Sunday, October 18, 2009

"Let Me Be Perfectly Clear"

In a Democracy, who provides better service, private enterprise or government? It sure as hell isn’t government. They are the biggest bureaucratic waste of time and taxpayers money. The government cannot do anything efficiently or cost effectively.

Obama accuses the health insurance industry of being deceptive and dishonest. I think it is the other way around. If this field was so lucrative in profits, there would be far more insurance companies offering services. The suggestion of government insurance pretty much puts these private companies out of business.

This health care plan won’t cover people who don’t work ( I didn’t say unemployed, there is a difference). Obama talks about the 43 million people not covered, well, they feel they don’t need it and spend the money on other things. If the worm turns, forget the other things, you will now spend it on health insurance, it will be taken out of you pay check. Then there are the 40 million people in this country illegally, they don’t need to qualify, the hospital emergency rooms will still take them.

Health insurance is relatively cheap if you are young and it gets progressively more expensive as you age. At age 65 it could be unfordable if you have retired, but that’s where the government plan kicks in. At this point, you are talking about insurance that even the insurance companies will not write without extremely large premiums. They know what their costs are, and they know what profits are. If you can keep costs and profits in reasonable perspective, you will succeed and survive. These health insurance companies seem to be doing OK.

The only real hang up we have is people don’t want the insurance until they need it. And when they need it, it is too late; the insurance companies don’t want them. Notice if you are in good health, an insurance company will offer you insurance at reasonable rates. At about the age of 55, rates start to rise and could be considered unfordable by low income workers. The individual has the option: is the 200 dollar premium per month worth it or do I skip health insurance? On a statistical basis, 8 out of 10 people without insurance, don’t get nailed and have a free ride, the other two pay the piper.

What Obama’s plan does, is get rid of the free ride. Everyone pays for health care. All of the people that didn’t pay into health care and never filed a claim now have to pay into the program.

It sounds great when government touts that the employer pays half of the Social Security tax and the employee pays the rest. If you are self employed, you get to experience the full reality of that, you pay both parts. The government wants to tax us another 20% of our earnings for health care and the employer gets to pay half. An educated guess is that 80 percent of what is paid out from premium payments, will be paid to those over the age of 65. And they already have Medicare. This health insurance program will be used TO FUND A PROGRAM ALREADY IN PLACE.

With private health insurance, your age and health determine your rates. With the government plan everyone will probably pay the same rate (keep it simple stupid). An insurance company knows down to the dime how much its needs to charge to make a profit, otherwise they face financial ruin. Does this sound like a government approach to problem solving? I doubt it.

Can the government allow private insurance to exist if everyone under the government plan pays the same rate? If they did, the insurance companies would cherry pick the young with a very good rate and the government would be stuck with the dogs. If I can’t short Bank of America or Citi Bank stock, without government changing the rules, you can see the hand writing on the wall – those thieving insurance companies need to go.

The thing that irritates me, is that it appears to be against the law to make a profit in this country (if you sell health insurance). Our Fuhrer has stated that the insurance companies are overcharging us.

I think that this guy we call president is too arrogant. This is a Democracy. It’s not his playground for solving social problems that we cannot realistically pay for.

Addendum added 10/19/09:

A government health care plan is an ambitious idea. I have no problem with the concept. The problem I have is with the excess reserves collected. Our government and its present finances are like a cocaine addict asking for $2,000 for “doctor bills.” It is obvious where it will be spent, just like our Social Security taxes were.

Social Security contributions currently are being paid out as fast as they come in. There are no excess unspent funds like there were in the past, to use in the budget. If this health care plan gets passed, figure that 10% of the funds will go towards health care and the other 90% will go towards” your account.” This means, Congress will write an IOU and spend it on the budget. It’s a little like promising your son a Corvette when he graduates from college and when the day arrives it turns out to be a Ford pickup.

The health care issue is not quite what it appears to be. Just use Social Security reserves as a measure. Congress has spent the reserves, they are gone. Your benefits come out of tomorrow's tax collections.

50 comments:

Anonymous European - not Dutch by the way said...

Dear Sir,

You should pay a visit to the Dutch medical system. Inexpensive and effective and accept to challenge your own prerequisites.

As long as the US is not paying a significant attentions to countries that have decently solved their health problem, it will not be solved.

Health is not a casual type of service. No more than defence. Even a die-hard libertarian can accept that...

