Archive for July, 2010

RATIONING MEDICAL CARE

July 12, 2010

RATIONING MEDICAL CARE

Our resources are limited. We have to make choices, to get the things we want most with our limited resources. That is rationing. Individually, we must make these choices within our individual resources.

With insurance, we pool our risks with others to provide for occasional extreme expenses. We pay regular premiums, spreading out the cost of major calamities over time and among a group of people within the same insurance program.

Back in the 1930s, medical insurance was rare, if it existed at all. When a medical emergency arose, we went to the County Hospital, supported by local taxes. The quality of care was not the best. I have a stiff elbow to show for it.

I take a dim view of any involvement of government in medical insurance. At the very least, it will add a level of bureaucratic inefficiency to the costs of medical care. At the worst, it will just reduce even more of whatever freedom is left in the medical care market. Say what they may, government involvement means medical care rationing driven by political considerations.

I believe the greatest problem with our medical care is the monopoly (granted by government) which enables the AMA to limit the supply of doctors, and to set rules by which doctors must treat patients. The result is not health care but rather medical care, suppressing symptoms by prescribing drugs. Prevention and cure are not part of the system.

A secondary problem is the close relationship of the AMA, the drug companies, and the FDA, which results in millions of routine prescriptions for expensive, ineffective, unsafe drugs. Prime examples are bisphosphonates, statins, and coumadin.

Providing by law for universal health care insurance will automatically assure that only AMA approved procedures will be covered by insurance. All existing health insurance already does that, but universal health insurance will even eliminate the option to pay as you go for your own health care. Of course, the automatic result of any socialist scheme like universal medical care is to reduce our freedom.

Insurance is an obvious solution to protect yourself from huge occasional unforeseen medical bills. On the other hand, insuring to cover routine office visits and checkups simply adds bookkeeping costs and red tape to your medical expense.

Pay as you go for health care forces you to make economic choices. The result is that you would spend less than you do under full medical insurance. You do your own rationing, according to your own priorities. Doctors and insurance companies prefer the full medical coverage; they earn more that way, and you and I pay for it.

Britain has its own version of universal health care. Through the years the government has tried many ways to limit the ballooning cost. Ultimately, as in Canada, the most effective rationing is the waiting list. When I lived in Britain, in 1999, I needed a knee replacement. The waiting list for that was 20 months. Fortunately, I had private health insurance and had it done immediately.

I feel that total medical insurance coverage, plus the conviction that “doctor knows best”, plus the conviction that the USA has the best health care system in the world, relieves us of responsibility for our own health. We fall in with the medical notion that sickness just happens, regardless of nutrition and lifestyle, and only an M.D. can fix it.

Take charge of your health. Invest some time and effort to learn about, and get, good nutrition. Get up from your couch and TV long enough to get some healthy exercise. Find one of those rare doctors who offer real health care and can see beyond their prescription pad. If you take out medical insurance, take the plan with the maximum deductible and co-pay to keep the incentive to look after your own health.

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THE MEDICAL PARADIGM

July 8, 2010

THE MEDICAL PARADIGM

Medical Doctors leave medical school prepared to treat the ills of mankind. They are not taught how to prevent them or to cure them. Essentially they learn how to suppress symptoms. The “diseases” they deal with are usually no more than symptoms of a malfunctioning system. They are taught which drug will suppress which symptom. If your blood pressure is above what is currently considered “normal” your doctor will prescribe a drug to reduce your blood pressure, with no further investigation to find and cure the cause of the high blood pressure.

The paradigm, the basic attitude in the medical world is that disease just happens, like a rainstorm or a lightning bolt or an earthquake. Their job is to repair the damage. They make no attempt to trace the cause so as to prevent a recurrence. They are not taught about nutrition or lifestyle. If you ask them about vitamins or minerals or any aspect of nutrition, they try to assure you that these things don’t matter.

