Sunday, August 16, 2009

Cal: What is Congress Afraid Of?

Hello again Fred, Christa, and all.

We have heard many anecdotes regarding the hardships, the horror stories, and the unfairness of the availability and application of American health care. It would be too easy to simply suggest that life is unfair, though it is. That might apply my coming down with cancer while my neighbor does not, but not, I think, to access to medical care. The central question, it seems to me, is how one goes about making access more available at reasonable cost, and without punishing restrictions. I have seen no evidence here or in watching the town hall protests, or from any opponents of the current proposals that anyone believes access should be denied (with the notable exception of illegal aliens). That begs a different discussion, though it is easy to include them in the abstract if we insist.

The fact is that when federal mandate is brought to bear we can never be sure of the unintended consequences, no matter how many pages comprise a bill. I have noted earlier how it can be foreseen that the proposed plan(s) will force me to cease providing access to health insurance to my employees. It is all but written in the plan. They will be on their own and will have no choice, being of modest means, but to join one of the "co-ops". They will be stuck with whatever they are offered, and, what ever the co-op becomes over time. That may not be pretty.

Consider that the housing mortgage and economic meltdown (and the loss of our retirement money) was caused by the passage of a well meaning congressional act called The Community Re-Investment Act of 1977. For anyone who does not know about this the act forced lenders to lend money in the neighborhoods where their branches were. It abolished the unfair practice of "red-lining", the lenders' policy of not lending in certain low-income areas, even to qualified borrowers. Clearly this was wrong. The Act sought to correct the injustice. But over time the mandate was changed, mostly for political gain-but that's another story.

By the mid 1990's lenders were encouraged to make mortgage loans to people who had no down payment money, not enough income, and poor credit records. Lenders, of course were reluctant, but were given assurances that they would be backed with mortgage default insurance which was provided by AIG, among others. Why would AIG do this crazy thing? Because the house banking committee headed by Barney Frank and Christopher Dodd provided pledges that the federal government would back them. Besides, what could go wrong? Well here's what did go wrong. The housing bubble burst (the bubble having been caused by the subsidized demand for housing), home values fell, people who had borrowed 125% of the original value and who were stuck with balloon loans could no longer afford the payments. Many had taken second mortgages and bought stuff. They walked away. Now the lenders looked to AIG to make good on the mortgage default insurance claims. AIG said, Who us? We don't have that kind of money. The rest is history. Hence, the market collapse. Hence, the loss of 40% of personal wealth. I don't think congress meant to do it. They're not that smart. But they are that incompetent. Can you name a single government program that came in on budget? Medicare Part D (prescription drug coverage) has already run up an unfunded liability of $17 trillion!

That's a long winded way of illustrating how the governments' intentions often morph into something unanticipated and ugly. The New Deal, which many say extended the Great Depression; Welfare, which trapped the poor in their poverty; the ban of chloro-flourocarbon (sp?) propellants, the replacement for which is many times worse for the ozone layer; the complete banning of the production of DDT, the result of which is the needless deaths of tens of millions of Africans to malaria.

Access to health care needs to be improved. It can be done through means much less draconian than federal programs. The needed changes are relatively simple. Make insurance portable, make it available to everyone, pre-existing conditions included, make it available to part-time workers, make it available to anyone who will pay for it (or who might need help with paying for it).

In America we do not have a guaranteed right to be born. We do not have a guaranteed right to a funeral. We do not have a guaranteed right to happiness. And we do not have a guaranteed right to health care. The governments role is to "promote the general welfare". The right that we have is the right to pursue it.

The Constitution of the United States of America is consists of about 1,100 words. The federal health care plan about 1,100 pages. What is congress afraid of?


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