A Healthcare Bandaid, where Major Surgery is Needed

Wherever you may fall on the political spectrum regarding the new federal health care law, we can all agree that the cost of health care in New Jersey continues to place a horrific burden on the public and private sectors.

So began New Jersey Assemblyman Gary S. Schaer (D-Passaic), chairman of the Financial Institutions and Insurance Committee, in an article late last year in the NJ Star-Ledger. In Health care costs undermine growth
, Mr. Schaer argued in favor of the "Healthcare Transparency and Disclosure Act", which will ostensibly "better assist New Jerseyans in making informed and financially prudent choices about their health care". This will "lower costs" and help "create jobs".

Mr. Schaer says we must accomplish those goals "with as little government intervention as possible" because "health care already is over-regulated". It never occurred to Mr. Schaer, or at least he chose not to mention it, that the over-regulation is the cause of the problems his bill seeks to address. It's nice that he wants to be sure that "patients must know each party’s financial responsibility for each medical transaction — no mysteries and no surprises". But mysteries and surprises are what you get under a system in which everyone is reponsible for everyone else's healthcare, but not his own. It is the government that created the third-party-payer system, in which insurance is provided by either government (Medicare) or employers, but in which the healthcare consumer does not own his own policy.

The over-regulation is widespread and deep. Until that problem is addressed rather than simply accepted as a given and then swept under the rug, bandaid solutions like the Healthcare Transparency and Disclosure Act will do nothing substantive except add another layer of regulation and enable politicians to claim to have "done something".

I've left the following comments, and then engaged in a little back-and-forth with another correspondent who took issue with what I had to say:

zemack December 01, 2010 at 7:24PM
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The need for government to control healthcare costs was created by government itself. More than half of American healthcare spending is by government, through such programs as Medicare, Medicaid, SCHIP, etc. Most of the rest is through the heavily regulated, mandate-burdened, competition-protected quasi-private insurance companies. The only practical and moral way to “control costs” is to free the market from government interference – meaning that each individual participant is responsible for managing his own healthcare spending based upon his own judgement. The natural incentives inherent in a free market – consumers seeking care that they can afford from providers seeking their business – leads inexorably to falling costs and widening availability and quality of healthcare. Free markets have been proven to be practical, and they are moral because they recognize the rights of all participants – consumers, insurers, doctors, pharmaceutical companies and other providers, and patients – to contract voluntarily with each other to mutual advantage.

We can begin to move toward a free market by focussing on converting what we now erroniously call the private sector into something that at least mimics a real free market. First, remove the burden from business by ending the third-party-payer (also referred to as employer-based) system of health insurance. Instead of businesses and other third parties like unions buying insurance on behalf of their employees, they should be allowed to simply deposit whatever they are currently spending to insure their employees’ into their own self-directed, personal tax-free health savings accounts. Individuals and families can then go forth and purchase insurance directly from insurers competing for their business. This would also alleviate a host of other problems by making health insurance portable like auto, life, and homeowners insurance, which people don’t lose when leaving a job.

But for that to work, two other reforms are needed. End all insurance mandates like community rating and benefit mandates. These mandates violate the rights of consumers by forcing them to pay for coverages they may not want or be able to afford and of insurers by restricting their freedom to compete based upon market realities. Mandates are special interest group driven, and really amount to using “private” insurance companies as conduits for government-enforced wealth redistribution. The other reform needed is to stop protecting insurers from interstate competition, and state politicians’ controlling power, by removing insurance trade barriers between the states. These three simple reforms would dramatically lower insurance premiums, leaving more money in people’s HSAs for direct payment of routine, predictable medical needs, resulting in lower prices for a myriad of procedures like mammograms, prostate screening, and doctor’s visits.

Assemblyman Schaer is correct that “Health care already is over-regulated”. These limited free market reforms would begin to reduce the over-regulation by partially freeing up the private sector. More would need to be done. The encroaching crisis in healthcare grows worse the farther we move away from a free market, and we should not reward government with even more power and regulatory authority. With due respect to Assemblyman Schaer, the Healthcare Transparency and Disclosure Act is, at best, a Band-Aid. The underlying problem is that healthcare is at least the second most controlled industry in America, behind only the financial industry (another big headache, not surprisingly).

