Saturday, November 10, 2012

The healthcare dilemma

Healthcare in this country is ... well ... not of the best.  Can we all agree on that?

There are statistics thrown around about our healthcare.  How we spend the most per capita of any country in the world and yet are far from the healthiest.  (I would maintain that our diet does have something to do with that, but I will agree that there are healthcare practices in our country that are neither cost-effective nor good for people's health.)  Or how many people don't have insurance, how many have it and pay through the nose for it, how much a hospital stay costs if you're uninsured.  I don't have those numbers.

What I do have is a few experiences.  Take my pregnancy with Michael.  During that time, the portion of our insurance payment that was added to cover just me was about $500 a month, I think.  That was employer-provided health insurance, but my husband's employer.  The expectation of course was that I would have my own job and not need to be on my husband's insurance, but that wasn't the life choice I made, so insurance is expensive.  (I am on a cheaper private plan now, thank goodness.)

During that time, I was informed that my insurance provider (United Healthcare, if you're curious) would cover my out-of-network home birth.  That's a smart decision for a provider to make, considering that a hospital birth can run $15,000 or more, and my home birth would cost them $3,300.  All I would have to do is request a "gap exemption" because it was out-of-network.  (There are no in-network midwives.)  And that request would have to come from my primary care provider.  I went through two PCP's before I found one that would make the request.  It took dozens of phone calls to the insurance company and to the doctors' offices to make sure they paid the bills for those two visits and to make sure the request had been sent and was being processed.

Then Michael was born.  Once I had recovered a little I went back to my job of calling UHC.  My exemption had been approved!  Hooray.  Next I had to submit the bills, which I did, having to do it twice before they were accepted.  Weeks went by, during which I called them a lot.  Finally I discovered what had become of my claim.  It had been denied.  Apparently my exemption (which I wasn't the one to request, and which I never got to see) said "nursing services" instead of "home birth services," so it didn't apply.  The entire claim was refused.

The whole experience was like beating my head against a brick wall, over and over.  I began to feel that this is not the best way, that this could not possibly be the best way.  I seriously contemplated ditching the insurance and socking the money into savings instead, because I am a pretty healthy person whose main healthcare expense is childbirth.  But John was nervous about that and we could just manage to pay up, so that's what we did.

How does the new healthcare law help this situation?  Not at all.  Not even a little bit.  Rates will go up for those who can pay them (and we just barely can now).  Those who can't are supposed to get some option they can afford.  No one any longer has any choice whether or not to carry insurance.  And everyone is still stuck playing the runaround game with the insurance companies.  A very real danger of this game is getting billed for things that turn out not to be covered and are out of your price range, so that you aren't able to pay the bill for services you've already received.  That bill will get sent again and again, you get calls from collections, and next thing you know you no longer have any credit.

For some real fun, try asking your doctor what that procedure will cost you and whether it's covered.  You will be forwarded to his billing department, who will ask the insurance company, and if you're lucky it will get approved sometime before you're dead.  But maybe after.

Okay, so we need a solution.  Here is what our solution needs to have:
1.  No one should be turned away from treatment they truly need because of inability to pay or a preexisting condition.
2.  Everyone should have free choice about what sort of treatment they want.  No one should be forced into a hospital birth or cesarean or medication they don't want.  Care should not be rationed out based on age or disability.  There shouldn't be long waits to see doctors.

I obviously lean toward a free-market solution for this, because economic freedom and civil freedom go hand-in-hand.  Unless you have a choice about what you will and won't buy, you aren't actually free.  Keep in mind that free healthcare isn't free; everyone pays for it through taxes, including those who don't want it.  In an ideal society, as I see it, a person should have the freedom to go live in the woods and answer to nobody if he doesn't want to.  With a lot of taxes, that becomes difficult to do.

Some of the problems with healthcare could be solved through the free market.  For instance, right now, the government certifies doctors.  If you want medical care, you have to go to a person who has completed a certain educational regimen and has passed certain tests.  Because of this, they all tend to have similar opinions (learned in school), they all spent a lot on that education (which means high prices for you), and there aren't as many of them as we might like.  Sure, you could go to an alternative practitioner of some kind.  However, they will not be allowed to prescribe medication or do surgery.  (In Virginia, at least, a midwife can't carry Pitocin or methergine (both lifesaving medications in the event of a hemorrhage) or stitch small lacerations (which happen pretty much always).)  There also may not be a clear certification for trustworthy practitioners.

