FARK.com: (7184025) In today's edition of MONEY DOESN'T WORK THAT WAY: "Rubio said that taxes remove money that was going to be spent into the economy"

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		In today's edition of MONEY DOESN'T WORK THAT WAY: "Rubio said that taxes remove money that was going to be spent into the economy" (cnbc.com)		114
		More: Fail, Larry Kudlow, supreme court rules, CNBC

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NewportBarGuy		2012-06-27 03:36:33 AM

'Hey guys, I would love to buy your insurance, but I have a kid who is sick. Will you cover them as well? Because this other guy will cover them, and I'll go with them if you don't do the same.' I think that now the consumer is empowered to make that argument."

Are you f*cking kidding me? "This other guy will cover them."???? What other-f*cking "guy" is losing $500,000 covering your kid with leukemia just to get your "business" (read losses) from their competitor? Are you for real?

People actually believe this sh*t?

Oh my god. It's like every retard in every economics class I've ever been in has found a collective voice. We laughed your ideas out of the classroom! Did you NOT get the hint?

If you have 10 DUIs and a vehicular manslaughter charge... Hey! Good luck getting car insurance. They'll give you a price, $2,700 per month. Don't you feel like an empowered consumer in the free market? It's Grrrrrrrrrrrreat!

RobertBruce		2012-06-27 06:37:52 AM

NewportBarGuy: wall of rant

There would be 'another guy' if they were allowed to sell across state lines. Also, competition doesn't drive down prices in your world? Weird.(and wrong)

miss diminutive		2012-06-27 07:52:13 AM

RUFIO WANTS FREE-MARKET HEALTH CARE SYSTEM!
RUFIO!!!

incendi		2012-06-27 07:56:55 AM

The only time taxes would actually remove money from the economy is if they were used to repurchase foreign held US government bonds ("paying down the debt") or if the government ran a surplus and began hoarding cash. In all other cases, it gets cycled back into the economy via government employee/military paychecks or purchases. Since the government mostly employs U.S. citizens and mostly contracts U.S. firms to manufacture items or procure services, while private companies and wealthy individuals tend to go solely for the lowest price point, it could be argued that taxation and government spending is more likely to keep the money moving in our economy than leaving the money in the hands of wealthy individuals and corporations.

/all taxation is theft

Vodka Zombie		2012-06-27 07:57:39 AM

RobertBruce: There would be 'another guy' if they were allowed to sell across state lines.

LOL! "If only Betty's Insurance Emporium of Greater Peoria was allowed to sell coverage in California. She'd take down Cigna in a heartbeat."

incendi		2012-06-27 07:59:45 AM

RobertBruce: There would be 'another guy' if they were allowed to sell across state lines.

They'd all relocate to whichever state was the first to allow an "unless we don't feel like paying for that today" clause in their paperwork.

GAT_00		2012-06-27 08:01:12 AM

BillCo		2012-06-27 08:14:11 AM

Hey Subby, when did you get your GED in economics?

Money taken as taxes does not encourage growth. People who are allowed to spend the money they earn do encourage growth.

It's really pretty simple.

Marcus Aurelius		2012-06-27 08:15:00 AM

RobertBruce: NewportBarGuy: wall of rant

There would be 'another guy' if they were allowed to sell across state lines. Also, competition doesn't drive down prices in your world? Weird.(and wrong)

Remember when we did that with the credit card companies and they suddenly all moved to Delaware and started charging 50% interest?

Nothing like a race to the bottom. Good times.

hinten		2012-06-27 08:32:12 AM

The money is gone, simply gone, poof, never to be found again, it's like it's a miracle.

Also:
Germany individual income tax rates ,2012

Tax % Tax Base (EUR)
0 Up to 8,004
14% 8,005-52,881
42% 52,882-250,730
45% 250,731 and over

Note: The rates are before solidarity tax,all individuals,and business tax-for business income.
Members of the church pay 8%-9% church tax.

Germany GDP Growth rate
www.tradingeconomics.com

James!		2012-06-27 08:35:02 AM

Rubio is upset about the government hoarding all that money. Stingy democrats!

xanadian		2012-06-27 09:35:41 AM

So, lemme get this straight. If my taxes go up, I'll still have just as much money to spend on crap (i.e., pour back into the economy)?

AWESOME

NewportBarGuy: 'Hey guys, I would love to buy your insurance, but I have a kid who is sick. Will you cover them as well? Because this other guy will cover them, and I'll go with them if you don't do the same.' I think that now the consumer is empowered to make that argument."

Are you f*cking kidding me? "This other guy will cover them."???? What other-f*cking "guy" is losing $500,000 covering your kid with leukemia just to get your "business" (read losses) from their competitor? Are you for real?

People actually believe this sh*t?

I believe this is the primary reason why Obamacare has the national mandate in it: so that people cannot game the system. "Oh, I feel fine right now, I don't need insurance." Fast forward some bit of time: "Oh noes, got teh cancer, better buy insurance!"

RobertBruce: NewportBarGuy: wall of rant

There would be 'another guy' if they were allowed to sell across state lines. Also, competition doesn't drive down prices in your world? Weird.(and wrong)

Insurance rates are based on the risk pool the insurer covers. Being able to cover more people across state lines--if they belong in the same pool--can bring down rates, because a couple $1m hospitalizations/treatments in a pool of thousands doesn't hurt the insurer's bottom line as much. Now, a couple high-cost treatments in a pool of, say, a hundred means that the insurer has to cover that cost. How do they do that? By raising everyone's premiums. It's why my company's OLD insurer charged us an arm and a leg: our average age here is 50-something, and there are a lot of diabetics here (Native American population--apparently, they're more susceptible to Type II diabetes). Now, our NEW insurer (either thanks to Obamacare or the law Gov. LePage signed some time back, I'm not sure which) is allowed to put us in a risk pool that covers *all Federal employees*. Bigger pool = less risk for the insurer.

So, long story short, opening up insurance companies to go across state lines MAY reduce your premiums. But not always. Competition helps, but not always in the way you think it would.

Also, insurance companies make money not just in premiums, but in how they invest your premium contributions. So, what you pay from company to company also depends on how well their investments are performing.

That's how I understood it, anyway...

xanadian		2012-06-27 09:37:02 AM

Oh, I'm a idiot. I should've formed my post thusly:

I used to work in the insurance industry, so I'm really getting a kick out of some of these replies...

;)

/needless to say, that stint didn't last long
//f*cking HATED selling insurance

xanadian		2012-06-27 09:42:00 AM

Vodka Zombie: RobertBruce: There would be 'another guy' if they were allowed to sell across state lines.

LOL! "If only Betty's Insurance Emporium of Greater Peoria was allowed to sell coverage in California. She'd take down Cigna in a heartbeat."

That, too. Again, it's related to risk pool. Small insurers are much less likely to have a large risk pool. Or large investments.

However, like we once had in Maine, allowing an insurer all but a monopoly for what they sell (*cough*Anthem*cough) doesn't help keep rates down, either.

It's really a bit more complex than "competition drives down prices." There are many factors.

/captain obvious signing off

SlothB77		2012-06-27 09:54:52 AM

The private sector more efficiently utilizes money and creates wealth, while the public sector less efficiently utilizes money and creates debt. There is a net cost associated with transferring money from the private sector to the public sector.

hubiestubert		2012-06-27 09:57:42 AM

What selling insurance across state lines does, is allow folks to ship cash out faster from the economy.

That is the real point. Not just removing some regulations that states enact for their own population--state's rights, whuddathunkit folks would be against that--but speeding up the process of siphoning cash out of local and state economies.

This is why we are seeing a slow recovery. A lack of ability to invest in those local economies. Watching chain stores roll in, with their own distro nets, their own warehouses that purchase overseas and ship to themselves, and produce their own products to bring to themselves. The largest players may employ folks locally, but they don't really contribute as much as local entrepreneurs would. Worse, they ask for subsidies in the form of a lowered tax base, and then ship their cash straight out, not even involving local banks, and then use these savings to stomp on competition.

You want to give tax breaks? Then do so to encourage local players to form. Encourage competition in the market, locally. Reward folks who take risks and contribute to their local tax base, as well as the local distro nets, and chains of services. Local businesses invest in their area, they also use local distributors, those distributors also purchase, buy gas, and a contribute locally as well. We want to see folks flourish, then encourage those smaller players to grow, not just invite chains who ship cash out far and away, and who ignore local distributors and purveyors.

