The Personal Blog of Michael Goodfellow

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5:07pm Thursday July 30, 2009

From what I read about the "ObamaCare" plan, here's how it stands:

- If you are on plain Medicare like seniors or disabled, you hope for no change. Some mythical cost control.

- If you are a senior on "Medicare Advantage", it sounds like they are planning to cut reimbursement to the insurance companies that run it. I would expect either benefit cuts, cost increases, or some way of shedding expensive customers.

- If you have Medigap insurance, I'm not sure what happens to it. It won't get cheaper, and might get more expensive due to mandated minimum coverage limits on all insurance. Or it might go away somehow, since I think they want maximum deductibles and minimum percentage payouts. On the other hand, AARP would really lay into Congress if they messed with this, so I doubt they cut coverage. If they increased the things it has to cover (like adding mental health coverage) it would get more expensive.

- If you are employed with insurance, you (or your employer) might also see increased costs due to mandated coverage and reduced deductibles.

- I'm not sure what happens if you are employed with insurance and lose your job. Is there still COBRA so you can pay your existing plan? Or are you immediately fined for not having insurance, just when you become unemployed? Or are you expected to get subsidized insurance then drop it again when you get a new job?

- If you are employed without insurance, there's an 8% penalty on the employer for not insuring you, and a 2.5% penalty on you for not having insurance. The problem is if you make $20K a year, that's a $1600 payment for the employer, which is cheaper than individual insurance (and a lot cheaper than family insurance), and a $500 penalty on you, which again, won't pay for insurance. So you might lose $2100 from your salary (employer share has to come from somewhere) and still not have insurance. You get some kind of subsidy, but it would have to be a lot to put a years health insurance under $500, especially for a family.

- If you are self-employed and have a Health Savings Account with high-deductible policy, it sounds like that goes away. The mandates for insurance make those policies impossible to write. Not sure if they eliminated the HSA program or not, but without the insurance policy behind it, it's kind of pointless. You pay more for more insurance.

- If you are unemployed and uninsured, you get a subsidized policy, but you of course have no money. I think you pay a penalty, but perhaps not if those are a percentage of income.

- If you are homeless or just the type that goes to the emergency room for everything and doesn't pay, then you probably continue to do this. They still aren't going to turn you away, and still won't be able to bill you. The only change is that costs which used to be padded onto the bills of the insured might now be coming from the Feds.

- Illegals still don't get insurance, and they are 8-10 million of the famous 45 million uninsured. Another big chunk are the unemployed, and as I said, I'm not sure what happens to them. A lot of the poor still can't afford insurance (esp. mandated gold-plated insurance) and so aren't covered. That's what happened under the Mass. plan.

So I can't see who benefits. The cost controls are an illusion at this point, and the Feds run another 15% of the economy. Sounds like a losing proposition all around to me. When push comes to shove and they run out of money, they will ration, the way Britain is doing now. Except I don't think Americans will take it as well. The NHS was government run from the start. Our system will still have lots of people who remember "the good old days" of private care.

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4:59pm Saturday August 15, 2009

When reading this item about Iraq off Cato -- Time to Leave Iraq -- I had that feeling that the whole country is just a Ship of Fools headed into the rapids and there's nothing I can do about it.

It's not just that I disagree with the neocons -- their values, their goals, their plans and their politics. It's that they don't even seem to care. They don't clarify their goals or strategy, they don't learn from their mistakes and they don't even want to look at whether Iraq is a success or failure. It's as if they don't even believe what they say.

They just want to act out some WWII-inspired fantasy of turning countries into democracies and being the world's policeman. But now Iraq is just "so 2005", so ignore it, wrap it up, and off to Afghanistan! And both wars have so much momentum that even the President can't seem to slow them down or divert them, let alone call them off. He'd rather let both wars be huge failures than take any short-term political heat. Again, it's as if no one, even the other party, cares what we accomplish. Thousands of American soldiers die, tens of thousands of Iraqis die, trillions are spent, and for the politicians, pundits and public, it's just "whatever!"

And it isn't limited to the wars. On health care, the Republicans are patting themselves on the back for derailing ObamaCare, but neither side is facing reality. We can't afford existing Medicare. The baby boomers start hitting 65 in a couple of years. Time is up for dealing with that crisis. Even if the Republicans stop health care legislation, they still have that to deal with. And not in some "future generation", but during their term of office. What can they possibly be thinking?

But what can the Democrats be thinking? It's not as if there's any cost control in the ObamaCare plan. They seem surprised that CBO keeps scoring the plan as expensive. Can't any of them do arithmetic? 45 million uninsured times $2000 a year (a very cheap insurance policy) is $90 billion a year, or about a trillion dollars in ten years. CBO is only scoring the first five years of the plan, since it phases in. Still, any back-of-the-envelope calculation would have told them the tab was going to be in that ballpark. And this is on top of the Medicare problem, Social Security, Cap and Trade, and the financial crisis. How does anyone think we can afford all of that?

In fact, the one thing that does seem to unite both parties is a complete disinterest in what the legislation will actually do. They just want to let the usual special interest groups fight it out, write a thousand pages of incomprehensible regulatory gibberish, and call it done. Just don't ask us to read it!