Anonymous said...

It's not "inexpensive" if you take into account tax rates in Holland:


* Part of the income from EUR 0 to EUR 17,878: 33.5 %
* Part of the income from EUR 17,878 to EUR 32,127: 42 %
* Part of the income from EUR 32,127 to EUR 54,776: 42 %
* Above that: 52 %.

And don't forget VAT: 6% for food and 19% for everything else.

Inexpensive my ass..

allen122060 said...

Well, I'm sorry to tell you that you are highly mistaken. My sister, her husband and children signed up for a insurance plan in 2001, their premium was $300/month. Their health insurance premiums have risen every year for the past 9 years and is now $2600/month. I hate the health insurance companies and hope we get a real public Option thank you very much.

Jim in San Marcos said...

To anyone that posted above, I added two paragraphs to the article to clarify what I was saying. Sorry for it being so long.

Jim in San Marcos said...

Hi Allen

I think you have to look at insurance a tad bit different.

The companies are quite competitive and they do make an honest buck.

The question I asked myself a few years back, was; "How much of this health care can I be self insured for?" What sort of bills would be considered unfordable or would change my lifestyle? A $10,000 health care bill might be a financial obstacle for my family, but a $80,000 dollar bill for a heart attack would be a big ding to our savings.

At that time I went with the $2,000 dollar deductible and the rates were reasonable. I think that some insurance companies even offer $5,000 deductible now.

My total out of pocket for those 10 years riding a 2K deductible was about $800.

Anonymous said...

If the government can show competence, I am fine with letting them tackle health care. As it is, their efforts have brought down the world economy, reduced our civil liberties, lowered our education standards, and decimated many of our national labs. With the best equipped Army in the world, we cannot even win a war.
Now the want us to trust them with a 1502 page health care plan?

Jim in San Marcos said...

Hi Anon Euro

I don't think any of these countries that have gone to government health care have solved the health issue. It is getting increasingly harder to budget the money necessary for these expenses in every country that offers it.

Almost every service the government can offer, can be done for half the price by private industry because cost is a major factor that determines profit. That concept is absent in government. There is no profit incentive--just a fed up taxpayer footing the bills!

Jim in San Marcos said...

Hi Anon 8:23

I agree.

The trouble I see, will these "fine Legislators" find the time to read the 1,502 pages before they vote on it?

They haven't broken any laws if they don't.

Thank you for your comments

Anonymous said...

My health care consists of...
Plenty of sleep.
Plenty of pure filtered water.
Organic raw food diet.
NO modern american diet foods.
Daily fresh squeezed veg juice.
Daily exercise.
Daily sunshine.
Basic supplements: probiotics, anti-oxidants and essential fatty acids.
A positive and relaxed state of mind supported by a good life philosophy and spiritual orientation.

If I ever needed serious medical attention (which won't happen) I'd go to Thailand, Cuba or Costa Rica for the same or better quality at 1/10 the price.

I'm not paying for any "healthcare" as a US citizen. I'll figure a way out of it.

Jim in San Marcos said...

Hi Anon 9:01

You forgot to include sex.

Without the threat of sex, the headache medication market could fall off a cliff (just ask my wife)

How does Cuba enter the market? I thought you had to hijack an airplane with a bic lighter and gasoline to get there?

I think you are doing all of the right things, that is what health is all about--Preventive maintenance

Thank you for your post and take care.

Anonymous said...

Jim

Rather than arguing whether the public system is better or not I would like to skip to meat of your argument. The government only wants to take over this industry (I think it is largest) to collect future revenues in the form of taxes today to pay for mistakes made yesterday. Unfortunately the mistakes have nothing to do with health care. If that is jist of your argument then I agree with it.

Rob in NS

Jim in San Marcos said...

Hi Rob

I couldn't have said it better.

If passed, this "health plan" could double tax revenues. Notice how this taxes everyone, not just the rich.

Anonymous said...

Not much longer before the Obama administration and advisors lose all credibility with the thinking American public.

Hope Obama gets run out of town on a rail.

We've got nothing but criminals and henchmen in the WH and CONgress.

Jim in San Marcos said...

Hi Anon 2:35

I think typically we want to blame someone for this mess. This didn't happen over night.

Obama will end up being the fall guy just like Hoover was.

