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Medical Insurance Is NOT Medical Care   1 comment

I know that flies right past the ears of many people, but take a pause and consider the implications of that statement.

Medical care is when you interact with medical providers and receive a diagnosis, surgery, therapy, a prescription and so on.

Medical insurance is how you pay for medical care.

Politicians use the terms interchangeably, but they are NOT the same thing. Whenever I hear someone use terms that mean different things as if they are the same thing, I become suspicious of their motives for conflating the two.

Of course, there are other types of insurance that we don’t do this with. Nobody confuses car insurance with vehicle maintenance, for example. I keep my own car clean and I pay out of pocket for repairs. If my car is damaged in an accident, my insurance covers the repairs, less the deductible, but I don’t call my insurance agent if I need an oil change or to replace my starter.

Homeowners insurance is similar. I don’t call my insurance company to finance painting the house. I call them when a tree falls on the roof.

Medical insurance ought to work the same way that car and home insurance do, but right now it doesn’t. Routine procedures, drug prescriptions for chronic disease, and a variety of other predictable and non-urgent procedures are all handled through insurance companies.

Now, take a pause and realize that one of the key differences between medical insurance and car or homeowners insurance is that medical insurance is a state-run and -regulated program with limited competition while care insurance has plenty of competition.

March is the month we renegotiate our car and home insurance and I received dozens of circulars in the mail offering me insurance plans that will meet my needs at a price I’m willing to pay. None of them offer to reimburse me for minor damage because they wouldn’t stay in business for long doing that.

Continuing this theme, repair shops, tire manufacturers, and other car-care providers all compete on price to get the largest possible share of the millions of car owners in the market for their products and services.

Meanwhile, the medical care market we currently know is provided by a mixture of public and private payers, and it funds a significant share of the vast majority of procedures. Providers don’t compete on price even for services that millions need on a regular basis.

When it comes to medical insurance, most people expect their coverage to give them more than they pay in. That makes no economic sense. If one person’s treatment costs $120,000 a year and they pay a monthly premium of $1,000, the company needs nine people to pay $1,000 a month, but those eight other people cannot consume any medical care services in order for the company to even break even.

The primary role of insurance should not be to pay bills. Insurance is customer peace of mind—a guarantee that a catastrophic event will not bankrupt us.

If medical insurance worked as it should, we would only use it for catastrophic medical needs. For more minor medical care services, we would be looking for the best-value care in the market because those costs would be coming out of our pockets. Yet the high levels of medical debt show that our current insurance system has strayed far from this model as the prices for minor procedures and treatments have gone through the roof.

Increased coverage sounds nice, but as our recent experiment in increased coverage shows, we’d still struggle with unaffordable copays and deductibles and staggering levels of medical debt. The first step toward obtaining an affordable medical insurance system that works for the maximum number of people is to let insurance be what it was meant to be: peace of mind against catastrophe.

Mountain Musing 3.18.19   Leave a comment

https://pjmaclayne.blogspot.com/2019/03/the-smells-of-childhood-openbook-blog.html?showComment=1552943105403#c4751698164642058762

Posted March 18, 2019 by aurorawatcherak in Blog Hop

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Open Book Blog Hop – March 18th   1 comment

Stevie Turner

This week the topic is:

‘If your childhood had a smell, what would it be?’

There’s more than one smell that takes me straight back to my childhood.  Two aromas are still with me today in the shape of my father’s binocular case and his leather wallet.  I kept hold of both of them; the binoculars are at the van and the wallet is in my desk.  I sometimes open the binocular case and wallet and just inhale the scent of Dad, which is still there even though he died 42 years’ ago.  His wallet still bears the old ten shilling note symbol, and there’s a little note inside in his handwriting, which says he’s just gone to the library and won’t be long.

wallet.JPG

Another scent is the smell of cigar smoke.  Dad would always smoke cigars at Christmas.  Every time I smell a cigar I can still see my…

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Posted March 18, 2019 by aurorawatcherak in Uncategorized

Scent of Childhood   6 comments

March 18, 2019

If your childhood had a smell, what would it be?


Rules:
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Cyrill Connelly famously stated that “The past is the only dead thing that smells sweet.”

I have to start out by saying that I am not a person who lives through my nose. My sense of smell is the weakest of my senses, so this article took some thought.

I grew up in Alaska, where homes are closed up against the winter for 6-8 months out of a year. You can’t even open the doors to air things out once a week. When I think of the smell of my childhood, I think of coming home from school and smelling the closed-up house – diesel heating fuel mixed with cigarette smoke mixed with damp-dog smell mixed with good food on the stove and coffee on the perk. Yeah, not all that appetizing and certainly not how my kids remember our house.

Our daughter, who does live through her sense of smell, says she always thinks of Pine Sol, Murphy’s Oil Soap, and lavender potpourri
mixed with the Asian spices of the stirfries that are my go-to weekday meal when she thinks of home.

