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The bottom 50% of the people paying taxes will most likely see little of an increase, but the top 50% will end up paying quite a bit more. Seriously, look who is paying all the taxes as it is.
The bottom 50% who are paying a boat load of money for their insurance premiums already. Premiums that are already padded with unnecessary expenses like "How do get out of paying for that procedure" or "How do I get the other guys auto insurance to pay that bill". (with collision injuries).
And the costs would go down because of economy of scale.
A fact: Medicaid/Medicare runs a lot more efficiently than private insurance. Off the top of my head, I believe the figures were 3% on admin costs, vs. close to 20% on admin costs.
The #1 greatest threat to the American economy is a future in which consumers save their money, rather than spending it. No spending money = no jobs to make money to save.
That's a hard truth, and a paradox I don't see many "rugged made it on my own" economic individualists being able to square.
Umm, I spend. I spend quite a bit. I just don't spend what I can't afford. Because I save and because I manage my money, I can afford many more things than those who do not.
I am not asking people to stop buying, but rather people to stop over spending on things they can't afford. Believe it or not, most lending companies don't want to have to chase you down and try and get money from you. Most mortgage companies don't want to have to foreclose. They want people to work with them and they to be honest are willing to work with those buying.
I had this conversation with my wife the other day about cars. I have never bought those expensive cars. I think back to 1972 when a VW BUG with all the trimings sold for around 1700 dollars. I think of that today and I see the VW bug going for 29000 full loaded and I can only think its a complete waste of money. Why is it so expensive? I mean, technology has only gotten better allowing companies to build for less, yet the prices are shooting up.
I think the problem is that people don't understand value. That is, older economic principals of the price being determined by the product and its shift of supply and demand has now been replaced predominately by market pricing. That is, it bases its principal on "what people will pay" rather than "what the item is worth". For clarity, I do not mean the subjective interpetation of peoples perception of worth, but the "Natural price" of an item. That is, what it takes to build the item (labor, parts, storage, marketing, capital reinvestment).
So when you have an economy filled with people who could care less about the worth of the item and have very poor understanding of managing their money, we get an overinflated market filled with costly items that just aren't worth what people are paying for them. People are working harder at the lower end, but their money isn't going as far.
The thing is, the beauty of free market system is that the "buyer" is truly the person in control. What would happen if people started only buying cars that they could afford? That would mean, less over spending, yet would that mean that the spending would dry up? Would not the products shift to provide more affordable products? Would not business and industry seek ways to attend to that market? So basically, people begin buying on their own terms rather than buying on the markets terms.
Let me explain from a personal example. When I was having hard times, I lowered my spending. I stopped buying things I could not afford. I put my money into necessities, not luxuries. So as you say, I did lower my spending, but only for a time to where I could pay off debt and get myself into a position where I was in control of my money. After that, I bought things I "wanted", but since I was not blowing money to interest rates, I had more money to spend on products.
Now my friend stayed on the other side of the fence in spending. He bought and bought what he couldn't afford. After a while he hit a cap as he started to get in trouble. He could no longer afford to support his "spending" and it halted almost as closely as mine did when I started saving. I eventually was able to spend my money on wants AFTER I had put myself in control of my finances. Eventually I had all the things that this person had (minus brand new cars as I think they are such a poor investment these days, I can buy a used car for much less and save a great deal of money) and whats more is I was able to continue to afford more than he had while STILL saving for my future.
Edit: Just to clarify the end result of that example. My friend stayed in debt and his spending dropped off completely since his credit became a bane to him. He lost much of what he bought and ended up paying for debt that he had nothing to show for. I on the other hand am still buying and have much much more than he has. I am spending now, he is paying of expenses from years ago. See the problem with his over spending?
Debt is terrible for the economy. We lived without that major debt not too long ago. Credit cards and over spending such as that didn't not exist to the extent that it does now. My grandparents didn't get one until they were 50 and they lived in a booming economy.
The market will adjust. Spending right now is out of control. People are irresponsible and it is actually hurting the market. If my wives lending company didn't have to worry about over due collections, that department would shrink, but on the other side of the coin if people were buying what they could afford, the payment office would increase in staff.
I really don't think we will have problems if people started spending their money wisely. We did it in the past.