A slow-motion government takeover of American healthcare has been advancing for decades, turning an industry that should be a growth driver into a growth inhibitor. Real reform, and cost control, means reversing that trend. Most Americans don’t want full socialized medicine, and never have. Yet, that is where we are headed. But, the trend can be reversed, and decontrol looks to be the next big healthcare trend. Far-sighted, courageous politicians can get in front of the trend by advocating now for more freedom for all American citizens in healthcare.

jimmaiul December 02, 2010 at 9:40PM
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zemack, I'm sure you know the story behind employer based insurance, starting in WWII as employee compensation above wage and price controls. Employer compensation offers a big advantage as bulk purchasers holding down costs to individuals as compared to you as an individual buying insurance in the market, It's just the way markets work, so people have to get together and use the market to their advantage. it would be understatement to say you would be taken to the cleaners if you bought insurance as an individual.
Why not extend this practice to the entire country, and while you're at it eliminate the profits from insuring people which don't go to health care anyway. That's how other countries spend 1/2 per capita what we do while none of their citizens goes without access to routine medical care.

zemack December 03, 2010 at 2:39PM
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Employer-based insurance was imposed back then through the tax code. The individual market was long ago made dysfunctional by this and other government policies, some of which are listed in my comments above. My proposal is simple: Shift all tax benefits to the individual, and put him in charge, which is his unalienable right. Those of us who choose can still pool our money under group plans. But, it would be our choice.

Profits are a driver of lower costs, and accrue to producers - including insurers - who successfully compete through lower prices and quality service (but only in a market free from government force ... a free market … which we need to establish). Government, not having the need to consider the bottom line, simply doesn't have any incentive or need to control costs. That is the main reason healthcare costs have skyrocketed in the US, quadrupling as a percentage of GDP since the mid sixties. To the extent that other countries actually do have lower costs (for a variety of reasons, including faulty accounting), they do it by denying care.

At some point, probably starting with ObamaCare, our government will do the same under such guises as "cost control" and "comparative effectiveness". Then we will be at the mercy of government bureaucrats and politicians backed by government’s power of legalized physical force. I’d rather be “taken to the cleaners” by truly private insurers whose only “power” is their desire to attract and hold my business with products that benefit me and that I voluntarily agree to purchase. Profits (and CEO salaries) earned through free market, mutually beneficial trades are a moral and human right for those who earn them, and a boon to our standard of living.

Jimmaiul, you’re willing to throw away our freedom in the healthcare area based upon faulty premises. You should check them.

jimmaiul December 03, 2010 at 9:13PM
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Government, not having the need to consider the bottom line, simply doesn't have any incentive or need to control costs

zemack, this is precisely what governement in other counries do, they control costs through rationalization, what esto denigrates as rationing resulting in dead canadians who fail to make it to our health care paradise. The provinces have a fixed budget so politicans either spend it smartly or they're out on their ass. Here government encourages just the opposite in delusional devotion to free markets, medical policy is outsourced. Instead of the "efficiencoes of the market:, we get a revolving door, insurance co. to Congress , money in legistlation out, LIz Fowler from Wellpoint insurance seated behind Senator Max Bacuus handing him papers during testimony.

Government coercion is a bit of a stretch, don't you think? more like corporate coercion when private entities become too big to fail .

zemack December 06, 2010 at 7:36PM
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"Rationalization" is a buzz word for rationing - stripping us of our freedom to pursue healthcare in voluntary association with providers. It means, quite simply, death squads.

"Too big to fail" is a government creation, which feeds growth of businesses racing to enter the exclusive bailout club, known as "too big to fail". Stop the bailouts, and many business behemoths would fall to smaller, better competitors, who are currently at a disadvantage thanks to government protection of the big guys under "too big to fail" policies.

Government coercion is no "stretch". It is a fact. A government, by its nature, has a legal monopoly on the use of physical force (coercion). No private business in a free market can legally force anyone. It is only in a mixed, regulated economy - where business and politics blends - that private businesses appear to have coercive powers. You said so yourself: "Instead of the "efficiencoes of the market:, we get a revolving door, insurance co. to Congress , money in legistlation out, LIz Fowler from Wellpoint insurance seated behind Senator Max Bacuus handing him papers during testimony." If we had capitalism - the separation of economics and state - the government would use its monopoly on legalized coercion to protect us from criminals, foreign enemies, fraud, libel, breach of contract, and the like. Business would have only voluntary pursuasion to buy its products. Fowler would have no need to sit behind Baucus, because Baucus would not have the power to legislate government control of health insurance. He would be on his own, trying to devise policies that we like and can afford.

