When times are tough, families cut back on consumption. Last June, Vista Water District announced that we were doing such a good job of conserving water, that they had to raise rates to cover the fixed costs. People are starting to realize, a decrease in consumption raises the unit price of water, natural gas, etc. These suppliers have fixed costs no matter what the consumption level. The net effect, we consumed less and paid more.
Anthem Health Care for California, today raised rates 30 to 39 percent. The government is shocked, and by God, they are going to get to the bottom of this.
Basically families have decided to do without insurance unless they really need it. With less people wanting insurance, the rates have to go up, to pay for those claims from people who are sick. All the insurance company does is take total costs, add in a profit and divide it by the number of customers, to arrive at a billing cost. It could be argued that the insurance companies are ripping people off, but I would argue, if they show enough profit, there would be lots of competition.
Look for the same to follow with car insurance. Rates will go up. Our land line telephone just went up three dollars a month as did our cable bill. Our household has changed auto insurance providers in just the last month because of cost. We are about to drop cable and the land line telephone.
America is downsizing at a drastic rate. Costs will go up while this happens. Then follow the bankruptcies, and then we get the lower rates.
The irritating part of this is that a family can feel the financial pain of a contracting budget, just like a State government. The Federal Government still has money that they can pull from "thin air." It kind of makes you wonder. If they can pull something out of "thin air," what part of what they are doing, IS NOT a magic act?