Sunday, March 2, 2014

Imaginary Treasures

Specifically, that which "exists" to be somehow pried from the U.S. Treasury. Some asset holdings in particular can fool observers, who read more into them (in terms of wide distributive potential) than they are actually capable of providing. Fiscal strategies of the present have more limitations than the fiscal options which previously existed. How so?

Those who dream of procuring a "magic" fiscal key for continued growth, perhaps do not realize it was already claimed a half century earlier! Lest anyone think those in power might provision needed skills sets, let alone a general income guarantee for the underemployed and the unemployed, something stands in the way. Indeed, the roadblock has some bearing, on why it seems necessary to compensate those who can't participate.

Not only does this create issues for governmental decision making processes. That "early grab" also leads to another unfortunate rationale. It goes something like this: if the government can't "get us out of a fix", how or why should the Fed be able to? So what's the problem? If "all roads lead to Rome", most monetary roads of the U.S. present eventually meander back to healthcare. Uwe Reinhardt wrote an incisive article, which explains how the key to the Treasury was already claimed. From the opening paragraph:
About half a century ago, organized medicine and the hospital industry in this country struck a deal with Congress that in retrospect seems as audacious as it seems incredible. Congress was asked to surrender to these industries the keys to the United States Treasury. 
Reinhardt's article matters on so many levels that I was hard pressed to just focus on a couple of points for this post. Indeed, when I read it, I already had a post in progress, detailing the degree to which healthcare was swallowing up everything in its path. Specifically: the economic demands of healthcare, now impact the ways in which wealth is defined and determined.

For instance, only think how nonsensical Republican strategies for smaller government sometimes seem. After all, the healthcare establishment is part and parcel of how government and private business often operate together - Obamacare or no. Does anyone think a general income could actually be implemented to get rid of "welfare", when said welfare is mostly a way to reimburse special interests "catering" to limited incomes? Unfortunately, no proposed solutions to simplify the system will work, so long as the underlying intent remains that of protecting knowledge and skills use rights for the limited few.

One recent TV commercial bashed Obamacare yet again, and compared it to a high school food fight. But the premise was lame indeed. No alternatives were offered in the last voting season and no one is offering any now. The Republicans could come up with nothing better ("vote for us instead"), than "we're not food fighting we're too busy creating jobs". Jobs are great - if and when it's possible to create them in resource rich states - but that rationale is hardly a true counter for the real problem which Republicans have yet to face.

So long as political parties are about oil (for or against) and other special interests, renewed fossil fuel production mostly serves to "feed the monsters" of skills limitation. That means precious little left over, for societal vision and continued growth into the future. Small wonder that party platforms get uptight when anyone actually confronts them on their lack of strategy. So long as everyone plays offense and defense re "meddling" governments, the "roads" of jobs, taxes and retirement benefits which eventually end up in healthcare wealth, cannot change course.

Who even has an idea anymore, what an optimal amount of healthcare might be? That is, in contrast to other ongoing societal needs, desires and aspirations? Both supply and demand for healthcare have been skewered for so long, that normal lifetime healthcare needs get put off until one can take care of them in retirement - at least in the U.S.

This issue goes well beyond the incentive to allow everyone to participate, in anything remotely related to healthcare. People need to be able to do so at all stages of life. Otherwise we also end up with the lousy default option of today's dramatic surgeries, which find much of their primary compensation in the U.S. for late life issues.

While this is an important facet of healthcare, it never should have overshadowed the multiplicity of ways in which healthcare was once utilized. By focusing on retirement age issues over the actuality of  lifetime health needs, we also alter the trajectory as to what late life issues might even consist of. Sometimes, extensive surgeries offer a new lease on life and hope. Other times, they are - unfortunately - imaginary treasures. We don't have to be harsh judges to decipher the unknown difference (death panels) ahead of time, if we are willing to transform what is now an extremely expensive resource based choice.

First, "do no harm" according to the Hippocratic oath. Yet to a considerable degree, the harm has already been done, as economic activity of all kinds remains in doubt. How can anyone know whether resources and assets will be productively used, if feeding "the hungry monster" means people can no longer rely on compensation for their own attributes. It has became progressively more difficult to compensate many people in the workplace, who do not work directly with subsets of chronic illness as covered by Medicare.

What's more, people who once knew how to tend to basic healthcare needs, have been told for nearly a century to just let the experts take care of it all for them. Conditioned over time to not help themselves in this regard, they end up waiting for someone else to help them instead. Now, even monetary systems are finding themselves compromised, from the results of these needless power designations. It is time to provide the healing that heals on all levels - by allowing people to take care of themselves on true economic terms, once again.


  1. Becky, O/T: I'm like to learn how to perform "neutrality of money" calculus, MM style. Setup: cashless society, central bank (CB) has $1 reserve liabilities, reserve requirements are 0%, commercial banks have $2 deposit liabilities, and the average price level is in equilibrium at P = $1. Now the CB takes over the banking sector, merging its balance sheet (BS) with those of the commercial banks. Result: CB has $0 reserve liabilities and $2 deposit liabilities. Define "money" to be what the long term neutrality of money works on.
    1. What was the stock of money prior to the CB taking over?
    2. What is the stock of money after the CB takes over?
    3. Did demand for money change? By how much? Why?
    4. What is the long term affect on the price level P?

    Now say the CB buys $2 of Tsy bonds from the public and enough time passes for P to reach a new equilibrium.

    5. If this is done prior to the CB taking over, what is the effect on P? What is the effect on the demand for money?
    6. If this is done after the CB takes over (and after a new equilibrium is reached), what is the effect on P? What is the effect on the demand for money?

    1. Tom,
      My apologies for not being able to answer your concerns directly! Pricing is primarily a (fluctuating) surface observation of total economic participation, alongside elements of wealth capacity which people feel they can trust and rely upon. Indeed that is my focus, to ensure that belief in the human component is stabilized so that other aspects of the economy are capable of stabilization as well. Long term neutrality is also a result of confidence in this regard.