In an ideal free market, there can be multiple certifying organizations, and you could educate yourself and choose what sort of doctor you preferred.  If you were poor or not very ill, you might choose someone more like a licensed practical nurse or physician's assistant, both of whom are quite qualified to treat most commonly-arising illnesses, but who are legally not allowed to practice without the oversight of a "real" doctor.  Recently I read Middlemarch, and there's a bit in there about the different kinds of doctors available.  Apparently there were some major disagreements between the physicians and apothecaries, and you could get a different kind of care from each.  (This would be so interesting to research if I had the time.)

Overall costs would go down.  It costs a huge amount to keep all these insurance companies and medical billers in business.  And prices are jacked up by the hospitals because you don't always read the bill.  I believe that hospitals and insurance companies are colluding to raise prices.  The hospitals raise theirs so they can make more money, and the insurance companies agree to pay (though they often pay less, through their "special discounts," than the listed prices).  In return, the hospitals discourage cash patients.  Usually, the high prices are enough to do it, but I've even seen posted signs saying that cash patients will be charged a $75 surcharge.  What for?  Cash patients cost them nothing.  But they're hoping this will encourage you to buy insurance so they can start billing for more.  The insurance companies obviously benefit from this.  Overall, healthcare is taking a larger and larger percentage of our paychecks every year.

Ending this whole scheme would save most of us a lot of money -- but it would also put a lot of us out of work.  Healthcare is a very profitable, and growing, field.  Pharmaceuticals are America's single most profitable industry.  What if we only paid the amount it actually costs to produce those pills, instead of the steep markups the insurance companies agree to pay?  The economy would adjust, but it would take some time.

But what about the really serious problem of those too poor to pay?  Even if costs go down, there will be some people who can't pay.  How do you deal with this?

Some say the solution is really simple.  You just  make a law that says you can't deny treatment to anyone who can't pay, and you can't charge anyone a cent if they live below the poverty line.  Of course this isn't a purely free-market solution, but it seems a small enough law not to disrupt the general libertarian idea very much.

But it would cause problems.  First off, you couldn't just claim to be poor.   You'd probably have to have some registry and get your poor-person card.  (And then people would insist that everyone with a poor-person card has to be drug tested or sterilized or actively seeking a better job or whatever.  The way people would like to do with welfare recipients now.  It seems modern Americans do not believe in the deserving poor.  But say that didn't happen.)  Would you show it before receiving care, or after?  If you showed it before you were treated, do you think that might affect the care you received?  If you'd presented proof of your ability to pay, they'd be happy to wheel out the expensive MRI machine for you, but if all you had was a poor-person card, more likely they'd feel your broken wrist, say, "Feels like a sprain to me!" and slap it in a brace.

Okay, say how much money you have is confidential and they have to treat you all the same.  Money no object, everyone gets the MRI.  Eventually, the MRI machine begins to wear out and has to be fixed.  So the hospital gets it serviced.  MRI machines are expensive; the repairs cost a lot.  Suddenly we realize that the hospital in Alexandria, where almost everyone pays cash, gets a new MRI machine; while the hospital in Front Royal, where half the population has a poor-person card, gets an "out of service" sticker till further notice.

Heck, that is already where we are.  Our local hospital is painfully understaffed and undersupplied.  Every time I've ever been there, I've regretted it.  They left John waiting for hours for pain meds when he went there in agony with diverticulitis.  He was hospitalized for two days.  The whole second day was just spent waiting to be seen by a doctor so he could be okayed to start eating by mouth again.  A friend of mine went there after passing out, and was left alone in a room with her friend for hours.  It was only when the friend noticed the patient had stopped breathing and yelled for someone to come that she actually was cared for.

These aren't awful people.  They're just terribly, horribly understaffed.  And why?  Because the people here are poor.  The hospital sends out bills, but the people don't pay them.  Mostly they just come to the emergency room because they can't be turned away, but they're always there with infections that must have taken weeks to get that bad.  Being seen sooner might have helped, but no one will give them an appointment because they know they can't pay.

Elsewhere, the same thing is happening.  In Philadelphia, hospitals are closing due to lack of funds.  There is no longer (or wasn't, when I was there) a hospital within the city limits that still had a maternity ward.  It's too expensive.  Risk of lawsuit too great.  Too few people can pay.  So everyone either went to the suburbs, if they could pay, or went to the emergency room, if they couldn't.  The emergency room is no place to have a baby.