I think that most of the blame for this mess can be blamed on collective greed of the masses and a Congress that wanted to help keep the party going.

When you look at it from a historical point of view, this is nothing more that a cycle that mankind goes through ever three to four generations. It will happen again in another 100 years.

The good thing is that we have front row seats, the bad thing is nobody wants them!

Thank you for your post

AIM said...

Well said Jim. I agree with the causality that you cite. And emphasize the intense greed within Wall St. and the collusion/negligence from govmt and regulators. The sad point is that we have govmt leaders (espec democrats) using this crisis to advance their agendas instead of working collectively to clean out the debris, repair the damage and save this country. Shameful.

AIM said...

Interesting point for all of you armchair financial historians...

Wilson had a stroke and didn't do anything in the last year or more of his term. His wife basically ran the country and didn't do much of anything either (definitely didn't address the economic turmoil that had erupted). The incoming Harding was considered a corrupt, inarticulate and ineffective president (it was actually some of his cabinet members that were the severely corrupt... and he nailed them on it and a few of them wound up committing suicide!) Yet... when the crash/depression hit in 1919-1920 he didn't do anything about it. He ignored his Treas Sec's pleas to act also (think Treas Sec was Hoover). Plus, the Fed was inactive and didn't do anything either.

No one has learned from this lesson, and many will try to keep it hidden. Fact is... we DON'T need government and Fed interference, stimulus, etc. Things shake out, reorg and get back into order when the market and economies are left to their own devices. This point in history is proof of it.

Jim in San Marcos said...

Hi AIM

I don't think that there is much of a country left to save. It's kind of like holding your mouth shut when you have to sneeze, you end up blowing your nose. That's pretty much what the government is doing.

Congress authorizes a trillion dollar TARP plan, without taxation to support it? This airliner is not going to be lucky enough to crash land on the Hudson River. The punch bowl is empty and a government check won't do the job to get it filled up.

History agrees with you on letting the market forces fix the mess. Government intervention only slows down the process.

Anonymous said...

As an aside, I didn't like the Sunday school analogy. A bit too crude for my taste.

Jim in San Marcos said...

Hi Anon 12:30

You have a point, I cleaned it up.

Anonymous said...

My mother had heart surgery in 2003 and did well.

She gets a letter from her health care provider that says "this is not a bill."

Then the bill arrives a week later with the same information. Basically , she gets a letter in the mail that says the bill is on the way.

This is the private sector for you. Driving up the cost for stupid reasons. Greed is at the forefront.

AngryTaxPayer said...

Hey Jim,

Keep up the good fight...

The United States is bankrupt. The US dollar is about to become toilet paper. The Free-Press is controlled by the government. There is too much corruption in in DC with politicians, unions and big corporations.

Unfortunately, those with eyes and ears know the outcome of this story already.

- Larger intrusive government
- More fraud waste and abuse
- Fewer government services
- Higher income taxes
- Higher property taxes
- Value(my-ass) added tax
- Even lower productivity
- Collapse of the US dollar
- Several lost decades
- Loss of US sovereignty to NWO
- A repressed, overtaxed, liberty stricken society

End the end...

- State secessions
- Civil War
- Rebirth of the Nation

With life, liberty and the pursuit of happiness for all.

ATP

Jim in San Marcos said...

Hi Angry Taxpayer

I think you're right, the country's bankruptcy is entering the terminal mode of no return. Bernanke and Obama just refilled the punch bowl. We get to drink ourselves sober or have fun trying.

schleppauto said...

orrupt, their main objective is to make as much money and at the same time provide as little service as possible. They are running a business based on the idea of making as much profit as possible. This concept does not mesh well with the concept of providing health care for people. Profit and greed always win out and the patient suffers.

A public option for all the people and funded by taxing all of the people is the only fair and least corrupt way of handling the health care issue.

I'm self employed and have to purchase my own health care. If you think the health insurance industry is not over charging us, than how do you explain Kaiser permanente charging only $280 per month for a comprehensive family health insurance plan in 1995 with only $5 copays to charging over $1,000 per month for the same plan with $30 copays in 2007. Our pay did not go up four times.

It is simple they are a bunch of cheats and are helping to bankrupt the american way of life.

schleppauto said...

The health insurance companies are greedy and corrupt.


Sorry this first line got chopped off.

AngryTaxPayer said...

