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In reference to my two other posts above, there are two kind of bubbles, those associated with investing and those associated with infrastructure and the fabric of society. The investment type, come and go. The other stick around and change how a society functions.
None of the investment bubble changed society or did so to a minor degree. People have short memories. The housing market is already seeing bidding wars for houses. As the remnants of that bubble go away (will still take some time) people will revert back to past behavior. That is already proved true.
A bubble involving infrastructure and the fabric of a society (tech as infrastructure, healthcare as a fabric of society) will alter the fundamental way in which people do things, perceive their place in society and their ability to function in it.
Technology isn't going to provide for increased healthcare capacity as the demand from a single payer system strains it. The demand will come too fast and there isn't going to be enough money to mitigate the needs for development of technology solutions in that system. It will simply be overrun by demand.
Those thinking investment will help increase supply to meet demand are forgetting one thing. One goal of all single payer systems is the elimination of profit from that system. That isn't a stated goal, it is essential to the single payer systems. When single payer systems are implemented the innovation and incentives leave that system and you end up with mediocre. Now, there are those who talk about Cuba, Canada and Europe. Uh huh. Look at the types of government and controls necessary to create those healthcare systems and lets talk. Then consider their populations and how their societies function in comparison to ours. That is like speaking of their transportation systems. People forget that traveling in the USA from North to South or East to West in the USA takes you across all of the countries in Europe and this is one country. The scales needed to do what they do could be accomplished here but not without investments our society is unwilling to put forth and that isn't going to change. In the USA, visit any emergency room and see what is going on. Have you see a lot of new hospitals being built? Neither have I.
The idea that preventative medicine is somehow going to lower demands on immediate healthcare doesn't wash. It works with the moderately educated and lower middle class and up but not with the lower income brackets. It takes education to understand the relationships between preventative care and reducing the need to immediate and intensive care. That education requires time but the demand on the system isn't going to allow for that time. Notice how successful our education system is in maintaining ethics and the morals of what we'd all like to see in society now and think of adding another burden. Sorry, there isn't enough capacity to accomplish that. The people that go to emergency rooms now and demand resources will continue to do so. Single payer doesn't help.
Demand only provides for opportunity in investment when the opportunity functions is a free market, not one controlled by government. You can have limited success in less than a free market so long as there are more than one vector to distribute goods and services. With healthcare and single payer, there is only one vector and you end up with price controls and nationalization of that service. There is no incentive other than having a steady job. When healthcare professionals are seen as only having a job and that becomes reality for them, watch out.
Healthcare bubble? On the way.
Last edited by Mack Knife; 01-19-2013 at 11:50 AM..
There are no current bubbles, and it is not possible to inflate one currently.
What I am reading in most of these posts is a lack of understanding of what a bubble is and how it is formed.
A bubble is not a normal market fluctuation. Prices of assets fluctuate constantly, just because prices drop it does not mean that a bubble has burst.
Bubbles require two things, speculation and irresponsible lending policy.
Things have to be able to be bought and resold in a relatively short period of time at a profit, and people need to be able to finance those purchases in order to facilitate the prices rising beyond whatever is its intrinsic value.
Bond bubble and student loan bubbles are the next couple bubbles in my view. Bond bubble IS related to speculation and irresponsible lending of money by the fed at 0% and related speculative asset purchases.
Question for those who think healthcare or medical expenses are the next bubble to burst...how exactly does this play out? I don't disagree that expenses are ridiculously high, unsustainable, and eventually will need to find a way downward. But I don't see how this can "pop" in the bubble sense. What happens here?
The new income based repayment scheme was the bailout - pay as much as you can. I know plenty of people who have taken out $100,000 in loans, now make $30,000/yr and are paying peanuts under the plan. As for private loans i'm pretty sure somewhere down the line they will also become dischargable and the government will make those institutions whole at the taxpayer expense. Of course as usual the government will totally ignore the root cause of the whole problem which is the soaring cost of college education...they will keep making loans available for any amount encouraging colleges to keep raising tuition to ridiculous levels.
Americans have an addiction to spend money beyond their means without a care in the world. The government does it's part by extending cheap money ad-infinitum. This spending is a form of socialism where the cost is spread through inflation.
People who took loans without taking into account whether they could reasonably pay it back should not be able to get any breaks...that's my philosophy anyway. Personal responsibility. However, the concept of personal responsibility has all but vanished in this country.
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