Okay, so we're back to the drawing board.  Where is the money to come from so that the poor can get healthcare?  Healthcare in America today is expensive.  That's because of the technologies available.  When your friendly doctor had nothing but a couple of bottles of penicillin and some suturing silk and plaster casting, he didn't have much overhead and could charge you a few dollars for a visit if it suited him.  Nowadays, there are so many expensive machines and medications available -- which do save lives -- but which cost a heck of a lot.  I read a blog post recently in which the mother of a preemie said that her daughter's care cost $100,000 a week.  And she had been in the NICU for a year.  Her insurance covered it.  What if she'd been uninsured?  Would they refuse to treat her daughter?  Or would they keep sending her bills until she was out on the street?  What, do we just pull the plug on anyone whose care is more expensive than we can afford? What exactly is the cost on human life?  I am all for paring down unnecessary care, stopping doing tests and surgeries just for fear of a lawsuit, but what if your choice is only to give the expensive treatment or watch a person die?  Who could ever make that choice?

A single-payer system, i.e. socialized healthcare, honestly sounds much more attractive to me.  Yes, I know that this is very un-libertarian of me.  But there has to be some special solution for healthcare, because it is a legitimate need, and because need for it does not correlate with income.  That is to say, you might be a millionaire, healthy as a horse, and never have to see a doctor; or you could be a homeless beggar and have lymphoma.  I believe the free market is the best solution to most problems, but a system is unacceptable if people have to go without food, shelter, clean water, sanitation, or medical care.  Without these things, people die.  No one should die of poverty in a country as wealthy as ours.  Private charity can handle the first four needs pretty well, and a very limited government safety net could probably handle the rest.  But the last is really, really expensive.  Only a lot of government expenditure could do it.  No charity has the budget.

Socialized healthcare has three problems:
1.  There has to be enough money to pay for it.  If there isn't, you end up with Greece.
2.  There have to be enough doctors to provide it.
3.  You may not have complete free choice of what kind of care you want.

For the first problem, there are always taxes.  But would that do it?  Canada and Great Britain seem to manage fine.  Except of course neither of those countries is the police force for the entire world.  That might be something to examine, ahem, ahem.  In other words: if we taxed everyone something roughly equivalent to what they now pay for insurance, only staggered based on income, and we ended foreign wars and occupations, we might be able to swing it.

For the second, different countries handle this in different ways.  From what I hear, Great Britain hasn't handled it all that great.  (I'd love to hear from some actual Brits on this one.)  I heard there were long wait times and the hospitals are understaffed.  But I have also heard that this isn't true in Canada.  John tells me this is because Canada has made itself something of a mecca for foreign medical students, and encourages them to come for education and a good job.  That sounds pretty clever.

For the third, the best you can really do is say, "Well, these are the services that the national system will cover for you.  If you want something different, you will have to pay for it yourself."  Of course, you may not even be able to do that because all doctors are employees of the government, and if you don't like the doctor you have, too bad, you may not be able to get a different one for love or money.  But if you want a procedure that's not covered, you could set up some kind of a system where people could pay extra for that.  And of course you can always go to an alternative practitioner if you want and can afford it.  However, with those higher taxes, you may not be able to afford it.  This is the dilemma of socializing anything: if you pay for it with taxes instead of directly, you can't choose what you get.  Whereas in a free market, everyone can choose something different without harming other people's freedom.  (That's why we say that personal freedom is best expressed in a free market.  Milton Freedman explains it much better than I do.)  But in the final assessment, I think it is more important that a mother in dire poverty can give birth in a sanitary environment with someone to hold her hand and a doctor to help her out if she needs one, than it is for me to be able to deliver with the location and attendant of my choosing.  You can die without any healthcare; you are merely inconvenienced by having healthcare not of your own choosing.

If you consider the doctors, however, freedom will be necessary for them too.  That is to say, I believe it is morally wrong to require a doctor to do anything he objects to.  I think a fair system will allow doctors to opt out of performing abortions, for instance.  This would be the wise thing to do, if you want to attract doctors to the system, to make sure you are not driving away large segments of the population from considering medicine as a career.

So, I think I just sort of endorsed socialized healthcare?  It's not an ideal solution at all.  However, it seems to be better than what we have.  You couldn't do it overnight, though, because of the huge medical and insurance industry and all the jobs that would be lost.  Sooner or later, though, I think the economy will have to transition away from that sector a bit, because it is bloated beyond sustainability, and because I don't think you can ever guarantee healthcare to everyone at current prices.  You're not only paying for treatment for sick people, but also for "economic stimulus" to keep the vast UHC call center, with which I am so intimately familiar, employing people.  That's too much, and that's one reason why I think the new healthcare law isn't going to work.  As I see it, instead of doing away with the collusion of hospital and insurance company, it's getting in on the monopoly and making it a collusion of hospital, insurance company, and government, using force to make sure we hand over our money to insurance companies who will hand it over to hospitals who hopefully will use some of that to treat the sick.

