Interesting article on US surplus turning into massive debt

[RocketMan]

Reagan was not the first to increase spending or to go into debt; that really started to take off in the 1960s.  

An interesting statement, especially when it is Congress that actually controls the budgetary purse strings.  The President's budget is little more than a formality.  Also, does anyone remember when the phrase, "Dead on arrival", was first conspicuously used in reference to a budget submitted by a President to Congress?

[Monkeyleg]

As Obama has said, we need to have spending reductions in the tax code.

[brimic]

Jobs would definitely be the best answer.

and where will these jobs come from?

[Ron]

and where will these jobs come from?

government investment :)

[TommyGunn]

Reagan was not the first to increase spending or to go into debt; that really started to take off in the 1960s.

An interesting statement, especially when it is Congress that actually controls the budgetary purse strings.  The President's budget is little more than a formality.  Also, does anyone remember when the phrase, "Dead on arrival", was first conspicuously used in reference to a budget submitted by a President to Congress?

True, but really, not exactly my point.  Reagan argued for a cut in the size of government but never got much more than a reduction in the rate of growth in social programs.  He also increased spending on the military, which was decimated by Peanut Carter.

[SteveT]

I spent part of last year living and working in China.   The subway in Beijing is 20 cents, the buses 5 cents (must be gov subsidy).  The average manufacturing worker in China makes around 2000 RMB ~ $300/month although it's going up.   This for a 7 day week, no benefits, no unemployment insurance, no OSHA, no nothing.   

We could lower corporate and personal tax rates to ZERO and those jobs wouldn't come here.   In fact it's likely and it's currently happening that companies are leaving CHINA because it's too expensive, India is much cheaper.

[brimic]

Chinese business practices aren't always on the up and up either. You look to cut manufacturing costs by procuring cheaper materials from China, they send send you something that meets and exceeds specifications so that it passes your qualification testing, then almost invariably they send you a shipment of junk, which you are stuck with. Sure you can try to  send it back, but you have to deal with shipping/customs, but usually the vendor will blame you or the shipping company for the low quality and won't take returns on it. You end up eating the cost and disposing of the materials.
There has been a trend to outsourcing to India as well, but with the same problem as China.

[SteveT]

Chinese business practices aren't always on the up and up either. You look to cut manufacturing costs by procuring cheaper materials from China, they send send you something that meets and exceeds specifications so that it passes your qualification testing, then almost invariably they send you a shipment of junk, which you are stuck with. Sure you can try to  send it back, but you have to deal with shipping/customs, but usually the vendor will blame you or the shipping company for the low quality and won't take returns on it. You end up eating the cost and disposing of the materials.
There has been a trend to outsourcing to India as well, but with the same problem as China.

I don't think WalMart has that problem.

[brimic]

lol, so true.

Problem is, my career has been in the pharmaceutical/chemical industry.
When you get reagents in that are going to be used to make drugs that contain iron filings, bugs, hair, grass clippings, etc, there are going to be problems. Ditto that for chemicals that are used in moisture sensitive reactions that show up on our dock in a sealed drum with a few inches of water in the bottom.

It seems the chinese industrial model is to make things as quickly and cheaply as possible with no quality controls whatsoever. We complain about  or even boycott gun manufacturers where we hear an internet rumor of a MIM part breaking once, but we'll still go down to Walmart and buy a socket set made out of pot metal. They keep producing because there are enough suckers on our end that keep buying.

[SteveT]

At some point you have to ask yourself if you could live on $10-$20/day.   Because you probably will have to.

Doctors are the next stop for the magical outsourcing machine.   In Thailand I got pay as you go western quality full checkups for $250.  Everything included.  
They don't have pharmacists in Thailand, or anywhere in Asia where I've been.  You just go to a drugstore and buy whatever you want.   I don't know if this includes morphine and the like but it does includes most normally prescribed medicine.  These doctors will either immigrate or the jobs will done via broadband. Being a doctor will be a high 5 figure job in the US within a couple decades.

The USA has never been an exceptional country, just geographically lucky.

[De Selby]

Doctors won't be outsourced because they have a powerful union, and the insurance companies make a fortune off of them.  Don't worry - market conditions will soon make travel for medicine unaffordable for most, so the cheap Thai and Indian doctors won't be a threat.

America is well on its way to becoming a third world country.  I'd like to come back to this thread in five years and see how hit everyone is on finance, corporations, and the free market.  The place is already noticeably poorer and run down than when I left, and I see no reason why that will reverse between now and then.

[SteveT]

The Thai and Indian doctors will come here.   Forget about unions,  Good lord how backwards are you!   

