patrick.net

I like the idea of gold and silver money, but if you read a bit, you see they had plenty of bubbles and busts in the 1800's with gold and silver as well, because of debt.

A debt is a promise to pay, and you can promise to pay gold and silver just as well as promising to pay paper money. And those promises can cascade on each other, building up massive promises in a bubble and then all dissolve in a bust.

But at least gold and silver don't have much inflation.

Our money isn't on paper at all anymore -- it's digital. We do business by trading credits.

The odds of going back to commodity trading is about as likely as going back to a barter system.

But at least gold and silver don’t have much inflation.

How about the Coinage act of 1873?

Another problem with precious metals is that counterfeiting is trivial, especially with modern technology.

1. Create a mold of an appropriate coin (can be done trivially in your back yard)
2. Cut gold coins in half (or less, if you're good).
3. Create a disk of steel or some other cheap metal
4. Plate the steel with the remaining gold.

Very few people would know the difference, and tracing it back to the source would be damned near impossible. Coin counterfeiting was a very widespread practice before the shift to paper currency.

Another problem with precious metals is that they have intrinsic value. Gold is used in electrical components and silver has natural anti-microbial properties that make it useful for many applications. Using useful materials for currency puts arbitrary limits on these things.

Why not use iron, copper, aluminum, or lead instead of silver and gold? Why not use precious stones?

There are certainly many faults with fiat currency, but there are many faults with commodity-backed currency as well. Arguing for something different for differences sake is pretty lame.

Not all precious stones are safe. De Beer's currency is being counterfited in labs to my delight. I would love to get my hands on one of these flawless diamonds the size of my fist. I would find many cool things to do with it besides try to use it as money.

I agree - mostly.
As Patrick said, there were plenty of booms/busts when we were on a gold standard. It's part of the business cycle of capitalism. Like all cycles there is a lesson to be learned. Busts should wipe out the imprudent and remind all of the dangers of too much risk. They are tough but fair.

One of the arguments for forming the Fed, after the panic of 1907, was to smooth out these cycles with an accordion like currency (Senator Root in 1913 argued it would become only expansive). It's sound in theory but like communism, fails in implementation. The problem in my mind is they don't address the booms then rush in and backstop the busts on the citizens dime using emergency and fear as the justification.

Kevin,
As to credits, we were on a gold backed currency until 1971 and credit existed then. There is no reason credits can't be set to a certain troy ounce. A central bankers job should be to assure that the currency under his care is exchangeable into gold at the lawfully stipulated rate. That's it. Now they have become central managers and are capriciously improvising a monetary solution to a credit crisis they fostered.

Gold is used in electrical components but, it's a trivial amount. It's anti-corrosive so sees use in harsh environments but is a fairly poor electrical conductor. Silver is the best electrical conductor but its price has (mostly) excluded it from being used as an industrial metal. We could use iron, copper, aluminum, or lead as backing but they are used in industry. Copper and Nickel have, until recently, been used as money in pennies and nickels. Gold is the traditional money precisely because it a commodity that does not have much practical use.

You are correct about the counterfeiting. Quarters and Dimes are ridged on the edges because when they were smooth (and silver) people would shave slivers off the edges.

Coins of pure gold or silver would be a known weight, making it very easy to use a machine to check their purity. Gold and silver are elements so looking up the density is easy. Gold in particular is good for coins, because nothing else is as dense. Lead is lighter, actually.

So if there's any doubt, you can just weigh and measure a gold coin and know that it's pure. I don't care if pure gold is soft. It will last long enough for many uses.

Silver's purity is harder to check, but there are also cheap ways of checking it. And it is more volatile, with demand rising and falling, and more being found all the time.

One thing I hate about metal coins is that they are given dollar amounts totally without reason except for politics. Gold and silver coins should simply be weights of that amount of the metal, not "dollars" or any other politically defined currency. Once you do that, you defeat the purpose of having gold to begin with, because you can define a dollar as an ever-decreasing amount of gold.

>>Patriot Act seemed to have worked I have not seen any reports that a specific provision of the Patriot Act was instrumental in apprehending the suspects.

Well, I'm not part of the a.m. radio crowd, but it shouldn't matter if I were. I am disappointed in the apparent justification for your leaving. I wish that you would reconsider based on your own consideration. It is unfair to make the association that being part of the a.m. radio crowd, or being conservative, entails incivility. You do this. I agree that incivility can be a good reason to move on, yet you seem to allow your political bias (which can be viewed by some as just as unsavory as you view others) to have undue influence. By adding your own gratuitous political barbs (all you had to do was complain about incivility, irrespective of politics) you employ the same political intolerance that you condemn--albeit with a little more civility, thank you. And, goodbye.

