If we don't fix the entitlement crisis -- specifically, the Medicare crisis -- soon, it's not going to matter one little bit what the Presidential candidates promise us. What's especially disappointing is that when you look at the platforms of the 2008 Presidential candidates, only a couple of them have even brought up the subject of Medicare reform. At least six of them appear to think that there's no problem at all...and that's a problem all of its own.
As some of the candidates get behind proposals for "national health care," it brings up two serious concerns:
- First, anything that they do has to make sure it doesn't discourage Americans from saving. And that's a tall order -- if you're in your twenties or thirties today, and you're really thinking about the long run, you're saving not just for retirement, but also for other needs in the future -- which will probably include health care. Perhaps you're saving now so you can afford a heart transplant (or maybe a whole new bionic replacement heart) someday. And that would be a completely rational thing to do...unless the government says it's going to take over all health care, in which case you no longer have the same incentive to save. But the law of compound interest remains in effect, so instead of saving a little today and getting the future health care essentially for free, we put off paying the bills until they cost much, much more.
- The second problem is that the notion of "health care" is preposterously over-broad. Maybe the government has a role in providing catastrophic health-care insurance...or coverage for emergency care...but what about preventative care? What about routine checkups? What about wellness and exercise costs? What about dental coverage? The problem seems to be that once this camel gets its nose under the tent with "comprehensive health care reform", we're going to be left without any choices. Government will not only insist on being involved in each phase of our health care, it's going to get in the way of our ability to make our own choices. And it's going to be just as bad for us when government tells us that it can't afford some of the things we might want as when it tells us we won't get to experience the benefits of the things we chose to do for ourselves.
We are, however, paying too much attention to house prices: New-car sales are being squeezed by falling house prices. If you were a farmer a hundred years ago, you didn't buy a horse based upon what you thought your farm was worth. You bought the horse based upon what that horse could do. A car is a tool, just like a horse used to be. It's crazy to decide how much to spend on it based on how much you think your home would sell for...especially if you aren't even planning to sell that house in the first place.
It turns out communism isn't quite as dead as we thought: Russian officials are imposing price controls on food. I don't believe in psychic powers, but I can already tell you that this is going to result in food shortages. It's also terrible news that Western speculators are keeping the Russian stock market afloat.
Even with candidates dropping out of the Presidential race, the economic platforms of the 2008 candidates for the White House just aren't meeting the minimum expectations. More of them think we ought to do nothing about Medicare than think we ought to act, and only four of them have really worked in the private sector for any length of time.
20% of Canadians apparently think $100 is too much to pay for a cancer vaccine. Is that a pathetic commentary on socialized medicine, scienfic illiteracy, or consumerism?
Peer into the future with the updated Future Scale. And get a good read in with "Buffett: The Making of an American Capitalist". It's well worth the read.