Tax breaks aren't bad, but they have to be a carrot, not a blanket reward for putting out a shingle. Encourage useful behaviors, not just throw out a welcome mat for folks who will prey on local economies and give little in return for the favor...

kingoomieiii		2012-06-27 10:38:41 AM

miss diminutive: [2.bp.blogspot.com image 400x250]

RUFIO WANTS FREE-MARKET HEALTH CARE SYSTEM!
RUFIO!!!

www.wired.com

If you know what I'm talking about, you can't un-hear it now.

SacriliciousBeerSwiller		2012-06-27 10:57:37 AM

enik		2012-06-27 10:57:42 AM

I recently cancelled a vacation and indefinitely put off home improvements when I saw how much extra I was going to have to pay in 2011 income taxes. So, uhhh, I guess it's just you minimum wage/unemployed (i.e. OWS types) who think money doesn't work that way.

Emrick		2012-06-27 11:04:43 AM

It is amazing that so many people don't know (won't admit) that government spending increases gross domestic product.

GAT_00		2012-06-27 11:08:20 AM

SlothB77: The private sector more efficiently utilizes money and creates wealth, while the public sector less efficiently utilizes money and creates debt. There is a net cost associated with transferring money from the private sector to the public sector.

Thank you Naive Bullshiat Platitude Man. Your contributions are noted and laughed at.

bhcompy		2012-06-27 11:09:17 AM

Emrick: It is amazing that so many people don't know (won't admit) that government spending increases gross domestic product.

Halliburton knows it, but they prefer not to talk about it.

/that tax money may go back in to the economy, but it's the ultimate example of trickle down theory considering where it goes

Magorn		2012-06-27 11:09:46 AM

dlp211		2012-06-27 11:11:59 AM

King Something		2012-06-27 11:16:12 AM

enik: I recently cancelled a vacation and indefinitely put off home improvements when I saw how much extra I was going to have to pay in 2011 income taxes. So, uhhh, I guess it's just you minimum wage/unemployed (i.e. OWS types) who think money doesn't work that way.

Compared to your 2010 tax bill, your 2011 tax bill was so high that you had to cancel a vacation and home improvement projects?

Unless your "vacation" was "stay at a friend's or family member's house halfway across town for a few days while I take paid leave from work" and your "home improvement projects" was "fix a slight leak in the kitchen/bathroom sink faucet," chances are that your income also went up high enough that you could have easily covered those expenses regardless of your tax bill.

/if taxes below $250k are 0%, above $250k is 50% and you make $250,002 per year, your tax bill is one dollar, NOT $125,001
//farking progressive taxation, how does it work?

Rapmaster2000		2012-06-27 11:18:22 AM

enik: I recently cancelled a vacation and indefinitely put off home improvements when I saw how much extra I was going to have to pay in 2011 income taxes. So, uhhh, I guess it's just you minimum wage/unemployed (i.e. OWS types) who think money doesn't work that way.

The same thing happened to me. I was making $300,000 last year, but now I am making $330,000. Since the tax rate goes from 33% to 35% at $328,000, my accountant told me I should quit my job and get on welfare so now I make no money. That's what these libs don't get. If high achievers like me don't get to keep our money then we will just GO GALT and there will be no one in the marketplace who knows how to create credit default swaps.

What will you do then, libs? What will you do without Randian Superheroes like me to broker your credit default swaps? Yeah. Think about that.

Arkanaut		2012-06-27 11:19:54 AM

BillCo: Hey Subby, when did you get your GED in economics?

Money taken as taxes does not encourage growth. People who are allowed to spend the money they earn do encourage growth.

It's really pretty simple.

Things that don't encourage growth:
-Interstate Highway System
-NASA
-Darpanet
-Public schools and universities

Things that encourage growth:
-Chasing risky financial instruments

GoodyearPimp		2012-06-27 11:20:32 AM

If taxes were zero....Ayyyyyyyyyyy!

Tyrone Slothrop		2012-06-27 11:28:38 AM

RobertBruce: NewportBarGuy: wall of rant

There would be 'another guy' if they were allowed to sell across state lines. Also, competition doesn't drive down prices in your world? Weird.(and wrong)

Except in insurance, the cost is based on the risk pool, and having competing insurers doesn't drive down cost. It's an area where the standard rules of capitalism break down. Link

Dr Dreidel		2012-06-27 11:36:56 AM

Magorn: enik: I recently cancelled a vacation and indefinitely put off home improvements when I saw how much extra I was going to have to pay in 2011 income taxes. So, uhhh, I guess it's just you minimum wage/unemployed (i.e. OWS types) who think money doesn't work that way.

You are either:

a) extremely uniformed about your finances
b) lying
c) Have a crooked accountant

Tell me exactly whose taxes have gone up in hte last year, or the last 5?

Well, it could be something other than one of those 3 options. For example, a company I used to work for simply forgot to take MD's county taxes out of its employees' checks for a year. I ended up owing something like $1,300 to the state over that.

That may fall under (a) or (c), but my taxes didn't change; my withholding did.

// can't rule out that the company was crooked, though
// president's getting sued by her silent partner and several of her clients as we speak

bhcompy		2012-06-27 11:40:05 AM

Tyrone Slothrop: Except in insurance, the cost is based on the risk pool, and having competing insurers doesn't drive down cost. It's an area where the standard rules of capitalism break down. Link

Because insurance itself is a scheme to drive up costs and profits. Pay cash for your office visits, you'll save a lot of money. Better off if insurance only covered catastrophic things.

Robespierre		2012-06-27 11:52:22 AM

BillCo: Hey Subby, when did you get your GED in economics?

Money taken as taxes does not encourage growth. People who are allowed to spend the money they earn do encourage growth.

It's really pretty simple.

If its so simple, you can then explain to me the mechanism that prevents some spending from promoting growth, when other spending promotes growth, based on the identity of the spender.

Citations encouraged.

Robespierre		2012-06-27 11:57:15 AM

hubiestubert		2012-06-27 12:02:26 PM

Robespierre: enik: I recently cancelled a vacation and indefinitely put off home improvements when I saw how much extra I was going to have to pay in 2011 income taxes. So, uhhh, I guess it's just you minimum wage/unemployed (i.e. OWS types) who think money doesn't work that way.

You were going to spend that money, now the government is going to spend that money. It's still spent, so yeah, it still does not work that way.

Heck, some of that money will even go to job creators in subsidized industries...

cameroncrazy1984		2012-06-27 12:04:12 PM

hubiestubert: Robespierre: enik: I recently cancelled a vacation and indefinitely put off home improvements when I saw how much extra I was going to have to pay in 2011 income taxes. So, uhhh, I guess it's just you minimum wage/unemployed (i.e. OWS types) who think money doesn't work that way.

You were going to spend that money, now the government is going to spend that money. It's still spent, so yeah, it still does not work that way.

Heck, some of that money will even go to job creators in subsidized industries...

And the money from the Bush tax cuts is currently sitting in record numbers in companies' bank accounts.

So...yeah, even that wrong.

douchebag/hater		2012-06-27 12:10:01 PM

Subby:

Actually, it does work that way.

You're welcome.

Douchebag/Hater

AliceBToklasLives		2012-06-27 12:10:41 PM

Arkanaut: Things that don't encourage growth:
-Interstate Highway System

notsureifserious.jpg

Robespierre		2012-06-27 12:15:43 PM

cameroncrazy1984: hubiestubert: Robespierre: enik: I recently cancelled a vacation and indefinitely put off home improvements when I saw how much extra I was going to have to pay in 2011 income taxes. So, uhhh, I guess it's just you minimum wage/unemployed (i.e. OWS types) who think money doesn't work that way.

You were going to spend that money, now the government is going to spend that money. It's still spent, so yeah, it still does not work that way.

Heck, some of that money will even go to job creators in subsidized industries...

And the money from the Bush tax cuts is currently sitting in record numbers in companies' bank accounts.

So...yeah, even that wrong.

Higher taxes can solve that little conundrum. Perhaps on wealth and not income?