Drugs are the primary tool of Medical Doctors. The textbooks in medical school are written by drug companies. Continuing education comes from pamphlets, samples, and drug salesmen. The dangerous side effects of drugs are minimized in this education. The minute an old drug is replaced by a new one, the new one is advanced as a great improvement over the old one. Only then are doctors made conscious of any shortcomings of the old drug.

From ancient times, diagnosis depended on questioning and examining the patient. That method has largely been replaced by tests. Numbers rule. Your blood pressure numbers almost automatically call for a drug. Your pulse and temperature provide more numbers.

More and more blood “workups” are required for diagnosis. Measurements of all sorts of things indicate what drugs to take. Blood tests can indicate all sorts of unseen problems. However, the determination of “normal” readings is much influenced by the drug companies in order to push their drugs. Blood tests are convenient for doctors, but are often less reliable than other methods which they find less convenient.

My own experience bears this out. I have been hypothyroid for as long as I can remember, but it was never identified until I was 29. I had all the symptoms: always cold, tired, and sleepy. At that time the standard test of basal metabolism (energy consumed while resting) was determined by measuring my oxygen consumption. My metabolism was very low. I was prescribed, and started taking, thyroid hormone.

My prescription was renewed for 10 years. Then a new test for thyroid condition came out- a blood test called PBI. I was declared normal and the prescription was withdrawn. At 39, I was once again cold, tired, and sleepy.

At the age of 82, I tried again to get my thyroid adjusted. A new blood test called TSH, said I was normal. Case closed? No, I found a holistic doctor who examined me and agreed that I was hypothyroid. He took more elaborate blood tests which confirmed the diagnosis. After a 33 year gap, I am once again taking thyroid hormone. For all other doctors I encountered during that gap, the currently “approved” blood test was the final word.

The shocking thing about the American medical system is the drugs that doctors routinely prescribe. Coumadin is the medical version of warfarin, a blood thinner long used as a rat poison. It is so dangerous that it has been banned for medical use in Japan and the European Union. Yet American doctors routinely prescribe it for lifetime use for people with cardiovascular problems and after various surgeries.

Coumadin dosage is so critical that patients should have daily blood tests to monitor blood clotting rate. Many foods interact with the Coumadin, either increasing or reducing the effect. Therefore, patients on Coumadin are forbidden to eat a healthy diet.

A Japanese enzyme, Nattokinase, is equally or more effective at preventing unwanted blood clots, and far safer. Certain foods (like fish oil) are usually sufficient to do the job with complete safety.

Blood tests to monitor cholesterol are routine. If your total cholesterol exceeds 200, doctors automatically prescribe statin drugs. They treat cholesterol as if it were some kind of toxic waste that must be reduced as low as possible. Quite the contrary, research indicates that a healthy level of total cholesterol is between 200 and 300. The doctors are dead wrong about cholesterol so their patients end up dead.

Cholesterol is an essential part of body metabolism. It is a basic building block your body uses in building nerves and brain cells, and is the source material for creating all or your many hormones. You need it. That’s why your liver makes it.

Statin Drugs reduce cholesterol by inhibiting an enzyme which is also essential for production of Coenzyme Q-10. Co-Q10 is essential for muscle strength, and is crucial for the most important muscle in your body – your heart. Statin drugs cause heart failure! The cholesterol scare is a scam dreamed up by the drug companies. Statins are one of their most profitable drug families.

Cancer is a prime example of the medical paradigm. Until the 20th century, cancer was relatively rare. An epidemic of cancer began when our foods started to become industrialized. It is now neck-and-neck with cardiovascular disease as our number one killer, which is also a product of malnutrition. Doctors believe that cancer just happens.

The American medical mainstream can’t cure cancer. Doctors have just 3 options, surgery, radiation, or chemotherapy. On average, none of these treatments extends life significantly, and they all make the remainder of life miserable. And they are very expensive.

