but believe both programs would require too much Accounting for proper tax assessment. Jim Webb wants to tax the huge bonuses, and Robert Frank wants a positive consumptive surtax. Both want to go after the big Money winners. Way too complicated for any tax assessment. Webb wants a temporary tax, Frank wants a Tax which is permanent, but with all types of safeguards to ensure that the Accounting firms will make a fortune. Tax revenues from whatever passage along these lines will deteriorate from the Get-Go. Making the Tax Code even more complicated is not the Answer!

Here is where I would go at the Problem. First, I would clearly separate Salary and Bonuses for Tax purposes. Salary will be taxed at normal rates, while Bonuses would be taxed at special rates. My contribution will be to state that Salary will enjoy the benefits of deductions; Bonuses will not. The second measure will state that all Salaries and Bonuses will be subject to the taxation; this to discourage the impending nepotism of award of bonuses to such things as Wives, Children, and Friends to drop below the contracted minimum Bonus subjugation to the Tax. Third, I would establish a common rate of Credit extension for each Income level, and tax any overage as a form of Bonus extension. I would finally set the Bonus tax rates no higher than the nominal Personal Income tax rates currently on the books–simply eliminating the Tax Credit, Deductibles, and all Tax Exemptions from application of the Bonus tax.

Such a Taxation would increase total federal tax revenues by an estimated 11% overall. The system should be implemented immediately, not waiting for better economic times. There will be vast opposition to this position, but it is the only Condition under which such a Tax increase would work; showing that there is a manner to increase Tax revenues even in a sharp Recession, without worse impact on the economy. I thought of a Tax deduction for this special Income, where the Bonus Earner would get a percentage Tax deduction for the Bonus if he could prove to have spent the funds on Consumption by the time of Tax filing; though I discounted this measure as it led to accountability issues–of which We have far more than necessary. lgl

Saturday, March 20, 2010

The Statement for Today

I will not say that either Steve Roach or Paul Krugman make sense, as being deep in Right Field is as bad as being deep in Left Field; those short, outfield Sliders will score on you every time. No one seems yet willing to admit that Exports will help no one–not even the Japanese. You must structurally alter your domestic economy in order to ease a Recession; Exports are only Icing on a Cake, one has to look to the later if one wants any real Nutrient. We all need to relax, and stop trying to grind Profits out of this mess. The first thing to do is dismiss Exports as a relevant factor; physical quantities of Product and Material is not likely to alter much under stressed conditions. Any alteration of Paper exchanged under such Trades is almost worse than bureaucracy; which thinks all those filled papers are utterly necessary. Physical loss in the interior of an economy cannot be corrected by exterior effects upon that economy.

I sometimes wonder if my Readers should not read Mark Thoma rather than myself (it is where I have gotten all my material so far today), as I might appear as more Chocolate than Fruit. Get out this Piece, and suggest all Politicians utilize present bias in trying to restart the economy. One would have to combine present bias with a Rebate system across a wide range of Products to produce any deducible effects, but a proper Rebate program would reduce oversupply of much Production on a continuous basis. One of the best ways to utilize present bias/Rebates is a lottery system where an effective Rebate is awarded to any Consumers who purchased Products with the most oversupply for the month. Many would argue for Tax Credits for this Rebate, though I would imagine the best method would be actual Cash awards, with the presentation of Sales slips. This Cash would present the greatest chance of immediate Consumption. I am talking about a Government program here, with heavy pressure to insert Mad Money for Consumption; not any value for Private Profits.

I am now at the place where I should somehow connect the two previous paragraphs, and somehow present a directional summation. This is always where it gets tricky! What I am trying to state today must be that economic misfortune is always an internal affair, with all Incentives rather immaterial unless they are directed toward an internal reordering of economic direction. The secondary element must portray that all economic initiatives taken should have long-term consequence, so that the internal changes are permanent. The Correction must alter what is, and maintain that alteration into an on-going boom. Many will claim that this is twisting the market system, but it is exactly this Twist which is necessary for maximum optimum performance in the economy. It is also a Call to rid ourselves of all the junk which doesn’t work and shows favoritism to heavy-spending political contributors. lgl

Friday, March 19, 2010

Everything I didn't want to know about the American economy

Ponder on this item in the Press. Capture lines for GDI will be naturally slower than for GDP, because of the nature of their constructions. GDP increase needs only pushed Production schedules in the Short-Run, with methodical Hiring practice in the Intermediate Term for Growth. GDP decline can come far more rapidly, with sudden Lay-Offs; but in both instances, GDI must consistently follow because of the labor income paid out. GDI, on the other hand, must see the return of both Profits and Wage Income, along with the issuance of Royalties for Patents and Copyrights. All depend on Production Sales to major degree, while GDP depend only on Production schedules. There are great reasons to stockpile not only Product, but materials for Production under recessionary conditions; it has to do with cheaper Pricing of materials after Sales downturns. Profits, Wage Income, and Royalties are hard to reconstruct without a sustained Period of high Sales. This puts a drag upon GDI, causing some problems for use of the measure as an economic indicator; still, long delay Periods in the GDI will assure long-term reduction of GDP. This later is only a good economic indicator if GDI closely tracks it with at most a delayed Period of two Quarters.

