Failing Econ 101 – Top Ten Economic Reasons Obamacare will Fail
Democrats in general and President Obama in particular know little of how an economy works. An economy is typically looked at as a societal way of providing and acquiring goods and services. The Soviet Union tried a different method of managing their ‘official’ economy, but only drove the free market underground. If you were a resident of St. Petersburg back in the 70s and didn’t want to eat lard for dinner, you bought your food from someone in the back-alley who carried it in from the country.
Every economy is market driven. That is to say those individuals will seek to maximize the value they receive in exchange for a portion of their hard-earned income. Individuals also act in their own self interest nearly 100% of the time. It is this last point that has the Obama administration flummoxed. The President thought that people would be happy to reduce their level of health care service in exchange for… well… in exchange for providing a bunch of folks who can already afford insurance as well as a couple million illegal aliens some form of health service. Obama’s core problem is that voters actually read the House bills.
The wealthy don’t have nearly the concerns that the middle classes do for acquiring goods and services. The Wealthy therefore do not need to keep the free market as open and as efficient as possible as they have their long term interests already secured. The wealthy are also surprisingly more apt in the current political climate, to be represented by Democrats. In fact, of the 25 wealthiest Congressional districts in the US, 14 are now represented by Democrats.
Democrats consider themselves the upper crust and elite of American society although few will admit to it. The moral superiority that comes with saying “I am successful and I am a Democrat” is losing its luster now though as real live voters are asking if any Congressional Democrat has read the health care bills. The problems always start when the limousine liberals begin to make policy. As fits their role in society, they are the philosopher-kings of modern America and as such they decree what is law. If they say there will be no Health Care rationing, then that should be good enough for the common folk. It really doesn’t matter how the bill is written or what it will really do.
Democrats have themselves in such a box now over their health care failures. They really, REALLY counted on the voters ignoring the debate and trusting their representatives to do what is best for them. After all, that is what Democrats do – decide things for others. Unfortunately, Democrats and those on the left have no inkling of what makes an economy successful and what makes the economy in the United States the best and most productive in the world. It is these failings of understanding that will undo the Democrat’s takeover of health care. Here are the top ten Econ Laws that the lefties don’t seem to understand. Fortunately, the average voter understands.
10. Granny is a protester – And she isn’t afraid of Keith Olbermann. Take away her right to chose (her own life) and Granny will be busting down the door to the town hall with a shotgun. When the lefties removed personal choice in favor of government mandated treatment standards, Grandma will have to follow the rules and go without the treatments that might help extend her life. Unfortunately for the limo lefties – she doesn’t want to. Econ Law violated: People always act in their best self interest.
9. Reducing while increasing costs – The lefties have positioned the argument that costs will be reduced for most health care services. Unfortunately, most adults understand that to reduce health care costs somewhere, someone has to pay or the taxpayer gets cheated. Under this legislation, Doctors are facing huge decreases in their reimbursements for services provided to senior citizens. If people are forced by government to earn less, fewer of them will remain in practice. This leaves fewer medical practitioners to serve potentially millions of illegal aliens as well as those Americans currently uninsured. It doesn’t take a rocket scientist to determine what happens to actual medical costs at that point. Econ Law Violated: Scarcity of services drives costs up (not down). Obama can’t possibly deliver reduced costs under this system.
8. There is no ‘free lunch’ – Senior Citizens also understand that the discount received at Sunday brunch has to be made up somewhere else. Usually, having the family join Grandma and Grandpa at Denny’s balances out things for the restaurant – Grandma and Grandpa get a discount, the rest of the family makes up for it. Government cannot possibly provide the same medical services that Grandma and Grandpa receive now at a reduced cost without taxpayers footing the huge bill. Econ Law Violated: People want the value that they pay for – and don’t want that value going to benefit someone else.
