Gun Control

Recently, I read an article from The Economist on the subject of gun control.  If you're interested in reading the article, here is the link http://www.economist.com/blogs/democracyinamerica/2012/07/gun-rights?spc=scode&spv=xm&ah=9d7f7ab945510a56fa6d37c30b6f1709

In this article the author refers to Justice Scalia's comments on the second amendment.  As a Justice, Scalia interprets the amendment in a very literal sense calling "bear" the idea of being able to wield a gun with your "bear" hands, so to speak.  This idea rules out the possession of say a tank or a fighter jet.  The original intent of the second amendment is to allow the citizens to prevent a tyrannical governmental takeover.  In today's world, the government military has possession of much better artillery than a handgun or even an AK-47.  Scalia suggests that if the second amendment is to live up to its' original intent, citizens should be aloud to own a tank or a rocket launcher.  I completely agree.  Of course, the way to go about doing this would be to amend the second amendment (which of course is very unlikely to happen).  Or, simply legalize the purchase of these military weapons!  Yeah, I'm sure this will go over well in the media...the simple fact of the matter is that the more of those who own guns, the less likely it is we will kill each other.  

The author goes on in this article and makes this point if we are to legalize all sorts of weaponry for purchase in the United States:  "And should those citizens decide to fully exercise such rights, then their second-amendment freedom will become the freedom to be attacked and crushed by the police and the US military, on behalf of those of us who support the integrity of the American government we have elected and the enforcement of its laws."  To which I say, very unlikely.  It is the citizenry which enacts such laws and protections.  It's an easy argument to make when you say everybody has a gun so we're all dead.  It's much tougher to make the argument that if we all have guns then we're all protected.  However, it is much easier for someone to attack an unarmed enemy than it is an armed one.  This notion has been proven on numerous occasions.  Namely, the cold war. 

Social Insurance

Social insurance, the idea of government provided insurance, has its roots in the era of FDR and the New Deal of the 1930s where Social Security was developed.  It has been a controversial topic in today's political field and probably always will be.  One of the biggest debates is about the trust fund for the baby boomer generation.  This fund is about $3 trillion and will disperse from 2011 to 2030.  The idea behind it is to cover social security benefits for the generation born between 1946 and 1964 in which there was a substantial increase in births during that period.  After that, it will go back to a pay-as-you-go system.  The idea that social security is bankrupt is misleading.  However, given the fact that people are working longer and are less likely to retire at age 65 presents a problem for future beneficiaries.  This has led to the increase in "retirement age" to 67 for the generation of people in their early 20s.  If social security isn't to change to adjust to the health of individuals then it will certainly go bankrupt as later generations are likely to outlive the funds paid into social security.  

I think that social security should be gradually depleted OR an opt-out option should be available at some age.  What age that should be could be up for debate, but, my initial thought is at age 25.  At that age, I feel that an individual should be allowed to opt out of paying for social security.  That age could help alleviate the transition problem as well.  However, the counter-argument is that most would probably opt-out so they could keep the extra money and this won't create a strong enough incentive to open their own retirement account, especially those in poverty.  So this could lead to an increase in funding for welfare expenditures.  

Immigration 1

Immigration is a delicate topic is today's political spectrum.  There is the Arizona law that was recently upheld in the U. S. Supreme Court which allows for officers who make a routine traffic stop to inquire about legal status in the United States.  That, with many other steps taken by border states to contain illegal immigration, has fueled the immigration debate in the country.  In order to become a citizen in the United States residents with a green card are eligible after 5 years of resident status to apply for U.S. citizenship; or, one can Mary and wait only three years or just go strait into the military during wartime.  The only issue is the process can be very long after applying for citizenship and even though you are paying taxes because you are a resident, you can not vote or participate in the political process.  However, you are welcome to go to our schools and even receive lower tuition rates because of your immigrant status.  