"The Message of Christ" and New Jersey's Education Wars

As his state’s landmark Opportunity Scholarship Act moves inexorably toward passage in the legislature, New Jersey Governor Chris Christie is ratcheting up his battle for education reform centered around parental school choice. On the opposing side, defenders of the government-run public school monopoly are resisting Christie’s initiatives with everything they’ve got.

The Opportunity Scholarship Act is tax credit-based in order to conform to the constitution requirement to separate church and state. There are no direct government checks going to any private religious school.

Yet NJ Star-Ledger columnist and steadfast opponent of the school choice bill Bob Braun doesn’t see it that way. In a recent column entitled N.J. vouchers would wrongly use taxes for schools with religious affiliations, Braun correctly and lucidly defends the “wall of separation” doctrine. He concludes with this ringing endorsement for freedom of ideas:

At recent Sunday masses, churches in the Newark Archdiocese showed a film urging parishioners to donate money to Catholic ministries, including schools. The voice-over on the film noted that Catholic education "conveys the message of Christ."

But no Catholic — neither I nor Chris Christie — has the right to expect Protestants, Jews, Muslims, and non-believers to support our causes, convey our messages, involuntarily through their tax dollars.

So, how does that statement square with his staunch defense of the education status quo? I’ve left the following comments:

"I am Catholic. A graduate of a Catholic elementary and a Catholic high school. I contribute weekly to my parish, monthly to a Catholic hospital, and annually to my high school.

"Voluntarily.

"It is just plain wrong to use taxes to promote a religious message."

The irony here is monumental.

Why isn’t it just plain wrong to use taxes to promote any non-religious message? Education is fundamentally about promoting ideas, beginning with basic philosophy. Should education be about molding students to conform to the group, so as to promote social agendas, as progressive educators believe? Or, should education be about training children to become independent-thinking adults, their minds trained to operate objectively so as to deal with reality in service to the furtherance of their own lives? When you are forced to pay taxes toward the public schools, you are forced to pay for ideas – a “message” – that you may or may not agree with.

Braun promotes voluntarism on one hand, while on the other unwaveringly defending a system based solely on the antithesis of voluntarism - force. Worse still, he dismisses those taxpaying parents seeking to gain control over a bit of the lifelong flow of their own money into the government-run establishment, and redirect it toward a better education for their own children! Instead, he demands the initiation of still more force in order to extract even more money from unwilling taxpayers to pour into the public schools.

Yes, no one should be forced to financially support religious schools and their teachings. Likewise, no one should be forced to support any school through taxes. No one should be forced to pay for the education of anyone else’s children, but should be free to voluntarily pay, with their own money, for the best education they can find for their own – or voluntarily contribute to the education of others. This is possible only in a free market – the “free” meaning free from physical coercion. Considering Braun’s voluntarist premise, he should be an unabashed promoter of free market education, since the free market is based solely on the premise of voluntary contract and voluntary association among men.

What, exactly, is “the message of Christ”? Is it voluntarism, or force? To Bob Braun, the teachers union, and all other reactionary defenders of the status quo, I ask: Why do you insist on maintaining a public system that collects its revenues and students by the legalized force of compulsory taxation and compulsory attendance laws? Don’t you believe that parents exercising their moral right to act on their own judgement with their own money would voluntarily choose your schools for their children, and voluntarily pay for them?

NJ State Senator Tom Kean Jr. on the Opportunity Scholarship Act

New Jersey’s Opportunity Scholarship Act, the tax credit-based, private education voucher bill that sets up a program of school choice for low-income parents whose children attend schools that are “failing”, is marching toward apparent passage into law.

State Senator Tom Kean, Jr., the Republican senate minority leader and co-sponsor, has published an editorial in the NJ Star-Ledger in support of the bill entitled, Give New Jersey kids a chance to escape failing schools. Unfortunately, his support is rather tepid and I believe not consistent with Governor Chris Christie’s radical reform plans. He writes:

 

The act is in no way an assault on public education. It creates a five-year trial program that allows a select number of children in the 13 worst-performing school districts to choose another public school, or a private or parochial school. That can hardly be classified as an assault on public education.