7. When Democrats say “We” they typically mean ‘You.” Democrats operate by different rules than the rest of us. Now that voters have had a chance to read the proposed health care legislation – although though many of their representatives haven’t – even the lunatics at MSNBC can’t turn back the wave of anger. Most Democrats in Congress have shown that they won’t enroll their own families in the public plan. Voters understand that if the health care public option is a good plan, people will be anxious to sign up. If the people that wrote the legislation aren’t willing to participate, why should anyone else? Econ Law Violated: A product has to be good enough for the creators to buy before consumers will consider it.
6. Democrats ran hard last fall on the illusion of a middle class tax cut. Now that the CBO (the only people in Washington who can operate a calculator) have made the case that the proposed versions will only escalate costs and not reduce them, the middle classes are seeing themselves in the cross-hairs of Obama’s tax target finder. Econ Law Violated: ‘Bait and Switch’ only works once – if that.
5. Government workers that are expected to run the massive federal infrastructure necessary to oversee the new health care system will probably expect to be paid. The Congressional Budget Office at least took this into consideration when preparing their estimate of the ultimate impact should the health care legislation be enacted. The cost of administering this system – much less providing the benefits – is overwhelming. Adults who vote understand this. Econ Law Violated: Regulation and Bureaucracy Never Save Money – so who gets the bill?
4. “You can keep your current health care plan if you choose” admonishes the President. Even He understands that statement is contingent on the employer choosing to offer the same plan next year. Careful reading of the legislation reveals that employers will be financially penalized if they do not turn their workers over to the government option. Obama’s House allies conveniently noted that most employers pay upwards of 11% on employee salaries to provide health care. Should companies choose not to provide health care and effectively turn workers over to the government, they will pay an 8% penalty on salaries. Dumping private insurance then cuts operating costs by 3% of salaries. Companies in competitive businesses will be compelled to drop private coverage to keep up with competitors’ cost structures. So that plan you like right now just won’t be there. Econ Law Violated: Companies are inanimate organizations – they will ALWAYS do what is financially best for the organization.
3. Leftists – including the Golden Tongued President, build their empires on the belief that voters will support them if they provide benefits at someone else’s expense. This is why a balanced budget amendment is needed. The failure in the health care debate is that the ‘benefits’ have turned out to be quite a bit less than the health care citizens currently enjoy. And on top of that, the thing has a huge price tag. Team Obama has floated the idea that “the wealthy” can be made to pay for it, but the size of the bill makes this silly. Econ Law Violated: Government has no money that it doesn’t first extort through taxation. And taking money from ‘the wealthy’ kills jobs. (Proven, historical fact)
2. Democrats just can’t seem to figure out how to repeal the Law of Supply and Demand. The Soviets tried this for decates without success. The number of general practicing physicians is declining, which in the best of circumstances will only create greater scarcity of medical service. With Doctors set to become essentially federal employees, many of these will instead choose other occupations which of course exacerbates the scarcity. When the federal government sets prices at rates below the current rate for services to seniors, the government has effectively set a price for service that ensures there will be no services available – just like the Soviets setting food prices below the cost of production, which led to nothing but fried lard for dinner. Econ Law Violated: Nothing on earth overrules the Law of Supply and Demand.
1. Team Obama is run by a bone head. This should be a ‘no brainer.’ Folks expect to pay good money for good products and services. When those services increase in cost, the market expects that quality and quantity of service will improve or remain relatively constant. The Chosen One so arrogantly believed in his persuasive skills (or believed in the utter stupidity of the American voters) that He could persuade people to accept an incredible decrease in service – even bordering on withholding services at the end of life to save money – and at the same according to the CBO, absorb a huge cost increase. People aren’t above paying a premium for the best health care in the world. Raising taxes while cutting health services to provide care to those that either won’t buy their own insurance or for illegal aliens isn’t acceptable. Arlen Specter found that out the hard way. Specter’s bigger lesson will take place in 2010. Econ Law Violated: People expect direct benefits proportional to what they pay.