Jim,

I'm currently living in the Philippines on a pension. Living here has its drawbacks at times, but there are benefits... health care being one of them.

There is no such thing as health insurance here, but there are hospitals, doctors, nurses and all the same medications you can get in the US. A typical visit to the doctor/hospital here costs $5-$10 dollars for the visit. That is not a co-pay, that's the total cost. Any drugs prescribed you pickup at any local pharmacy at 1/5th of the US price... all name brand and even cheaper if you want the generic stuff.

A trip to the dentist for a checkup, cleaning and couple of fillings is a whopping $10.

How can that possibly be? Perhaps in part, its a totally free-economy for health needs here. No insurance companies are involved and no bureaucratic government regulations to get in the way.

Its an all cash-and-carry operation with equal and sometimes better service than what I was getting while in the US having health insurance.

Sometimes the best system is no system at all. Free markets have a way of allowing cream to rise and the silt to sink to the bottom and at the same time allowing for higher quality, affordable products and services. Private competition is GOOD while government takeovers are BAD.

After the revolution and the new country rises from the ashes, perhaps we will be left with a government once again... For the People, by the People.

ATP

AngryTaxPayer said...

schleppauto,

I have to disagree with your assessment that insurance companies are the problem and a government taxed and run program is the answer.

I believe health insurance premiums are skyrocketing from all those sucking they system dry from preventable diseases and sickness. The US has become one of the fattest, laziest and non-productive societies on the planet.

Please provide one country that has implemented a government run health program and has been successful without cutting benefits, services, or procedures and ultimately taxing its citizens to death.

Please explain what has happened in our own country with Massachusetts where they have tried it? I see no benefit of the government being involved in any way in health care.

Don't be fooled by the corrupt politicians running and legislating the country. The current program proposed by these idiots collects taxes for 10 years and only provides 5 years of benefits. Then what? Higher taxes? Fewer benefits or procedures?

The US government has never run any social program efficiently and are now bankrupt. What the politicians are very good at is making many promises but always come up short... and in the end, we all wind up taking it in the shorts through higher taxes.

ATP

AIM said...

Rome had a two tiered economy. The elite were quite separate. When the barbarians came in the majority (the lower tier) considered they were being liberated.

We have a two tier system now as well. Congress has their own social security, own health care, just got more jets, government salaries are 35% higher than in the private sector and there are great benefits.

Government is going to continue to grow and create more of these imbalances. They are really asking for it.

The fall of this empire will occur in a much more compressed time period than that of Rome.

Maybe permanently disruptive revolts and violence in about 5-10 years?

Maybe a peaceful revolution (evolution) led by the millenial generation?

Who knows but there is definitely going to be revolution in one form or another.

AIM said...

I"ve completed my current study on inflation vs. deflation. I think that the deflationists are incorrect.

Reasons: 1) they would be correct if we were on a gold standard. but a government with a fiat currency that has no intrinsic value can and will print money and create credit on a massive level to stop any deflation. and, they will really begin printing once China and Japan stops lending. 2) there is no historical example of any debtor nation on a fiat currency ever going into deflation. they've all inflated themselves into a valueless currency and destroyed economy. 3) these asset prices going down is not deflation, they are just adjusting from being too high in relation to dollars (we're being fooled into thinking it is deflationary). consumer prices are going to climb (they are beginning to now) and the dollar will fall precipitously. 4) the government will never bail out the Fed, raise interest rates, stop deficit spending to stop inflation... they'd destroy the banks and business and all the bailouts would have been in vain.

Say goodbye to your standard of living.

Need to shift gears and work on an immediate strategy for inflation because that invisible monster is upon us.

Anonymous said...

Higher taxes to pay for all this health reform will end up coming back to haunt them as unintended consequences. For example, states know that they can actually lose revenue as taxes go up.

I have a personal example of this, for those interested. I computed my total taxes last year, and it was well over 50%. So, I had an epiphany: everything I am buying is actually costing me twice the price (in salary terms). The solution I came up with is to double the price of everything I want to buy, to see if it is worth the value. This lead to:
1. Avoiding local retail items.
2. Making my own things and doing my own repairs.
3. Planning to go off the grid. A 120$ electric bill was fine, but not the reality of having to earn $240 to pay for it.

Jim in San Marcos said...