An “assault on public education” – i.e., government-run schools – is precisely what parental school choice can and should be about. I’ve left the following comments:

Why should only corporations be free to fund only a limited number of children’s educations? Why shouldn’t every taxpayer be free to claim tax credits to fund any child’s education? On what basis can anyone claim that the “best” schools provide a good education across the board? Parents of those schools have no less of a right to choose an alternative than the parents of those “failing” schools in Newark or elsewhere, if their judgement tells them they can do better.

Last May, Governor Christie told the American Federation for Children in Washington, DC that the Opportunity Scholarship Act is only a start that will lead to school choice for every parent in the state. I hope he follows through, and that Senator Kean will support him. Universal tax credits for school choice can and should be implemented, and “financed” by applying the nearly $14,000 per child per year NJ currently spends on public K-12 to cover the “cost”. This is not an assault on “public education”, but on government-run schools, as it should be. The existing public system has no inherent claim on those education tax dollars – those who earned the money in the first place do, and have a moral right to spend it as they see fit. And the public system has no inherent claim on the children – the moral right to determine the course of their children’s education belongs to the parents. We have a government of, for, and by the people – not the other way around.

Empower the parents to choose the education best suited to their children’s needs, and liberate the educators from the oppressive state and union regulations so they can compete for the parents’ business, and NJ will become a beacon of educational excellence. And to those reactionary defenders of the government-run public monopoly, I ask: Why do you insist that the public system continue to collect its revenues and students by force of compulsory taxation and compulsory attendance laws? Don’t you believe that parents armed with choice would voluntarily choose your schools for their children, and voluntarily pay for them?

Let’s find out! Christie has courageously gone on record for tax credit-based universal choice. Tom Kean Jr., his Republican friends, and forward-looking Democrats and Independents should get behind his revolutionary ideas to make it a reality.

Christie’s speech can be accessed @ http://www.blip.tv/file/3763938

-Mike LaFerrara, Flemington

Charter Schools – Good, but Not the Long-Term Answer

New Jersey recently approved a record 23 new charter school applications, as its Republican Governor Chris Christie launches his promised efforts to majorly reform education in his state. Charter schools are institutions that operate outside of the mainstream public schools, relatively free from regulation and teachers union influence. Although they are publicly funded, they enjoy much more freedom to innovate, and generally offer superior educational services compared to the traditional public schools in their respective districts.

What the Charter school experiment tells us is that more freedom from government controls yields higher quality over time in education. The reason is simple: Throwing off central planning in favor of even limited freedom liberates the minds of parents and educators who are then freer to act on their own judgement. Free markets – even a limited version – unleashes an intellectual division of labor, and the explosion of ideas that goes with it.

The value of freedom in education has gotten a most dramatic chance to demonstrate itself from an unlikely source – Hurricane Katrina. New Orleans, which had one of the worst public school systems in the nation prior to that storm, is now boasting one of the best. How did this happen? Holly K. Hacker of the Dallas Morning News reports:

When Hurricane Katrina struck five years ago, it displaced families and destroyed schools. And the storm unwittingly provided a chance to reinvent public education in a failing school district.

So was launched the nation’s biggest charter school experiment.

One early lesson: The relative freedom of charter schools — they’re independently run and exempt from many state education laws — appears to have been key to an overall boost in student performance in New Orleans. But the charter school setup alone did not guarantee success. The best ones have strong leaders, capable teachers and a relentless focus on learning.

In other words, freedom in the right hands works.

Hacker goes on to describe how “the right hands” use their freedom to act quickly to further the education of the children. As she points out, “the charter school setup alone did not guarantee success”. Nothing can guarantee “success”. What the relative freedom of the charter schools does guarantee is that the best, most motivated educators are free to flourish.

Charter schools have their detractors, especially among the entrenched establishment. And they can trot out statistics from standardized test scores and the like to “prove” that charters are at best equal in quality to the public schools. But there is nothing like the market – i.e., individuals acting on their own judgement – to tell us what the real truth is. The New Jersey Star-Ledger’s Julie O’Conner describes the force behind the charter school movement:

[F]or all the talk about urban parents not being interested in their children’s education, each year thousands … line up in districts all over the state in a desperate bid to get them into better schools.