There has been a downturn in American manufacturing for decades, but this evaluation accounts only operating plants, and the entire Production area shows a reversal of fortune which is far from being over. There are several factors contributing to a failure to return to previous Production rates. American business practice makes Work Experience a demerit, preferring to employ foreign subcontract labor for supplying Parts and Production, over a higher-Waged American labor force. American health care has become too expensive for Business to underwrite labor health care; an underlying demand which propels most Wage discussions. American Plant and Technology is Ageing, and Recapitalization follows the cheaper labor. American Business has not introduced good Quality Control measures, so that American Products are again gaining a bad Name; a major factor which had to be dealt with in the mid-1980s. There is finally a disbelief among American labor that Manufacturing is a viable employment future; it all reflects in the quality and speed of their labors.

I will finish with this article from Leonhardt, which has little to do with the previous discussion; except in the general Overview of the issues involved. GDI is not rising, and there is some rationale for expecting it to stay static even after GDP increases. This means that American business must export, or never return to previous Profits. The obvious Option of Choice from all Parties is for Government to replace both reduced Consumption and uncaptured Export. American labor wants the Government to sustain their previous Consumption patterns, and American businesses want their Profits at any Cost. The trouble will come when underwriters of American debt no longer want US Treasuries; a Time not as far distant as Anyone would like. It does not bode well for the future, and I as an old man, can always die!. lgl

Thursday, March 18, 2010

What do you say?

All the little items which makes One wish he was in a Nightmare instead. It is not as bad as it would imply, but only because We are spending our aggregated wealth on the facade of Good Living. Will We recover?–Of course we will, but what does it mean for the future? Nations are beginning the process of securing themselves from payment of the fantastic Royalty charges from Patents and Copyrights–the last refuge of the American economy. They probably will not be that successful in the Short-Run, but they are producing college graduates much faster and cheaper than We are getting trained personnel into key positions. The health care industry is burning itself out with excess Charges; probably less than one percent of American households could possibly pay for their own health care. I have one friend who gets only one Shot per month–at a rate of $2400+ per Shot. Americans have abandoned Production, and are no longer paying the Service industries a Living Wage. Everyone talks about Stocks, Hedge Funds, CDO Swaps, and Credit Card outrages; much like the late 1920s-- except for all the new Crap. It is a Warning Sign when all discussion is on failed new instruments; it meaning that We have taken a Wrong Turn.

I am no great fan of the Fed, but I would comment that the regional Fed banks have been more vital than the New York Fed or Washington in dealing with the Nuts and Bolts of Banking. It is probably why Congress has turned against them; they proving to be efficient operators in their own areas, while Congressmen and Senators are mainly in the employ of the Big Banks; the later wanting to operate in regional areas with the same freedom as on Wall Street. It is not really intelligent to allow the people who brought us the corrupt financial instruments of the last decade more freedom to operate in their own interest. The only real outcome of the current disaster may be the realization that Government is as bad as the Big Banks in the contest to survive the greed of the nefarious.

I will guide my Readers to this defense, though I would advise approaching it with a great deal of skepticism; something which should always be utilized when dealing with Government officialdom. It does not help my sense of well-being to know that the effects of the Great Depression did not really become bad until 1931. I need to be a little careful in this, as I wish to avoid a Charge of being a Fear-monger. Still, the later part of 1929 and the entirety of 1930 was a period of degrading elements throughout the American economy, leading to real hardships in 1931 as households became drained of financial assets. We are now told that Unemployment is unlikely to get better in the coming year, on which I agree. The Press Release sounds good, but one has to remember the rupture of Jobs has not turned around, though We are now watching dismissals based upon lack of Consumers Sales, rather than attempts to grab Profits which were elusive; by the way, those Profits were not really realized anyway. Rule of Thumb: Never believe the claims of a Corporate board, if there is an up-front declaration that they are going to hoard the Cash. It only means that they know bad times are coming, and are trying to get as much as they can out of it personally; under such circumstances, Stockholder loyalties are valued as not worthwhile, while division of the Cash cuts down on their own bonuses (think that their belief in long-term employment has diminished). It is not the case with this Press Release, where all hope to last at least as long as Obama. lgl