Hi Angry Taxpayer

I think that you have hit upon something. The doctors are guilty of gaming the insurance companies. Pay the copay and they run amok. When I go in, I don't really care what the charges are as long as I only pay the $20 copay. It's not against the law to try and increase your income, and it works.

I can remember back 40 years ago and what you quote for doctor rates in the Philippines, were what we use to pay. There were no credit cards or insurance plans like we have today, back then.

Jim in San Marcos said...

Hi An Inquiring Mind (AIM)

I agree it has to be inflation. Angry Taxpayer pointed out the fact that "The US has become one of the fattest, laziest and non-productive societies on the planet."

Since we produce food, we could see inflation there first. We consume gasoline, and it isn't dropping in price. As for everything else, we won't be buying much, we're broke.

It has all of the appearances of deflation, but if consumption picks up and we don't produce it, it will cost more. It is very convenient from a government perspective that people have chose to save rather than consume, it masks the inflation.

Jim in San Marcos said...

Hi Anon 6:58

Congratulations to your new saving plan.

I have been a coupon shopper for years (they still double coupons in CA) and I eat what is on sale. Lobster and King Crab go on sale so I do eat well, just not when I feel like it (of course a lot of King Crab comes frozen so I buy a few pounds for the freezer).

A lot of the logistics about freezer space has to do with repackaging the food. Hamburger, I buy fresh on sale (or day old) and repackage it. I portion hamburger into 3/4 pound squares in Saran wrap with a date on it and freeze it. If you don't take the time to repackage what you throw in the freezer, your limited in what you can buy. The supermarket packages are made to look big and take up space.

When I buy a car, I drive it into the ground.

And I think the same way as you, I had to earn $2 to spend $1. I also pack my own lunch and Thermos of coffee.

My son is going to spend all of these saving when he goes to college next year.

I hope your plan works out well, take care

AIM said...

The smart ones (the non-victims) will deal with inflation by going into debt to buy tangible assets (real estate, etc.). They will not only preserve their existing wealth but they will be the beneficiaries of the redistribution of additional wealth (which is what inflation does) because they'll pay off those debts with ultra cheap dollars.

Debt and tangible assets are the "one two punch" that knocks out inflation. It is the only way to win the boxing match.

Isn't it funny. The new psychology, the new attitude for Americans is to pay down your debt and save

WRONG! Don't follow the herd and be a victim. Before the heavy upsweep of inflation begins one should borrow, borrow, borrow and acquire hard assets.

The populace are being set up to be sitting ducks for inflation. You only deleverage and get out of debt and save when you are in a deflation... which our brilliant minds in the government will do everything ni their power to avoid (by using inflation).

The above is a brilliant nugget of information. One, if applied, that will be the determinant of whether you are a winner or a victim over the next few decades.

I plucked this gem of a concept out of my flation studies. My strategies will be based on it.

Jim in San Marcos said...

Hi AIM

There could be one problem. In a currency collapse from inflation, You might own the asset and also be liable for property taxes.

You could buy a million dollar house with 100K down. In a collapse, you would have property tax assessment of 10K a year. If you are out of work or retired, you could still lose the house to back taxes in 3 to 5 years.

This is what would happen to the absurdly rich, they would still have their toys but limited access to cash. A 10,000 Rolex watch might raise $100 in new currency. Their inability to support their assets' tax base would eventually mean the loss of their toys to pay taxes.

frakrak said...

Jim I still think Obama is player a game of distraction over health care. Public health care has never redeemed itself in any form … anywhere!

Unfortunately for your blog my comments on all things financial would tend to fall into the “financially challenged” category! Ask me about psychology or theology and I could give you the impression of a coherent well informed answer! I have provided a link that places my naïve financial credentials out there for all to see. I can’t vouch for its worth for the more financially able to read, but my gut feeling about the reality of the inflation or deflation debate makes good naïve sense to me!
Cheers once again
Frakrak

http://peakwatch.typepad.com/peak_watch/2009/10/index.html

AIM said...

Jim 7:16

You have a point about property taxes. A desperate govmt will raise them for needed revenue (creating more property defaults and eventually causing a tax revolt, I should add).

One would need to have a business(s) in place that is viable in recess/depress times in order to maintain one's assets. That is part of my plan as well. The purpose of a business is to generate revenue and acquire and maintain assets.

Debt and tangible assets are the two necessary components to weather inflation.