New Jersey’s suburban schools are among the best in the nation, judging from test scores. But in the cities, many of the districts are disasters, failing students year after year. The most notorious ones become dropout factories, churning out hundreds of students each year who are unable to read, do basic math or function at a community college.

Pent-up demand is growing among an army of urban parents who want to escape that. Gov. Chris Christie has pounced on the issue with an aggressive plan to expand choice. He wants to expand the alternate public school system — charters — and supports a bill to provide vouchers for poor children to attend private schools.

Overall, charters show mixed results. But some are vastly outperforming urban district schools. Students are chosen by lottery, and an estimated 20,000 are on waiting lists across the state.

However those “mixed results” are determined, those 20,000 waiting to escape the public schools trumps the experts, in my mind. While bean counters pour over test scores, the “army of urban parents” who actually know their individual children are telling us that there is no contest between the traditional public schools and the charters: The charters win hands down. Or, at the very least, the traditional public schools are failing their children miserably, and those parents are looking for an alternative.

But for all of the success of the charter schools, they do not constitute a long-term solution to our widely acknowledged educational problems. The reason is simple: They are publicly funded and therefor ultimately subject to being smothered by special interest politics and the entrenched establishment. In other words, they will eventually morph into the public schools they are designed to be an alternative to. There are already danger signs. In an article entitled Unions knocking on charter school doors, Steve Gunn reports:

For years, our nation’s powerful school-employee unions, like the AFT and the National Education Association, opposed the very concept of charter schools and pressured state governments to cap their numbers or shut them down altogether.

They simply didn’t want the competition.

But now that charter schools are obviously here to stay, the unions have adopted a new strategy. Their goal is to aggressively recruit charter school teachers into their ranks, so that charters will be burdened by the same type of labor problems that plague so many traditional public schools.

Keith Johnson, president of the Detroit Federation of Teachers, was honest when he wrote the following in a recent union newsletter:

“It is reasonable to believe that as more charters are faced with having to be more like traditional public schools, many of them will dry up.” One of the most compelling features of charter schools is their lack of a union and collective bargaining agreements.

Let me state, for the record, that I am not against unions, as such. Indeed, I am a life-long union man myself. But, unlike my private sector trade union, the teachers union has monopolistic powers: In other words, it is backed by government’s legalized coercion. Specifically, the power of the teachers union stems from the nature of our government-run public school system. It is backed by compulsory taxation and compulsory attendance laws. The teachers union draws on that compulsion. Add to that the lack of competition due to the inability of parents to choose their children’s schools. Hence, the union’s inordinate powers to shackle education.

The problem is not the union, per se. It is the compulsory nature of public education. The success of the charters will not be enough to sustain them, as long as the compulsion remains. Because they are publicly funded, the teachers union and the establishment rules will combine to smother them. Gunn goes on:

Perhaps the Houston Chronicle summed up the situation best when it wrote: “Allowing unions to infiltrate too many charter schools will eventually lead to the death of the innovative conditions that led these campuses to prosper. Successful charter schools need less regulation, not more — and efforts to impose more are really just thinly veiled attempts to undermine the entire concept.” Thus far only a small percentage of charter schools across the nation have union teachers.

But the number will continue to grow as more students flee to charter schools, and the unions increase their efforts to organize the teachers at those schools.

This movement could effectively destroy the very qualities that make charter schools different, and eventually kill the charter schools themselves.

The only long-term solution to our educational problems is a free market. That would entail the elimination of tax supported schools altogether, and empowering the parents to direct their childrens education with their own money. Anything short of that will ultimately prove Keith Johnson to be right. The charters will be “faced with having to be more like traditional public schools, [and] many of them will dry up.”

In the Spirit of “Compromise”, How About a Flat Tax?

The recent compromise between President Obama and the Republicans that extended the Bush tax cuts for two years has put the income tax on the back burner, for now. But, it could become a major issue as the 2012 election approaches.