Ahem.  Didn't mean to rant.  I do not care for the new healthcare bill.

Here is an idea that's been knocking around in my head lately, though.  When I was in Italy, I was told that there were two kinds of hospitals: public hospitals, paid for through taxes, and private hospitals, paid for by those who could afford them.  In a way it was a hybrid system.  (I don't know any details beyond what I just said, but wouldn't that also make a fascinating research topic?)  I like the idea of being able to choose whether to go to a hospital that just treated everyone, with a basic package, for free, or to a hospital where you had more choice but would have to pay for it.

The concern here is that you would have horrible, dirty, run-down, overstaffed public hospitals to which no one who could help it would ever go; and nice hospitals for the rich.  (The Italian public hospitals certainly didn't look very nice, although I only saw the graffiti and broken windows on the outside, and I don't know what they look like on the inside.)  My solution is to make the public hospitals teaching hospitals.  If you want to be a doctor in the United States, you would have to do, say, five years in the public hospitals first.  (Ideally this would be considered part of your tuition for med school, making med school cost less and be more available for poor smart kids who wanted to be doctors.)  You'd get trained, you would give back for awhile, and after you'd done your rotation at a public hospital in a backwoods area like where I live, you could try to get a job at a private hospital in a wealthier area that supports it.  What this would mean is that enough of a free market would survive that you could still sustain some level of profit to motivate people to research new technologies, develop new medications, and of course go into medicine in the first place.  Your paycheck at the public hospital might be low (for a doctor), because the government can't afford to give you six figures, but you'd have the promise of maybe making more money later on in your career.  And there would still be a sector of the economy that makes its profit on health insurance, brand-name drugs, and so forth.

I am not an expert on healthcare by any means, but if I were queen of the world, I'd like to try a system like that.

What are your thoughts, you lucky few who have read down through this whole thing?  (This is what happens when I can't blog often.  I just build up a bigger deposit to dump on you all at once.)  Of the solutions I've mentioned, which do you prefer -- or have you thought of a better one?


Charming Disarray said...

I lived in the UK for fifteen months, and my roommate was a podiatry student, and she was pretty horrified by American healthcare. The problems that Americans like to talk about with socialized healthcare are greatly exaggerated. It's quite simply not true that if you get sick, you will get stuck on a waiting list and die of whatever you have. You always have the option, in the UK, of private healthcare--which is sometimes better, if you can afford it, and sometimes provided through the employer. For everyone else, there's the NHS, which seems to work just fine. One thing that struck me was the salaries for NHS doctors or healthcare providers are roughly the equivalent of teachers in the US. They don't get massive paychecks, and they don't have to go to school as long. It seems to be much less of a glamour profession than it is here. Sure, some NHS facilities are not the most up to date or ritsy. The one I went to in my neighborhood was pretty grungy, but there was nothing wrong with the care I received, and it was covered through my visa. On the other hand, everything else in the UK was pretty darn expensive, and there didn't seem to be a lot of jobs.

But I do think it's too bad that the US didn't put a system like that in place when the UK did. I think we wouldn't be in this mess now if we had. Trying to implement socialized healthcare now seems like much too little much too late. I think most people should be able to agree that insurance is a scam, though.

some guy on the street said...

The whole point of a State is to do by cooperation what ought to be done, but cannot be done privately --- that is, cannot be done with the expectation of local profit. Everyone involved benefits by it, but the accounting for that is simply too awful.

The upshot being, if there's a good reason for having a city somewhere (the local farmland will support exports, or there's a natural harbour, or a major crossroads...) then there ought to be a hospital there. It's simple justice, after that, that the hospital and the care in it should meet some minimum standard, without respect to the means immediately to-hand. Something like this is why I nurture a life-based monetary theory, that hospitals and similar things should be the primary issuing point of currency: they are where the living substance of the State are cared for. Mad, I know. But there it is: the state really does want citizens (at least for soldiers and sometimes voters), and they must be born somewhere, and cared for; so doctors and other medics who actually handle that are fundamentally servants of the State, why should not the State support them? Why shouldn't there be an Army of GPs and surgeons and nurses and orderlies? So long as they were only "deployed" in actual necessity, and where they were wanted... And that's not to say other enterprise *couldn't* run parallel services; indeed I seem to recall there's all sorts of private militiae up for hire, out there, too. Not to mention that both medecine and martial force are disciplines dominated by prudence, minimalism, and double-effect morality; it's a natural kinship.