Arkanaut		2012-06-27 12:20:27 PM

AliceBToklasLives: Arkanaut: Things that don't encourage growth:
-Interstate Highway System

notsureifserious.jpg

Maybe you could read the rest of my comment, you might figure it out yourself.

The All-Powerful Atheismo		2012-06-27 12:24:31 PM

GoodyearPimp: [images1.wikia.nocookie.net image 200x331]

If taxes were zero....Ayyyyyyyyyyy!

Your fish are dead

AliceBToklasLives		2012-06-27 12:31:35 PM

Arkanaut: AliceBToklasLives: Arkanaut: Things that don't encourage growth:
-Interstate Highway System

notsureifserious.jpg

Maybe you could read the rest of my comment, you might figure it out yourself.

Nope - In today's political environment, my snark detector is broken.

Slaves2Darkness		2012-06-27 12:36:51 PM

"When the government spends that dollar, they're going to be a lot less efficient, a lot less stimulative," he said.

Ummm...no. Just no. You sir are so ignorant of economics that you should shut up right now.

The truth is their is that the government is more efficient, more stimulative when spending money then the individual. There is even a name for it, it is called the money multiplier, the money multiplier is if the government spends X they get X + Y increase or stimulation in the economy.

Now then you can have a negative money multiplier of the government is taking more money out of the economy then it is possible for them to put back in, but the latest research indicates that point is some where between a top marginal tax rate of 60-70%.

Slaves2Darkness		2012-06-27 12:40:58 PM

BillCo: Hey Subby, when did you get your GED in economics?

Money taken as taxes does not encourage growth. People who are allowed to spend the money they earn do encourage growth.

It's really pretty simple.

Money taken as taxes spent on goods in services by the US government has a bigger positive impact on the GDP then individuals spending that same money when that spending is on goods manufactured in the US and services provided by US individuals and firms. It's really pretty simple and any Macro Economics 101 course will explain it to you.

WorldCitizen		2012-06-27 12:42:40 PM

BillCo: Hey Subby, when did you get your GED in economics?

Money taken as taxes does not encourage growth. People who are allowed to spend the money they earn do encourage growth.

It's really pretty simple.

Yes, and money taken in taxes then disappears into a secret, evil government wormhole. It is never spent again or never earned as income or profits by anyone ever again. I can see that you did very well in economics class.

Debeo Summa Credo		2012-06-27 12:46:57 PM

xanadian: Oh, I'm a idiot. I should've formed my post thusly:

I used to work in the insurance industry, so I'm really getting a kick out of some of these replies...

;)

/needless to say, that stint didn't last long
//f*cking HATED selling insurance

What kind of insurance did you sell?

Debeo Summa Credo		2012-06-27 12:49:54 PM

cameroncrazy1984: hubiestubert: Robespierre: enik: I recently cancelled a vacation and indefinitely put off home improvements when I saw how much extra I was going to have to pay in 2011 income taxes. So, uhhh, I guess it's just you minimum wage/unemployed (i.e. OWS types) who think money doesn't work that way.

You were going to spend that money, now the government is going to spend that money. It's still spent, so yeah, it still does not work that way.

Heck, some of that money will even go to job creators in subsidized industries...

And the money from the Bush tax cuts is currently sitting in record numbers in companies' bank accounts.

So...yeah, even that wrong.

How much did the bush tax cuts reduce corporate taxes?

quiotu		2012-06-27 12:52:02 PM

Slaves2Darkness: BillCo: Hey Subby, when did you get your GED in economics?

Money taken as taxes does not encourage growth. People who are allowed to spend the money they earn do encourage growth.

It's really pretty simple.

Money taken as taxes spent on goods in services by the US government has a bigger positive impact on the GDP then individuals spending that same money when that spending is on goods manufactured in the US and services provided by US individuals and firms. It's really pretty simple and any Macro Economics 101 course will explain it to you.

Also, here's a question for all those supporting less taxes so the 1% can spend more in America.

How does them buying an Italian sports car and going gambling in Dubai help the American economy?

Just curious... or do you think America is the only economy they can spend their money in?

Debeo Summa Credo		2012-06-27 12:53:03 PM

HotWingConspiracy		2012-06-27 12:56:07 PM

Debeo Summa Credo		2012-06-27 12:57:05 PM

quiotu: Slaves2Darkness: BillCo: Hey Subby, when did you get your GED in economics?

Money taken as taxes does not encourage growth. People who are allowed to spend the money they earn do encourage growth.

It's really pretty simple.

Money taken as taxes spent on goods in services by the US government has a bigger positive impact on the GDP then individuals spending that same money when that spending is on goods manufactured in the US and services provided by US individuals and firms. It's really pretty simple and any Macro Economics 101 course will explain it to you.

Also, here's a question for all those supporting less taxes so the 1% can spend more in America.

How does them buying an Italian sports car and going gambling in Dubai help the American economy?

Just curious... or do you think America is the only economy they can spend their money in?

Well, how much does giving additional handouts to the poor add to the economy, when they spend it on imported Chinese items at Walmart, if you want to cherry pick potential places to spend cash? Or do you think all dollars spent by the poor stay in
the US?

I'm not arguing for lower taxes on the 1% by any means FYI, but your logic is flawed.

neon_god		2012-06-27 01:03:48 PM

Slaves2Darkness: "When the government spends that dollar, they're going to be a lot less efficient, a lot less stimulative," he said.

Ummm...no. Just no. You sir are so ignorant of economics that you should shut up right now.

The truth is their is that the government is more efficient, more stimulative when spending money then the individual. There is even a name for it, it is called the money multiplier, the money multiplier is if the government spends X they get X + Y increase or stimulation in the economy.

Now then you can have a negative money multiplier of the government is taking more money out of the economy then it is possible for them to put back in, but the latest research indicates that point is some where between a top marginal tax rate of 60-70%.

That isn't how the money multiplier works. All increases in spending, by anyone, have a multiplier effect. What you're getting at is that government deficit spending increases GDP by more than the amount of stimulus, which is true. The problem with that is that deficit spending has to stop eventually, and when it does the multiplier disappears.
What Rubio's talking about is the idea that a dollar of spending funded through taxation is less efficient than a dollar of private spending. The economic concensus is that that's true. Of course, if the money is spent wisely, say on infrastructure that promotes future growth, it could still be a good idea. But private spending is more efficient and more stimulative in the immediate sense.
Always remember: in general, markets create wealth and raise inequality. Goverents redistribute wealth, and waste some in the process. It's about striking a balance between the two (for the record, I do think the US could use stronger government overall)

gittlebass		2012-06-27 01:07:49 PM

oh man, i cant wait for the birthers to come out of the woodwork against rubio and demanding a birth certificate if he gets a vp nod, they'll do that right?

Stile4aly		2012-06-27 01:42:13 PM

bhcompy: Tyrone Slothrop: Except in insurance, the cost is based on the risk pool, and having competing insurers doesn't drive down cost. It's an area where the standard rules of capitalism break down. Link

Because insurance itself is a scheme to drive up costs and profits. Pay cash for your office visits, you'll save a lot of money. Better off if insurance only covered catastrophic things.

Two years ago I had to have a herniated disk in my back repaired. I was in crippling pain, but no danger to my life. I stayed in recovery for one day and checked out the day after the surgery. My insurance cost for the surgery was $2000. The EOB showed that the insurance company had been billed over $70K.

Now, let's say I grant that if there were no insurance costs would be 50% less. Where would I get $35K for a non-emergency surgery? If I wasn't paying for insurance for the last 10 years, I'd have saved about $36K, but I expect a fair amount of this would have been spent in the interim for other doctor's appointments and living expenses. If I couldn't pay it up front, should I be forced to live in pain until I save enough to pay for it?

CheatCommando		2012-06-27 01:42:26 PM

NewportBarGuy: People actually believe this sh*t?

The alternative is to admit that just about everything they stand for is not only wrong, but evil. People do not make such large leaps easily.

M Bison		2012-06-27 01:43:33 PM

Link

Seriously, this comic sums it up.

meanmutton		2012-06-27 01:43:44 PM

incendi: RobertBruce: There would be 'another guy' if they were allowed to sell across state lines.

They'd all relocate to whichever state was the first to allow an "unless we don't feel like paying for that today" clause in their paperwork.