It's $10/$20 a day for the lucky ones, and medical experiments for the rest.

I'm pushing the 29th amendment.  If you don't speak at least two languages, your citizenship is revoked and you're deported.

[makattak]

At some point you have to ask yourself if you could live on $10-$20/day.   Because you probably will have to.

Doctors are the next stop for the magical outsourcing machine.   In Thailand I got pay as you go western quality full checkups for $250.  Everything included.   
They don't have pharmacists in Thailand, or anywhere in Asia where I've been.  You just go to a drugstore and buy whatever you want.   I don't know if this includes morphine and the like but it does includes most normally prescribed medicine.  These doctors will either immigrate or the jobs will done via broadband. Being a doctor will be a high 5 figure job in the US within a couple decades.

The USA has never been an exceptional country, just geographically lucky.

BWAHAHAHAHAHAHAHAHAHAHAHAHAHA

...breathe... breathe...

So geography is destiny? That's cute.

$250 a visit? How long was the visit? Half an hour?

That's a pretty good wage. Doctors are probably not worth the current wage in the United States as supply is controlled by a cartel. We also use doctors (are REQUIRED to use doctors) for things that can be done by less skilled labor.

De Selby may be right that we are on our way to a third world country. As usual, he blames the wrong cuplrit, though.

I don't love corporations, De Selby. They are heartless and willing to do anything for a profit. (Which is their purpose.) I don't hate them, either, because the only way they can harm me is by cheating me at which point they will never have my business again.

It's only when the government gets involved that they can cheat me without my permission. You know, like GE.

[MillCreek]

Working in healthcare as I do, if you take away medical tourism, there are only a few medical specialties that can be done remotely via telehealth/broadband.  'Nighthawk' radiology, whereby a radiologist on the other side of the world reads and interprets imaging studies, while it is night here in the USA, has been done for a while.  The same can be done for remote viewing of pathology samples by a pathologist.  Remote access to psychiatry is done in some locales.  Some consultations by internal medicine subspecialists can be done remotely.  

But for those areas of medicine that require hands on examination or treatment of a patient, such as surgery, obstetrics, much of primary care, orthopedics and the like, these cannot be done via broadband or teleheath. 

Interestingly enough, two areas of society that have done the most work on telehealth access of physicians for patient care has been the US military and the prison system.  They are also the systems that make the most use of physician extenders, such as nurse practitioners, physician assistants and independent duty corpsmen/medical technicians (for the military). 

The initial enthusiasm for medical tourism seems to have really died down, according to what I read in the journals.  In part, this is due to higher travel costs plus more competitive pricing here in the US.  Medical tourism is still pretty big in Southern California, where the retirees can drive to Mexico for cheaper drugs, surgery and dentistry.  

[brimic]

They don't have pharmacists in Thailand, or anywhere in Asia where I've been.  You just go to a drugstore and buy whatever you want. 

Hence the reason why the majority of antibiotic resistant bacterial strains originate from Asia.

[De Selby]

mak

It's not true that only Government involvement leads to you being cheated - you can be impoverished, for example, if a corporation corners the market that serves you in a necessary product or service and then demands most or all of your wages as payment.  Corporations with enough cash & assets can do this and have done this in the past.  

Also, having one of the most privatised and least regulated health care industries in the world, we also have one that is by far the most expensive, procedure for procedure, on the whole, or by any other measure.  Going to be tough to blame that one on government.  Blaming torts is another common tactic, but there's no industry more protected from suit than medicine.  It's as tough to sue a doctor in the US as it is to sue a doctor in many "socialist" countries.

At the current rate, prices increases will make health care unaffordable for a majority of Americans.  I can only assume that fewer people than now will be crying about socialist medicine and the evils of regulating insurance companies.  

[makattak]

mak

It's not true that only Government involvement leads to you being cheated - you can be impoverished, for example, if a corporation corners the market that serves you in a necessary product or service and then demands most or all of your wages as payment.  Corporations with enough cash & assets can do this and have done this in the past. 

Also, having one of the most privatised and least regulated health care industries in the world, we also have one that is by far the most expensive, procedure for procedure, on the whole, or by any other measure.  Going to be tough to blame that one on government.  Blaming torts is another common tactic, but there's no industry more protected from suit than medicine.  It's as tough to sue a doctor in the US as it is to sue a doctor in many "socialist" countries.

At the current rate, prices increases will make health care unaffordable for a majority of Americans.  I can only assume that fewer people than now will be crying about socialist medicine and the evils of regulating insurance companies. 