(I have this idea in my head that the American military used to be a great bastion of Conservatism, somewhere; a reflection of "no atheists in fox-holes", perhaps. Maybe I'm off, there, but...)

Anyway, there's some rambling craziness out of my head, make of it as much or as little as you will.

Sally Thomas said...

We lived in the UK for four years and, as a family, used the healthcare system a *lot*. We had a child hospitalized; we had a baby; my husband had knee surgery. For us, as a non-tax-paying family on student visas, it was the sweetest of sweet deals in many ways. I might add that, prestigious overseas Ph.Ds not translating all that directly into full-time academic positions and being, meanwhile, pretty much total resource-drainers, we also had the (fortunately temporary) opportunity of experiencing what it's like to be on Medicaid in this country.

What the NHS seems to get right:

1. Ease of access. There's no going down to the DHS to apply for benefits and be programmed into the system, at great length, before you can go to the doctor. You simply go to your nearest GP practice with your proof of residence/eligibility, have a brief interview with whatever doctor is taking registrations at the moment (and it's always somebody -- practices tend to be fairly large), and there you are.

2.House calls and other after-hours care. I'd be willing to accept pretty much any health-care system that included a doctor on my doorstep in the middle of the night. There was a shared-call/shared-clinic system of GPs in Cambridge -- Camdocs -- who covered after-hours medical needs, both in a central clinic which you could visit at any hour, and via an on-call doctor who would make a house call if you couldn't get to the clinic (as was the case when my husband threw his back out and couldn't even walk to the bathroom). We also had a doctor from our own GP's surgery come to us when all three of the children we then had had chicken pox.

I have heard, I believe, that funding for this system was in jeopardy, and/or that fewer doctors were participating in it.

3. Ready availability of hospital care. One of our children had two bouts of severe croup our first year there, and the instant and automatic response of our GP was to send him to the hospital, where he spent a couple of days each time. Hospitals are no-frills -- no private rooms, for a start -- but nobody seems to question whether you really need to go there.

4. Same-day access to care when you're sick. You might not see *your* doctor, but you will see whoever the duty doctor is in a fairly reasonable timeframe.

5. Flexible, non-interventive, often-in-home maternity care. I LOVED having a baby in the UK. Prenatal visits alternated between in-office appointments with my GP, who saw my whole family for everything, and the practice midwife, who would come to me at home. After the baby was born (hospital birth, but with a midwife; absolutely the best birth experience of my four), the GP, the midwife, and the health visitor (aka well-baby nurse) come to see you in-home. At one point during that baby's first or second week of life, I had all three of them in my sitting room at the same time.

6. You don't -- at least, we didn't -- ever feel like numbers in a system, like second-class citizens, which was very much how we felt on American Medicaid. Our doctor knew us all, gave every impression of liking and respecting us -- he seemed to take for granted that my husband and I were good, sane parents, which was not AT ALL the impression I got from doctors who saw us as Medicaid patients -- and, because he wasn't billing us for individual appointments, would treat however many of us showed up for a given appointment, as in swabbing everyone in the family for strep when he suspected one person of having it. We still miss that doctor, though I suspect he's not practicing as a GP any more. My husband was able to move up the queue for minor knee surgery fairly quickly I think in part because our GP was in the process of specializing in orthopedics under the "resident" surgeon and working in his clinic. Anyway, he was great, and we loved him.

(to be continued)

Sally Thomas said...

OK, so as you might imagine, after all that, I don't see socialized medicine as a function of demonic possession of an entire society. But what they don't get right is as important to consider as what they do:

1. I'm not sure how to head this generally, but the impression I often got was that the NHS went shopping every year at the Merck or Roche or (your favorite big international pharma here) tag sale. In general I'm not a fan of heavy antibiotic use, but sometimes we did need them, and the forms they came in were sometimes . . . interesting. Maybe I just got weird stuff because I'm allergic to most of the standard antibiotics, but I can remember a course of doxycycline pills which I was supposed to dissolve in a glass of water, like alka-seltzer, and drink. Only they didn't really dissolve -- they just came apart in the water and floated down to form a gray silt on the bottom. So there's that. I guess I'd call it the sneaking suspicion that budget limits tend to express themselves via pharmacology.