Tuesday, March 16, 2010

The Nature of the Accounting

I am one of the Twelve Percenters, and will let the Reader find out what that means. We spent too much for not enough, and round up paying twice for what We should not have bought in the first place. Two Negatives only make a Positive in Mathematics. The Graph shows a Potential which was always too extreme–Never could We have made the almost Ten Percent, even taking very Trick in the Bridge; remember We are a highly developed maximized economy. The loss should never have been presented in shortened form, but allowed to flow from 2000 onward, showing a proper projection of the loss; which was to greatest degree was only loss of Growth; there was no real slippage back into the Dark Ages. I personally know that Menzie Chinn was only trying to get a manageable Graph, but this one leaves a lot to be desired.

I will give this link which is very informative as Tutorial, if not on Specifics. I disagree with the Dodd bill, if for no other reason than anything over 1300 pages should never be passed into law. The Fund is too large initially, and will eventually devolve down on traditional banks, who are not the culprits which should be controlled. Compliance will be almost impossible throughout the context of the bill; fulfillment of some provisions will negate others. You can be positive that anything of such length will have hidden provisions which will nullify the major policy projections desired; meaning traditional banks will follow the Rules, all others will not. Taxpayers really have no one on their Side, and will face a deceptive Accounting protocol. It will get ugly, as Accountants design complex ways to circumvent the regulation.

Please check out this link, which will explain Why 1300+ Pages of regulation will add nothing. They still cannot figure out a correct evaluation for Lehman assets this far into the collapse. The whole situation may prove beyond a doubt that Bear Sterns and Bernie Madoff were only the honest ones. They at least only kept two sets of Books, not the 25-50 sets of Accounting which lied even inside the firm. It is very interesting to note that Regulators can only compare data with that found in other deviant firms, because no one can really find any honest assessments on the Street. Madoff’s storefront Accountant was at least honest enough to admit that he did not know what the hell he was doing. Now, they want to overlay the entire business with a regulatory system which will take 5 years simply to learn, never to be applied. lgl

Sunday, March 14, 2010

Reintroduction of House Calls

Tyler Cowen expresses an excess fear of managed health care; I actually don’t blame him as I have had some personal experience. I also agree with him on the Statement that Governments and Private Insurance will not be able to pay for all the medical care which people insist upon. Tyler being Tyler, and I being me; I know that We would disagree on Solutions to the problem. He would leave the Supply Side alone, only tinkering with the Demand for medical services. I would consider health care Supply as Profits-Optimizing enterprises inherently concerned with their bottom line. Tyler would add pressure to an already victimized Consumer, while I would make life unbearable to the medical Suppliers.

The whole rationale behind my objective policy would be to alter the power relationship where the Consumers have little effective impact on the market, in the face of Suppliers setting all the Rules and Procedures under which the market operates. I would simply utilize Government to change the matrix; a factor which I am sure will make Tyler howl, if he ever hears about it–remember he publishes within the NYTimes–which I don’t. My Readers ask How I would do this, and I will try to explain.

The first thing I would outline is Patient loads for Doctors; a situation where to maintain their license to treat Patients, they had to treat a certain number of Patients per year as set by Government regulation. It would change the nature of the market; forcing Doctors to accept a set number of Patients, no matter What their ability to pay. Medical Schools would be mandated to graduate a set number of Doctors per year, allowing for full Coverage of all medical Patients; failure to graduate this number of Doctors would lead to withdrawal of certification for the medical faculty. The level of proper medication for the total medical population would be determined, along with the Average medication deployment for each Doctor. A new Tax would be assessed on medical practice, with Doctors charged a tax on each proscribed issuance of a dosage of medication; something that could range in variance to amount like Personal Income, from maybe 15 Cents per Pill for normal issuance to maybe $3 per Pill or dosage for excessive proscriptions. There could also be a mandatory limitation of Doctor fees per Patient per year; I being Mean, and suggesting a limit of $1000 per Patient per year. I would grant Clinics an amount of no more than $3000 per Patient per year, and hospitals no more than $5000 per Patient per year. I would simply tell all health care Providers that they had to operate within their parameters, or lose their license to practice medicine anywhere under our Government’s jurisdiction. lgl

Saturday, March 13, 2010

Mortgaged to the Hilt

I would endorse this Piece, if only I could discern what was said. We bloggers carry our prejudices with us, but refuse to admit We have them. It all comes from playing the Devil’s Advocate too many times. We believe We can lampoon every Thought, and Readers can outline our humor without precise underlining of the event. We all want to be the Stephan Colbart of the Page, but have not had sufficient practice. I have always been willing to grant a Toast to the foolhardy of heart, but wonder if We should engage in the practice. I once knew an old Stylist who ranted about Clarity–Clarity–and more Clarity. I worry that I often even confuse myself, though I console myself by such complication I even mistake my own words.

