I'll start out by saying that you'll notice in this post a few things that I omitted last time- thats what I get for posting so late, I'm only
One area in which we have had difficulty communicating so far seems to be as to the nature of research and supporting arguments.
As is probably frustratingly apparent from my hesitance regarding fairtax, I really don't like taking a people's word for it, even if between them
they've got more degrees than a baking thermometer (which the who's who of fairtax supporters have). So if what you ask of me is an impressive
veritable library of abstracts on various studies hosted by a single organization and signed off on by a pantheon of professors, I won't pretend to
have it. I don't have any clue who Lawrence Vance is, but if I had to guess, I'd say there's a good chance that I'm almost as smart as him, if not
smarter. Afterall, we agree that Math doesn't lie, so I don't need Mr. Vance to tell me what's true or not.
I generally reconstruct the argument for myself to see that it works, and I've been encouraged in this recently since reading Freakonomics (yeah,
sounds like an odd place to get your view of economics, but it's really a fun read and serves to demystify what exactly economists do). The heart of
the discipline is basically just to ask a question, determine a few potential causes, and look at not only the answer but how it works with a little
math and deductive logic. There are a great many known principles that aid this process, as well as competing schools of thought which, if vindicated,
may also help, but they aren't always essential, and not being indoctrinated to any particular school of thought can have the benefit of freedom to
pursue the answer that seems most reasonable.
In so many words, when practical I try to be my own economist. I may not have any laurels to rest on, but if my numbers and logic are sound, I don't
see the lack of a degree as a major challenge.
I apologize for that lengthy intro to my evidence, but hopefully it will help us see the relevance, though not necessarily the correctness of
In the way of evidence, I have begun with an examination of one of the hard-to-procure goods that is currently provided for in part by socialist
means, namely healthcare. (I know what a dirty word socialism is in our country but I don't have any missiles in Cuba or a plan to shoot JFK- I'm
just discussing the viability of consumer-organization carried out through the structure of government).
I took the average health insurance premium from the 2005 Report
of America's Health Insurance Plans Center for Policy Research (PDF)
(although I was working from memory from a different thread and undershot
by about 200 dollars annually: it turns out that it's 4424 annually for the average family, not 4200 as I mistakenly said). Note that this survey was
done by insurance providers and was from a large sample group, not the entire population, and so it's not a universal number to work from. It's a
starting point and we can use other numbers to check the viability of any conclusion reached.
So I divided the American population into an equal number of standard families (300 million / 4.5), then multiplied the result by the premium for an
average family, not as a perfect number but as a ballpark figure to start with- sort of a "sanity check" on current spending. The answer was if
America really did consist of nothing but standard families, two parents, and either 2 or 3 kids, the 66.6 million families in America each paying
4500 a month would equal a nation-wide 100% insurance cost of $299,700,000,000. (up from 287.4 Billion when I misquoted the average premium).
Compare that, the ballpark cost of 100% insurance, to the cost medicaid in the 2007 budget proposal: 276.4 Billion. (
graph Proposal itself
And of course that only pays for about half of the funding the states get to administer. The feds match state funds and provide grants. So roughly
double that to 550 Billion and you're in the neighborhood of what Medicaid is actually spending to insure approximately 45 million Americans
So this leaves us with a very perplexing question. Why is Medicaid, which generally helps those below the Federal Poverty Level (about 42 million
people) costing us more than the insurance industry says it should cost to ensure everyone? Medicaid is spending in the neighborhood of 13,000
annually PER PERSON (not per family!) compared to about 1,000 dollars a person privately according to my math with the numbers from AHIP.
Possibilities: 1. Medicaid is paying too much for its own internal structure. 2. The states are diverting funds. 3. Medicaid is being
overcharged/defrauded either by doctors or patients. 4. AHIP rigged the numbers.
Let's start with number 4. I found a second source that gives different numbers- the Robert Wood Johnson Foundation's State Coverage Initiative, a
health-care oriented philanthropic group. Report (PDF)
Their numbers, found on page 8, focused on employer-provided healthcare and are a little over double. They average it at 4,000 for employee only and
11,000 for a family.
If we take their numbers, you would expect full health insurance to cost 732.6 billion dollars to cover 300 million Americans, compared to medicaid
which is paying 550 Billion to ensure 42 million Americans. This would make Medicare 13,000 a person while employer provided insurance would be 2,450
Furthermore, this new source includes data on coverage, mentioning that about 15% of Americans were completely uninsured as of 2004. The vast majority
of them are people making less than 200% of the Federal Poverty Line. This is very interesting because now we know that our insurance sollution
doesn't have to address 100% coverage- 60% of people are covered by employer-provided plans, 15% are uninsured, about 15% are on public programs, and
we can deduce that about 10% then are paying for private insurance. So we actually have 30-40% of the population to address here, meaning that if we
fix medicaid, we're actually looking at a savings of 250 Billion annually before the costs of whatever reforms are calculated, but also before
reduction in medicare
needs, market forces of increased participation, and decreases in provider-absorbed costs for emergency care of the
uninsured are calculated, so we have a strong chance of saving money and providing full health insurance if we can circumvent the problem with
We can protect against most possibilities- state diversion of funds and internal costs, simply by leaving that tax money with the employers on the
condition they use it to provide health insurance. In so many words: what's better than using a consumption tax to make people able to get
healthcare? Using no tax at all to help them get it. In your opinion, is that idea at least close to as non-intrusive as the fairtax? What you're
doing is telling employers and employees "we're cutting payroll taxes big time. Get the best deal possible on your insurance and you can keep the
savings, but we do expect you to act responsibly, because if you waste that money elsewhere and still expect free healthcare, we're taking it
Originally posted by ape
honestly I have looked at every aspect of this system and it's certainly better than our current system.
For the sake of being civil and giving you and the people who've put so much effort into the idea a fair shake, I'm not denying that it could be.
But as I examined above, it is possible that there are other things better than our current system as well which might be more familiar to us, and as
such more wieldy for us. Learning the little contingencies of a new idea can be a very rough experience.
Take capitalism itself. It's been refined and come to work pretty dang well for us, a few glitches aside, but it came with these little catch 22s
that nobody would have thought of right away that required some hard lessons and subsequent regulation.
what I like about the up to the poverty level monthly prebate is that it's there to redistribute your own money that was yours to begin with,
they arent taking away from one and giving to another, they are giving back which already belonged to one in a TRUE progressive manner hence not
getting taxed on necessities.
Allow me to offer a second way of viewing this, which you are free to critique or simply disagree with, but which I think may appeal to your
curiousity if I understand your principles correctly.
Taxes buy things. They are not a charity donation, but a purchase of things that we use, such as roads, police, unemployment insurance, social
security, etc etc.
Now, if you're in poverty, and because of your prebate you effectively pay no taxes, since you don't have the money for anything but the bare
necessities, then you're not paying for the things that you recieve. You are being provided certain necessities for free, such as police protection,
and others are paying for it.
This is a necessary thing in any fair society. The poor should not be beneath the protection of the law- they deserve police protection. They are a
part of our society- not the biggest part, but they do things that need doing. It's a very mild kind of socialism.
In that respect, I don't think it's very different from current income redistribution. Its just that instead of paying for poor people's food, now
we're paying for their police. Agree?
it is up to us to make sure these crooked politcians get voted out and exposed as the frauds they are. that goes across all party
[edit on 28-1-2007 by The Vagabond]