But there’s another smell that came to my mind immediately when I read this topic. The smell of cold icy ground and new green growing things. There’s a bite to the Alaskan air just before the melt starts. Our trees, the great lungs of the atmosphere, take an ice nap from October through April, so there’s a natural build-up of nitrogen and CO2 in our winter air. You can feel it if you’re active outside in the spring, even when you’re a long way from human habitation. You get the slightest headache because your body knows it’s not quite right. And, when the snow starts to melt, there’s this delicious cold flavor to everything. It’s like ice cubes with just the barest hint of salicin (you know that as aspirin) from the willow trees that are the first to wake up. I love to stand at the head of a hiking trail, just far enough from my car that I can’t smell the heat from the engine and pause … take in a deep breath … launch into the Alaskan wilderness. In a couple of weeks, the snow will be gone and the plants will suck in all that extra CO2 and burst into a spring that is so fast you’d think it was part of a Nature channel documentary.

Yeah, I’m feeling nostalgic because that incredible state of being is about 2-4 weeks away. We’ve survived another winter and our house windows will be open all summer because I prefer the smell of rain, sun, growing things, and freshly mowed grass over what I grew up smelling. Not every childhood memory is worthy of nostalgia.

Now let’s check out what my fellow bloggers have to say about their childhood scent memories.

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Posted March 18, 2019 by aurorawatcherak in Blog Hop

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Andrew Yang’s Math Doesn’t Add Up on Universal Basic Income | Jacob Dowell   Leave a comment

The UBI rests on the assumption that consumption spending grows the economy and drives production. Transferring money from savers to consumers, as Yang’s UBI hopes to do, does not grow the economy in the long run—it has the opposite effect.

Source: Andrew Yang’s Math Doesn’t Add Up on Universal Basic Income | Jacob Dowell

Andrew Yang, 2020 Democratic presidential candidate, has revived the debate on Universal Basic Income (UBI) with his proposed “Freedom Dividend.” His plan is to offer an alternative to the modern means-tested welfare state with one simple program to pay $1,000 per month, or $12,000 per year, to every American adult over the age of 18.

Yang has already received a thorough response from Gonzalo Schwarz. Though Schwarz’s response contributes important insights—such as the insignificance of technology replacing jobs, the self-worth that work brings, and the likelihood of a UBI supplementing rather than replacing welfare—I would like to contribute some further insights that more directly address the economic errors of Yang’s arguments.

First, let’s look at the funding. Yang says his 10 percent Value Added Tax (VAT) would raise $800 billion per year, save $600 billion per year from the costs of other welfare programs, save $200 billion per year from reducing the demand on health care services and incarceration, and eventually raise $600 billion extra per year from economic growth.

There is an even deeper flaw in the argument that the UBI would expand the economy.

Before the economic growth (which would not actually happen as I explain below), he has only $1.6 trillion of funds. Even after his expected economic growth, he will have only $2.2 trillion of funds per year, still far from the $2.8 trillionrequired excluding bureaucracy (234 million people 18+ at $12,000 per year). Yang never mentions debt as a means for payment, but his own math doesn’t add up.

Yang is also deceiving in his argument about the program’s impact on the economy. He cites a paper by the Roosevelt Institute that finds, at $12,000 per year, UBI would expand the economy by 12.56 percent over eight years. However, the 12.56 percent growth is under a scenario of a completely debt-financed program. The study admits that a completely tax-funded program would result in a 6.5 percent growth over eight years. Since Yang’s program is mostly tax-funded, it is highly deceiving to claim economic growth of 12.56 percent.

However, there is an even deeper flaw in the argument that the UBI would expand the economy. It rests on the assumption that consumption spending grows the economy and drives production.

The argument goes like this: By transferring money from those who save money to those who have a higher propensity to consume, there will be more spending on consumption goods such as food and clothing. This, in turn, will give an income to the shop owners who will spend their new profits on other consumption goods. And the circulating money creates more economic activity for the macroeconomy.

Transferring money from savers to consumers, as Yang’s UBI hopes to do, does not grow the economy in the long run—it has the opposite effect.

The “propensity to consume” as the cause of economic growth is a common Keynesian notion. But it’s dreadfully wrong. First, it is important to recognize that economic growth is not when everyone gets more money. Economic growth occurs when an economy produces more valuable goods. And what causes this? Capital goods.

Capital goods are the previously-produced goods that are used in the production process and that improve the productivity of workers and the general economy. The use of hammers and nails, for example, greatly improves a construction worker’s ability to build a house. Capital goods are created through savings and investment—the opposite of consumption. Without investment funded by savings, the production of capital goods will slow, causing economic growth to slow.

It may be argued that no one argues for 100 percent consumption spending and that since an individual business will be getting more money, they will be better able to afford more capital goods. But this argument still ignores how the capital goods were produced in the first place.

To create capital goods, someone in the past must have put aside resources to use for a line of production that would not create immediate value. To create a hammer, someone has to save and invest resources into mining iron ore, which then requires resources to smelt into steel. Someone must also have invested resources into tree-cutting for the wood to create the handle. Each of these projects, in turn, required resources for its production process.

In order to have economic growth, there must be a sacrifice of current consumption in order to fund the creation of capital goods.