If only there was an ability for the Federal Government to regulate interstate commerce or something...

meanmutton		2012-06-27 01:46:58 PM

The funny thing is that Rubio appears to have not actually said what the article paraphrased him as saying.

Thats_Not_My_Baby		2012-06-27 01:51:31 PM

I have a question about the mandated insurance deal:

I was talking with a friend about how everyone being forced to buy insurance or pay a penalty would increase the pool of insured and thus spread the risk over more people, and should make insurance less expensive.

She posited the situation in which a person would rather pay the penalty every year and receive no insurance then pay for the insurance that she would be forced to buy. In her view the lowest insurance plan would be more costly than the penalty.

Is there credence to this? In her mind EVERYONE would be doing it. In mine, it would probably be only a tiny percentage that wouldn't affect anything all that much.

incendi		2012-06-27 01:55:17 PM

meanmutton: If only there was an ability for the Federal Government to regulate interstate commerce or something.

Yeah.. but we'd get 30 years of people dying before you could get the federal government to take any action on that, and whatever they do would probably make it worse for another 15 before they fix it.

bhcompy		2012-06-27 02:01:39 PM

Stile4aly: bhcompy: Tyrone Slothrop: Except in insurance, the cost is based on the risk pool, and having competing insurers doesn't drive down cost. It's an area where the standard rules of capitalism break down. Link

Because insurance itself is a scheme to drive up costs and profits. Pay cash for your office visits, you'll save a lot of money. Better off if insurance only covered catastrophic things.

Two years ago I had to have a herniated disk in my back repaired. I was in crippling pain, but no danger to my life. I stayed in recovery for one day and checked out the day after the surgery. My insurance cost for the surgery was $2000. The EOB showed that the insurance company had been billed over $70K.

Now, let's say I grant that if there were no insurance costs would be 50% less. Where would I get $35K for a non-emergency surgery? If I wasn't paying for insurance for the last 10 years, I'd have saved about $36K, but I expect a fair amount of this would have been spent in the interim for other doctor's appointments and living expenses. If I couldn't pay it up front, should I be forced to live in pain until I save enough to pay for it?

I would say that significant surgery to correct a debilitating injury is "catastrophic".

I went to the dermatologist to have a growth checked out and removed(numbing shot, razor blade. not rocket science or crazy medicines). Insurance cost in the neighborhood of $5k, which means I'd be on the hook for at least $1500 to meet my deductible plus whatever they cover past the deductible. Or I could pay $200 upfront for the procedure and a cancer test. I took option 2.

SharkTrager		2012-06-27 02:02:42 PM

Thats_Not_My_Baby		2012-06-27 02:03:19 PM

bhcompy:

I went to the dermatologist to have a growth checked out and removed(numbing shot, razor blade. not rocket science or crazy medicines). Insurance cost in the neighborhood of $5k, which means I'd be on the hook for at least $1500 to meet my deductible plus whatever they cover past the deductible. Or I could pay $200 upfront for the procedure and a cancer test. I took option 2.

Are you serious on option 1? That doesn't even seem real.

Ham Sandvich		2012-06-27 02:13:40 PM

hubiestubert: What selling insurance across state lines does, is allow folks to ship cash out faster from the economy.

That is the real point. Not just removing some regulations that states enact for their own population--state's rights, whuddathunkit folks would be against that--but speeding up the process of siphoning cash out of local and state economies.

This is why we are seeing a slow recovery. A lack of ability to invest in those local economies. Watching chain stores roll in, with their own distro nets, their own warehouses that purchase overseas and ship to themselves, and produce their own products to bring to themselves. The largest players may employ folks locally, but they don't really contribute as much as local entrepreneurs would. Worse, they ask for subsidies in the form of a lowered tax base, and then ship their cash straight out, not even involving local banks, and then use these savings to stomp on competition.

You want to give tax breaks? Then do so to encourage local players to form. Encourage competition in the market, locally. Reward folks who take risks and contribute to their local tax base, as well as the local distro nets, and chains of services. Local businesses invest in their area, they also use local distributors, those distributors also purchase, buy gas, and a contribute locally as well. We want to see folks flourish, then encourage those smaller players to grow, not just invite chains who ship cash out far and away, and who ignore local distributors and purveyors.

Tax breaks aren't bad, but they have to be a carrot, not a blanket reward for putting out a shingle. Encourage useful behaviors, not just throw out a welcome mat for folks who will prey on local economies and give little in return for the favor...

On a related topic, I've noticed more and more people starting their own side businesses out of necessity. Most can't find regular work and are channeling hobbies, passions, talents into a small bit of income. Since most need the money and are selling out of their house, van, cardboard box, etc., a lot of the goods are competitively priced.

Most of it is services, beer, food, arts and crafts. The quality varies but some stuff will catch on. The chains can't compete on quality.

If the economic environment around them is decent enough, they can grow. Enough of that happening across the country and we might just get out of this mess.

MusicMakeMyHeadPound		2012-06-27 02:18:20 PM

Thats_Not_My_Baby: I have a question about the mandated insurance deal:

I was talking with a friend about how everyone being forced to buy insurance or pay a penalty would increase the pool of insured and thus spread the risk over more people, and should make insurance less expensive.

She posited the situation in which a person would rather pay the penalty every year and receive no insurance then pay for the insurance that she would be forced to buy. In her view the lowest insurance plan would be more costly than the penalty.

Is there credence to this? In her mind EVERYONE would be doing it. In mine, it would probably be only a tiny percentage that wouldn't affect anything all that much.

The annual penalty is either $95 or 1% of income (whichever is greater) except if you can prove financial hardship. As a healthy unmarried young male, no kids, I was quoted between $850 and $1300/month for health insurance when I shopped around last summer.

So yeah, she's right about it being totally worth taking the penalty if your only choices are obtaining self-funded insurance or not (and she can't claim hardship, like being unemployed).

However, employers will get socked so much harder for not making health insurance complementary to employee's pay packages.

This was essentially the Democrats saying, "Ok, you biatched and moaned about keeping health care linked to employment, so we'll do it your way!"

TyrantII		2012-06-27 02:25:53 PM

RobertBruce: NewportBarGuy: wall of rant

There would be 'another guy' if they were allowed to sell across state lines. Also, competition doesn't drive down prices in your world? Weird.(and wrong)

They are allowed. As long as the company has a presence in that state you buy from, you can have their insurance for your corp.

Which is why instead of Blue Cross Massachusetts (one of the best) I get to deal with Blue Cross Georgia (one of the worse)

Every freaking time I go to the doctors BC-G rings it up as an hospital visit and tells me to pay them, every time I have to call them and dispute it with some south drawl buffoon that takes 30 min to change a pull down variable on a PC, and every time they don't make a note on my account and hope I forget and pay them next time. Every time. And that's after 45 min fooling around with their "voice activation" menu tree they put in place to get people mad and to leave instead of staying on the line.

If I was ever sick, I'd hate to think of the BS they'll bull on me when I'm only worried about me and my family.

Selling across state lines just means less care, and more BS from states with a hand in the cookie jar of insurance, like Delaware and Georgia. It's not going to lower costs or improve service. It's will just pull everyone else down to offer Walmart style health insurance.

8 inches		2012-06-27 02:29:17 PM

Thats_Not_My_Baby		2012-06-27 02:38:52 PM

MusicMakeMyHeadPound: Thats_Not_My_Baby: I have a question about the mandated insurance deal:

I was talking with a friend about how everyone being forced to buy insurance or pay a penalty would increase the pool of insured and thus spread the risk over more people, and should make insurance less expensive.

She posited the situation in which a person would rather pay the penalty every year and receive no insurance then pay for the insurance that she would be forced to buy. In her view the lowest insurance plan would be more costly than the penalty.

Is there credence to this? In her mind EVERYONE would be doing it. In mine, it would probably be only a tiny percentage that wouldn't affect anything all that much.

The annual penalty is either $95 or 1% of income (whichever is greater) except if you can prove financial hardship. As a healthy unmarried young male, no kids, I was quoted between $850 and $1300/month for health insurance when I shopped around last summer.

So yeah, she's right about it being totally worth taking the penalty if your only choices are obtaining self-funded insurance or not (and she can't claim hardship, like being unemployed).

However, employers will get socked so much harder for not making health insurance complementary to employee's pay packages.