The bottom 50% who are paying a boat load of money for their insurance premiums already. Premiums that are already padded with unnecessary expenses like "How do get out of paying for that procedure" or "How do I get the other guys auto insurance to pay that bill". (with collision injuries).
And the costs would go down because of economy of scale.
A fact: Medicaid/Medicare runs a lot more efficiently than private insurance. Off the top of my head, I believe the figures were 3% on admin costs, vs. close to 20% on admin costs.
Actually, you are incorrect that is far from a fact. Again, My wife worked in the industry for over 6 years. Medicare/Medicaid does NOT run more efficiently. A large percentage of the denials for patients were caused by the "inefficiency" of governmental agency approval. Doctor offices started billing patients with the stipulation that they must "pay first" and wait for the refund. The doctors hated dealing with it, my wife hated dealing with the process at her work.
My mother as an example when she retired attempted to use it. She had doctor offices threatening to take her to collections because Medicare was slow in response to the process and slow in its payment. Also, Medicare claims often contained many errors in its coverage payments. It wasn't uncommon to see a payment come in that only paid for a "portion" of what its contract specified it fully covered. My mother dropped using it completely and went over to a private plan that she researched exactly to her need and she hasn't had ANY problems to date.
Also, as I said before, people pay MORE for plans they do not need. They don't read their policies, they don't make sure it is what they need. You have to take an active part in the process and more importantly, FOLLOW the procedures that your insurance requires in order to have it cover expenses.
There are some glitches in the system and there are some situations where people have been taken advantage of, I do not deny that, but how is it that I can find affordable plans and policies that meet my families needs and not pay HUGE premiums that you seem to pay?
Maybe because my wife has worked in the industry, that we know how to get the proper plans and coverage, but then wouldn't the problem be more with "education" on the issue rather than one of claiming the entire system is "out to get ya"? Maybe?
You aren't providing a great quality of life without my help.
Really? You participated in my recent boat purchase? And, the new vacation home purchase too? You participated in the private school tuition for the grandkids? AND, the new cars? AND, the new "living enviornment" (pool, spa, outdoor kitchen) we put in this summer?
Your position seems to stand on the fact that the "majority" of people who are having hardships are somehow in a position that they had nothing to do with. Positions like yours use examples of people with major medical conditions that severely hamper their lives and attempt to explain them off as the norm.
Don't think I am unaware of the "required reading" many who share your position use as proof. I have read much of it and it takes samples it decides will best fit its purpose and then attempts to claim that most people are suffering from a bad hand to which they have no control or ability to change. It uses major assumptions about the conditions and glorifies instances by handcuffing itself and claiming they can't change, or excel.
As I said, my wife worked in the "medical insurance" industry for several years. While you may think you know what is going on, that the system is some "evil" entity filled with suits picking the pockets of the honest citizen, that is far from an accurate assessment.
As I said, many of the claims they had issues with were due to doctors offices being irresponsible and not filing the proper paper work, patients picking plans they didn't read and didn't follow the procedures to which those plans refer. Government health care plans taking abnormal times to receive verification and approval with the insurance company's hands tied waiting for the bureaucratic process to process the information so they can actually get the patient taken care of.
My points about my wives lending experience isn't a "couple" of people a day, but the majority of the people she speaks with as well as all those who work in her corporate office.
And don't think that "poor" people are the ones with this irresponsible behavior. She gets calls from businesses and high wage individuals as well. People making 160k a year but can't seem to make ends meet (poor souls) who refuse to part with the 3 50k cars they are "leasing".
Just listen to your local financial show and you will hear all sorts of people calling in to whine about their problems, yet refusing to take the advice of the host on how to solve their problems because they can't give up all those "cool" items they have in order to get themselves out of debt.
As I said, I have been at the bottom, I learned about debt early on and I have learned about the steps it takes to live responsibly. While you may throw a few dollars at the homeless guy to make yourself "feel good", I stop and talk to them to "help them help themselves".
I have worked with many people throughout the years by helping them recognize a "want" vs a "need", showing how it is important to read their contracts and seek opportunities to repair their debt and live with all the necessities while only making small amounts of money. Showing them how to educate themselves own their own so they can move up in the job to be able to afford schooling to which they can achieve a better life. These people learned self respect and learned that they didn't need to rely on anyone but themselves. That nothing gets accomplished by riding the coat tails of other, they must do it themselves.
