John Lounsbury's  Instablog

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optionsgirl Comments (4067)
 
It's called dying with your boots on!
10 Dec 2011, 04:14 PM Reply Like

John Lounsbury Comments (3786)
 
OG - - -

I'm hoping to get more done on this weekend and build it into an article that looks at the problems at both ends of the demographic distribution.

In the meantime, maybe we are changing from "boots on the ground" to "boots in the ground."
10 Dec 2011, 06:41 PM Reply Like

untrusting investor Comments (6976)
 
Interesting stuff. Not sure what the implications are, but as one approaching retirement ... certainly not looking forward to working indefinitely.
10 Dec 2011, 07:15 PM Reply Like

Leftfield Comments (3067)
 
Raising the retirement age in SS and other pensions is mandatory if insolvency is to be minimized. Loud though the complaints will be, this likely the single most effective change possible.

Meanwhile, our society of increasing entitlements and impediments to productivity is destroying the jobs markets for the young, many of whom cannot pay their college loans or learn skills on the job. A bloated public education bureaucracy that stifles adaptation of curricula to the actual world we live in is also a monstrous impediment.

No doubt the article will offer interesting solutions to broken-down US jobs creation.
11 Dec 2011, 10:55 AM Reply Like

John Lounsbury Comments (3786)
 
Leftfield - - -

Raising the SS retirement age will be a given soon. The number of people remaining in the labor force past age 65 is going up fast: Nearly 1/3 are in for 65-69 and approaching 20% for 70-74. It is quite reasonable to expect something like 65 for early reduced benefits and 70 (or even 72) for full benefits. It is also likely that there will be reduced benefits for higher income people, say reductions starting at 3X poverty level and becoming 100% at 6x poverty level. Today, that would start SS reduced payments somewhere around $50,000 to $60,000 per individual and have the progressive reductions reduce SS retirement benefit payments to $0 somewhere between $100K and $120K per individual.

Now, we also have to get serious on getting the cost of medical care down to 10% of GDP (or even less). What has been started is not going to get there, so much more needs to be done.

Both of these actions will be diminishing total personal income so there is a negative impact on the economy, even though reduced cost of health care will free up money for other personal expenditures. So reducing healthcare costs may have some offsetting economic benefits.

None of what I have discussed in this comment gets to the problem of where the jobs are going to come from for the under 30 crowd that is taking the brunt of the current employment depression. And, with so many now carrying substantial college debt (about $25K on average?) loan repayment takes a big chunk out of earnings for many years. For example, repayment of $25K at 6% over 10 years requires payments of more than $3,300 a year. This may not be a major burden for an engineer (if he can get a job), but for a starting school teacher, social worker or professional assistant starting at $30,000 a year or less it is a draconian burden.

And , of course, the college graduate who can only find minimum wage (or near minimum wage work, may make less than $20,000 a year.

Finally, there are millions in this under 25 cohort that aren't even in the labor force. They can't even afford transportation to jobs that would compete with $250 a month in India or $300 a month in the Philippines. See http://bit.ly/ueJJwn


11 Dec 2011, 01:39 PM Reply Like

siliconhillbilly Comments (1131)
 
John, I would like to know where these "efficiency in health care" improvements will come from. The present system is so screwed up that the incentives to reduce costs are vague and dispersed.

A single payer system pushes all of my "Socialism is doom" buttons, but I don't see any other way to provide even minimal health care to those that are unemployed and broke. Emergency rooms as clinics and hit and miss private charities just don't cover the territory.

There are many visible medical technologies that might make a big difference, but most are not interesting to private investors because of their lack of a profitable market.

Example: An "at birth" vaccine or probiotic treatment to eliminate dental caries. The research is there but the money for the controlled studies isn't. The technology could produce big health care savings for a smallish investment, but who pays and how do you get the "patient" to use the result? Lots of stupid and/or ignorant people out there. For those too dim to have their children vaccinated, do we still pay for the kids dental treatment as they get older? Naturally. Sigh.

Treating 20 million cases of type 2 diabetes in 10 years, with related nerve damage and kidney problems is going to cost a LOT of money. What a mess. Charging it (borrowing the money) just isn't realistic any more. Printing enough money to bury the debt will just crash the economy from inflation and lack of investment in new technology for higher productivity.

Maybe I'll emigrate.
11 Dec 2011, 02:37 PM Reply Like

John Lounsbury Comments (3786)
 
siliconhillbilly - - -

I wrote about the need to push expenditure decisions directly to the consumer during the healthcare debate 2-3 years ago. The idea was that it is only when the patient has an economic stake in how healthcare is delivered to him/her personally will there be a force driving effective efficiency. The single payer option can address costs statistically but does not have any chance to drive down costs in a way which is efficient for all consumers. Only individual decision control can do that.

Of course, the idea I outlined is too idealistic to be a perfect solution. Some of the impediments:
-- Some patients will simply not make the effort (or lack the intellectual competence) to learn enough about their options.
-- Since there will always be some sort of safety net, there will be those who will try to game the system.
-- Some of the providers of care and services will not be on board for efficiency because if will reduce their income.

Yes, the idea that "free market competition" can drive down costs and drive up efficiency is wonderful. But it many areas, and health care is one of them, free market conditions do not exist - prices are essentially fixed by insurance companies (and government) and consumer information and education is lacking.

The ideas that there are "capitalist" or "socialist" solutions (bottom up competition or top down management) are just keeping us from making progress. My idealistic patient control model or someone else's single payer model are both pie in the sky for the world as it has evolved. Both might have some merit if you were starting from scratch to design a healthcare system. But both are so distant from our present reality that thinking that one or the other is "the solution" is plainly poor thinking.

So, if there is going to be evolution from the current morass, the steps would likely involve some aspects of both centralized control and individual decisions, competition. And such solutions are not politically possible in a system with the free-market fantasists and the central control freaks demonizing each other.

Let me know where you are emigrating.
11 Dec 2011, 03:41 PM Reply Like

siliconhillbilly Comments (1131)
 
John Lounsbury said: "Let me know where you are emigrating."

I'm thinking of Robert Heinlein's moon colony, as portrayed in "The Moon is a Harsh Mistress".

Maybe it exists in an alternate universe. Sigh.
11 Dec 2011, 10:33 PM Reply Like