Since Mexico's wage gap is so vast and inflation so large, the currency in Mexico is extremely weak in comparison to the United States.  This creates a strong incentive to migrate and I can hardly blame those who have come to the United States for a better life.  After all, we are the shining light on a hill for the rest of the world, at least for now.  I want to know what the incentives are to actually migrate legally.  The process of receiving your green card and then waiting to gain legal status can, in many cases, take years and sometimes decades.  The incentive to migrate illegally is high, especially given the state of the economy of our southern border neighbor.  Now, I don't think the Dream Act is the right solution.  However, I do think that something must be done in order to fix this problem.  There is nothing wrong with immigration, and it is done legally everyday.  The incentives for immigration to the southern border states outweigh the incentives for legal immigration.  There is what is known as the bottleneck in the southern border states.  The system can't handle that many immigrants at one time, and so the incentive for illegal immigration is high. 

Wage Gap

The wage gap is something often talked about in today's economy.  I would like to inquire about a theory I have of why the wage gap is so vast.  I theorize the the idea of a minimum wage does not promote an equal share of the money supply.  While that may seem counter-intuitive, I would argue that a minimum wage actually brings other wages in the market down as well.  The reason being is that an employer will hire someone worth a few more dollars than the minimum wage for that minimum wage amount.  This is possible because the wedge the government has created between the desired lower wage for some employees offsets the higher wage desired by others and in essence creates a lower wage for overall even though it is granting a higher wage for a few employees.  The lower wage overall only increases the wage gap between the middle and lower classes and the upper class. 

A Quote From Hayek

Given recent events, It has been difficult to find time to create a new post.  However, I do have some now.  Since classes have ended I have been reading a book titled "The Road to Serfdom" by F.A. Hayek.  In it there is a quote which says, "But to call private property as such, which all can acquire under the same rules, a privilege, because only some succeed in acquiring it, is depriving the word 'privilege' of its meaning."  This quote struck me and I began to wonder whether or not healthcare was really a privilege or indeed a right.  I began thinking about the quote in the Declaration of Independence that says, "that they[men] are endowed by their creator with certain unalienable Rights, that among these are Life, Liberty, and the pursuit of happiness..."  Indeed Life is a right.  You have a right to your life and not to be deprived thereof by another individual.  You also have a right to Property which would be included in the idea of liberty and the pursuit of happiness which is later specified in the U.S. constitution.  Now, what about healthcare?  Is healthcare a right?  By the definition of privilege above, I certainly wouldn't call it a privilege.  Nor would I call healthcare a right.  Healthcare is similar to property in the sense that all may acquire it but not all will, except that all will be treated if need be in the healthcare industry even if they don't have insurance.  The word privilege applies to congressmen who receive health benefits through their elected position.  It is a privilege to be elected by the people to receive those benefits through that office which elected.  It is not a privilege for any individual to receive healthcare benefits for free and nor is it a right.  It is, rather, a result.  

It is a result of the three things every American is guaranteed which were previously cited from the Declaration of Independence.  Without Liberty, property cannot exist, and without property, a pursuit of happiness cannot ensue for any individual.  Health Insurance would fall under the category of a property and is therefore accessible to all American citizens.  To say that healthcare or health insurance is a right IS depriving the word property of ITS' meaning and therefore once taken away by the government, it can just as easily be taken away all together.  

I'm Just a Bill

Obamacare has been surprisingly up held.  The Supreme Court's ruling is based on the idea that congress in allowed to tax under the constitution and thus the individual mandate is constitutional.  This means that if you chose not to purchase healthcare you will be stuck with a small fine, at first.  For the first two years of Obamacare there will be a fine much less than that of the actual cost to have a health insurance plan and then the fine goes up substantially.  What does this do?