I have worked with people like this, have you? Who have you helped that you did more than just throw money at them thinking that will solve all their problems? What did those people learn that you did help? That they can't survive, the sky is falling and the reason their life is in the toilet is because someone else put it there? That the system is "evil" and against them? Wow, thats so inspiring it makes me want to rush out in the world and succeed!
I have read many supports in this thread with "special" cases each more and more explained to be "nothing they could do" and the odds were stacked against them using that example as a means to demand a forced system to save the rest of the world from this fate. While there may be situations where this is true, it is not everyone and using it as an example of impending doom is misrepresenting the issue and doing nothing more than to fuel those who are not in those situations to a line of excuses as to why they can't improve themselves.
Seems to me that you do the people a great disservice. That your position is actually a poison to successful venture in the world. You tell people they "can't", well... not without your benevolent help as they just aren't smart enough or strong enough to do anything on their own. You tell them they need the government to think for them, help them, and manage them.
You also turn this into a political issue with your itching to categorize my comments by claiming I am a right wing wacko.
The simple fact is that many people are irresponsible. They don't budget, they over spend, live beyond their means and personally I am a bit sick of hearing about some sob story of a family that had more kids than they could afford, bought a house on a variable interest rate using multiloan techniques to attempt to afford it, lease their cars, eat out all the time, own cell phones, watch cable tv, have the internet, buy clothing that is brand name, and spend on items of "luxury" while I did all of the opposite choosing "lesser" living styles to make sure I could save, afford education, pay for private health insurance, life insurance and live in a way that allowed me to prepare for my future.
So please excuse me if I don't send my money to your "church of doom" and bow down at your alter of "the sky is falling". I know better.
I have no idea how my little paragraph provoked this 2-page long, hyperbolic tirade of indignance and superiority, or how you got an impression that I attend the "church of doom" or think that the "sky is falling," but I guess people just read different things from the same writings sometimes... oh well. You're still basing every broad judgement you make about society on some anecdotes from your wife's business and some people you've met. Not a good way to judge such a huge portion of American society.
I'm not saying there AREN'T irresponsible poor people... there are plenty of irresponsible people in all income groups and classes. But you have yet to back up your claim that most poor people are lazy and irresponsible with a single fact... instead it's just a lot of "Well, I saw this guy buy chocolate with food stamps once," "Well, I saw a sattelite dish sticking out of a house in the ghetto once," "Well, I saw a caddilac at the welfare office once," "Well, I know a few poor people who don't budget their money well," "therefore all poor people are lazy and it's mostly their fault because of my experience with a few people I know."
Last edited by fishmonger; 10-25-2007 at 10:32 AM..
I have no idea how my little paragraph provoked this 2-page long, hyperbolic tirade of indignance and superiority, or how you got an impression that I attend the "church of doom" or think that the "sky is falling," but I guess people just read different things from the same writings sometimes... oh well.
Wow, lets see... trying to find any comment here that attempts to discuss the actual issue... hmm... not seeing any, just you getting offended, making claims about me personally, and ignoring everything said. Yep, typical.
There is a lot of merit to your previous post. But, I would like to point out something.
Quote:
Originally Posted by Nomander
Let me explain from a personal example. When I was having hard times, I lowered my spending. I stopped buying things I could not afford. I put my money into necessities, not luxuries. So as you say, I did lower my spending, but only for a time to where I could pay off debt and get myself into a position where I was in control of my money. After that, I bought things I "wanted", but since I was not blowing money to interest rates, I had more money to spend on products.
In truly hard times, your necessities (and I do mean necessities) cost more than you earn. That's the nature of true economic hardship. example: You make enough for rent and utilities, but if your shoes fall apart, you don't have money to buy new ones. It's even worse if you have to pay your utilities off in partial payments because you never have enough cash to pay it off in one fail swoop. And that is the reality for many hard-working Americans.
Quote:
I can buy a used car for much less and save a great deal of money) and whats more is I was able to continue to afford more than he had while STILL saving for my future.
I always tell DH that. I don't see any need to buy a new car when I can get an almost new car for about half the price.
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