"I have not seen any reports that a specific provision of the Patriot Act was instrumental in apprehending the suspects" Of course 'you' didn't. I don't think 'you' ever will.

thomas.wong87 says

“I have not seen any reports that a specific provision of the Patriot Act was instrumental in apprehending the suspects” Of course ‘you’ didn’t. I don’t think ‘you’ ever will.

So why don't 'you' fill us in. Awaiting with baited breath.

The politicians can still create millions out of thin air just by issuing promises that taxpayers will pay gold in the future.

The gold isn't really there, but if people believe they can get it later, that belief can be used as money.

'You' are right! lets scrap the Patriot Act invite 'them' over for a beer on the patio and watch some good old fashion Football game. Throw some steaks, chicken, corn on the grill and talk over our differences.. Hey Osama! how you like your steak... well done or bloody raw ! LOL!

"So why don’t ‘you’ fill us in." And who is 'us' ? 'You' speak for the rest of 'us'.

Thomaswrong say: "elliemae says I am still waiting for CHANGE, but see the Patriot Act which our President voted AGAINST, will be renamed and fully supported. Patriot Act seemed to have worked, and worked well. Wonder how many are aware 3 people were caught from what may be a terrorist act on US soil. Stay tune for more details to be public. Good job VP Cheney!" Elliemay no say it. It was someone else. Although I believe that Presidents Bush & Cheney were the absolute worst we've ever had (and resent that peopel attribute the capturing of such criminals as mentioned above to bush & cheney - they didn't arrest 'em) , I've never weighed in on the patriot act.

The left vs right thing is a wedge argument. Just like Intelligent Design, it goes nowhere, but simply wants you to pick a side. Just respond once, however ridiculous the argument, and WHOA, WE HAVE A DEBATE!!!!!! EVOLUTION IS IN CRISIS!!! That's were we are with health care. If you have a vested interest in the status quo, then stupid debate over death squad panels and rusty scalpels in 3rd world countries is great stuff. But the important thing is everybody has to pick a side. Apparently, someone still has to the opportunity to choose the right side of a very, very naughty girl.

BobK says

From what I’ve seen, the left has taken over the forum. I’m afraid that one day it will dominate to the point where dissent is punished.

10 comments and you feel threatened by the evil left? Coming after you with their free health care and safe working conditions. Fair taxation and accountability for corporations who ship good jobs to our competition. Shaking like a leaf, no doubt. Where's the Great Right Hope? South Carolina? Alaska?

jl444 says

Well, I’m not part of the a.m. radio crowd, but it shouldn’t matter if I were. I am disappointed in the apparent justification for your leaving. I wish that you would reconsider based on your own consideration. It is unfair to make the association that being part of the a.m. radio crowd, or being conservative, entails incivility. You do this. I agree that incivility can be a good reason to move on, yet you seem to allow your political bias (which can be viewed by some as just as unsavory as you view others) to have undue influence. By adding your own gratuitous political barbs (all you had to do was complain about incivility, irrespective of politics) you employ the same political intolerance that you condemn–albeit with a little more civility, thank you. And, goodbye.

A most excellant post. @Ellie, you are correct when you say Bush and Cheney did not arrest anyone. But, if you take that position, isn't it impossible to blame Bush for going to Arabia and killing people for oil? (or pick any one of the other popular attacks on the war). Bush, while he was entirely too free (notice I do not use the "L" word) with spending, was a great President for security of this land, in my opinion.

elvis says

When our country had HONEST politicians

No such thing has ever existed in any country ever. Don't believe the myth of the altruistic founding fathers.

I still don't see how gold is not just some arbitrary definition of value or how it's any better than fiat currency. How many houses is a kilogram of gold worth?

You need a unit like "dollars" because otherwise you just have a barter system, and if you look at any economy that still uses a barter system today you'll see that economic output is anemic. People need to have some reasonable level of confidence that they can exchange goods and services for some reasonably fixed value and get back an equal amount of goods and services by exchanging those credits.

It's simply not practical to carry around physical gold no matter what you do -- it will still be digital transactions, and those transactions will be arbitrary barter (this house costs 12 kilograms of gold) or some defined unit (1 dollar is 1/1000th of an ounce of gold).