Cancer can be cured. President Reagan went on the Q.T to Germany for a cure. Folks in California go to Tijuana, Mexico to be cured. The cures available there are forbidden in the USA.

Cancer can be prevented. A bit of advice I read recently was: “Eat like your great-great grandmother ate”. My formula is more accessible; a low carbohydrate diet and interval training exercise.

The moral of the story is this: Take charge of your own health. Doctors give the impression that they have all the answers, but they don’t. Above all learn about what you can do, by way of nutrition and lifestyle, to stay healthy to a ripe old age. For more information on health, check my other Blogs under the “HEALTH” category.

END THE FED

July 6, 2010

END THE FED

(In case you don’t know, The “Fed” is the US Federal Reserve System.)

Why end the Fed? Most Americans have no idea. I think it’s important that every citizen understand this. If enough people did understand this, Ron Paul would now be the U.S. President.

The Fed is the means by which our government can tax us without limit, so the government can finance wars and other programs which taxpayers would refuse to support. The Fed is picking your pocket with the stealth tax.

Without the stealth tax, we probably would have avoided involvement in all of the wars of the past 100 years. There would be no American Empire.

Inflation caused by the Fed is the cause of the boom and bust business cycle, stock market, commodity, and housing bubbles, the great depression, and all the lesser recessions since then, including the present one. The course the Fed is following will assure that this recession will become a long, hard depression, with increasing unemployment and hardship.

The American Banking system is a cartel, and the Fed controls it. A cartel is a group of companies acting together to gain the advantages of monopoly: the profit advantage that comes from the exclusion of competition.

The banking cartel was created by the law which created the Fed. The system protects the banks from competition and from failure. Thus secure, the banks can invest recklessly. That recklessness was what caused the crash of 2008. Sure enough, the banks threatened with bankruptcy in 2009 were rescued with massive bailouts from the government. The excuse was that they were “too big to fail”.

Who’s to blame for this crazy system? I wish I knew. There is a hint, though in the identity of the people who drafted the law which created the Fed. In a secret meeting on Jekyll Island, Georgia in 1910, representatives of the Morgan banks, the Rockefeller banks, and Kuhn, Loeb & Co drafted the bill to create the Fed. The bill was passed into law by Congress in 1913

It would be interesting to trace the relationship of all the financial beneficiaries of the 2009 bailouts to see how they relate to the people who wrote the law, 100 years ago, that created the Fed.

Now I’m going to try to explain just how the Fed can cause all those problems. Bear with me. It isn’t simple. In fact the Fed is designed to create an illusion, to delude us into believing that our government, our banks, and our dollars are real, honest, and trustworthy. All these things rest on our faith. If we lose that faith, they will all collapse. That might return us to the sort of country, and government, that the Constitution originally spelled out.

The Evolution of the dollar

Our dollar started out as the Spanish silver dollar, a strong and trustworthy currency. Later we went onto a gold standard. The dollar was defined as one twentieth of a troy ounce of gold. Ten dollar and twenty dollar US gold coins circulated along with silver dollars. Paper treasury notes circulated in $1, $2, and $5 denominations. These, and silver coins, were all redeemable on demand in gold.

We were on the gold standard. Independent banks printed their own paper notes but they too were redeemable in gold. Banks did print some paper notes in excess of the gold they held, but prudence kept them from getting reckless, lest they get caught out and go bankrupt. This kept them fairly cautious and “reasonably” honest.

Bank customers deposited cash in checking accounts. Banks lent temporary fictitious money called credit to customers by crediting their checking accounts with dollars. Banks developed clearing systems so that checks written on an account in one bank could be deposited to an account in another bank. Any imbalance in the flow of money by checks from one bank to another was balanced by a transfer of gold between the banks.

These transfers of gold kept the banks honest, or at least “prudent”. They had to keep enough gold or silver cash on hand to redeem banknotes and checks. All the banks produced some banknotes and credit in excess of their cash reserves; call it an overhang. If they all had about the same overhang in proportion to their reserves, the interbank gold transfers would balance and they would all keep enough cash to redeem checks. Charging interest on credit outstanding was profitable and the chief source of income for banks.

