The Bottom Line

Cash In Hand

You often hear various people on the left and right tell you that if you vote for this candidate or that, if you support the Tea Party, the Republicans, the Democrats or whatever that some terrible thing will befall you — and if you instead vote their way that it will all be ok.

Well, how’s it working out for you?

I remind you that the Republicans could have prevented the government from re-opening until Obamacare and the health scam generally was stopped and reversed.  They could have also forced an immediate balanced federal budget.

I remind you that the Democrats promised you that you’d be able to keep your health plan if you wanted, but if you didn’t it would be cheaper under Obamacare than before.

We now know the claims from both sides were lies.

And by the way, while some people can buy a “cheaper” plan the deductible is almost always two, five or even ten times what their current plan offers and as such the claim that your “previous” plan was “junk insurance” is exactly backward — what you are being forced to buy now is trash by comparison.

I have repeatedly said that the last apparent peaceful remaining means of protest for Americans is a tax strike — a lawful one.  Refusing to work beyond your bare necessities and by doing so destroying the predicate base upon which Treasuries have value, thereby forcing government to resolve the health monopoly problem and balance the budget or be destroyed by market forces, is the only way out of the box that does not involve violence.

I have repeatedly been told that (1) I’m crazy, (2) that their wife or husband (usually wife) will divorce them if they do this, (3) that they “can’t afford” to do any of that (usually by people voluntarily living in a very high-cost area such as NY or Chicago) and that they have to stay on the hamster wheel as it’s the only thing they can do.

I have repeatedly maintained that you’re wrong and in fact you’re just like the Jews who believed it would all be ok as they got into the boxcars, despite the fact that an immediate revolt, while very high risk with the knowledge that some of them would be shot and die, was in fact their last clear chance to avoid all of them being murdered.

If you don’t act now you’re going to be financially murdered.

Let’s put a number on it: The CBO says that by 2016 the average family is expected to face $20,000 a year in medical expenses between “insurance”, deductibles and direct costs if employer-based, and $15,400 if not.

Here’s the paragraph:

CBO and JCT project that a typical family health insurance policy purchased through an employer will cost about $20,000 in 2016 and that the typical premiums for the second-lowest-cost silver plan available through the exchanges for that family will be about $15,400. The difference in projected cost for the two policies reflects various factors: First, employment-based plans are expected to have an actuarial value of 85 percent (roughly comparable with the average for employment-based plans today), and silver plans will have an actuarial value of 70 percent.25 Second, administrative costs are expected to be much higher for exchange plans than for plans offered by large employers, principally because of the higher cost of handling enrollment and collecting premiums. Third, the premiums for the second-lowest-cost silver plan are expected to be below the average premiums for silver plans.

The real news is much worse that it first appears.  Note the bolded section.  The remainder from 100% of actuarial value is paid for, on average, out of your pocket!

So if you have employer “sponsored” insurance the amount your pay will be reduced by gross is $20,000plus you will spend (on average) $3,529 out of pocket, for a total reduction in your gross earnings capacity of $23,529.  Note that in the 1990s my sickest and most-expensive to insure employees cost approximately $8,000 a year with close to zero out of that staffer’s pocket.  This is a tripling of that expense.

If you’re not covered by an employer?  It’s roughly the same — your insurance plus out of pocket will be $22,000.

That’s more than you spend on your housing — all-in — if you’re an average middle-class family.

Who among you will not be in the streets — literally thrown in the streets starving — if you are forced to do this?


Nobody, that’s who.

These are not my figures — they’re the government’s figures.

And while the CBO also states that “exchange subsidies” will help, will they help enough to matter?  No —after tax family expense for an employer “sponsored” plan for said $50,000 family, with the subsidies included, will be according to those estimates total $17,300!  And if you believe the fanciful figures bandied about for non-employer-sponsored coverage, it will still take $6,000 annually out of your pocket and I’m willing to bet that if you have a $50,000 family income you don’t have an extra $6,000 each and every year.

This is not some abstract event 10, 20 or 30 years in the future — it is just a few years down the road and on the present course the inevitable outcome of both Obamacare and federal deficits.

If you need proof simply look at the Detroit pension situation.  Recover is likely to be 15 cents on the dollar — that is, fifteen percent of what was promised.

Can you live on that?  Better think long and hard about that because Detroit is not an isolated instance — Chicago, for example, is right behind it.

Yeah, it’s true that I can go on a “general strike”, severely-limiting my output to that required only for minimalneeds — no special school provisions, no fancy vacations, eating at home all the time, cheap jeans and running shoes for medical care instead of paying the dick-dock, and I’ve got a cushion to tap and spend down.  But Idecided to live in a low-cost area 15 years ago; I moved here, I gave up being a hamster, I elected not to go back to school and get a law degree, I elected to live where the rat race had fewer rats and consumed far less cheese.

I made those choices and you can too.

Your wife may not want to — she may “demand” the private school for the kiddies, the Lexus, the diamonds and the big house in the suburbs instead of the 3/1, 1,200 sqft basic brick place that will house you and provide you with a place to shit, shower and sleep — at 1/4 or less of what you pay in the “big shitty.”  She might even be threatening divorce and poverty if you don’t play “her way.”

You ought to be showing her the facts, figures and math.  The trajectory of debt in our society and government.  What pulled-forward demand means and how it works.  That no loan is ever made without interest, and it’s never zero-cost.  That inefficiency applies to economics as it does to thermodynamics.

And finally, that the CBO — your own government — says you’re screwed in 2016, just three years from now, if you get in that boxcar.

That’s not “perhaps”, not “odds-on”, but with certainty.

The simple fact of the matter is that if you do keep on keeping on you’re going to be in poverty anyway, so you may as well do it on your terms and choose when, where and how so being less-well-off doesn’t mean starving in the streets, which is exactly where the above attitude is going to land all of you, including the wife and kids.

But if you make the alternative choice you might, if enough people come along, actually manage to prevent the disaster that is otherwise inevitable.

Choose wisely folks.

The Market Ticker

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