On the matter of "sound" currency, I think you underestimate the value of confidence. Consumer confidence has always been the largest component of any economy. "Value" of physical goods is arbitrary. Gold has little inherent value other than scarcity and corrosion resistance. The "valuable" things are the products that we purchase -- food, clothing, housing, etc.

It's highly unlikely that private citizens would even be allowed to possess gold if it was the backing of our currency due to relatively cheap counterfeiting. Scales aren't that accurate, and those that are are way too expensive for personal or small business use.

All of the current problems with our financial system would still exist even if we were on a gold standard. Some small and arbitrary benefits would be:

1. Government purchases would be financed through taxes rather than debt (probably a net positive)
2. Inflation would be more tightly controlled. This is a wash. Inflation is not bad in and of itself -- it really depends on whether you're a debtor or a lender. Inflation or deflation are only an issue when they become extreme. Inflation is still quite possible even with a gold standard -- supply and demand have a bigger overall impact.

We'd also have plenty of bad things:
1. Savings would sit idle rather than being invested, reducing economic activity
2. Counterfeiting of gold-backed notes becomes an infinitely more lucrative activity.

We'd still have fraud, we'd still have unchecked credit (the real "monetary supply"), and we'd still have corrupt politicians.

staynumz says

Yes, I have noticed how all these jobs have come back to the states since your buddies took control. Cap and tax will surely invite millions of jobs back to the states.

Our industry has some of the cheapest prices for energy in the world. That's not the problem. Cap and tax is an idea supported BY industry, because it makes another market out of nothing. Wanna pollute? Just turn up the dial.

thomas.wong87 says

“So why don’t ‘you’ fill us in.” And who is ‘us’ ? ‘You’ speak for the rest of ‘us’.

Ok fill ME in. How exactly was it that the patriot act made it possible to arrest these people and why was it impossible under existing laws pre patriot act. I I I I I I am waiting with baited breath.

Re Patriot Act: Frightening violation of civil liberties, passed by a panicked Congress only a short time after 9/11, and most of them didn't bother to read it! Watch Michael Moore's documentary. We are governed by ill-informed idiots (who are put into office by equally ill-informed idiots). Fear lives! Fear, fear, fear, fear. Be afraid. Be very afraid for the future of your country. It isl destroying itself from within, WITH YOUR HELP.

I think gold and silver coins are quite practical, and they were used for centuries. But true, most transactions would still probably be digital, so you're back to debt, ie promises to pay.

I don't see counterfeiting being as much of a problem as debt.

Savings would sit idle more with gold, but that's not all bad. There should not be investment unless the investment has some chance of actually being profitable. Our big problem right now is artificially low rates that encouraged debt for unproductive investments.

Kevin,

Good post. I agree with you and disagree with elvis on many things.

We appear to be heading to digital credit/debit dollars. As a boy in the early 1970's my mother used to drive to the local bank, make a cash withdrawal and drive around town paying bills, bring home the receipts and fill out the ledger. Later she switched to checks. Fast-forward to today where all my bills are paid electronically and I rarely have more than 10 physical dollars on me to buy coffee. I've thought for some time now that minting money is, well, a waste of money. Overall digital currency is good. It's how modern commerce works and it could almost eliminate counterfeiting. I think the idea of paying with a pirate’s bag of gold coins where the merchant has to check the purity seems dated. A vision of a 19th century gold rush town clerk biting coins comes to mind.

Yes, there have been honest and dishonest politicians for time immemorial. The founding fathers were a collection of excellent men gathered at an opportune time and place but, were ambitious and egotistical. Not bad things. They had passionate differences. Benjamin Franklin thought the Currency Act of 1764, where England outlawed Colonial Script (a fiat currency) and forced hard money, was the catalyst for the Revolution. Hamilton, like most Federalists, was not opposed to a central bank. He proposed the First Bank of the United States in 1791. We are still debating Hamiltonian vs. Jeffersonian ideals today if we know it or not.

Confidence is central to all tender. Whether the tender is gold, paper, rice, or bamboo, the willingness to accept it depends on confidence that the next person will accept it at similar trade value. Though, like you said, Gold has no inherent value, it has been accepted as tender for over 3000 years so enjoys a history of universal confidence that cannot be matched. The problem with our currency is that it is only backed by the good intentions of the U.S. government and the demonstrated strength of the U.S. economy. This has been good enough for ~40 years but, very well could change. The inflationists argue it is already changing.