Don Quixote rides again. Everyone looks for stability, and Some even seem to try to parameter instability. The authors expect a Profit if the wounded animal can stumble past November. What everyone ignores is How Much Money has already been pushed into this thing, How Many have already gotten their fair value out of this thing, and How many Homeowners have been crushed by this one asset. This is not a rant against Bottom Feeders–who are utterly necessary in this complex world of Ours. It is a precise Statement that there should be a financial authority who can call a halt to these financial aberrations, saving both Homeowner and Investor vast losses, and All a vast waste of Time. Appropriate and timely Bankruptcies could cut away dead flesh, and allow for new Growth. How many Shots with a Cardiac needle and how many Jolts with the Paddles must it take, before Someone will sign the Death Certificate?

Maybe my Readers will understand the previous argument better, by reading this article. One has to ask How Much will be spent by homeowners who will eventually lose their homes, prior to the actual point of actually losing their homes. It is the highest Rental Prices in the Country, while it serves no one; not the Homeowner, not the Mortgage holder, and not the Investor. The Real Estate markets will again crumble in the face of the defaults, and no one even bothers to inform homeowners that they have no chance! It is the real degree of inefficiency in the mortgage markets which is costing everyone involved, and practices should be changed. This is forestalled because of the memory of great Profits previously earned, but which cannot come again, without the same damage again unfolding. When are We going to admit our Enemy is Us? lgl

Thursday, March 11, 2010

The real Question to ask.

I am basically a lazy individual, and very rushed this morning, so I will only present this article for my Readers. Study the context of the piece, and overlay it on Today. There are serious considerations which make decisive differences between the two eras. The most fundamental being the interrelationships between social groups–i.e., Politics. A simple Buyer and Seller have an ordered agreement, basically focused upon Price. Extended beyond the simple Buyer concept comes the institutional Agent; here, We must focus on the group interest inherent within the Corporate power, and the entrenchment of that power in the negotiations. The Great Depression held a huge number of simple Buyers and Sellers without overriding group interests, while those group interests which existed were rather young and primitive. The incidence of entrenchment was relatively low, and Few could hold to a Price schedule unaffected by exterior pressures. Can the same thing be said about the Corporate structure today?

Study of the basic formulation of social groupings will express the Concept that Power alignments between Interests within the Group are settled early in the arrangement, and vary only under sharp pressure from exterior forces; some of the great upsets of economic activity has been the advent of Corporate Raiding, hostile Takeovers, and Stockholder challenges. Groups do everything they can to protect their interior power alignments, and extrude exterior pressures from their decision-making. The Great Depression showed little success in maintaining internal cohesion due to the great stress of economic circumstance placed upon all. The current Corporate structure is expressing much greater resilience than their unlucky predecessors, and there has been much less alteration of Price schedules because of that strength.

Now We come to the crux of the argument. The Great Depression expressed a long period of recovery, which was not duplicated in successive Recessions until the recent pattern. The Question becomes what connects the two eras with common delayed outcomes? It is not really a matter of fiscal or finance policy, as there has not been much variance in any of the policies since the Great Depression. The Corporate structure has not varied in content, only in relative degree of power. It must revolve around the degree of entrenchment of power within the power matrix, and individual immunity to the adverse forces afflicting the general run of the economy. We must examine How this immunity was created, the extent of it’s power, and whether this independence is of benefit to the greater economy. These are the real Questions which must be answered to gain real understanding. lgl

Wednesday, March 10, 2010

Why do I have to explain these things?

This only makes sense to those of Us who lived through both periods of time, but check the Timing; Disposable Income at the household level began to fail, just at the moment when in-line charges to get anything done started to accelerate. The Cost of Living made a march upward with only marginal revision in the handling Costs, while Wages stayed static in the face of the creeping inflation in those formative years. One of the benefits of growing old comes in being able to detect a whiff of that skunk, before he crawls underneath your rocking chair. A early Warning Sign of Inflation can be found by watching the handling fees of professionals, who early abandon market size in favor of maintaining lifestyle costs. Things are going from bad to worse, but no one yet notices the increasing failure of labor to meet their financial commitments conjointly.

One has to read this thing, though it is basically an effort to acknowledge fiscal irresponsibility in the face of fear of rising Taxes. There is no way We are going to grow our way out of debt, neither on the Public or the Private level. Both Taxes and Wages are at traditional low levels, and percentage raises in both are called for, before We will find any way out of our current troubles. One of the basic troubles within the economy is the expectation by business that they can change the matrix of Production Costs to enhance Profits, without altering the underlying Product Demand necessary to purchase their Production. Serialized Production Costs may be the greatest economic component underwriting Consumer Demand, and Business profiles are always trying to reduce these Costs.