Yes, a corporation that achieves a monopoly on a necessary product could do that. It's VERY hard to do and I challenge you to provide an example of a company that has done that (and then raised prices to monopoly levels) without government aid.

We have all kinds of messed up incentives in healthcare in this country. We have a disconnect of the consumer from the price, we have massive regulations and cartel control, and the government pays for 40% (roughly) of the healthcare consumed in this country. "That market" is only marginally involved in healthcare. Instead, we have all the drawbacks of a government controlled system and none of the benefits. Instead of consumers deciding how to best allocate scarce resources, we have 3rd parties doing it.

Torts need to be reformed as well, but they are not driving most of the increased costs. Screwed up incentives, regulations and a cartel are.

[De Selby]

What government interference drives health care costs, and how would removing it lower costs?

You're right that it's hard to gain a monopoly, but collusion to fix prices also creates the same problem - that's something that happens despite its being illegal. 

One other reason why it makes little sense to say "hands off corporations" is that they buy Government influence as their resources increase; it's dangerous for consumers to abide by free market principles when we know corporations will not (they, as you said, exist to make money).

[makattak]

What government interference drives health care costs, and how would removing it lower costs?

You're right that it's hard to gain a monopoly, but collusion to fix prices also creates the same problem - that's something that happens despite its being illegal. 

One other reason why it makes little sense to say "hands off corporations" is that they buy Government influence as their resources increase; it's dangerous for consumers to abide by free market principles when we know corporations will not (they, as you said, exist to make money).

Government interference in that health insurance comes from pre-tax wages so that most people get health insurance through their jobs. That's a huge distortion to begin with.

Collusion can do the same thing, but it's still very hard to do without another party enforcing it. (Usually government.)

I'm well aware corporations can't be trusted:

“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

That was Adam Smith. I don't trust corporations. I just trust the government less. I want it to have less power so it doesn't really matter if the corporations capture it.

[Monkeyleg]

It's too early in the day for me to reply to De Selby about anything except perhaps the weather.

While it's true that we have a trade imbalance with China, we should keep in mind what it is that they're selling to us, and what we're selling to them. They're selling the low-tech cheaper items to us, and we're selling them higher-tech, more expensive things. The items we sell to them are products of much higher-paying jobs than the items we buy from them.

There are many companies who've had it with the poor quality, too. I remember doing a photo shoot for West Bend cookware. They stopped having their coffee makers and other appliances made in China for a couple of reasons. One is the cost of their money. While those ships are at sea, and the company is waiting on delivery, they're paying for the use of their money. In the end they figured they would make more money by having shipping times shortened.

The other problem was with quality. The parts didn't always fit together properly. The black coffee makers would be assembled using the handles for the white coffee makers. They wound up either fixing or throwing out a lot of product. It just wasn't cost efficient for them.

[TommyGunn]

Also, having one of the most privatised and least regulated health care industries in the world, we also have one that is by far the most expensive, procedure for procedure, on the whole, or by any other measure.  Going to be tough to blame that one on government.  Blaming torts is another common tactic, but there's no industry more protected from suit than medicine.  It's as tough to sue a doctor in the US as it is to sue a doctor in many "socialist" countries.

It's pretty easy to claim other countries have "cheaper" health care when many countries are socialized and the patient isn't paying for it, but in fact they really are, just through their taxes.
And whether you like it or not, legal problems cost a huge amount of money in our system.  Why don't you ask any doctor how much he pays in insurance costs against these problems.  I would bet you would be stunned.
My parents spent a few years of their life living in Scotland and dealt with the socialized healthcare system they have.  The ONLY good thing I will say about the  health care there was that they took my 93 year old grandmother off half the drugs American doctors had put her on and this improved her mental acuity greatly.
The paperwork, the medical practices ... all were atrocious or second rate.  Call an ambulance where my parents lived ....a panel truck with a cot is what it is.  No resuscitation equipment.... noit heart monitoring equipment, nada.
Need to see a specialist?  You're gonna wait for months.  
Could go on.
Is our system perfect?  Hardly.  But Obama's "solution" will turn ours into what theirs is now.
As it is, our system is hardly the "least" regulated.  Many of the problems surrounding the expense of health care insurance is a direct result of being REGULATED.  This is also a big problem on a state basis.  In Connecticut, for example, healthcare insurance must pay for hair transplants.
Why?  This is vanity and unnecessary .... and it raises the costs of insurance for all policyholders.  
And examples like that abound.  If insurance companies were freer to operate in interstate ways it would open up a lot of competition and that is the best palladium to high prices.