Where we diverge is that you seem to argue that because we have moved to more of a digital currency, it being backed by a commodity seems antiquated. These things move in cycles and presently I think the opposite. Currently the Federal Reserve can conjure money from the ether with the push of a button ("printing" is an allegory) and this, for many, is making the currency seem monopoly-ish. As money becomes more abstract, the need for it to be re-grounded is increased - lest confidence is lost.

There should not be investment unless the investment has some chance of actually being profitable.

I'm not sure what you mean by "some chance" here -- nobody invests unless there's "some chance". What matters is that the risk be commensurate with the reward.

If you're saying that you should only invest if you strongly believe that you'll get a return on the reward, that's a different thing. You're talking about a very conservative investment strategy, which is fine when you're trying to protect existing wealth. You won't become wealthy that way though (lets be honest -- if we saved 100% of what we earned we'd still retire middle class).

Aggressive investment strategies require more risk taking (and I mean actual risk -- as in "if it goes wrong, you lose the money"). Consider Venture Capital as an example. VCs can be slimy sorts, of course, but the basic business model is reasonable, and I don't believe it would be in the country's best interest to discourage it.

There's absolutely nothing wrong with risk. Risk is the main thing that sets the American economy apart from the rest of the world, and the reason why we enjoy the wealth that we have -- it's certainly not because we're better educated or biologically superior in some way. What is very important, however, is to ensure that when someone takes a risk, they internalize it as much as possible. If I fail, it shouldn't impact you (unless you invest in me or something).

reniam says

Overall digital currency is good. It’s how modern commerce works and it could almost eliminate counterfeiting.

Except on the part of the book keepers, of course.

reniam says

Where we diverge is that you seem to argue that because we have moved to more of a digital currency, it being backed by a commodity seems antiquated. These things move in cycles and presently I think the opposite. Currently the Federal Reserve can conjure money from the ether with the push of a button (”printing” is an allegory) and this, for many, is making the currency seem monopoly-ish. As money becomes more abstract, the need for it to be re-grounded is increased - lest confidence is lost.

The rub here is that even if you back with gold you're still not really constraining the ability to conjure money. Gold only enters the scene when someone actually wants to exchange credits for gold, which is an incredibly rare event. There's also nothing actually constraining the value of gold, and governments can (and have in the past) redefine its values arbitrarily. Consider the history of silver as a currency, particularly in the United States.

My main issue with this thread isn't so much about whether or not we should have a commodity standard, it's that I don't believe that it would actually address any more problems than it creates. There's a lot of evidence to argue in favor of fiat currency -- consider the massive improvements in quality of life since the world abandoned commodity standards half a century ago -- and even if you ignore those arguments, you're still left with a change that wouldn't likely accomplish much.

Would gold force real constraints on credit? How (remember, it's all digital and no gold changes hands until someone trades in their credits).
Would gold prevent the human-nature failures that are the central cause of every market failure?
Would gold improve the standard of living? How?
Would gold stabilize the economy? How?

It seems like the core issue here is inflation, but again, I would argue that inflation is not automatically a bad thing, and the debate on the issue is far from being black and white. If the only problem that sound money solves is inflation, then it doesn't solve much of anything.

The purpose is to return to an objective, rules-based currency. Dollars can’t be conjured unless there is a specified amount of gold to back it up. If done correctly, would go a long way in restoring confidence in the currency - the main thrust of your original post. It would help limit government spending. If you’ve been reading the news you’ve probably heard that our creditors are nervous about the dollar and are not buying long term bonds. This is a big red flag for, as you pointed out - lack of confidence. To reiterate: Creditors are showing a lack of confidence in what backs up our currency – the good intentions of the U.S. government.

For your questions: I know the gold standard is not the panacea many proponents seem to believe. Cycles of capitalism, bad government policy, corporate greed and rackets, individual’s whims, follies, and idiosyncrasies will still be with us. These are separate issues.

Has standard of living improved? We live in bigger houses and have more stuff but, inflation-adjusted wages peaked in 1973 (pg. 92). Debt, cheap imports, and cheap energy has had much to do with the standard of living increases you have seen. I would think that visitors to this site would understand the consequences of borrowing money. It will make you look good for awhile, then poof. Cheap imports have hollowed out our economy. There is a good chance we have hit peak credit and peak oil.