This was essentially the Democrats saying, "Ok, you biatched and moaned about keeping health care linked to employment, so we'll do it your way!"

My god. I'm in your same position as far as demographic and there is no way in hell I could pay those rates. Thankfully, I'm under 27 (or is it 26) and may continue to leech my parent's insurance from their employers.

NemoD		2012-06-27 03:25:12 PM

Debeo Summa Credo		2012-06-27 03:25:14 PM

Thats_Not_My_Baby: MusicMakeMyHeadPound: Thats_Not_My_Baby: I have a question about the mandated insurance deal:

I was talking with a friend about how everyone being forced to buy insurance or pay a penalty would increase the pool of insured and thus spread the risk over more people, and should make insurance less expensive.

She posited the situation in which a person would rather pay the penalty every year and receive no insurance then pay for the insurance that she would be forced to buy. In her view the lowest insurance plan would be more costly than the penalty.

Is there credence to this? In her mind EVERYONE would be doing it. In mine, it would probably be only a tiny percentage that wouldn't affect anything all that much.

The annual penalty is either $95 or 1% of income (whichever is greater) except if you can prove financial hardship. As a healthy unmarried young male, no kids, I was quoted between $850 and $1300/month for health insurance when I shopped around last summer.

So yeah, she's right about it being totally worth taking the penalty if your only choices are obtaining self-funded insurance or not (and she can't claim hardship, like being unemployed).

However, employers will get socked so much harder for not making health insurance complementary to employee's pay packages.

This was essentially the Democrats saying, "Ok, you biatched and moaned about keeping health care linked to employment, so we'll do it your way!"

My god. I'm in your same position as far as demographic and there is no way in hell I could pay those rates. Thankfully, I'm under 27 (or is it 26) and may continue to leech my parent's insurance from their employers.

The idea under the insurance exchanges in obamacare is that the elimination of adverse selection will drastically bring down rates. Which, theoretically, makes sense.

bhcompy		2012-06-27 03:26:49 PM

Thats_Not_My_Baby: bhcompy:

I went to the dermatologist to have a growth checked out and removed(numbing shot, razor blade. not rocket science or crazy medicines). Insurance cost in the neighborhood of $5k, which means I'd be on the hook for at least $1500 to meet my deductible plus whatever they cover past the deductible. Or I could pay $200 upfront for the procedure and a cancer test. I took option 2.

Are you serious on option 1? That doesn't even seem real.

This is what told me when I discussed payment with them. I know that my insurance was billed $2k for a routine 2-d ultrasound last year(at a doctors office, not a hospital). There's no reason an ultrasound should cost that much. The going rate for 2-d ultrasounds is generally a few hundred dollars according to my research, but stupid me didn't do any research on the matter until after I got the bill and shiat my pants. Now I ask before paying what they will bill my insurance and how much they would take in cash to do it outside of insurance simply because cash pricing is generally cheaper than running it through insurance in the first place(for my plan with Aetna through my employer).

CujoQuarrel		2012-06-27 03:48:06 PM

Thats_Not_My_Baby: MusicMakeMyHeadPound: Thats_Not_My_Baby: I have a question about the mandated insurance deal:

I was talking with a friend about how everyone being forced to buy insurance or pay a penalty would increase the pool of insured and thus spread the risk over more people, and should make insurance less expensive.

She posited the situation in which a person would rather pay the penalty every year and receive no insurance then pay for the insurance that she would be forced to buy. In her view the lowest insurance plan would be more costly than the penalty.

Is there credence to this? In her mind EVERYONE would be doing it. In mine, it would probably be only a tiny percentage that wouldn't affect anything all that much.

The annual penalty is either $95 or 1% of income (whichever is greater) except if you can prove financial hardship. As a healthy unmarried young male, no kids, I was quoted between $850 and $1300/month for health insurance when I shopped around last summer.

So yeah, she's right about it being totally worth taking the penalty if your only choices are obtaining self-funded insurance or not (and she can't claim hardship, like being unemployed).

However, employers will get socked so much harder for not making health insurance complementary to employee's pay packages.

This was essentially the Democrats saying, "Ok, you biatched and moaned about keeping health care linked to employment, so we'll do it your way!"

My god. I'm in your same position as far as demographic and there is no way in hell I could pay those rates. Thankfully, I'm under 27 (or is it 26) and may continue to leech my parent's insurance from their employers.

I think something ate my reply to this so I'll try again

Where are you that insurance for a 27 year old costs that much? I just did a quick look at eInsurance.com for a 30 year old in Orlando , Florida and policies from major (Aetna, Cigna) cost on the order of $100 per month [non-smoker].

In my state I can get insurance from the high-risk pool for $650 per month and that's for someone 2x that age.

Those numbers seem waaayyyy high

Qaiwolf		2012-06-27 03:52:10 PM

kingoomieiii: miss diminutive: [2.bp.blogspot.com image 400x250]

RUFIO WANTS FREE-MARKET HEALTH CARE SYSTEM!
RUFIO!!!

If you know what I'm talking about, you can't un-hear it now.

Zuko is SO last Avatar incarnation. These days it's all about Iroh.

media.tumblr.com

Wendy's Chili		2012-06-27 04:09:00 PM

BillCo: It's really pretty simple.

Get this man a Nobel Prize!

regindyn		2012-06-27 04:16:21 PM

KhanAidan		2012-06-27 04:27:45 PM

Debeo Summa Credo: Slaves2Darkness: "When the government spends that dollar, they're going to be a lot less efficient, a lot less stimulative," he said.

Ummm...no. Just no. You sir are so ignorant of economics that you should shut up right now.

The truth is their is that the government is more efficient, more stimulative when spending money then the individual. There is even a name for it, it is called the money multiplier, the money multiplier is if the government spends X they get X + Y increase or stimulation in the economy.

Now then you can have a negative money multiplier of the government is taking more money out of the economy then it is possible for them to put back in, but the latest research indicates that point is some where between a top marginal tax rate of 60-70%.

Citation please on the "latest research". I'm honestly interested.

Money spent by consumers and investors has a multiplier as well.

Here's a couple of links about the government expenditure multiplier:

Link
Link

Basically, as interest rates near the lower bound at zero percent, government multipliers tend to skyrocket above 1. In a 'normal' economy however the government multiplier will fall below that as crowding out and inefficiencies take hold.

I don't know about some of the other stuff Slaves2Darkness mentioned. I think part of the idea might come from the loss due to savings rates. In our current economy, money that is being hoarded in savings is not being multiplied out through the banks. I would say that currently the government expenditures multiplier will be larger than the multiplier from consumption propensity until banks are lending at higher rates.

HellRaisingHoosier		2012-06-27 04:34:48 PM

Americans, that is your future Vice President.

Ha ha ha ha ha!

TyrantII		2012-06-27 04:41:57 PM

KhanAidan: Debeo Summa Credo: Slaves2Darkness: "When the government spends that dollar, they're going to be a lot less efficient, a lot less stimulative," he said.

Ummm...no. Just no. You sir are so ignorant of economics that you should shut up right now.

The truth is their is that the government is more efficient, more stimulative when spending money then the individual. There is even a name for it, it is called the money multiplier, the money multiplier is if the government spends X they get X + Y increase or stimulation in the economy.

Now then you can have a negative money multiplier of the government is taking more money out of the economy then it is possible for them to put back in, but the latest research indicates that point is some where between a top marginal tax rate of 60-70%.

Citation please on the "latest research". I'm honestly interested.

Money spent by consumers and investors has a multiplier as well.

Here's a couple of links about the government expenditure multiplier:

Link
Link

Basically, as interest rates near the lower bound at zero percent, government multipliers tend to skyrocket above 1. In a 'normal' economy however the government multiplier will fall below that as crowding out and inefficiencies take hold.

I don't know about some of the other stuff Slaves2Darkness mentioned. I think part of the idea might come from the loss due to savings rates. In our current economy, money that is being hoarded in savings is not being multiplied out through the banks. I would say that currently the government expenditures multiplier will be larger than the multiplier from consumption propensity until banks are lending at higher rates.

Which is why FED policy of 2% inflation for infinity is bunk. FED needs to get off it's inflation fellation and worry more about employment. Right now they're policy is to protect those large cash reserves that companies are hoarding, at the expense of making sure the labor market clears.

paulleah		2012-06-27 04:46:36 PM

Taxes dont remove money from the economy, but they do reprioritize spending and remove it temporarily from the free market. They certainly slow and divert money, which in many cases is as good a removing it. Especially if they are sending it overseas for something.