2. It is not a good system in which to be an old person, if you are not an extraordinarily healthy old person. Now, many elderly English people whom we knew did in fact seem to be extraordinarily healthy and active, maybe because in a place like Cambridge, people don't rely on cars to get them where they need to go. Walking makes you healthier, and things like failing eyesight don't condemn you to the life of a shut-in quite as fast as they do here. But that stereotype of waiting years, in pain, for a hip replacement is not merely a stereotype. My husband's Anglican confessor was a very old man of great holiness, grace, and fortitude, which he sure needed, as he suffered for the entire four years that we knew him, waiting for his number to come up for a hip replacement. He was a retired vicar and could not afford the luxury of private insurance; by the time it was his turn for surgery, he was tremendously frail and further weakened by Parkinson's, and died soon afterwards.

My personal observations are weighted heavily to the positive -- as a young, healthy family, we had a positive experience overall. At the same time, we were not blind to evidence of budget contraints in the system, or to the effects of a very heavy tax burden on the middle- and working-class families whom we knew through our parish and our children's schools.

Sorry to run on so long. I think you've written a very thoughtful, balanced post on a subject which I ponder a lot, reflecting on our own experiences. *How* our country could effect anything like what's truly good in the NHS without its being both too much like our current Medicaid system and a backbreaker for the economy, burdening the attempts of working- and middle-class families to make comfortable lives for themselves, is really beyond me.

Sheila said...

Thanks for all the input, guys! It's nice to hear that England is managing better than "rumor" (i.e. news media outlets with an agenda, I'm guessing) would have it.

Some guy, I honestly have no idea what you mean when you say, "a life-based monetary theory, that hospitals and similar things should be the primary issuing point of currency: they are where the living substance of the State are cared for." You've said something similar on John's blog, but I can't make heads or tails of it. Do you mean that when the government prints money, they should build hospitals with it? Because if I take it the other way I could understand it, it gives me the mental image of folding up a couple of doctors and sticking them in my wallet. I'm not playing dumb here; I just don't understand what "primary issuing point for currency" means.

Sally, some of the problems you mention aren't confined to the UK. I have at least one older friend, maybe two, who are hobbling around on joints that desperately need replacing, because they can't afford to get them fixed. No lines, just no money. The wealthy, it seems, can still get their joints fixed with no wait in either country.

I guess it really does come down to possibility. Is it too late to enact such a system here? It might. On the other hand, maybe it could be done in a small way. The government could buy out some of the struggling hospitals in poor areas (like inner Philly and my own rural town) and turn them into government-run, free hospitals. This would probably work better if done on the state level, and other states could enact similar systems if they liked what they saw.

On the other hand, this new healthcare law is a step in the opposite direction. Instead of trying to pare down and introduce competition to the bloated insurance/medical/pharmaceutical complex, the law will help it extract money from individuals by *forcing* us to buy their product. This will only increase its bloat and make it easier for it to jack up prices. Meanwhile, they can say that no change is necessary because "after all, now no one is dying for lack of healthcare." It's just that everyone is going to be paying such a large percentage of our income on insurance that we can't afford anything else.

some guy on the street said...

John likes, for some reason, to express a hope that weights of ¹⁹⁷Au are a reasonable medium for commuting debt; I'm sceptical about this for various reasons, mostly because the same substance is a widely traded commodity in itself, with surprisingly variable supply, and for which the demand will only become more complicated as our technology becomes more subtle. Instead, the thing that ought to back a currency is (surprise!) the market it trades in. If one is happy to trade for gold, then let him be happy, but the only sensible reason for collecting dollars and cents is to trade in the national market.

This is a much wider thing than raw materials or other commodities; it includes infrastructure for moving goods and people; it includes transit for moving labourers and others; but at root it all exists for people.

What I mean, altogether, is that the government pays its army of doctors; there may be other armies of doctors, that's fine (it probably ought also to pay you something for what you do that others would have doctors do for them, but never mind). If the government must print money to pay its doctors, then fine: the source of the economy is the maintainance of the end of the economy. In the opposite direction, taxes should be paid to the government for use of the resources of the common good: minerals extracted, whether in mining or farming (yes, farming extracts minerals, mostly phosophorus, which accounts for about 1% of every living cell), and other things that are harder to describe. Prossibly there might be an argument for taxing the use of others' labour, being evidently a constrained resource of the common good, but I'm not sure.

Of course, the sources and sinks in a system are only one tiny facet of the dynamics: one must consider also the pressure in it, the variable potentials, friction along the way, all sorts of things...

To be sure, all my notions may well be nonsense, and I'm sure we'll never find it out by experiment. Maybe a modern Ludwig von Mieses will thoroughly exclude the possibility of any calculation in a sgots-y economics; I wouldn't even mind.

Sheila said...