The second-level question you should ask is: Is it sustainable? A circle where the world produces stuff for us/we send them IOU’s seems destined to fail. My belief is a gold standard would not improve standard of living as you would define it. It is a hard task master so would probably bring it down to a sustainable level. Instead of 3 people living in a 3,000 s.f. home they would live in a 1,400 s.f. home. I believe this is inevitable anyway as we bring our standards inline with reality.

On a more philosophical note, I haven’t seen standard of living improve in my lifetime (I’m ~40). People are more isolated and stressed, work in jobs that don’t create value, eat crappier food, are in worse health, and have fewer friends and loved ones. By my measure we have moved backward in many ways.

Inflation is a difficult thing to argue. It all depends on how it is defined. Commodity standards do not prevent inflations/deflations but, help minimize them. I’ll let data argue for me: By the BLS’s own calculator, the buying power of a 2009 dollar is ~4% of what it was in 1913. A 1790 dollar had $1.08 buying power in 1913 (according to CPI).

Kevin says

Another problem with precious metals is that counterfeiting is trivial, especially with modern technology.

This will prove to be a serious problem in the future for bullion coins. To make an almost undetectable gold coin or bar, one uses a core of tungsten with the same exact density as gold, then covers with a layer of gold thick enough to pass an assay. Then needed design and purity marks are stamped onto the bar/coin to simulate the original. I've done research on this subject, and have found that several offshore companies are already producing fake Pandas, Maple Leafs, and Aussie Nuggets. Just a head's up!

I like gold and silver as money, but it doesn't solve everything. There were many boom/bust cycles with gold and silver, maybe more of them. There were depressions in 1890 and 1907, and the creation of the Fed was an attempt to fix them (along with protecting the interests of the biggest banks).

The problem is that then banks promise to pay gold and silver they don't actually have because they've lent it out to someone who invested it in their business and it's in yet another person's hands now. That's not dishonest, just normal lending. Then people get spooked, they all show up at the bank, and wham, there are bank failures. And short term interest rates skyrocket, and businesses fail because they can't afford the higher rates.

So maybe one solution is to limit the promises of immediate repayment in gold or silver by banks to the reserves they actually have on hand. Other people would have something like a CD, where the money is tied up until a certain date. Maybe fewer people would deposit money, and there would be less investment though.

Why isn't universal health care a necessary service?

Last time I read the constitution it allows congress to tax. The 16th amendment allows taxing without census. There is no mention whatsoever about how congress may spend. Please explain how universal health care is unconstitutional. I'm always interested to listen to a learned dissertation on constitutional law.

That being said, can isn't the same as should. So where does public good become socialism? Does elvis drive on those socialist roads, fly using the socialist air traffic control system, log onto the socialist internet? Or is socialist any program for the public good that you don't agree with?

There has to be a balance where the public good outweighs the cost in taxes. I agree the US government has far overstepped that line. Some programs for, example aid to farms almost all goes to large corporations, are simply huge boondoggles. But simply saying all government programs are socialist is just silly.

elvis says

You guys still MISS THE POINT.

Pardon me, I’m new here but this appears to be the de-facto refrain on this forum for those who don’t see things the same as others. Perhaps others have different points of view. Jeeesh.

Elvis - I didn’t see your point on some things because, frankly, some of what you said was wrong. I’m tired of the Jefferson quote. The founding fathers were not in agreement about central banking. The first Bank of the U.S. was chartered in 1791 with the support of Hamilton and Washington. It helped solidify the fragile federal government. Its charter was allowed to expire by Democrat-Republicans (the Homo-Erectus of the modern Democratic Party) in 1811 in opposition to the Federalists. After the death of the Federalist Party and an inflationary period during the War of 1812 (in which the U.S. had a hard time outfitting an army) the Democratic-Republicans suddenly decided the country needed a second Bank of the U.S. and massive government-sponsored, domestic infrastructure projects - just as the rival Federalists had always clamored for. Imagine this from Madison; a member of the Virginia Junto and disciple of Jefferson.

I do agree that a return to sound money would be wise. I work with several Asians and Europeans. Most Americans are unaware how much built up resentment there is toward America. It is almost completely ignored by the press. A large portion of the other 96% of the world’s population wouldn’t mind seeing us stripped of our reserve currency status.