I would really rather give money to my local feed store or local farmers market than give it to the gubbermint to then have them cut a subsidy check to a farmer.

Citation Needed		2012-06-27 04:46:46 PM

BillCo: Hey Subby, when did you get your GED in economics?

Money taken as taxes does not encourage growth. People who are allowed to spend the money they earn do encourage growth.

It's really pretty simple.

Well if a group of people are hoarding money and paying 1/2 of what most others do in taxes get their tax rate bumped up a bit and that money goes to paying for federal workers and constuction crews that spend 80%+ of their pay then that would be a tax increase that would stimulate growth. Unless that is you think people that just accumulate wealth and don't actually spend hardly any of it somehow 'grows' the economy then I guess my point is moot.

notShryke		2012-06-27 04:50:08 PM

HellRaisingHoosier: Americans, that is your future Vice President.

Ha ha ha ha ha!

Says the guy voting for Joe Biden. Haha.

xaks		2012-06-27 04:52:37 PM

CheatCommando: NewportBarGuy: People actually believe this sh*t?

The alternative is to admit that just about everything they stand for is not only wrong, but evil. People do not make such large leaps easily.

Sad but true. Rubio are Romney are a match made in heaven this way.

notShryke		2012-06-27 04:54:51 PM

Citation Needed: Well if a group of people are hoarding money

No such thing. It's a myth. Jesus, do you honestly think rich people purchase mattresses and stuff them with cash??

that would be a tax increase that would stimulate growth

Wealth re-distribution has never stimulated growth. Ever. At its best, theoretical best, it serves to stabilize spikes. Growth comes from the private sector, specifically the owners and runners of businesses.

KhanAidan		2012-06-27 05:06:22 PM

notShryke: Citation Needed: Well if a group of people are hoarding money

No such thing. It's a myth. Jesus, do you honestly think rich people purchase mattresses and stuff them with cash??

No, but banks are. These banks are not lending their reserves:

Link

Currently there's about 750 billion dollars in excess reserves that normally would be flowing through the economy.

scandalrag		2012-06-27 05:33:16 PM

quiotu: Slaves2Darkness: BillCo: Hey Subby, when did you get your GED in economics?

Money taken as taxes does not encourage growth. People who are allowed to spend the money they earn do encourage growth.

It's really pretty simple.

Money taken as taxes spent on goods in services by the US government has a bigger positive impact on the GDP then individuals spending that same money when that spending is on goods manufactured in the US and services provided by US individuals and firms. It's really pretty simple and any Macro Economics 101 course will explain it to you.

Also, here's a question for all those supporting less taxes so the 1% can spend more in America.

How does them buying an Italian sports car and going gambling in Dubai help the American economy?

Just curious... or do you think America is the only economy they can spend their money in?

Well, going gambling in Dubai helps the American economy because they get executed and their estate has to hire lawyers especially their heirs hire separate lawyers to fight the first group of lawyers. I would especially appreciate that since my firm handles Dubai's investments in gambling and I am a partner in the Estates and Trusts division. That's a win-Win for me.

\The UAE may look away from drinking and prostitution generally, but they really crack down on gambling in Dubai. If you are lucky, they will only deport you if they catch you betting a buck on a soccer game or a camel race.
\\Yet they still own 50% of a casino here in Vegas.

jigger		2012-06-27 07:09:39 PM

Robespierre: BillCo: Hey Subby, when did you get your GED in economics?

Money taken as taxes does not encourage growth. People who are allowed to spend the money they earn do encourage growth.

It's really pretty simple.

If its so simple, you can then explain to me the mechanism that prevents some spending from promoting growth, when other spending promotes growth, based on the identity of the spender.

Citations encouraged.

Hmm. What about Production Possibility Curves with respect to opportunity costs?

If the government spends the money on unproductive shiat, like expensive bombs that go boom and don't do much to further create utility or wealth, then more consumers will be worse off than if they spent it on productive shiat like bridges and roads, or if the consumers were allowed to spend money goods with higher utility.

Debeo Summa Credo		2012-06-27 07:13:11 PM

KhanAidan: notShryke: Citation Needed: Well if a group of people are hoarding money

No such thing. It's a myth. Jesus, do you honestly think rich people purchase mattresses and stuff them with cash??

No, but banks are. These banks are not lending their reserves:

Link

Currently there's about 750 billion dollars in excess reserves that normally would be flowing through the economy.

You know, the alternative to banks buffeting their capital reserves is increasing their risk profile. So what you're asking for is or banks to take on more risk.

You might be fine with that but just be sure you understand that's what you're asking for.

KhanAidan		2012-06-27 07:24:01 PM

That's precisely what the Federal Reserve is worried about, thus why they started paying interest on the reserves. They believe it is more important to have the banks holding excess reserves to protect against possible future losses than to have the money moving through the economy.

I make no comment on whether this is a good idea or not, I am merely pointing out what is happening. This holding of excess reserves has basically stopped cold any multiplier effect that might have come from savings.

Goimir		2012-06-27 09:20:20 PM

BillCo: Hey Subby, when did you get your GED in economics?

Money taken as taxes does not encourage growth. People who are allowed to spend the money they earn do encourage growth.

It's really pretty simple.

But people don't spend money, they hoard it. Businesses have larger reserves than ever. Taxes are lower than ever. The wealth gap is larger than anyone alive can remember.

thrgd456		2012-06-27 09:26:07 PM

giving money to the government is the LEAST efficient way of introducing it into circulation.

DistendedPendulusFrenulum		2012-06-27 09:49:22 PM

DistendedPendulusFrenulum		2012-06-27 09:52:22 PM

Goimir		2012-06-27 09:54:25 PM

thrgd456: giving money to the government is the LEAST efficient way of introducing it into circulation.

But not using it doesn't get it into circulation at all.

Major-General		2012-06-27 10:37:38 PM

As usual, a subby who doesn't understand that G can only come at the expense of C and I. Stupid Keynesians.

KhanAidan		2012-06-27 11:39:16 PM

Major-General: As usual, a subby who doesn't understand that G can only come at the expense of C and I. Stupid Keynesians.

Err....that's not exactly how it works.

Future consumption will fall once the government begins to raise taxes and pay down debt, but given the time value of money, the increase in G will be of a greater value than the decrease in C (though in dollar amounts they will be approximately equal). In fact empirical evidence is beginning to suggest that even in the short term we see consumption rising with government expenditures:

Link

As for the crowding out effect; a key assumption in the decrease of investment is that the economy is already on its steady-state growth path. We are not. The crowding out effect also is based upon increasing interest rates from government expenditures, something that is not happening in the U.S. In fact there is evidence to suggest that government expenditures may even have a 'crowding-in' effect on investment.

DirkValentine		2012-06-27 11:54:29 PM

MusicMakeMyHeadPound: As a healthy unmarried young male, no kids, I was quoted between $850 and $1300/month for health insurance when I shopped around last summer.

That's bullshiat. I'm 35 and was a in a face-wrecking accident 2 years ago. I got quoted in the 200-400 month range.

jso2897		2012-06-28 12:10:53 AM

I see the worm-farmers are out in force tonight.

Watching_Epoxy_Cure		2012-06-28 01:35:35 AM

NewportBarGuy:

If you have 10 DUIs and a vehicular manslaughter charge... Hey! Good luck getting car insurance. They'll give you a price, $2,700 per month. incendi: RobertBruce: There would be 'another guy' if they were allowed to sell across state lines.

They'd all relocate to whichever state was the first to allow an "unless we don't feel like paying for that today" clause in their paperwork.

Yeah, of course--that's such a problem with auto insurance.

Idiot.
There's a reason that guy has to pay that much a month, 'cause if he doesn't we will. Now which seems more fair to you, eg. he pays his own bill or everyone else does?

RobertBruce		2012-06-28 02:59:38 AM

Tyrone Slothrop: RobertBruce: NewportBarGuy: wall of rant

There would be 'another guy' if they were allowed to sell across state lines. Also, competition doesn't drive down prices in your world? Weird.(and wrong)

Except in insurance, the cost is based on the risk pool, and having competing insurers doesn't drive down cost. It's an area where the standard rules of capitalism break down. Link

That's even worse of an argument. ALL pools increase in size if the national population as a whole is what they, the insurance companies, are competing for.

