What’s on my mind…
Economic recovery is important. But you have to ask yourself, what is the cause of the economic collapse in the first place?
Mortgages are one cause, of course. Buying a home is the American Dream, and banks and mortgage companies were eager to grab all the dollars they could over the last 30 years by using variable rate mortgages, not thinking — or caring — about what happened down the road when the balloon inflated and mortgage payments became more than the average family could manage. This surely comes as no surprise. But in my opinion, the mortgage crisis will eventually settle itself, even if the government does nothing. The result may be a glut of rental property on the market, and, probably, a glut of renters, barely holding onto financial solvency, nevermind the American Dream. Those who can afford to buy will be attracted by lower property costs, and those who cannot afford to buy will rent those properties. An increase in class separation will result, but that is almost inevitable anyway.
The unavailability of credit, especially to small business, means that jobs will recover at a much slower rate than the overall economy. According to a recent count, the country has lost some 8 million jobs in the economic crash. There are some regulatory bills that are kicking around Congress at the moment that will provide incentives for hiring, but it is too little, and much too late. It is estimated that these incentives may create less than 300,000 jobs, a mere bucketful removed from a vast pool of unemployment. More must be done, of course. Surely this is no surprise. If the various financial agencies in the government do their jobs, credit should eventually recover and credit will once again become available (to those who don’t really need it, at least at first, but jobs are jobs), incentives will kick in, and the job market will improve — but not enough.
What will really improve the job market is one single force — consumer spending. As it is now, we are in a downward spiral: job losses mean less income, less income means less consumer spending, and less consumer spending means less enployment. We live in a consumer society, and jobs are created when spending allows, and sometimes forces, businesses to hire. Spending must be suffient to overcome the reluctance of the business owner to take on more employment tax and employee insurance expense.
And health insurance? Insurance companies, who are right now (and continously) asking for rate hikes, blame rising medical costs, and the medical community blame lawsuits (often frivilous, but increasing common as people grab on to what they see as an easy way to get rich), that cause an ever-increasing climb in the cost of malpractice insurance. Once again, the consumer is the helpless victim of the spiraling of health care insurance; some simply have not been able to keep up and they fall off the roles of the insured.
Here is, it seems to me, a key that can be used to increase comsumer spending by allowing American workers to keep more of their income, create jobs, and promote economic recovery. This is the one are that is not self-correcting. The health insurance and medical communities are on a road to self-destruction, “riding the bubble” as it were, which will burst, as it did in the housing market, and total chaos in health care will result.
One of two things need to be done immediately. Either the government should implement a Medicare-based public option, which will provide a downward pressure on insurance rates, or they should require that all private insurers be strictly non-profit, which will turn the focus of the insurance companies away from profit and shareholders, and place it on those who they are supposed to serve — the American people.
Will it happen? Almost certainly not. The Republicans in Congress cannot hand a Democratic president such a huge win as health care reform so close to mid-term and second term elections, not if they intend to re-take the seats they have lost. This vicious lack of bipartisan concern for the welfare of the American people is not only unconsitutional, it’s immoral — but that is another discussion for another time.
I like the Medicare-based public financing of health costs with private delivery of health services, but this will not happen since so many citizens equate public with Stalinism and failure.
Switzerland has all private but non-profit insurance which has levels of coverage. The basic level is affordable for all (similar to the connector in MA). The highest level offers coverage in every country in the world. This also works. I could live with either system.
Like you, I am concerned that neither the current state nor the new health care law sufficiently hold down costs.
But seriously…the only way that costs are going to decline or be retrained is to cut services or make the entire population healthier. Which do you think is more likely to occur?
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