Central Banks in and of themselves are not evil but, are fallible because they are run by men. They are the backbone to transactions in this country. Conspiracists quiver but, they move money around efficiently. They should be the lender of last resort. The gold, guns, and grub crowd may want a return to gold coins but, I, for one, like buying my widgets from Amazon. They should be regulated. They should not be a super-regulator or be central economic planners as President Obama has indicated. Currency they create should be backed by gold but, to me, what the medium of exchange isn’t very important as their job should be to make the public indifferent. Paper, zinc coins, digital, can all be replaced with the same gold, where 1000's of gold coins would be lost forever or destroyed per year.

elvis says

LIBERALISM => SOCIALISM => TYRANNY. (I thought I’d put it in its simplist form)

Simple is as simple does.

elvis says

Universal health care is not a necessary service because it is unconstitutional.

But, like thunderlips11 said - you can extrapolate out this argument to police, fire, education, et cetera, et cetera. There wasn't a police force in NYC until the 1840's and the Mets and Muni's often fought each other. "Fire clubs" didn't show up until about 1850. At that time they were little more than strong arm gangs for politicians. Education wasn't standardized until the late 19th century. I'm and east coast guy - kids used to work in factories in my hometown. That's sad. I have a 9 year old kid.

Article 1 of the constitution - of which a framed parchment copy hangs above my desk as I write this - deals with the legislative branch. It is terse and vague with the understanding the legislature would create laws. I take it very seriously but, it is just a framework of operation.

God, more of the same drivel. It's really difficult for someone like me, traditionally conservative, with a view of limited government to have to argue for government in the face of this tired, almost religious, dogma.
1. The Robin Hood argument is pointless since it is NOT the 'exact same thing.' Government and its actions (taxation and expenditure) are accountable to the people. Government represents the population, provides for the general welfare, and also makes those laws which are "necessary and proper" to provide for the general welfare.
2. While I take issue with entitlements and policies, which unjustly create classes (mainly protected) government has a legitimate role when it comes to policies, which benefit the whole through public investments. Those being traditionally defense, public works, science and R&D.
3. When a free market, specifically health care as the current example, fails it is government who has to be the last resort to redesign the rules to ensure a free market where the public gets the service that it needs.

The current health care system is a complete failure. Rather than listing why, I would suggest people watch "Sicko" for the stone cold reality of US health care. Other nations, now as or more prosperous than the United States have universal healthcare. Their horror stories don't even compare to the cases anyone reading this in the United States probably know of first hand, be it through a friend or relative's experience.

>> Universal health care is not a necessary service because it is unconstitutional.

Riiiiiight .....

It's hard to get a read on just how out of touch the average citizen is on the state of healthcare, since every poll I have seen asks either biased questions or the wrong questions altogether. The sad fact of the matter is that you can be turned down for private coverage for something as trivial as a sinus infection, hay fever, or diaper rash. My old Blue Cross of CA agent has had people denied coverage for all these reasons. So if anyone in your family has been sick with anything that was diagnosed... ever... you might well be uninsurable in the private market. Most people simply don't realize this. If you doubt it, call an agent you trust and ask them about their experience.

For the past two years, do to a labor conflict, I was without my "cadillac" group plan and had private coverage. I would have been ineligible for that individual plan I had experienced so much as strep throat in the prior two years. My Cobra would have cost me $700 a month, and that would have run out six months before my group coverage resumed. So I would have been stuck trying to get one of those $10,000 deductible plans that costs more than $700 a month, and if I had been turned down for that, I would have been without insurance for half a year. All for getting that hypothetical case of strep throat.

So if your employer fires you or simply decides not to cover you, and if anyone at all in your family has been diagnosed with anything at all, no matter how seemingly trivial, you could be screwed. No matter if you, like I, have payed in over $100,000 in premiums in your adult life to health plans and faithfully always been insured. The second you are removed from the protected realm of employer-based covered, you are facing possible financial ruin if you break your leg or need any sort of major procedure. Is this really the best possible plan? Is it the one Americans would vote to support if they actually had all the information and knew how at risk they really were? Or is it just the scenario that works best for the powerful healthcare interests?

The only reason people like me with employer-paid coverage enjoy any level of protection at all is due to legislation. We cannot be turned down due to pre-existing conditions only because Congress passed a law granting us this right. So why on earth should entrepreneurs, workers, and anyone else on an individual plan not have these same rights? Why must they continue to be abused by insurers who do their best to weed out anyone who is a "risk," even if they have faithfully been insured all their lives?