The same was true during the financial crisis. The whole attitude of Congress was "Keep this away from me! I don't understand any of it! You, Federal Reserve, here's a blank check. Just solve this problem and don't even tell us what you are doing."

Again, this isn't a matter of values or priorities. It's beyond incompetence. It's a complete disinterest in the results of their actions. I would call it panic, but that requires a certain alertness. This is some kind of psychosis.

So I look at the entire political system and I think how unreal it all is, and how tired. Republicans are running on intellectual fumes -- neocons and old warhorses like McCain; anti-gay, anti-immigrant, anti-trade sentiment and populist know-nothings like Palin. No awareness of where the country is right now, and no willingness to stick to any principles at all.

I still like the libertarian arguments on Reason and Cato, but they have their problems as well. First, they are a tiny minority. Second, they mostly criticize the system without offering practical, politically possible steps in the right direction. And third, they are hopeless nerds. I watch those guys on video and I think "This guy couldn't sell me ice cream on a hot summer day!" And I'm someone who agrees with him!

I could never take the Democrats seriously either. From the various bailouts to all their plans for the economy, health care, environment, it has the same feel of unreality as the Republicans. As if they just don't want to know whether any of these plans can possibly succeed, or whether we can afford to even try. They just want to act out their fantasies, where they save the Earth, bring healing to the poor and end racism.

For example, I wrote to one guy on global warming that the only thing that matters is what gets invented in a lab somewhere. If we can build better batteries or solar panels, do carbon capture or geoengineering, then we can make a difference. But the hair-shirt conservation measures have no real effect. And you can prove that with statistics about efficiency and the savings they could possibly get.

If you actually cared about global warming, you'd want to know what works. (and build nuke plants, which is apparently being shot down by the Obama administration.) But he doesn't even want to talk about that. It's just "if we don't pass cap and trade, the oceans will rise and the Earth is doomed." And if you don't agree with him, you are an evil "denier." It's not even a reasoned argument. Where am I supposed to go with that?

Given that none of the financial system problems, or demographic problems have actually been resolved, I expect the country to fall into crisis mode again. Like California, I expect the federal government will fiddle with its books, borrow more money and deny reality until it all comes crashing down.

So I do expect a train wreck at some point, but I don't expect chaos. Instead, it will just be a hunker-down, "do something, anything!" government-orchestrated mess. More of the same, with increasing instability and poverty.

The thing to remember is that most of the third world has worse governance than we do, worse financial problems, fewer natural resources and a less educated population. Still, from Argentina to Poland to India, they just limp along. Anarchy does not break out. I see no reason for it to do so here either. Things will just suck.

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5:35pm Friday September 18, 2009

Think of how ridiculous prediction really is. Say you took your time machine back to 1999. It's the top of the internet bubble. The country is at peace and has a small budget surplus. We are the "world's only superpower." Iraq and North Korea are sometimes alarming, but there are no other threats on the horizon. It's "the end of history." If you asked people what might be a problem in the future, some would have mentioned the Y2K bug.

You climb out of your time machine and tell them that in ten years, the U.S. will run a two trillion dollar deficit, be at war in Afghanistan and Iraq and have a black President. Oh, and Y2K was nothing!

Not only would people have laughed at you, experts would have lined up to tell you that that was all impossible. The U.S. financial situation could never deteriorate that fast (and the country could never borrow that much money without hyperinflation.) We'd never go to war in two third world countries at once, and if we did, it would be over in no time, since they barely have armies to resist us. And where would a black President come from, since there were so few prominent black politicians in the Senate or as state governors?

The farther back you go, the more absurd actual events are compared to what people expected. Suppose you had gone back to 1984 and told them about the state of the world in 25 years. The Soviet Union had invaded Afghanistan, and cold-war relations were at a new low. Japan was eating into the U.S. market in one area after another. The religious right was on a roll. The IBM PC and the Apple MacIntosh were fairly recently introduced.

You tell them that the Soviet Union will break apart (with little violence) in just a few years. That Japan will enter a 20-year slump. That China will be making half the products in U.S. stores, and loaning the U.S. money to fund its deficits. That everyone has a home computer and that this thing called "the Internet" was changing commerce, news and entertainment in strange ways. And that the religious right didn't get a thing they wanted -- just the opposite (more pornography available, abortion still available, gay marriage legal in more and more places.) No one would have believed any of that. And again, it wasn't just that they didn't think these things were likely. Experts would have told you that it was all impossible.

If you had gone back to 1899 and told them about the future, you would have been regarded as insane. Who would have predicted (or believed) a country with hundreds of millions of cars, 300-passenger aircraft flying between huge sprawling cities, major industries dedicated to movies, television, and music, most of the population carrying mobile telephones, computers in most homes, etc.?

Who would have understood that those cities could be destroyed in half an hour by computer-directed intercontinental ballistic missiles armed with nuclear warheads, launched from the other side of the world? Who would have guessed that within a lifetime (from 1900), Russia would be the world's second military power, Japan its second economic power, and the British Empire would be gone? Who would have believed World War II and the murder of millions by their own governments?

So whenever I read someone confidently predicting this or that in ten, twenty, fifty or a hundred years, I just roll my eyes and continue on to something else. When it comes to the future, none of us know what we're talking about.

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