Health Care Crisis

For a long time Republican politicians have been telling us that the best way to solve the health care crisis is to allow the private sector to run it. Isn’t our health care system in the hand of the private sector right now? The argument went on telling us that privatization of the health care system created competition, thus lowered the costs. We saw from our own pocket books that it was not so, otherwise we would have not been talking about this subject right now. They also told us that privatization (of the health care system) allowed us to choose our own providers which, in turn, allowed us to choose our own doctors, our own hospitals. It sounds good, if we have a lot of money. But most of us are not in the financial situation that makes those choices affordable.
We can have a universal health care system that does not require the government to be a provider. We can localize the health care system, like we used to localize the banking system, limiting the service within the boundary of the states or certain regions. A single insurance company or a group of insurance companies can pool together to get a contract with the states to write a health insurance policies to cover everybody in the state. The whole principle is that the premium for individuals in a large group insurance policy would always be a lot lower than if a policy was written for one individual or a small group of individuals. We see that vividly in our work place. The states can collect the premiums through payroll tax then pay to the insurance company (ies).
The state might want to exclude from the universal health care policy those who already have health insurance through his/her work place in order to avoid competition with the health care benefits from companies which many of them use as part of their recruiting tools. It should also be flexible to allow individuals to buy their own private health insurance, if they chose to do so. By the way, not be able to buy your own private insurance is one of the many scaring points against universal insurance that Republicans often raised as an issue.
A state universal health care, not only helps those individuals who cannot afford health coverage, it also relieve pressure from small business owners, who cannot afford to buy health insurance for themselves and their families.

The Evil Side of Tax Cut

The argument for tax cuts is that they will induce the economy by encouraging investments, thus creating jobs, thus creating income. In reality, an average household would receive from the tax cuts to the amount of about a couple of pizzas a week which would not do much to the national consumption. Finally, the people who need help the most, those who have no job, would be left out in this process. The ones who benefit the most are the rich and very rich. The richer they are, the bigger the reward. These people would not increase their consumption because of the tax cuts. They all ready bought every thing they wanted, without having to wait for tax cuts. They would use the extra money to invest alright, buying more stocks. These money would pour into the treasuries of the corporations which the proponents to tax cuts told us that it would help them to expand their businesses which in turn would help the economy. Put yourself in the shoes of the CEO’s. Would you build more factories, hire more employees, when you have no sales? History told us that it is not so. Reagan tax cut in the 80’s did not help the economy any, so did Bush’s. The unemployment figures are the same today as that before the 2003 tax cut. Even the recent tax rebate had very little or no effect on consumption number.
Tax cuts never work well for the economy because it has a very short term effect, if any. In the mean time, the economy needs a long term solution. The proponents of the tax cut policy are always the opponents of government spending policy. Interestingly enough, it costs the government the same, whether 400 billions of dollars are coming from tax cuts or from government spending. Is one ton of cotton or one ton of steel heavier? However, there is a big difference between the two policies (tax cuts vs. government spending), in consequence. Tax cuts result in dead money. The money stops dead in the coiffures of the corporation. As we all know, the money is not good if it is not circulated. On the other hand, the same 400 billions of dollars of tax cuts can be use by the government to create job projects such as repairing and maintain the nation infrastructure, expand public transportation, encourage alternative energy research and production, encouraging research and production of fuel efficiency vehicles (Detroit surely would welcome this kind of government spending), and more… The government is the biggest consumer group as well as the biggest employer in the nation. When its resource is pumped into the economy, certainly it will produce strong impact. All the money that the government spends on job projects will not go to waste, as the tax cut proponents have always suggested. Since job projects create jobs, thus create incomes and consumption (and more jobs and income as a result), thus create income tax which comes back to the government. The Hoover Dam project, the National Highway project provided employment for millions of people for decades. Those were big government spending projects, but they also were the big jolts to the economy. Certainly, nobody could say the money spent in those projects went to waste.