This cheaper fine is not only for individuals, it is for businesses as well who will be required to provide health coverage.  The fact that a business can pay a small fine rather than provide health coverage to its employees creates an incentive to not provide health coverage at all.  Whether employers choose not to provide it to their employees is yet to be seen, of course, as an effect of Obamacare, but rather from the current recession.  Given the fact that we are in a recession it would make sense that employers will look for any incentive to keep their business afloat and choose not to provide health insurance but rather leave it up to the individual employee to acquire on their own.  I suspect many will choose to pay the fine as well because their healthcare was originally free but now must be paid for and it would only make sense that most would simply pay the fine because it is cheaper.  As soon as this begins to happen, the  Affordable Care Act is in full swing and the economic effects will begin to take place.  Health insurance providers will probably lower their prices for a short period as well to match the subsidized pricing.  However, this is not meant to last.  Competition will weed out the the firms that can't compete with the subsidized healthcare or the fine and as soon as that happens prices will start to climb again because less firms means more market power for each individual firm.  By this time, the fine will have been increased for those who chose not to purchase healthcare and if you notice, prices are now higher across the board.  This is obviously a generic outlook on the economic repercussions of Obamacare.  


Now, what we have is an oligopolistic market where a few large firms share most of the market.  I feel this will only amplify the wage gap that already exists in our economy which is ever so often brought up by the media and the occupy movement.  Now a few large firms can charge substantially higher prices to those top wage earning individuals and the government will just provide healthcare to the low wage earners.  Everyone is happy because they receive healthcare!  Woo Hoo!  The End right?  Not so fast.  Why are the top wage earners paying more?  Not only can they afford it but they will be paying for a better service.  This means they get care first and this is possible because it is a private firm that they have health insurance from.  Remember, fewer can afford it, so much fewer customers, and thus much shorter line meaning better and faster healthcare.  This concept of the rich getting richer and the poor getting poorer is unethical and capitalism at work according to today's rhetoric in the media but this is what you get with the Affordable Care Act.  Now those on subsidized care must wait.  This is the effect of one firm crowding out the rest of the market.  While everyone has access to the service, there is only one place to get it.  However, I'm sure we can be reassured by a hopeful message like, "great things come to those who wait."  Yeah, good luck with that. 
 

A Truly Affordable Act

The healthcare law is set to be ruled on in the next coming days.  The repercussions of this ruling could be massive if the law is struck down partially.  If the ruling on the mandate is that it is unconstitutional, it would not make sense to have any other part of the law upheld.  The Affordable Care Act is set to work on this premise which is why the healthcare industry has been preparing for its implementation in the last two years.  The economic repercussions of allowing MORE subsidized medicine will be substantial and, just like any service, must be paid for.  If the mandate, and the mandate only, is ruled unconstitutional then the ACA will have to be paid for by other means.  This may mean higher taxes across the board.  And even if the individual mandate is struck down by the Supreme Court that still leaves the business mandates which requires businesses with over 50 employees to provide health coverage. 

Clearly the ACA has many strings attached and if the main one is cut then we have nothing but a dysfunctional puppet trying to put on a show.  Insurance companies will be required to take on customers even if they have pre-existing conditions without charging extra, costing even more money which will in turn raise prices on those who can afford it to a point where they no longer can.  This will then force those individuals to take the subsidized healthcare which will in turn raise taxes even further.  Just the fact that insurance companies will have to cover anybody and everybody will send some out of business and cause prices to skyrocket forcing more people on subsidized care or to simply not have healthcare, since the mandate was struck down.  Thus, we are still in the same predicament we started in, if not worse.  

This law if put into effect will simply crowd out the private sector of healthcare.  It will put your health in the hands of politicians and not doctors.  

The best alternative I can see is to strike the entire law down and take a look at the policies already in place.  Some argue that regulating healthcare is regulating interstate commerce.  Even if healthcare is interstate commerce, health insurance is not.  Therefore the market for health insurance should be less regulated and allowed to cross state lines in order for competition to take place.  That is a truly AFFORDABLE and CARING ACT.