Dog Health Care vs. Human Care
My six-month old Siberian Husky, Jack (click here for picture), recently had some health problems. Namely, He swallowed a hackeysack, one of those little bean-filled balls that kids kick around. After two trips to the vet and severy tests, the situation was resolved and the hackeysack removed.
But, the situation got me to thinking about health care and the ways in which human health care differs from veterinary care. First and foremost, Jack was “uninsured.” I’m not sure about the number of “uninsured pets,” in this country, but I am pretty sure that it is a national crisis of epic proportions and that some government solution is necessary.
Anyway, because Jack had no insurance, his bills were all paidout of pocket and upon completion of his treatment by me and my fiancee. To say the least, this is not common practice when it comes to human health care. In fact, a friend of mine was treated for a torn anterior cruciate ligament in Albuquerque and, after repeated requests for an itemized bill, the hospital simply refused to provide one.
It would seem obvious to me that if you don’t provide consumers any information about their health care costs and the tradeoffs they create, you will continue to have costs spiral out of control. Perhaps we can take a lesson from the vet…now if I could only get Jack a Health Savings Account!
Federal Funding for RailRunner?
Right now, New Mexico is looking for $75 million in federal money for the RailRunner commuter train. The Albuquerque Tribune editorialized that the project was worthy of federal support and that Senator Domenici should use all of his political wiles to get the funding.
While it may seem simple to New Mexicans who think governments have an unlimited amount of money to throw around, even the federal government must (or at least should) prioritize. The problem is, as I point out in my subsequent letter to the editor, when government provides a particular service or several services, it becomes far more difficult to prioritize.
Although I don’t think we’ll see full-blown capitalism in transportation anytime soon, I do think that the first step is to return transportation policymaking to the states. That way, at least states will be able to try innovative solutions and compete with each other to find the transportation systems that work and that their citizens and businesses will use and can pay for.
If you want to see what an innovative, free market transportation system might look like, check out the work of Bob Poole and the Reason Foundation.
Wealth Will Help Us Survive Climate Change
The Journal’s Business Outlook section had a nice story (subscription required) about a recent talk given here in Albuquerque by Robert L. Bradley Jr. of the Institute for Energy Research. Bradley’s main point (as disucussed in the article) was that our economy, because it is relatively free market and wealthy, can cope with what climate change occurs. Rather than panicking about a degree or two degree increase in global temperatures — whether it is human caused or not — we would be much better off devising ways to make sure our people can cope with the potential problems of global climate change.
Omitted from the Journal article was another important point made by Bradley, that is that ethanol and other so-called “alternative energy sources” are not really viable as replacements for the current suite of fossil fuels. Unfortunately, as Bradley made clear for the specific benefit of the Domenici and Bingaman staffers present, New Mexico’s Senators don’t seem to have gotten this message. In fact, legislation now being pushed by the Senators would again expand the alternative biofuels mandate.
Thanks to the New Mexico Prosperity Project for putting on an excellent event.
Education from the Top Down
Yesterday, the US Census Bureau released its latest report on the public financing of elementary-secondary education. The data itself is also available.
On average, $8,701 of taxpayer money was spent on each student nationwide in 2005. New Mexico ranks at #35 in spending, $7,580 per K-12 student. Compared to its neighbors, New Mexico collects more revenue per student, but only Colorado spends more ($7,730 per student). Interestingly, Arizona and Utah are at the bottom of the list, spending just $6,261 and $5,257 per student. The problems with New Mexico’s public schools are not due to a lack of funding.
Where New Mexico really stands out is in the large imbalance in revenue for its public school system. Only two states (Arkansas and North Dakota) and the District of Columbia receive more federal funding per student, and we rank #10 in state funding. When it comes to local funding, however, New Mexico ranks #48, one of only 4 states where local sources provide less than $2,000 per student. Only 13.4% of public school funding in New Mexico comes from local sources, versus 43.9% average nation-wide.
What is the result of this displacement of local education funding by state and federal money? New Mexico ranks #42 in spending on classroom instruction, including teacher salaries and benefits, while landing much higher at #25 and #26 for spending on school and general administration respectively. Only 56.5% of public education spending in New Mexico goes to actual instruction, compared to 61% in the country as a whole.
When local communities, parents and property-owners, are directly funding their schools, they have a much stronger incentive to see their money spent where it counts. Clearly, this is a weakness in the financing of New Mexico’s public schools.
Single-Payer Cheaper than Current Health System?
There has been a great deal of talk recently about health care reform in New Mexico, in part, because Governor Richardson is likely to dub the 2008 legislative session “the year of health care” and use the session to push for some kind of major health care reform.
The major proposals are known as the “Health Security Act” (single payer system), “New Mexico Health Choices” (taxpayer-subsidized vouchers), and the “Health Coverage Plan” (expansion of existing government programs like Medicaid). Specifics of all three are outlined on page 14 of this document.