BigBooper		2012-06-28 03:14:35 AM

notShryke: HellRaisingHoosier: Americans, that is your future Vice President.

Ha ha ha ha ha!

Says the guy voting for Joe Biden. Haha.

I really, really hope Romney goes with Paul Ryan. I'm sure he won't, but imagine how much better American politics would be if politicians laid their cards on the table. You know, actually told people what they believed in, and what they would really try to do if they got elected.

As opposed to now, when the best way to get elected is to make a massive amount of wildly unrealistic promises. Fark. Some Republicans actually believe that if Romney is elected that he will bring forth some sort of free market utopia with zero taxes. You know, by shiating it out or something. And how would government services, the military, etc. get paid? Shut the fark up commie, that's how.

ds615		2012-06-28 03:20:44 AM

It's not a free market system.

In this case, I MUST buy the product. So someone is getting my money. Sure, Blue Cross wants it to be them, but if not...meh. They get the money from that guy there that MUST buy it.

It removes the major factor from the Free Market. If I no longer have the option to just not buy it, then there is no reason for the companies to lower their cost.
Every insurance company could triple their rates tomorrow, and what will you do? Right, you'll buy it anyway because you have to.

BigBooper		2012-06-28 03:27:26 AM

NewportBarGuy: 'Hey guys, I would love to buy your insurance, but I have a kid who is sick. Will you cover them as well? Because this other guy will cover them, and I'll go with them if you don't do the same.' I think that now the consumer is empowered to make that argument."

Fark me, he really said that.

Ok, real life example. I farked up my back, and will be having surgery next week. The estimate is $100,000 before we get into physical therapy, post op checkups and the like. I will pay anyone here $500 a month to pay that bill. Anyone? Anyone? C'mon, I'll pay you that EVERY MONTH! That's $6,000 a year! And you better farking cover me, or I'll go to your competitor.

Wow, I feel so empowered. I really have the hammer here.

/FYI: when lifting something very heavy, jerking and twisting when it gets catches on something is apparently the WRONG thing to do
//who knew

KhanAidan		2012-06-28 03:35:30 AM

ds615: It's not a free market system.

In this case, I MUST buy the product. So someone is getting my money. Sure, Blue Cross wants it to be them, but if not...meh. They get the money from that guy there that MUST buy it.

It removes the major factor from the Free Market. If I no longer have the option to just not buy it, then there is no reason for the companies to lower their cost.
Every insurance company could triple their rates tomorrow, and what will you do? Right, you'll buy it anyway because you have to.

I would like to point out that they would still compete in price for your business over their competitors. So long as entry is not barred, collusion should be a fairly difficult thing to maintain (empirical evidence suggests that even many of the railroad cartels were not able to retain collusive behavior). I would offer the car insurance companies as evidence of this. States require car insurance, but I do not know of any evidence of collusive behavior amongst such insurance companies.

Vangor		2012-06-28 04:08:12 AM

RobertBruce: There would be 'another guy' if they were allowed to sell across state lines. Also, competition doesn't drive down prices in your world? Weird.(and wrong)

Nothing stops insurance companies from selling in other states except the will of the companies themselves. What insurance companies want is to avoid state law concerning coverage by having state lines open and policies sold to be influenced by the laws of the states those companies are based out of.

ds615: It removes the major factor from the Free Market. If I no longer have the option to just not buy it, then there is no reason for the companies to lower their cost.

Would argue two or more competing groups have a greater incentive to reduce costs due to a much larger market. Price difference is made up by volume. Further, establishing and maintaining greater market share gives you more control over the direction of the market.

Cookbook's Anarchist		2012-06-28 05:55:33 AM

Debeo Summa Credo: Well, how much does giving additional handouts to the poor add to the economy, when they spend it on imported Chinese items at Walmart, if you want to cherry pick potential places to spend cash? Or do you think all dollars spent by the poor stay in
the US?

Umm, if they are spending it at Walmart, then the money serves to employ and train people to work at that Walmart, which is located in the US. In turn, employed people will spend more at shops and businesses in the US. The problem seems to be where the entity Walmart spends its billions in profit. Since Walmart is buying the cheap crap from China, it is Walmart that is shipping our money overseas.

Even if people are ordering online, chances are that the money is still being circulated in the US. If you purchased your raw materials from outside the US, then you are the problem not the people that buy your assembled products in the US.

Cookbook's Anarchist		2012-06-28 06:02:08 AM

MusicMakeMyHeadPound: The annual penalty is either $95 or 1% of income (whichever is greater) except if you can prove financial hardship. As a healthy unmarried young male, no kids, I was quoted between $850 and $1300/month for health insurance when I shopped around last summer.

As a healthy unmarried young man, also no kids, I currently pay $100 for health insurance. Not a quote, an actual payment. The best insurance I could get would still only cost $300-$400.

If people opt out and take the punishment, isn't that money still going to spreading the risk? Or is that woman suggesting that government will just pocket the fee and not spend it (which I'm pretty sure, never happens).

Bruce Campbell		2012-06-28 08:02:16 AM

Cookbook's Anarchist: As a healthy unmarried young man, also no kids, I currently pay $100 for health insurance. Not a quote, an actual payment. The best insurance I could get would still only cost $300-$400.

If people opt out and take the punishment, isn't that money still going to spreading the risk? Or is that woman suggesting that government will just pocket the fee and not spend it (which I'm pretty sure, never happens).

It's a tax penalty. Being that it's the government collecting it, a portion of it might go into some trust for that purpose, but more than likely it will end up in the general fund. It's the compounding problem of adverse selection that is even more troubling. Once enough people realize the penalty is cheaper than having insurance, they won't purchase insurance. Since the reform act also prevents insurers from excluding pre-existing conditions a few years down the road, there is no impetus to be insured until something bad happens to you, so the majority of what you will have in a health insurance plan are sick people, thus making the offer of insurance by a for-profit business a losing endeavor. That is, unless they can revise rates to make up for it, which the states won't likely approve the full amount of the request or deny a rate increase outright. If you're for that, fine, but that would be the endgame of the plan as it is would be a single payer. Whether that is right or wrong is moot.

LiquidSky		2012-06-28 08:04:15 AM

Debeo Summa Credo: KhanAidan: notShryke: Citation Needed: Well if a group of people are hoarding money

No such thing. It's a myth. Jesus, do you honestly think rich people purchase mattresses and stuff them with cash??

No, but banks are. These banks are not lending their reserves:

Link

Currently there's about 750 billion dollars in excess reserves that normally would be flowing through the economy.

You know, the alternative to banks buffeting their capital reserves is increasing their risk profile. So what you're asking for is or banks to take on more risk.

You might be fine with that but just be sure you understand that's what you're asking for.

Uh, Dubeo & KhanAidan ... Excess reserves != capital reserves. The "excess reserves" earning interest at the Fed are customer deposits, over and above the 10% reserve requirement. Capital reserves is money/stuff that is actually owned by the bank itself (retained profits from previous years, current value of the land the bank sits on, etc, etc) ... this is not sitting on deposit at the Fed.

Capital reserves buffer investors from the risk of bank going bankrupt. Reserve requirements buffer depositors from the risks of a bank-run. Totally different types of risk. Totally different piles of money.

KhanAidan: That's precisely what the Federal Reserve is worried about, thus why they started paying interest on the reserves. They believe it is more important to have the banks holding excess reserves to protect against possible future losses than to have the money moving through the economy.

I make no comment on whether this is a good idea or not, I am merely pointing out what is happening. This holding of excess reserves has basically stopped cold any multiplier effect that might have come from savings.

I think you're confusing the side-effect for the intended result. Read the link you posted. What the Fed was trying to do was be a lender-of-last-resort to Bank B (so that Bank B [which had a lot of mortage customers but few depositors] could continue lending to the public exactly as was doing pre-GFC, even though Bank A was too chicken to lend to it). The side-effect is that Bank A ends up with excess reserves. Normally that side-effect would then lead to a lowering of the inter-bank rate (as A got desperate to put their money to work & started offering it around cheaper), but the Fed chose to pay interest on excess reserves specifically to prevent that happening (because they were worried about the interest rates falling too low.)

jodaveki		2012-06-28 08:30:18 AM

Thank goodness guys like Rubio, who understand all these complicated numbers and graphs and equations, are in charge! If not for men of his calibre, we'd be a ship lost at sea!! Gosh!