One can ask Why business would try to crush this basic payment system, when it is so important to the entire economic function. The fact is that while the function is fundamental at the level of economics, it is almost unnoticeable at the individual firm level because of the wide-range spread of the function–Who can tell what Cost is entailed by refusing to pass along Productive Profits to their Employees? It means nothing at the individual level, but on the economy-wide level, can cut Consumer Demand by as much as 50%. Business also does not recognize that national governments also react like normal Consumers over the long-run, as they face equal Interest rates on debt aggregation; this means reduction of taxes conflict with business interests, though try telling that to any business personnel. It is a wonderful world We live in. lgl

Tuesday, March 09, 2010

Give Me a little Taste!

I commend my Readers to examine this article, one viewpoint of American society. The message in the piece is remarkably truthful, and the gullibility of Investors comes from an adroit use of propaganda by financiers. Let me present another truthful scene, but one that may make it more understandable to the Reader. Laboring classes have been told for decades that they had to purchase a piece of the American economy in order to achieve Wealth. Under tutelage from Wall Street which extends even into Grade Schools, American labor made a grand, huge entrance into the World of Finance. They were the Country yokels. Wall Street enticed them to invest huge amounts of Cash, from which Wall Street drained immediate Profits for themselves. Everyone knows laborers invest to Save for their retirement; a dream world where all things turn out well, and Everyone gets to act like a semi-millionaire. It is a program promised to work at all times, with repetitious renditions that Stock prices have increased almost continually since the Great Depression. Every Discontinuity of that rise in Stock pricing is excused as Recessionary pressures, and long-term investment will smooth over the losses to the advantage of the Investor.

The above Statement was the propaganda; now, We can attempt a greater reality. There is a Point in the future where labor will want to pull funds from their investments; in order to finance that wonderful retirement of which We all dream. Here comes the first difficulty: the fact that Stock prices have been increasing simply because Money has been flowing into the markets; attempts at too rapid Withdrawal of such funds has been the major source of those discontinuities of Stock pricing aforementioned. There is some disagreement about this factor, but there is factual evidence that funds are actually withdrawn faster than they were initially saved; resulting from a relative desire to maintain parity with Spending practices held during their Work lives. It is known that Retirement is basically based upon the birth rates some 65 years before, and that there are massive Retirement cadres coming, backed by reduced levels of labor behind them. It can be proven that an outflow of Cash from the Markets lead to decreasing Stock prices, and that reversal of Income flow is coming successively over the next decade. Wall Street will continue to do well, based upon their up-front fees, but Stock prices are in for a very difficult passage.

The Baby Boomers are faced with a reality which is extremely uncomfortable. They cannot pull their funds from the Markets without real loss of invested value of their holdings. They cannot finance their Retirement programs without withdrawal of those funds. It is in many ways the reverse of mortgage finance. There is gain from buying positions in the market, though there is loss in selling positions in the market; in both mortgage and investment, it is hard to get Cash for the value of the possession. Retirees are about to find the demon existent in their Stock portfolios; Cashing Out means Crashing Out. Be careful of the Gold Brick that has a Credit Default Swap attached to assure validity. lgl

Monday, March 08, 2010

Name of the Problem

I almost get a feeling of disappointment when I agree with Paul Krugman as I do here; this is not to say that he is not a great economist. It is simply that We approach economics in two separate ways, with separate sets of value attached to our assessments; still, along about Midnight, We have to reach the same place when We have the same desire which is the viability of the economy. It is a fact that Unemployment benefits, on one level, contains the only true Stimulus operating in the economy; it is all wrapped within the fact that Stimulus must actually impact Demand to be truly Stimulus. Business Tax Breaks only protect Business from drops in Consumer Demand; not quite the same thing as Stimulus. Business seems to desire to fulfill the Demand of a more well-heeled Consumer, though they commonly share the sentiment that this should not come from an increase in Wage Cost. I don’t see How they can expect this Effect, when foreign competition on the Product level supplied is rapidly approaching equality with almost all American Products. There will come a Day when American Business is again going to need American Consumers; they should not anger those Consumers too seriously, as the later Group could also think about foreign Suppliers.

James Hamilton takes a look at a new Index; one which expresses a great deal more pessimism than most of these Indexes. It is again one of those things where the more inclusive that you make the data, the more the economic problems appear on the radar. I happen to agree with the data presented, and stare for a long moment at the graph that Hamilton provides to the Reader. We currently find Ourselves at the end of the line, in more ways than one. I hope that it does not make you feel warm and fuzzy. The sustained deterioration is still present, and economic conditions are still worsening; a factor which should really be a Worry, as TARP is proving to be a massive failure as Stimulus. We need a program which actually gets households back to Spending, but at a sustainable level.