Businessmen, investors, and speculators use credit to invest and make a profit. They always complain that there isn’t enough “money” in circulation. What they really mean, however is not money but cheap credit. The British had long since perfected a central banking system (The Bank of England) which provided lots of cheap credit. This provided funding for the many colonial ventures which eventually built the British Empire. Many Americans clamored for a duplicate of the Bank of England. They wanted to get rich quick, using cheap credit.

The Genesis of the Fed

Twice in the 19th century the US government created a central bank and twice the government, under new administrations, closed them down. Finally in 1913, the Fed was created. It has lasted nearly 100 years.

The purpose of a central bank is to form a cartel of the banking system, to coordinate the expansion of lots of credit on top of the gold reserves. By 1971, the number of dollars in circulation was so great And the value of the dollar so reduced, that foreigners were exchanging all their dollars for gold. At that point we simply went off the gold standard. The government confiscated all the gold. We were left with the fiat dollar. The law (fiat) said that the dollar was legal tender, and the legal tender law said that we must accept the dollar “for all debts, public and private”.

The Stealth Tax Alias Government Deficits

Government, more than anybody, likes cheap credit. Obscured by the smoke and mirrors of bookkeeping, (Now you see it, now you don’t!) the Fed “lends” the government whatever amount of money it wants. The loan is never repaid, and the interest the government pays the Fed is returned to the US Treasury. I’d call that loan an outright gift, wouldn’t you?

This is how our government finances its deficit. The Fed creates (counterfeits) new money for the government to spend. Talk about our grandchildren paying the mounting “debt” is a smokescreen. This is why people in government can say, “Deficits don’t matter.” That newly created money is spent as fast as it is created, and becomes a permanent addition to the money in circulation. That’s money inflation.

Something that’s hard to realize is that money, like any commodity, obeys the law of supply and demand. The more dollars available on the market (in circulation), the less each dollar is worth. Not immediately, but in time. The market reacts slowly because the realization spreads slowly that something has changed. Gradually all prices rise. You and I get less real wealth in goods for the money we earn. Uncle Sam has cleverly picked our pockets.

Remember, money is not wealth; it is just a medium of exchange. Putting it in terms of macroeconomics, the market adjusts prices so that the amount of money in circulation matches the amount of goods in production.

It would be tempting to set this down as an equation (It has been tried) but there are two problems with that. First, an equation implies an instantaneous reaction while the response of prices to money supply is a slowly ongoing process which never quite catches up with the latest change in the money supply.

The second problem lies in the definitions of “in circulation” and “in production”. They are both difficult to define and impossible to measure. But that is a fundamental problem with macroeconomics.

The Business Cycle

Perennial government deficits are a one-way street. Government wants money, the Fed supplies it, the government spends it, and goes back for more. The trend is an ever increasing money supply and an ever decreasing value of the dollar.

The business cycle, however, involves a cyclical variation of the money supply which is superimposed on the trend of increasing money supply caused by the government deficits.

The business cycle is caused by the efforts of the Fed to sustain an unsustainable boom. The boom is unsustainable because it is an illusion. The idea that manipulating the supply of money or credit can somehow increase the production of goods is a basic Keynesian fallacy.

The Fed tries to stimulate the economy by reducing interest rates to encourage the expansion of credit. The banks gladly extend credit at low interest, mostly to businesses.

Businessmen invest the new money on capital goods to improve productivity in hopes of profits. Such expansion appears profitable because of the new low interest rates.

The boom that follows does not affect everyone equally. Rather than increase total production, it shifts some productive activity away from production of consumer goods to production of capital goods: the buildings, machinery, and tools needed to improve production. These capital goods will increase productivity, in time. Meanwhile, the supply of consumer goods will be reduced to provide the means (labor and materials) to produce the capital goods.