MusicMakeMyHeadPound		2012-06-28 08:58:23 AM

DirkValentine: MusicMakeMyHeadPound: As a healthy unmarried young male, no kids, I was quoted between $850 and $1300/month for health insurance when I shopped around last summer.

That's bullshiat. I'm 35 and was a in a face-wrecking accident 2 years ago. I got quoted in the 200-400 month range.

It's God's honest truth.

I live in New York's Capital District Area. Insurers contacted were:
Emblem Health
HealthyNewYork
CDPHP
MVP

Lowest rate was EmblemHealth at $850 for basic care. Highest was CDPHP at $1300.

I would encourage you to research it yourself.

ds615
It's not a free market system.

In this case, I MUST buy the product. So someone is getting my money. Sure, Blue Cross wants it to be them, but if not...meh. They get the money from that guy there that MUST buy it.

That's how it has been, though.

Part of my pay package is health benefits. I disapprove of my employer's choice of insurer and I can't get them to allow me to freely allocate the roughly $10,000/yr portion of my compensation that goes to pay for it.

My paycheck does not go up for declining benefits and Blue Cross charges by employee headcount.

KhanAidan		2012-06-28 01:28:54 PM

LiquidSky: Uh, Dubeo & KhanAidan ... Excess reserves != capital reserves. The "excess reserves" earning interest at the Fed are customer deposits, over and above the 10% reserve requirement. Capital reserves is money/stuff that is actually owned by the bank itself (retained profits from previous years, current value of the land the bank sits on, etc, etc) ... this is not sitting on deposit at the Fed.

Capital reserves buffer investors from the risk of bank going bankrupt. Reserve requirements buffer depositors from the risks of a bank-run. Totally different types of risk. Totally different piles of money.

You are correct about that part. Capital reserves are the main form of protection against asset risk, in our current climate however banks are also holding excess reserves to maintain liquidity outside of asset deflation given the previous fears of possible bank runs occurring because of the crisis. It happens anytime there becomes uncertainty in the market. Generally I've tended to believe that asset risk more or less directly moves liquidity risk, I should have been more clear in what I was trying to say, my fault.

LiquidSky: KhanAidan: That's precisely what the Federal Reserve is worried about, thus why they started paying interest on the reserves. They believe it is more important to have the banks holding excess reserves to protect against possible future losses than to have the money moving through the economy.

I make no comment on whether this is a good idea or not, I am merely pointing out what is happening. This holding of excess reserves has basically stopped cold any multiplier effect that might have come from savings.

I think you're confusing the side-effect for the intended result. Read the link you posted. What the Fed was trying to do was be a lender-of-last-resort to Bank B (so that Bank B [which had a lot of mortage customers but few depositors] could continue lending to the public exactly as was doing pre-GFC, even though Bank A was too chicken to lend to it). The side-effect is that Bank A ends up with excess reserves. Normally that side-effect would then lead to a lowering of the inter-bank rate (as A got desperate to put their money to work & started offering it around cheaper), but the Fed chose to pay interest on excess reserves specifically to prevent that happening (because they were worried about the interest rates falling too low.)

I misspoke, sorry. That was one of the reasons that had been put forth for why the interest on reserves would be a positive thing. The idea being that as the economy got better and banks were more willing to lend, the interest on reserves could be reduced to 'slowly' free money back into the system in such a way as to prevent overt inflation. At the time there were other reasons given for it, including the one you mentioned. I should not have indicated that what I said was the only (or main) reason for the decision

LiquidSky		2012-06-29 05:38:44 AM

KhanAidan: Capital reserves are the main form of protection against asset risk, in our current climate however banks are also holding excess reserves to maintain liquidity outside of asset deflation given the previous fears of possible bank runs occurring because of the crisis. It happens anytime there becomes uncertainty in the market. Generally I've tended to believe that asset risk more or less directly moves liquidity risk, I should have been more clear in what I was trying to say, my fault.

No worries then, we agree :)

To be honest, I actually forgot to fully think through the effect of asset-risk on liquidity in the US system. I'm far more familiar with the Aussie system, which is a little different when it comes to liquidity-risk. Basically our banks are comparatively bigger (given the tiny size of the country), there's a lot less of them, and their portfolios are very, very similar ... there's no realistic scenario where just 1 bank would be facing a liquidity issue - if one was in trouble they'd all be. In that case the RBA (our version of the Fed) would obviously step in with extraordinary measures. Therefore, there's no real reason for our banks to accumulate liquidity buffers - they know they can rely on the RBA as lender-of-last-resort. (We don't even have a reserve requirement ... even the tiniest hint of a bank run and the RBA will have to step in to provide emergency cash.) The US has a far wider range of bank portfolio structures and the Fed has shown that they'll let certain banks collapse. In that scenario, a liquidity buffer does make sense.

I misspoke, sorry. That was one of the reasons that had been put forth for why the interest on reserves would be a positive thing. The idea being that as the economy got better and banks were more willing to lend, the interest on reserves could be reduced to 'slowly' free money back into the system in such a way as to prevent overt inflation. At the time there were other reasons given for it, including the one you mentioned. I should not have indicated that what I said was the only (or main) reason for the decision

Again, no worries, we agree ... multiple reasons it was.

/And stop being so polite, I keep thinking I've wandered off Fark :P

KhanAidan		2012-06-29 11:09:59 AM

LiquidSky: No worries then, we agree :)

To be honest, I actually forgot to fully think through the effect of asset-risk on liquidity in the US system. I'm far more familiar with the Aussie system, which is a little different when it comes to liquidity-risk. Basically our banks are comparatively bigger (given the tiny size of the country), there's a lot less of them, and their portfolios are very, very similar ... there's no realistic scenario where just 1 bank would be facing a liquidity issue - if one was in trouble they'd all be. In that case the RBA (our version of the Fed) would obviously step in with extraordinary measures. Therefore, there's no real reason for our banks to accumulate liquidity buffers - they know they can rely on the RBA as lender-of-last-resort. (We don't even have a reserve requirement ... even the tiniest hint of a bank run and the RBA will have to step in to provide emergency cash.) The US has a far wider range of bank portfolio structures and the Fed has shown that they'll let certain banks collapse. In that scenario, a liquidity buffer does make sense.

Argh, stupid Amero-centric economics. I hadn't really thought of the existence of such a banking system set-up in other countries. That's very interesting, thank you for sharing. I think I may go poking around for more information on non-American banking systems.

LiquidSky: Again, no worries, we agree ... multiple reasons it was.

/And stop being so polite, I keep thinking I've wandered off Fark :P

I figure you catch more interesting posts with calm than with flames :)

soj4life		2012-06-29 02:31:40 PM

FTA: Rubio said that taxes remove money that was going to be spent into the economy. "When the government spends that dollar, they're going to be a lot less efficient, a lot less stimulative," he said.

Agreed, not all government spending is efficient. You know, like the $18 billion we spend on just ac for the military in Afghanistan. Or the $5 billion spent on camo that failed. or the $17 billion they wasted on radios that do not work.

dstrick44		2012-06-30 12:04:05 AM

soj4life

Smartest
Funniest
2012-06-29 02:31:40 PM
FTA: Rubio said that taxes remove money that was going to be spent into the economy. "When the government spends that dollar, they're going to be a lot less efficient, a lot less stimulative," he said.

Agreed, not all government spending is efficient. You know, like the $18 billion we spend on just ac for the military in Afghanistan. Or the $5 billion spent on camo that failed. or the $17 billion they wasted on radios that do not work.

All the spending you just cited went to private companies.
An HVAC company scammed the government, etc...
That's what people seem to forget. The government doesn't build roads themselves. They hire private companies to do the work.
They don't do the high voltage shower wiring. Private companies do that.

Whether the products work or not, that money is in private hands now. Stimulating the nation. The WORLD, even. Can you feel the tingle?

I'm more worried about the 23 billion that went unaccounted for in Iraq.

How does camo fail, incidentally?

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