In a recent NJ Star-Ledger article, Compromise holds no hope for deficitNJ Assemblyman John S. Wisniewski (D-Middlesex) has weighed in with some thoughts on the recent Obama-GOP tax deal. He begins by charging the president with “succumbing to Republicans’ unflinching protection of the wealthiest of Americans”.

Apparently – and this is standard Leftist fare – Wisniewski doesn’t believe that all Americans deserve equal protection under our government. The horrifying implications of that statement need no commentary here. The Democrats have nothing but utter disdain for the US Constitution, and the principles upon which it rests, as everyone by now knows.

That aside, I want to put in a plug for an idea regarding major income tax reform. With the GOP ascendancy, and so much of his statist agenda already in place, Obama may be willing to take a breather as he looks forward to re-election. We could see major tax reform emerge from the battle over “tax cuts for the wealthy”. I don’t expect Obama to morph into a free market Rightist. He is socialist/collectivist ideologically, and always will be. He will keep his eye on that North Star. But he may be willing to give a nod to the Right – “tack this way or that”, as he put it - if for no other reason than to appear “centrist”, and actually sign on to some kind of sensible reform of our income tax code.

So, let me present an idea that the Republicans can use to take advantage of Obama’s temporary fit of centrism.

But first, let’s cut through some of the clutter exemplified in Wisniewski’s article.

First of all, this is not a debate about the deficit. Given the wild spending of both Republicans and Democrats in both NJ and nationally over the past decades – and especially the past ten years - neither party can be taken seriously on that score. In any event, government deficits are caused by too much spending – period. Liberals like to imagine the nation’s wealth as belonging to the government, and thus see raising taxes as the only solution to deficits. In Wisniewski’s perverted “logic”, we are “padding the deficit to pay for tax cuts [for the wealthy]”. Actually, he proposes to steal money belonging to a small minority of Americans who will be excluded from a tax benefit shared by all other Americans in order to cover the politicians’ profligate spending. This is a debate over fairness, and there is nothing fair about targeting a specific group for confiscatory taxes. If we’re talking about deficits, we’re talking about spending cuts.

And never mind that the rich must be taxed extra to fund worthy causes. There is nothing honorable about politicians practicing forced “charity” for the elderly or the poor or the disabled with other people’s tax money. And there is nothing honorable about receiving the money paid unwillingly by those taxed.

More fundamentally, it’s not about taxing millionaires and billionaires. The reference to Senator Lautenberg is disingenuous, to put it politely. It’s lovely that Lautenberg would “rather have a strong country than a tax cut”. But, Lautenberg’s millions, and the fortunes of all of today’s “rich”, are out of reach of the income tax. The tax debate is about taxing current earnings … i.e., current production. Not to denigrate the Senator’s business success: He did earn his money, and has a moral right to it. But his fortune is old money. His current income, no matter what rate it is taxed at, is peanuts to him. This explains, at least in part, why so many of the prominent wealthy are socialist oriented.

Rich people like Lautenberg, their previously established fortunes safely protected from income taxes, are after power and prestige - the political power to seize other people’s money, in order to spread it out among his favorite welfare clientele like the “alternative energy” gang or some needy group, so he can claim the unearned, phony prestige of making a “strong country” paid for out of his fellow countrymen’s hides.

When the Left demands higher taxes on the rich, what they are really calling for are taxes on the productive rich. The idle rich like Lautenberg get off scot-free. This is why steep, progressive income taxes hurt everyone. Economic growth is built on current income – i.e., current wealth production. Today’s existing fortunes represent past production. Today’s high earners represent current and future production. The top 2% of income earners represent fortunes in the making – the creators of businesses, products and services, jobs – that other less productive but hard working middle and future middle income people depend upon.

If Assemblyman John Wisniewski and others really care about “the economy” and “the middle class”, they would acknowledge these facts, and radically alter their positions on the income tax.

Now, let’s get to my compromise tax reform proposal. Before I proceed, though, let me state my philosophical position on the income tax. I would love to see income taxes abolished across the board. They are immoral because they strike directly at the heart of human survival – our ability to produce the things required to live and flourish – and they feed the power of politicians and government bureaucrats to control and manipulate our lives. They are impractical because they hamper productive activity (i.e., the economy). Furthermore, they are inconsistent with the constitutional protections for property rights and probably unconstitutional, the 16th Amendment notwithstanding. They are certainly inconsistent with our Founding principles. In any event, the income tax has become a vehicle for widespread wealth and income redistribution. That is clearly immoral and incompatible with the Declaration of Independence, which establishes the principle that the proper purpose of government is to protect individual rights. There is no constitutional authority for redistribution, a fact readily acknowledged by our current president.