The Fed operates on the Keynesian fallacy that adding money to the system is all that is needed to expand production and maintain prosperity. However, added production requires added materials and labor. Increasing the production of materials requires even more added labor. Labor is the limiting factor in a boom. More money can’t create more labor. It can only shift workers between jobs and companies and industries.

To persuade workers to move to new jobs requires offers of increased pay. This is the beginning of the price inflation which always follows an increase in the money supply. As workers spend their increased pay, we find an increasing supply of money chasing a reduced supply of consumer goods. Price inflation follows. Wage inflation spreads.

As with the stealth tax, the means to invest in capital goods is taken by stealth from the value of every dollar in circulation. It also reduces the value of my insurance policy and your pension fund.

The action of the Fed has defeated our efforts to provide for the future. The Fed has taken away our free choice as to how much to spend now and how much to provide for the future. We have been forced to do without some consumption goods now, to subsidize industry in the hope of better or cheaper goods in the future.

Businesses calculate the investment in new capital goods to be profitable on the basis of current prices of materials and labor. Increasing prices of materials and labor may be enough to turn the profit to loss. Some of those projects will fail. When this happens, new buildings and machinery will be wasted, abandoned or sold off at a loss.

When the banks feel that the credit they have expanded has become excessive in proportion to their reserves, they will halt the expansion or even reverse it. To do this, they will raise interest rates on their outstanding credit. This will cause more businesses to fail.

When, finally, some businesses default on their interest payments, bankers will panic and call in loans to retreat to a safer reserve ratio. This is the crash phase of the business cycle. Businesses retrench, downsize, and lay off workers.

The money supply has suddenly shrunk and prices and wages have dropped. Unemployment soars. Recession has arrived. The boom was started by creating money out of nothing. Now the money has returned to the nothingness from which it came. The Fed has orchestrated the cycle, guided by the fallacies of John Maynard Keynes.

FREE MARKET PENSIONS

July 1, 2010

FREE MARKET PENSIONS

The welfare state is under threat by demographics. Many people are now living for many years beyond retirement age. The US social security pension system is an ever growing government obligation. Financially, it is a pyramid scheme which is doomed to collapse. We badly need something better. The free market can always provide the best answer. The Social security system is a major and growing government intervention into the economy of each household. It’s time to retire the government pension scheme.

Following current US trends, we have people spending fewer years in productive work, more years preparing for work, and living more years after retirement. The number of people living past 100 is growing rapidly. I retired in 1991. Since then, my children’s generation has supported me. Now my grandchildren’s generation is also supporting me. If I live to 100, my great-grandchildren’s generation will be supporting me and also supporting my children. Perhaps I should do them all a favor and die now.

But what happened to all the money I paid into the social security fund? Wasn’t it invested so that the proceeds of the fund would support me now? No, it was “loaned” to the US government. But the US government doesn’t pay its debts. It spent the money and just kept on “borrowing” from the social security fund. The “fund” is a fiction. My pension is paid out of the social security contributions of the present working generations.

The free market alternative is obvious. Instead of investing in the fictitious government fund, you could invest it in some free market institution, which will be legally obliged to deal honestly with you.

If you pay into an annuity during your working years, you will have a pension for as long as you live.

A mutual fund of stocks and bonds can provide your pension in your old age. If you spend only the dividends in your retirement, you can leave the fund to your children to build up their pensions.

In each case your savings are invested in something productive which will earn dividends and interest for you by producing goods for consumption.

Paying into the social security retirement was easy when I started work back in the 1940s. As I remember it, my deduction was 3%, including the matching payment from my employer. Now, the total would be 33% if I were still working.

Phasing in a free market system, while still paying enough to cover the entitlements already committed to, will mean even greater taxation for the next working generation. The politicians haven’t yet found the political courage to start the transition. Will they ever? They may just paper it over with inflation, the stealth tax.

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