I would be very interested to know what your general plan is Jim to not be a victim to the severe inflation which will definitely be upon us sometime within this next decade, after the deflationary wave ends.

From reading your blog I know you're an intelligent man with common sense... what is your plan?

Anonymous said...

"I still think Obama is playing a game of distraction "

Well thought. I'll one-up your distraction idea, however: He is told to play the health care game, while some think he is trying to distract from the financial mess. Meanwhile, he declares emergency powers* which will anable him to legally force an unknown liquid into every American, targeting the entire young generation to go first: preg. women and children up to 24"

How do you like your president now?

This is 6:58:00 PM.

notes:

* "Administration officials said the declaration was a pre-emptive move designed to make decisions easier when they need to be made. "

"Health and Human Services Secretary Kathleen Sebelius now has authority to bypass federal rules..."

Jim in San Marcos said...

Hi Frakrak

That link is excellent.
Your statement," I have provided a link that places my naïve financial credentials out there for all to see. I can’t vouch for its worth for the more financially able to read. ." confuses the hell out of me. If that's you, its damn good.

I'm going to add it to my blog links later this week. Right now I'm getting my Windows 7 up and running, almost finished.

Thank you for the link

Jim in San Marcos said...

Hi AIM

Each person plan will be different depending on age. Those that are in their early twenties will have the easiest time of it. Those of us in our 60's have to face the full force of what is about to hit not to mention unforeseen health issues.

I am probably going to plug as much money as I can into my son's college education. And if the housing prices drop to a more reasonable level, my wife and I could buy a small home. I have a rental that is paid off and some gold and silver. Our 401k's are structured quite differently. Mine is in short term bonds and my wife's is in growth stocks.

If the stock market were to collapse, I would switch from bonds to stocks. If inflation takes off and stocks go to new levels, my wifes 401K will do nicely.

I think your retail store idea sounds good, inventory would be a hedge against inflation. Plus you would have a pretty good idea if inflation started to kick in.

The other thing I would recommend is not to keep up with the Joneses. Don't buy a Mercedes or BMW or a million dollar home, you pay for these items through taxes. Plus you pay a "I am rich" tax at the dealership.

Hope this is of some help, take care.

AIM said...

Thanks for the insight Jim.

I'm close to 60, and we boomers will be getting the brunt of, and most likely suffering the most, from the negative economics that are coming.

It has been said that one's greatest assest if their ability to earn income. Thus, skills and education is the right place to invest one's money (as in your son's college education).

Hope you've educated your son not to get the wrong education (one steeped in the non-reality based world of academia, or one that would put him into the failing system of the American economy).

Your plan looks pretty good. It's flexible. Simple, yet I can see that underneath it all, careful thought went into it. (I believe you have a government job as well.)

I'm a young and very healthy 58. I don't believe in the concept of retirement. There are too many interests and activities available. I will die in harness... productive and happy.

I've decided that the most important investments to work on are:

Knowledge and skills.
Anti-Aging Health Programs.
Small viable businesses.
Income properties.

(Right now the wife and I are living a frugal lifestyle, starting 2 businesses, studying business, working on our health enhancement programs, paying off a debt, saving as much as possible—amassing cash to buy businesses and rental properties when the time is right, just basically doing all we can before the proverbial poop hits the economic fan.) There is no time for sloth at this point in time.

Due to the possiblility of a severe depression looming over us... I'm also considering the idea of a small farm that produces some meat, chickens, eggs, vegetables and fruit. This would be a business, there would be an on site farm manager (because I don't know farming), it would also be our home, we'd have food for us and food to sell.

That's where I'm at thus far. My plan is flexible and ever changing as I learn more or as current events change.

Anonymous said...

Some people may not like the Sunday School analogy, but it was accurate. People want to maintain their standard of living now and the salvation of the future is left up to people who are intent on screwing them. This is today's political and economic news in a nutshell.

Frankly, we are in "injury time" right now. The CA treasurer is flipping out on the legislature because he cannot do his job properly due to their interference. It's good to see that at least a few in government get it.

frakrak said...

Poor expression once again from frakrak, the link is not mine, something I stumbled across a few days ago, made complete sense to me, glad you liked it also.
cheers

Anonymous said...

"The CA treasurer is flipping out "

Jim, what are your thoughts on CA. Do you think they will go bankrupt?

Jim in San Marcos said...