However, I realize that abolishing the income tax is a long-term goal and cannot happen today. So, since “compromise” is in the air in the wake of the recent elections, let me propose one of my own – a flat (or single-rate) income tax with no deductions or exemptions other than personal exemptions at the bottom (Steve Forbes has proposed a flat tax that contains exemptions that would make the first $40,000+ tax free for a family of four). That should satisfy liberals because it maintains progressivity. Since everyone pays the same percentage, the higher the income, the higher one’s tax burden would be. Assuming for the sake of argument that the rate is set at 10%, someone with taxable income of $50,000 pays $5000; someone who makes ten times as much - $500,000 - pays ten times as much in taxes, or $50,000, and so on. It would take a monumental act of evasion for anyone to claim that a flat tax is not progressive.

For conservatives, they would get the pro-growth incentives of lower tax rates.

In addition, since each dollar of income, no matter how much, is taxed at the same rate, the flat tax is much fairer and is non-discriminatory. And since everyone professes to abhor “special interests”, this would be a boon: the pressure groups would have nothing to gain from lobbying for tax issues, because the politicians would lose the ability to manipulate us through tax policy.

Now, that would be real change we can count on!

Best of 2010

Below is a compilation of some of some of my favorite essays of the past year, representing a decent cross-section of subjects covered.

Aborting "CO2 Machines" - Covers the terrifying implications of the EPA's new power to regulate carbon dioxide.

Gay Marriage and Individual Rights analyses this contraversial issue as it relates to America's Founding ideals.

In Defense of Special Interests - and the Constitution
and Are Media Corporations Next? examines how the calls to reign in "special interests" is an attack on the First Ammendment.

"Regulating" Business - the Good and the Bad examines the basic difference between the regulatory state and the proper function of government.

The Tea Party Movement - A Progress Report examines the promise and the threats the movement faces in its second year, as I see it.

The Voucher Trojan Horse briefly examines the perils of government vouchers and the promise of tax credits as a means of financing parental school choice.

The BP Gulf Disaster: the Proximate vs. the Ultimate Cause examines the role of government interference into the insurance market in the BP oil disaster.

NJ's "Affordable Housing Crisis" - It's the Zoning, Stupid! examines a key fundamental cause of high housing prices in NJ, and its consequences.

Rand Paul, Title 2, and the Importance of Principles is my favorite post of the year, because it is my difinitive statement on the importance of principles in human affairs.

OBushonomics vs. Gilliganomics examines the nature of Keynesian economics and why it is always doomed to failure. In this post, I explicitly reject the absurdity called "macroeconomics", a position recently echoed by Steve Forbes, who stated that "the whole idea of macroeconomics is a fraud".

Extremists vs. the Moderates: Why the Left Keeps Winning, and the Right has been Powerless to Stop It and Obama's North Star examines the philosophical nature of the battle between Left and Right in America, and how consistency counts.

The GOP Grabs a Tiger by the Tail briefly gives my take on the 2010 mid-term elections.

Ayn Rand: Tea Party Voice of the Founding Fathers examines why the Left seeks to drive Ayn Rand out of the Tea Party Movement, and why the movement desperately needs Ayn Rand.

"Responsibility Depends on Individual Rights"

[This essay was originally published here on 5/11/09. With ObamaCare's centerpiece, the individual mandate to purchase health insurance, under attack, defenders are rushing to cloak the immoral legislation in a mantel of "personal responsibility". They follow on a theme long embraced by Obama. I republish it now because of its increasing relevance.]

Responsibility Depends on Individual Rights

At his March 24, 2009, news conference, President Obama once again reminded us that “we all have responsibilities”, as he reiterated the need to “invest” in major healthcare reform.

The President is right to call on us to take responsibility. He is right to call for fundamental healthcare reform. But what, exactly, do they entail? And how are they related?