One should read this article, if you expect that these Recessions ever go away. We always think that Systems again Power Up when Good Times return to the economy. The reality is that the economy only changes direction, and Sectors are left behind to smolder in defeat as the economy bounds forward once more. When Growth slows in the new Sectors, the problems existent in the older Sectors again come to the fore; worsening the resulting Recession. We must get into the Problem-Solving mode if We ever want sustainable Growth. lgl

Sunday, March 07, 2010

Predator and Prey

I present this singular material today, because I want to ask a serious Question which should be answered by Researchers. Every time Migrations are studied, they follow a certain progression flow. We always view the migrations of the Past as great Tribal shifts, but what if they weren’t? The Migrations today exhibit two exterior propellents: the invasion of a vastly superior military force; or the search by individuals for new supportive labor, as traditional methods of employment are running out of the resources necessary to support the native population. The Question I arrive at today asks if this is only the criteria of Today, or if the Present is only the prolongation of the migratory patterns of the Past. The Question need be asked, because if it is only a prolongation of the migratory patterns of Old, then the Developed West–especially the United States–may be destined to follow the route of the Roman Empire of the West; also knowing the Survivors of the Roman Empire migrated East to Byzantium.

We may be witnessing the Fall of the West, without recognition of that downfall. It is likely to be far more rapid than We suspect; perhaps with a total replacement of real political power within a Century. We do know that We are faced with the problems of over-population, with our technology strapped to maintain our current style of life in the face of shrinking resources. We know that Those who desire our Land and Resources are increasing in population far faster than our native population, with the piecemeal invasion of migratory Workers consistent with the migratory patterns examined in the Paper. We are also cognizant that foreigners are learning the complexities of our technology at a far more rapid rate than our native youngsters. Immigrants started to replace our native population is basic Grunt labor about a half-century ago, but are now replacing our native labor in skilled occupations and professions. Native populations are complacent–relying on our stored Wealth derived from the hard productive labor of our Forebears; though this becomes ever-increasingly less practical, as other Wealth is developed among Migrants. Are We on a predictable Curve which will end with our own downfall?

There should be a consistent Study of migratory patterns, with a real evaluation of the long-term consequences for our native population. We need to develop consistent policies of Restraint and Enhancement, all in order to ensure the survival of our native population in a challenged World. The one consistent element We can always find is the changing nature of social structure. Nothing stays the Same, past about three Generations. One has to recognize the smiling, genial face of the Predator, before One can forestall getting eaten. lgl

Saturday, March 06, 2010

The Train Robbers' Legacy

What do you think of this? I am truly swayed by many things in the course of my life, and David Altig provides such an astute rationale. I have always believed in Bank supervision, and have never thought much of Monetary policy. I have never considered the later a primary impulse for economic growth, thinking a real economic growth environment cannot be generated by what is basically an escape from the real Production Costs associated with the economy. I further hold the Thought that counter-cyclical economic factors negate any reduction of those Production Costs in the interim period. Most economic schools disagree with my assessment of course, but it does not lower the essence of my distrust of Monetary policy. I also do not believe that the Fed should interfere in Market flows, with a standardized rate of Return for Treasuries based on 4.2% for the Ten-Year Treasuries. It implies a correct rate of Taxation, both Apparent and Hidden, which impels a sound fiscal policy. We have went from a free market economy, to a Government-sponsored economy since the Great Depression; We were too far one way, so We went too far in the opposite direction. Someday I will be able to clearly define the bad habits of excess assumption of either direction, though the language currently escapes me!

David Lightman reports on the Gridlock in Washington. He insinuates that it is bad, though I imagine that anything inhibiting Congress from Spending more is a good thing. No amount of Tax Breaks are going to help, if Consumers are not buying the Product produced before or after the Tax Breaks. We need basic reform in almost every aspect of federal budgeting, and We are getting only rhetoric. We need to get something done, but it need be something which is positive. Asked What I could possibly suggest as economic relief, I proposed recently a million-man (or Woman) expansion of the National Guard; with the proviso that National Guard Salaries and Employments be exempt from consideration of Employment status for the receipt of Unemployment Benefits. We would get a trained semblance of a military force, though they would need significant Training before any deployment; a huge flow of Cash into households; even some constriction of the rates of obesity in this Country. It is something We can get both Sides to agree on, and it would be a significant benefit to businesses focusing on Military provisions.