There are so many examples of better systems out there, from single-payer to multi-payer. Unlike the UK, most other countries have privately run healthcare and even privately run, competitive insurers. The difference is they have rules made by the government that set prices, fix premiums, and guarantee coverage. If you think this is "socialism" and that it will somehow lead to tyranny, well, so be it. But what you don't get is that "capitalism" too can lead to tyranny and the destruction of freedoms. It almost did here in the late 1800's. Capitalism run amok can lead to fascism and the destruction of all the freedoms we hold dear, just as easily as can socialistic systems. What is desirable is a happy medium, in which basic freedoms are ensured for all citizens, free from the tyrannies of both extreme wealth and good intentions.

The problem is that many people don't understand how vulnerable they are to cancellation, denials, job termination without the ability to pay COBRA, financial devastation, death, and other healthcare-related disasters.

Having worked at an agency where I was expected to deny more than I approved, treat people in a demeaning manner and demand verifications the clients obviously couldn't produce (last year's bank statements from a homeless person!), I understand the problems. People line up hours before the agency opens, only to find that they have to come back the next day to wait again. Once they're seen, they have to prove they need the help - so they're given a list of items they need to provide in order to receive help. One of these things includes completing 10-40 job searches or a statement of disability - which can't be obtained from a doctor until you can afford to see one - so the clients are sent off to get the stuff before they receive assistance. So, they get the stuff that they can, wait in line again for a day or two (no appointments at this point as they're not yet clients), and produce the verifications and job searches. If the worker can't deny the service (and they try - oh, they try!), the client is approved to receive help for a month from the county hospital clinic. This takes several days to a couple of weeks for the initial process. Oh, and if they're working, they probably don't qualify because they're "over income" even tho they make minimum wage, part time.

Then it's on to the clinic, where one must make an appointment to be seen (appts can't be made without the medical approval above). Appointments are often over a month away, meaning that the client must go through the above process again in order to actually fulfill the appointment. Even if we're talking prescriptions written by another doctor (say, from the ER), the script must be re-written by the clinic's doctor. To keep costs down, the clinic only provides the most minimal of care possible. Specialists aren't part of this system, and there are no cases of emergent treatment or prioritizing.

So, to recap - if one has no access to healthcare and is very low income and needs a prescription filled, if he is able to spend multiple hours standing outside in the heat/cold, embarassment and disappointment, wait for an appointment, go through the demeaning process again, and finally spend five minutes with an overworked doctor whose mandate is to keep costs down.

Nope, nothing wrong with the healthcare in our country.

Elliemae,

That must have been a very frustrating experience. Almost like working for an insurance company, in some respects.

>>Furthermore - Medi-Cal only pays something like 25% of the Bill and the doctor, clinic or hospital has to write the rest off - but if you have no insurance - you have to pay 100% of the bill. Go figure.

I think you've got it backwards. What happens is that hospitals bill uninsured people at ~4 times higher price than the negotiated rate they get from insurance plans. In other words, the uninsured pay 400% of what they SHOULD be paying.

Elvis - Your point of view is pure generalizations. Like I say, it is almost a religion. One can't dare criticize the free market for the same reason you can't question the bible. It is right and thats that. But that is not the case. You can sit back and name dozens of screw ups by government and I can sit back and name the same number of clear abuses by private companies.

75% of business activity is waste, no one cares about that because the activity creates jobs, generates tax revenue, and eventually generally produces optimal solutions, but that is the reality. There is nothing sacred or noble about the free market, it is what it is. People who claim the free market is incapable of failure are putting the blinders on.

Wait until you actually need an expensive procedure, you'll find out the hard way.

>>OK- let me recap the problems with Socialism: it rewards failure and punishes success, it forcibly takes from some and gives to others, it destroys prosperity, it diminishes the work ethic, and it makes dependents out of people.

Sounds a lot like the United States in the years 1980(Reagan)-2009, except it was unbridled capitalism that caused those things to happen.

>>75% of business activity is waste,

That's a good point, Malcolm.

I remember once pointing out to a free market fundamentalist about some of the waste and grotesque inefficiency one can find in private enterprises, and not only in the government. Can you guess what he said? He said that he did not care because none of his TAX (my emphasis) money was being spent.

Apparently he did not grasp that the waste in private industry means that he has to work much harder and longer to be able to afford some product or service that he needs. But that's ok, as long as it is not the #$%^& gubbermint causing any waste. It was not his TAX money, mind you.

It's a double standard, an it just does not make any sense.