Hi "The CA treasurer is flipping out "


I think it is only a matter of time, which state will be first to declare bankruptcy. Michigan, Florida Nevada and California are in the running. From reading Bloomberg, it looks like California goes in the tank about February.

If Congress passes a TARP for California (troubled assets relief program) It will probably be called a CRAP--(California relief asset program). It kind of self explanatory.

The next few months could be wild ones for the big K (California)and we are not talking cereal.

Anonymous said...

The truth is that communism, socialism and capitalism are actually one in the same. They have the same goal of owning everything and paying no wages to slaves. It has never been about the fight between them, it has been about the fight between the groups using those economic philosophies to accomplish their goal.

Communism has gone into the trash bin and capitalism and socialism will also follow. Government and economics don't mix. History shows that. We keep evolving.

Marx was a great man. He saw the real problems and cared for humanity. Sadly, he influenced 2/3 of the world with a solution that was VERY WRONG. Never mix economics with government.

Now we are all on thin ice (I'm here in the USA, but I speak for the global economy as well) We're full of anxiety because we can't predict where things are going: another artificial decade of normality? long extended recession or chain of them? a long cycle of small booms and busts? an inflationary depression? deflationary depression?

The ignorance and corruption have gone too far. We will have to suffer the consequences now. Do we really think that emerging markets are going to spur a new global recovery?

What about increasing unemployment? What about no productive capacity? What about our symbolic/fiat currency? What about peak oil? What about all the foreclosures that are being held back? What about all the new ones coming over the next few years (alt-a and option arm)? What about all the banks that are truly under-capitalized? What about all the toxic assets on everyone's books? What about the 210 trillion in derivatives that will collapse when interest rates start going up? etc. etc.

We are definitely in for a turning. A perfect storm of encroaching cycles are upon us.

The big question that will be in everyone's mind in the next 5-10 years will be... "How do I live?"

Anon on a California Mountain

Anonymous said...

What about peak oil?
-I thought they recently found some large oil reserves in the Gulf.

Anonymous said...

anon on a ca mtn you are very scary but you are right. and i could add about 20 more points to your "what abouts".

i'm in the usa too. what do you do when you have a suppressive government. a socialist government going deeper into socialism. destroying our money. raising taxes. destroying the wealth and savings we've worked so hard for. destroying our standard of living. turning us into slaves. we're the last bastion of any semblance of freedom and we are now circling the toilet bowl.

what do you do. you can't fight them. they have the cops, prisons and might military. do we just succumb.

everybody ridicules and ignores the doom and gloom guys but you know what, doom and gloom is on the way, actually it is already here, look at our existing condition. where will we be at in 10 years. glad i didn't bring any children into this world.

this is coming at us from all directions and i don't have a solution.

Jim in San Marcos said...

Hi Anon On a California Mt and Anon 7:27

I think that you are both over reacting. This coming crash will ruin the rich and the retired. The majority of people will not even feel it.

It will seriously cripple the middle class and pretty much ruin any Congressional plans to spend our way out of this mess. The tax structure could fall apart. How do you tax people not working?

I think we will begin to see people working for the government to get their unemployment. It worked before, maybe now is the time to start again.

Jeffrey said...

Jim, I'm a free market guy, but it doesn't mean that I ignore or discount certain benefits that government does provide. For example, I mailed an envelope Express Mail via the Post Office today and paid $13.70 to get the package there overnight. No taxes used, the wait in line was 2 minutes and the government monopoly was 60% of the cost of either Fed Ex or UPS.

Example number two: I grew up in Sacramento in the 1970's. Never saw Mt. Diablo in the summer. Now, coming down from Placerville, I regularly see Mt. Diablo 90 miles away. All because of government regulations of auto exhaust.

Example number three: I was in an accident last year, head on at 25 miles per hour. Without air bags and seat belts I would be dead. The government's mandate cost me another $500 for the car, but it saved my life.

So please remember these things when you repeat such trite thoughts as "government never does anything efficiently or effectively"

Jim in San Marcos said...

Hi Jeffery

I think that competition keeps prices down. Bulk shipping through UPS is still cheaper than through the Post Office. lets face it, the postal service doesn't have the package route it use to, two other private carriers share in deliveries.

I too would have been dead if it weren't for seat belts, my dad had them installed before the government made it mandatory.


The government can be depended upon in the long run, but it takes time. I stand by my statement.

Thank you for your comments