I thought to provide this Piece also this morning, but decided it was a Weekend, and Why work hard? It basically only covers the ground I already covered, but from a semblance of support for the regime labor. So I will also present this material. We went from too little Government to too much Government, and Most think We have somehow become more successful. I personally believe We have only technologically advanced; something which would have occurred anyway. Still, my Readers are given a Counterpoint, while I can post this, and go out slumming and spending money I don’t have. lgl

Friday, March 05, 2010

Should have used the Seven Lean Cows Bit

I wondered What I would write today, then came across this Piece by John Quiggin. I cannot say much about his commentary except possibly to put it in context. The element I would advance is that social mobility means nothing at all if the Unemployment rate for February stands at 9.7%. I could discuss suppression of real Wages, over-taxation for Welfare programs which are still basically under-supplied in consideration of the Demand level, and the focus on destroying Savings of the Unemployed prior to engagement of such social welfare programs. The only real things that have trickled down have been the Costs of Living and bills of every kind and nature. What I dislike most about the modern economy as defined by Many consists of the creation of the Top-Ten-Percenter Lack of Suffering Recession, where the people who brought Us the Recession need not endure any duress; it seemed to means something more with a more general community spirit, when Everyone could curse because Times were bad!

I would like to state for the record that this Piece from James Galbraith makes a lot of sense, though I disagree with it in major and main part. I will now make a good share of my audience sick, by relating it to Hunting; it is all the same thing, though there is a real difference between shooting a Teal, and shooting a Canadian goose. The Powder, Shot, and cost of the weapon are basically the same. The cost of the license and Permits are basically within the same range. Hunting Guide and Lodge rentals remain basically the same, while Transportation stands at the same applicable level. Those who have never done anything so gross as shooting your Supper, I will explain there is a massive difference between the two birds. It is regrettably much the same with Stimulus; you Spend the same whether you go after the big birds, or the small ones; the only difference being you need to supply the small birds in Stimulus.

I have a short rule of thumb, which states that if the Stimulus does not reach the individual household, it is not actually Stimulus. One has to bribe the households to Consume, and when it gets bad, to even pay their bills. Underwriting of Business Profits will only protect the Businesses, generating neither further production or greater Hiring; they even use the Recession as excuse to hoard their Cash reserves–refusing Dividends and payment of Taxes. It is a strange fact that every Government which tried to make things easier for Business drowned in their own debt, while every Government which promotes decisive taxation policy and constrained Spending eventually winds up in a Boom. I wish I could develop the Recovery times and rates of expansion among several Countries at the same period of time, but it seems that all Governments swing in the same direction Worldwide at the same time; periods of Good Government are followed by periods of poor Government, so there can be no serious comparison. I will suggest that 5 years of heavy Tax policy will leave the Government in better shape, than will 5 years of deficit Spending. lgl

Thursday, March 04, 2010

The Medical Debate

I obtained this link from Marginal Revolution, which actually puts my Thoughts on medicine into economic context. I have long considered the medical profession as being the ‘Putz’ controlled by the pharma industry. Doctors suffer from two primary disabilities which decidedly affect their performance. The first is their constant desire to achieve greater success rates in their treatment of Patients. The second disability is their desire to maintain a uniformity of treatment amongst themselves; primarily to avoid malicious charges of malpractice, but also to uphold a level or Standard on which they can be adjudged. Corporate Boardrooms quickly recognized that control of the flow of information between Doctors could be a Profits-Enhancing enterprise. Big Pharma immediately started measures to ensure control of such information read by the medical profession.

Real Supporters of medical reform should acknowledge that there should be a federal Medical Board which should outline a program of minimum-cost medical treatments which Doctors could apply for the various medical conditions; it would help if the Doctors were granted freedom from malpractice liability if they maintained this level of medical treatment. This medical policy does not inhibit more advanced medical treatments which could be utilized on Those willing to pay for such advancement, but would provide alternate medical treatment for Those who would need some form of Public Option in health care. The Public Option could be extended to All, but with gradual withdrawal of benefits for medical treatments based on individual payments on a 1:1, 2:1, or 3:1 basis on added medical payments paid over the minimum standard. I give all 3 options in this because of the need for determination of the degree of strictness utilized in Government underwriting of health care; always considering the overall Cost to Taxpayers.

