PeakTrader.com

[administrator]

PeakTrader:

The U.S. is a most diversified and dynamic economy. Why slow the inevitable, i.e. moving from one economic revolution into the next, just because some workers pull ahead faster than other workers? Allow them to “do their thing” and grow the pie faster. Everyone will benefit.

****

A higher minimum wage will go a long way to correct a “market failure.” However, we shouldn’t ignore that much of the rise in real compensation was absorbed in higher health care costs from excess regulations.

Also, excess regulations and taxes prevented business start-ups and slowed the growth of small businesses. Most small businesses are created by the “middle class.”

Along with excess regulations, and taxes, in health care and small businesses, there are excessive regulations in energy, housing, education, environment, manufacturing, transportation, etc.

According to the CBO, the top 40% pay 106% of income taxes (the top 20% pay 92%), while the bottom 40% receive an average of over $18,000 a year in “transfer payments.” Many other taxes, fees, fines, fares, tolls, etc. are regressive, along with the $2 trillion a year of federal regulations.

The U.S. economy needs to expand at a faster rate, to create jobs, raise tax revenue, and reduce spending on the unemployed, along with raising living standards. Then, the country can afford more regulations.

****

Here’s an example of how regulation affect health care costs:

“…the way doctors record a patient’s medical problem or disease is going to drastically change next year, and is yet another area reinforcing this medical-industrial perspective of healthcare. The International Classification of Diseases version 10 (ICD-10) contains 141,060 code sets used to report medical diagnoses and inpatient procedures. That’s a 712 percent increase over the 19,817 code sets in the currently used ICD-9 version. With the stop and go implementation of the ACA and an unending deluge of administrative changes in Medicare payment, 141,000 new codes could not come at a worse time for our doctors. As we have noted before, physicians are already spending 22 percent of their time interacting with insurers on formularies, claims, billing, credentialing, pre-authorizations, and quality measure data. The workload can only increase with the new codes.

The windfall of government regulations has given rise to over a dozen associations devoted to “compliance” with all of these rules and regulations. In fact, these associations hold numerous workshops nationwide on various regulatory compliance issues. The Health Care Compliance Association alone has over a dozen different workshops on the myriad of government rules and regulations and offers a “compliance certificate board” or CCB. There are, in fact, more pages of regulations for Medicare than in the Internal Revenue Service code, and the Medicare regulations are more complicated.

http://www.forbes.com/sites/physiciansfoundation/2013/11/05/healthcare-is-turing-into-an-industry-focused-on-compliance-regulation-rather-than-patient-care/

****

Linus, I just gave an example above.

Excess regulation is a tremendous waste of time, effort, and money, which is paid for one way or another.

Industries with little regulation in a free competitive market have faster quality improvements and falling prices.

Is a heavy regulated and inefficient monopoly either selling a luxury good or providing a shortage better?

****

Linus says: “Unless you are contending that our health care providers are regulated more heavily than those in other developed countries, “excess regulation” cannot be considered to be a contributor to our per capita health care costs being twice as much as those in other developed countries, with no results to show for the higher expenditure.”

I wasn’t comparing countries. I made a statement based on economics. In the U.S., excess regulation resulted in a high quality and expensive good. I stated above, the U.S. needs a higher quality and cheaper good – a good that’s really affordable.

I don’t have time to reply to all your comments. However, turning the U.S. health care system into something similar to the public school system, where some schools are better than others and many affluent parents send their kids to, and pay out of pocket, for private schools, while still paying the cost of a public education, has not turned out well for many Americans.

****

“…an increase of 1 percentage point in the top 1 percent’s share of pre-tax income reduced growth of income for the median household by about USD530.”

It’s interesting he uses pre-tax income. What about income after taxes?

Anyway, the regressions are weak in explanatory variables. I’m sure, many significant factors are omitted.

****

Bruce, I don’t see any explanatory variables, just correlations using pre-tax income. So? The correlations explain nothing.

For example, it’s possible when the top 1% of income rises substantially that causes the top 20% of income to rise substantially too. More taxes are collected and spending on disincentives to work increase, e.g. for the bottom 40%, which reduces median income.

****

Bruce, the statement and my response to the statement is plausable, and may be one of many statistically significant factors. Certainly, the hypothesis wasn’t tested in the article above, which is very weak.

“An increase of 1 percentage point in the top 1 percent’s share of pre-tax income reduced growth of income for the median household by about USD530.”

It’s possible when the top 1% of income rises substantially that causes the top 20% of income to rise substantially too. More taxes are collected and spending on disincentives to work increase, e.g. for the bottom 40%, which reduces median income.

****

Bruce, do you think affluent people or low income people are more likely to buy a new car, for example?

And, I think, the tax on a new car is high, while a two-year old used car can be a good deal for a lower income worker.

Also, I may add, taxes and the costs of regulations are embedded in the price of new goods. It’s not just a sales tax, for example, along with other fees.

---