All of these steps required the production of goods that did not serve any immediate consumption value. The steel and the wood are only a means of creating a hammer, which is itself a means of creating houses and other consumer goods.

The final consumption good, however, would not be possible without someone in the past saving resources to be used for a line of production that was not immediately serviceable but used for the production of capital goods.

In order to have economic growth—to expand production—there must be a sacrifice of current consumption in order to fund the creation of capital goods. Transferring money from savers to consumers, as Yang’s UBI hopes to do, does not grow the economy in the long run—it has the opposite effect.

A common argument against UBI is that it will incentivize people not to look for work. Yang answers this criticism, saying that $12,000 per year will still not be a good enough living for most people, so people will still be incentivized to get jobs and contribute to production.

However, there are still marginal effects at play that can add up to huge changes: 1) It decreases the incentive for workers to quickly find new employment once they’re out of a job, and 2) it decreases their sensitivity to income differences between jobs.

A UBI would skew choices towards enjoyable work rather than efficient or productive work.

The increased time between jobs means there will be lower employment at any given time and, therefore, less production. And the decreased sensitivity to higher incomes means people will be more likely to do less productive work for the sake of enjoyment. While it may be desirable for workers to balance their income needs and their work preferences, a UBI would skew choices towards enjoyable work rather than efficient or productive work. Yang even admits this: “UBI increases art production, nonprofit work and caring for loved ones.”

While these may be admirable activities, Yang is forgetting to consider the opportunity costs associated with them. While people will be more inclined to make art, write novels, and work less, the amount of needed goods in society will decline. This may be a worthwhile tradeoff to some, but when the main stated goal is to help those in poverty, producing less clothing and food is not going to achieve the desired ends.

Andrew Yang does bring up some admirable points about a UBI avoiding the welfare cliff and reducing bureaucracy. However, the overall greater expansion of the government, the even more massive resource transfer from savers to consumers, and the productivity-reducing effects on labor all toll to a huge loss for the economy in the long run.

Posted March 16, 2019 by aurorawatcherak in economics

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#Writephoto – Tranquility (a poem)   Leave a comment

Roberta Writes

Tranquility

a state of calm

or peacefulness

that can be achieved,

I understand,

by reaching a state

of quietness

and serenity.

It has become

a pleasant thought

unbeknownst to me

for many a year.

I spend my life

yoyoing between

chaotic panic and

lessor anxiety

but I never reach

placidity or restfulness.

Is it my fault?

you are right to ask

Maybe,

I chose my career

quite ignorant of how

it would all unfold.

Can I change it?

Possibly,

I could perhaps go back

and restart

but twenty years down the line

it’s quite a challenge.

Would it work anyway?

I don’t believe so

extreme anxiety is now

so completely embedded

in my work ethos

it has become

a way of life

living on the edge

and diving off

just like a lemming,

destined,

to drown in adrenaline.

To much time has passed

it’s too ingrained

to be easily changed.

I…

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Posted March 15, 2019 by aurorawatcherak in Uncategorized

Oscar Wilde on Why Wanting to Be Left Alone Is Not Selfish | Jon Miltimore   5 comments

Individualism involves allowing people to flourish and think as they see fit, mainly by leaving them alone.

Source: Oscar Wilde on Why Wanting to Be Left Alone Is Not Selfish | Jon Miltimore

 

Confession: Oscar Wilde is one of my favorite writers. Though he was what Dostoevsky would have described as “a dedicated sensualist,” Wilde possessed a true creative genius perhaps unmatched among his literary contemporaries.

His essay “The Soul of Man under Socialism” is not, in my opinion, his best work. Written in 1891, it’s largely a stream of consciousness detailing what Wilde thought about art, capitalism, socialism, and—most importantly—Individualism.

Individualism is Wilde’s primary concern. What is it? Here’s what he had to say:

Art is Individualism, and Individualism is a disturbing and disintegrating force. Therein lies its immense value. For what it seeks to disturb is monotony of type, slavery of custom, tyranny of habit, and the reduction of man to the level of a machine.

Wilde’s ideas on government in the essay are a strange hodgepodge. He basically rejects both capitalism (too vulgar) and socialism (too authoritarian).

Still, the endgame of his philosophy soon becomes clear. Individualism involves allowing people to flourish and think as they see fit, mainly by leaving them alone.

Is wanting to be left alone selfish? Not at all, Wilde argues:

[U]nselfishness is letting other people’s lives alone, not interfering with them. Selfishness always aims at creating around it an absolute uniformity of type. Unselfishness recognises infinite variety of type as a delightful thing, accepts it, acquiesces in it, enjoys it. It is not selfish to think for oneself.

The tyrants, Wilde says, are those who demand of others to think as they do:

It is grossly selfish to require of ones neighbour that he should think in the same way, and hold the same opinions. Why should he? If he can think, he will probably think differently. If he cannot think, it is monstrous to require thought of any kind from him. A red rose is not selfish because it wants to be a red rose. It would be horribly selfish if it wanted all the other flowers in the garden to be both red and roses.

One could easily apply Wilde’s metaphor to the desires of many Americans today. Unfortunately, there seem to be legions of red roses demanding all flowers become red roses.

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