There is real need to establish a Public forum on health care, with a real Choice in the medical care system We would provide to all Citizens. The Reader should understand that the adoption of any element in the medical underwriting format will be almost impossible to supplant in the future, due to Voter reaction, Business opposition, and even Court refusals. We want to get this Right in the first try, and don’t want a great measure of the enactments to need recompilation. We are not able to adjust readily to any introduced formula, so We must ensure a major degree of certitude in what We attempt. Proscription D has proven a failure, as Consumers of Drugs pay as much as they ever did; big Pharma only getting additional benefit from the Government. We cannot continue on such a Profits-generating path, if We intend to somehow pay for our medical costs at the level of Government program. Decide Now if We want a paid medical system, or an impossibly bloated medical system which can be paid for by no one. lgl

Wednesday, March 03, 2010

The Public Option

I decided I would post about the Public Option this morning. The most basic rationale is the fact that the Public Option has already been discounted by the legislative leadership. One can question Why there is so much determination to suppress measures which would actually pay for the definite constructional Expense of medical care in this Country. Some speculate, of which I am one, that it is because a Public Option would entail the suppression of Profits which could be earned by health Providers; the health industry today being the largest Cash Cow in the American marketplace, with the least response to recessionary conditions. It reminds of Railroad Freight rates back in the days when railway was the only means of getting Product to the Consumer. There will probably be the necessity of Congressional destruction equal to Progressive conquest of the Congress at the turn of the 20th Century in order to get an effective Public Option passed; there are simply too many Congressional personnel currently under the sway of the health care leadership because of political contributions.

There are two basic ways to approach a Public Option health care system. The first method is a system which pays for everything; which will defeat any real attempt at implementation. The health care industry is left to set all Prices for medical provision, and they feel no inhibition from maximizing their benefit under the system. The Outcome is what is expected; they creating an industry which exceeds normal business Profits and Rewards, offering themselves an enhanced lifestyle at the cost of the lifestyle of their neighbors. Advocates of the Public Option must prove there is no difference between this method of health care provision, and the system currently in force. No one will get achieve any significant advance in health care provision, as long as the Reward system of the health care industry remains off the table. This is allowed through the simple methodology of guaranteeing all medical Costs, which simply makes the Public Option too expensive; in final analysis, health care Providers can keep insisting on additional expensive medical procedures to drive the medical Costs beyond rational payment. The is also the greatest defeat of the Single Payer Option, where the Payer must face the concentrated opposition of a unionized industry.

The second method of Public Option can be called the Limited Pay Option. I like a program where All can utilize the Public Option, and Doctors must maintain a minimum Patient load, if they accept any Public funds. Then I would keep the payment system of the Public Option simple and easily understandable. I would suggest that a simple Schedule of payment be designed which will suppress medical Costs. I would advocate payment of $1 per Pill, $3 per Shot, $25 per Doctor Visit, $25 per Clinic evaluation, and a mandatory $250 per Day maximization for hospital stay. All Surgical operations would have a limit Cost of $250 per Event, as would any evaluation process like an MRI. Private health care Insurers would be limited by law to pay no more than 4 times the allowed payment of the Public Option, so that each Individual would be responsible for any remainder of payment. Individuals would have the support of the knowledge that the health care Provider had already received a substantial payment for his, her, or its medical services; under the matrix of Thought that there are far cheaper methods of medical care. The whole purpose of my Thought consists of a desire to establish a real market inside the health care provision industry. Could it work? Who knows, but it is worth trying! lgl

Monday, March 01, 2010

Where does it Go?--The Good Lord only knows!

The Kids can study this Piece from David Merkel, and begin to understand How we have come to our current position. Everyone borrows, it is the nature of the World. There are Those who borrow based upon the realistic ability to repay the debt, and Those wh use borrowing capacity as a form of advertisement suggesting desired growth. It is like playing Dice, with only one way to make your Point, and many ways to miss. Saying that a debt restructure method is possible, is not saying that such method is likely. This style of borrowing always ends poorly, especially when all Players insist on constant re-betting on the outside Odds. Boom and Bust cycles are as likely as Spring rain and Summer heat when a consistent pattern is utilized.

I will let my Readers study this Piece, something basically written for Investors. Do you think that you would be enthused to risk great amounts of Money–especially your own–on the immediate information? The descriptions encase the basic environment for Investment, and One need not wonder too seriously Why there is a search for guaranteed Returns. I even find it amazing that there is so much Investment capital out there; this coming basically because of set Retirement portfolios reliant on a consistent Tax Break. Without these Accounts, it is likely that this Recession would follow the normal decay patterns of earlier recessions. I can only state to my Viewers that they should not expect rapid Recovery.

This information is far more indicative of the state of the economy than elsewhere. The States are in a lot of trouble, and for their populations; this means a lot of lost Jobs on the ground. The Stimulus packages rarely affect State budgets in any effective way, and the good numbers are not expected to come back anytime soon to State Treasuries. We cannot pull rabbits from the Hat, and the future remains bleak. The Fed and Congress must really analyze a policy of No Interest for Business, coupled with high Interest rates for Consumers. Somewhere in the mix it must be stated if Business gets a Break, then it must be extended to their Customers. lgl