The Random Comic Strip

The Random Comic Strip

Words to live by...

"How beautiful it is to do nothing, and to rest afterward."

[Spanish Proverb]

Ius luxuriae publice datum est

(The right to looseness has been officially given)

"Everyone carries a part of society on his shoulders," wrote Ludwig von Mises, "no one is relieved of his share of responsibility by others. And no one can find a safe way for himself if society is sweeping towards destruction. Therefore everyone, in his own interest, must thrust himself vigorously into the intellectual battle."

Apparently, the crossword puzzle that disappeared from the blog, came back.

Saturday, November 2, 2013

It's Not Really Lying... It is, However, Deception

The president, in stumping for his plan for health care insurance overhaul (the ACA: Affordable Care Act) promised two things repeatedly: an up to $2500 reduction in annual premiums for the "typical" family and that you could keep your current plan and your doctor.

Well, we now know these were not only untrue but at least since 2010, the administration knew they weren't true.

There's a section of the ACA which says that you can keep your plan but other sections add various minimum requirements for basic health coverage and these made a number of existing plans unacceptable under the ACA.

Now, I  (and many others) knew adding requirements could not possibly result in lower premiums, especially the "pre-existing condition" requirement (meaning insurers could not refuse to cover you if you have a pre-existing condition). Adding requirements would obviously apply upward pressure on premiums. It's simple economics. I suppose people thought the insurers would be forced somehow to eat the added cost. After all, insurance companies must be making outrageous profits. Except they aren't. Not in terms of net percentage. But you aren't being told that, you are only told about the dollar amounts. And about the executive compensation.

But those profits are the result of volume, not gouging the customers.

It's all part of the "Hate the Rich" strategy. It's fine to hate the rich, you have that right. I think it's stupid but that's because I see hating the rich as a waste of time and energy. I also understand the volume-profit association.. I worked for a regulated monopoly. profit was restricted for AT&T and its regional companies. Yet, they made huge dollar profits. Even back in the days when you paid only about $8 a month for a phone line, they made huge amounts in dollars. But, as a percentage of total cost of providing that service, it was minimal. this is how banks (you hate them too, right?) make money. 2%-3% is not unusual. But when you realize that is on billions in assets, you begin to realize it is volume that allows the huge dollar profit amounts.

Let's take your savings account. You are lucky these days if you are getting .75% interest on it. And that isn't a whole lot. Especially if you have the average amount (less than $6000). But if you have several million, it's a decent sum.

So, when you get worked up in a froth over banks and insurance companies, you might want to stop and do some research before you grab the torches and pitchforks.

Save them for the politicians.

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