To be responsible means to think independently, to act upon one’s own rational judgement, and to take responsibility for one’s actions. To be responsible means to recognize, as any honest person does, that each of us must earn his own keep and cannot consume more than he has produced. To be responsible, one must be free to do so. A responsible government protects every individual’s right to his freedom.

The responsible approach to healthcare reform begins with an examination of the existing structural impediments to the ability of individuals to the exercise and act upon their own judgement. If the President really means responsible, his reforms would begin dismantling the decades-long buildup of government interventions into the healthcare field that is responsible for its soaring costs.

He would end the government-imposed third-party-payer system, all government insurance mandates, and all legal barriers to interstate competition in health insurance. This will allow people to be responsible for the direct purchase of their own health care and health insurance. It will also liberate the insurance market, freeing insurers to compete directly for the business of the actual consumers of healthcare. Responsibility means recognizing the rights of consumers, patients, healthcare providers, and insurance companies to contract voluntarily with each other to mutual advantage. This will free employers from an irrational and increasingly untenable burden, and remove the loss of health insurance as a consequence of job loss or change.

Responsibility also means ending the unjust practice of forcing people to pay for other people’s healthcare. Lamenting the uninsured rings hollow when one considers the fact that the same person unable to afford his own health insurance nonetheless sees his earnings drained to support the elderly (Medicare), the poor (Medicaid), other peoples’ children (SCHIP), foreign aid healthcare spending such as former President Bush’s $50 billion AIDS relief package to Africa, etc, etc, etc. It is the responsibility of each of us, as individuals, to determine how we spend the money we earn…including when, who and in what capacity to help others.

Total healthcare spending in America today amounts to about $7500 per person. That’s $30,000 for a family of four. More than 80% of that total represents people spending other people’s money, a major contributor to large and unnecessary administrative costs. Rather than cycle our money through third parties, we (and our employers) should be free to direct our earnings into our own individual tax-free account, such as Health Savings Accounts (HSAs). Each of us can then take responsibility for managing our own healthcare dollars…including retirement planning…rather than a middle man or third party such as government, employers, or insurance companies and HMOs.

These steps would be consistent with the President’s call for both responsibility and major healthcare reform.

President Obama often speaks of responsibilities (or "obligations") accompanying our rights. That responsibility means respecting the rights of others. Each of us has the right to be responsible for our own healthcare. In short, that means free market capitalism…the only political/economic system based upon individual rights. It is only through the exercise of our unalienable rights that we can become truly responsible citizens. The government’s proper role is to protect individual rights, which includes protecting the sanctity of contracts, mediation of contractual disputes, and vigorous enforcement of the laws against fraud and breech of contract.

Of course, when President Obama speaks of “responsibility”, it is not the personal, take-charge-of-your-own-life variety that he speaks of. He means it in the altruistic, communitarian sense of being “our brothers’ keeper”. Said the President:

"But one of the most important lessons to learn from this crisis is that our economy only works if we recognize that we’re all in this together, that we all have responsibilities to each other and to our country."

He means that we are all responsible for the well-being of others, not of respecting each other’s right to the pursuit of his own well-being and happiness. He means for us to seek our own welfare not through our own efforts, but through the efforts of others.

His statement, “we’re all in this together, that we all have responsibilities to each other and to our country”, is a statist concept alien to a nation founded on the moral principle of individual rights. Statism holds that the individual’s life belongs to the collective, as represented by the state. His idea of “responsibility” is for each of us to set aside any selfish concern for our own individual lives, liberty, and property. We must submit to control by a government medical elite who we don’t know and who doesn’t know us, but who acts in the name of some mystical higher entity called “the common good”. His is a call for dependency and for the reign of the unearned.

There is, indeed, a connection between healthcare reform and personal responsibility. Unfortunately, Obama’s policies would sever personal responsibility from healthcare decision-making, leading to the opposite result of the goal of a more responsible citizenry. The principle that we are all responsible for each other actually rewards the irresponsible and penalizes the responsible.

The only true path towards the goal of “responsibility” and fundamental healthcare reform is the one that leads to the recognition of our unalienable individual rights, and consequently to free markets.

For more on this subject as it relates directly to the individual mandate, I urge you to read two excellent essays; The Irresponsible Individual Mandate by Yaron Brook and Don Watkins, and Beware Counterfeit ‘Responsibility' by Paul Hsieh