I still don't really understand what you mean. Yes, of course there must be taxes. If you want to be traditional about it, you could call property taxes "rents," because that's basically what they are. (Though practically, lower taxes are good for prosperity.) And of course the government should pay its workers. What I don't like is the notion that, if the government wants to pay its workers, it can just run off a couple of trillion sheets of paper off the printing press, and call it good. That money is only worth something in so far as there isn't a lot of it around. If you make more of it, everyone's dollars become worth less. The dollars in my saving account are sitting there, dwindling in value day by day, because the government is running money off its printing presses to pay its bills.

If the government wants money, it should tax its citizens, and use that money how it sees fit. Creating new money out of nothing, however, degrades the currency. Not only does my bank account lose value, but our dollar loses value in the world market so we can no longer buy as much from other nations. This is a problem.

There's nothing special about gold. It's chosen because it's durable, limited in supply, and relatively portable. You could pick anything you wanted that fits those characteristics, though. Silver, or aluminum, or dilithium crystals (if you don't mind my nerdiness). The point is that no individual, governmental or otherwise, can make more and thus change the value of everybody else's.

Or are we still talking at cross-purposes? I'm not sure. It *seems* to me as though you are addressing the question as to whether it is *moral* for the government to tax us and to use the money for the common good; I didn't think that was under debate but I will happily concede that. But if you're talking about whether it is *practically useful* for the government to print off huge amounts of money and rack up endless debt because it can't run a balanced book like you and I have to do ... well, I would say that it is not useful or beneficial for it to do so, and given the time I could probably compile you a long list of reasons and resources to back me up.

(Hint: "given the time" means "this will probably never happen." But there's always Google.)

Belfry Bat said...

No, I'm not wondering about whether taxes are moral, but about which taxes are sensible; the ACA notion of levying a tax on waiting to get sick, and kicking-back lots of that to trickle-out reserve fund managers is obviously wrong, and everyone commenting here agrees on that, I think. I'm not interested in whether the government "has money" or when it should, I'm interested in what money means. And above all, no, I'm not suggesting it should create new money out of nothing. I'm suggesting it should issue new currency backing new value in the system, in an ammortized way, in principle in ballance with the paths by which value eventually graduates out of the system. You don't call yourself nothing, surely? And if you don't want to be a valuable addition to the national economy, you should stop trading in currency.

No, I'm not the least bit advocating free printing of cash, nor the racking-up of absurd debt. I think an economy should be measured by what intrinsically has value, and that derived values should be measured by their use for intrinsic values.

Sheila said...

You're still talking in such broad abstractions that I'm am still in the dark about what you think should be done. So, what, they should print X number of dollars every time someone's born? And somehow remove dollars every time someone dies?

I admit I'm not an economics expert, but that's the best I can make of what you just said.

some guy on the street said...

That is, in fact, very nearly what I have in mind, but not quite exactly it. The soundness of any scheme such as I'm dreaming of would mean the arrithmetic works out just like that, but it isn't necessary to make the accounting so birth/death local. Certainly one wouldn't impose anything like a burial tax; I'm sure that'd be just insulting. Instead, the idea is to counterpoise the economic refleciton of the good of human life by taxing the irreversible extraction of the materials that go into maintaining that life. You can call that "renting farmland" if you like, but it goes beyond just farms. Municipal water supplies and more mundane infrastructure all suffer depreciation, for instance, I'm sure you can think of other examples.

The marvelous thing about having a huge and diverse country like the United States is that, to a certain extent you really can run the truly impersonal things on statistics. One doesn't have to track what every farmer is doing, just the average farmer; one doesn't have to track what everyone is eating, and how long they are living, but how long anyone lives on average, and so forth. Another side of the same averaging phenomenon is behind the soundness of price discrimination, about which I am glad to recommend at least everything that Darwin Catholic has written.

I happily admit I'm not an economics expert either, but it seems quite straightforward to me that what is behind any inflation is a decoherence between how much currency is regularly circulating and the uses available for it, to which the primary determinant is the number of people actually buying things. Anyway, that's my 1½¢.

Salixbabylonica said...

"I think it is more important that a mother in dire poverty can give birth in a sanitary environment with someone to hold her hand and a doctor to help her out if she needs one, than it is for me to be able to deliver with the location and attendant of my choosing. You can die without any healthcare; you are merely inconvenienced by having healthcare not of your own choosing."

The huge problem I have with this type of system - where one does not have the choice of providers - is that in the long run, I see the removal of choice leading to the reduction of quality in our healthcare. The power to vote with your feet is the only incentive we have for healthcare to be improved. If they get our money no matter what they do, there is no incentive for them to improve facilities where people are treated poorly (either in terms of medical treatments or in terms of respect for human dignity).