With momentum building for some kind of reform, it was troubling to read that a firm known as Mathematica, which is studying each proposal, recently found that the single-payer plan would save taxpayers money. This drew a quick response.
I’m not going to judge the credibility of Mathematica before their final report is issued and I understand that the analyst made “heroic assumptions,” but Canada’s problems with single-payeer care are well-known and socialism has a rather poor track record in health care, not to mention the Soviet Union.
Rather than more government, what New Mexico needs is to peel back government involvement in health care. That may take more time than simply imposing a socialist model, but it is the only one that will work.
Income Inequality
With all of the talk about increasing income inequality, particularly on the left, but also among politicians like President Bush, one might think that inequality simply follows the old race and geograpy pattern of wealth and poverty.
It turns out that the story doesn’t follow the old pattern and a new pattern is developing based on age. It turns out that far from the stereotype of old people living day-to-day on pensions and Social Security, older Americans are actually the wealthiest Americans (and they are getting richer every day).
Not surprisingly — as Mark Schmidt, my former colleague at the National Taxpayers Union pointed out a few years back — government policymaking plays a huge role here. Social Security, Medicare, and Medicaid are just a few of the most prominent of these massive programs that transfer wealth from young, productive workers to elderly retirees.
I’m not bashing grandma and grandpa here, but I am saying that Congress needs to do something to stem the tide of red ink. Unfortunately, politicians have been frightened for years by the spectre of angry old people rallying to vote them out of office.
The point is that the elderly are doing very well for themselves and policymakers need to reform and place strict eligibility limits on some of these programs (as I point out in this document) before it is too late.
Congressional Oil Impotence
Gas prices are rising and the usual cry has arisen from Congress that something must be done. As Mr. Gessing pointed out, our own Rep. Wilson is sponsoring this very piece of legislation.
What, exactly, can Congress do about such apparent price gouging? One thing they can’t do is lower the price of oil per barrel; OPEC regulates that. Mandating a set profit margin or lower prices can only destroy profits and drive oil companies out of business. That certainly won’t drive prices down.
OPEC only supplies 40% of the world’s oil, yet they possess 75% of the world’s reserves. They show no signs of increasing their production in order to drive down prices. If they refuse to deal with this situation (since Congress can’t mandate them), then another solution must be found. Congress could consider the perennial topic of opening up our own massive untapped oil fields. From ANWR to the massive shale oil supplies in the West, Congress could do much to loosen what the President labels our addiction on foreign oil. In the interim, price gouging legislation is the first step towards eventually higher prices and increased dependence on the whims of OPEC.
Rep. Wilson Jumps on Price Gouging Bandwagon
Congresswoman Heather Wilson has once again chosen to ignore basic economic principles in favor of trying to score cheap political points. The issue this time is “price gouging” legislation that she is sponsoring: HR 2335. While I can’t link to the bill text directly, you can read the bill for yourself by clicking here and entering “HR 2335.” Essentially, the bill sets up a series of regulations and fines, ostensibly for the purpose of preventing big, bad oil companies from taking advantage of us consumers.
Perhaps the ethanol mandate that Congress passed in the last energy bill is part of the problem? There’s also been a reduction in refining capacity which Congressional mandates have contributed to.
Instead of passing absurd “price gouging” legislation, Rep. Wilson and her friends in Washington need to look in the mirror for the real source of high gas prices. Wild goose chases after oil companies will only make matters worse.
Who Causes Inflation?
An article in today’s ABQ Journal details the new John Adams Dollar Coin which goes into circulation today. Contrary to most people’s understanding of money, the U.S. Mint fervently hopes that people will start “collecting the coins.”
The article notes the flops of the Susan B. Anthony and Sacajawea coins while simultaneously explaining that “the U.S. Mint believes it has the right [marketing] strategy.” Critics have noted that the dollar bill works just fine when it comes to this issue, yet the U.S. Mint continues to try to promote unnecessary and expensive endeavours.
One cause of monetary inflation is an abundance of unnecessary money chasing fewer goods. When the government mints money for the sake of coin collectors, the value of the dollar drops as the amount of money flooding the market grows. Apparently this could total 900 million coins in the first year, yet no plans have been made to decrease minting the dollar bill. And we wonder why the Euro regularly outperforms the dollar. Turning money into a consumer product certainly won’t help things.
Ernst and Young: NM Business Taxes Among Highest in Nation
Sure, the Rio Grande Foundation has been saying it for years: New Mexico’s tax burden makes the state a difficult place to do business. Now, the respected accounting firm Ernst & Young has reinforced those findings with a new study which shows New Mexico to have one of the heaviest business tax burdens in the nation.
The main culprit is the relatively heavy tax burden placed on business inputs by state and local government. Unfortunately, it is our gross receipts tax which is unique in the country for its high rates and broad base that cause this problem. I don’t know if the momentum is there on either side of the aisle for reform at this point, but changes are in order before the gross receipts tax gives New Mexico the heaviest business tax burden in the nation.