Maternity care as currently available in our system is the perfect example of this - much of the cruel, unnecessary, and dehumanizing treatment that dogs the system today is only possible because women (held hostage by insurance companies who will only pay for one type of care/provider) cannot punish wrongdoing by refusing to give the offenders any further money.

In the same way, forcing us to buy insurance exacerbates the same dynamic. Because insurance is tied to one's job and not really something that an individual can choose, there are no (okay, fewer) market forces pressing the insurance company to improve customer service and compete with other companies in price. This is why the Obamacare infuriates me - it's going the exact opposite direction than that which I would like to see. We should be able to de-couple insurance completely from our jobs. Then we'd see the real costs of our health insurance, companies would have to compete for customers, and if they put us through the kind of imbecilic run-around you got with your out-of-network exemption, they'd have lost your money instantly to another company.

I'm not sure what the ultimate solution is - but I'm sure that a decrease in choice won't solve the problems and will probably make them worse. Under the current system, isn't it impossible to deny care to those who urgently need it? Won't the poor mother still have a doctor when she comes in to the emergency room in labor? Yes, many do have to choose between risking their health and risking their financial well-being, but I suspect that there is no possible solution that doesn't include the possibility of having to choose between bankruptcy and needed healthcare. Even in fully socialized systems like England, there will always be treatments that the National Healthcare won't cover - from the much needed but not essential knee surgery to the super-expensive experimental cancer treatment that might be the only thing able to save your life. In the end, I'd prefer to at least have the option of bankrupting myself for the healthcare of my choice.

Sheila said...

SB, you may be right. Less choice may make things worse all-around. But on the other hand, doctors do not, in fact, treat people without regard to whether they can pay. They can get some emergency services, but once they've let a couple of bills go by, as I understand it, you can't get an appointment. And lifesaving surgery, or hospitalization, or long-term care? I don't think you can get that at all unless you have some way to pay.

It's one thing to be willing to bankrupt yourself for the care of your choice. But what if you were told, "I'm sorry, since you're uninsured, we can't schedule you for chemo (or whatever) unless you pay upfront"? Some people are in that position, and that's what's unacceptable to me.

It really feels like we're damned if we do, damned if we don't, doesn't it?

Some guy, do you mean to say that, because we all use similar amounts of water and air and such, we should all be paying the same amount of tax? Wouldn't that be an excessive burden for the very poor? (My favorite taxation system, by the way, is sales tax. If you really object to the tax, you can choose not to buy the product. And naturally those who can afford to buy much will pay more tax. My second favorite is property tax, on the grounds that all property is "owned" to some extent by the government -- but it must not be prohibitively high. Income tax, I hate. That's basically saying "no money may ever change hands without the state getting its cut.")

I'm thinking I'd better go read Darwin Catholic if I want to get some handle on what you're saying here.

some guy on the street said...

All pay about the same amount of tax? Goodness me, you're thinking locally again, or suspect me of the same at least. *If* everyone *did* use about the same ammount of water and air and, and everyone furthermore had the *same ability to pay*, then perhaps that would be a just solution, but clearly neither is the case --- in particular, no-one is average!. In a happier world, it might work, but not here. I agree that a sales tax (but not (!) a flat one) is a perfectly sensible idea, and that it furthermore reflects nicely how the superficial backing of a currency is "the market it trades in", my opening epigram above. The principle trouble with a sales tax is actually enforcing it, until our bills and coins start doing their own paperwork --- which is not a prospect I relish. But, again, these are not an economist's complaints, but a puzzle-fiddler's. You really shouldn't pay too much attention to me... but, you know how sometimes one finds it hard to resist trying to answer a certain kind of question? That's how this sort of thing makes me feel, this week.

Anonymous said...

I believe access to basic education, basic (compassionate) healthcare, and clean water are human rights, so I like your solution.

And though I don't have Libertarian-type faith in the Free Market, I am OK with privatizing darn near everything *else*.

When do you plan to run? :)

Sheila said...

Haha, I think you and I agree kind of a lot on politics. But I would suuuuuck as a politician. Hobo Mama said so herself on my last post. I also hate public speaking. John would be fabulous as a politician, and he is active in local politics, but I don't think he's ever going to run for anything either. We're too honest, sigh.

Anonymous said...

Funny, isn't it? We aren't supposed to agree on anything, right! ;)

Well, I'd be happy with some honest politicians (and I'd vote for you)! But yeh...I don't want the job either.

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