Financial topics

[Higgenbotham]

I don't know much about the details of health care as it exists today. From a business standpoint, my questions would be:

Why did the health care system need to be modified? What was wrong with the existing system? Does Obamacare address the supposed deficiencies?

Why did the health care bill need to be so complex? What will be the cost to implement it? How much money will it save?

With my very limited knowledge, my take is that the health care system needed to be modified because, like many industries in America today, it is some combination of dysfunctional and bankrupt. This was a bill to save the health care system, not to make it better or more accessible for the American people. The means to save the health care system is to increase the number of users, increase costs on the users, and collect taxes.

This page discusses possible exemptions to the health care law. As currently understood, the Amish may be exempt and there is some anger over the fact that Catholics will be required to pay for contraceptive services whereas the Amish may be exempt from the entire bill. Currently, the Amish who are self-employed pay no social security taxes and receive no benefits.

http://www.snopes.com/politics/medical/exemptions.asp

[gerald]

Greenspan was obviously attacking the man for the purpose of discrediting him, not because Greenspan believed that no one could have predicted the crisis.

The myth that Greenspan and his like want to preserve is that the requisite knowledge only exists within the inner sanctums. We've written about this before somewhere and I'll try to find it.

How much money did he lose and over what period of time?

The impression I got from reading the details was that he lost about 50% over a period of 18 months to two years. It's been a few years since I read about it though.

Another thing I'd mention is that he's been buying farmland and gold. He may well be right in the long run, but I saw no indication he sold out at the peak last year.

Yes, there are people investing in farmland. However, farmland can be more complex then it appears, and it is not for everyone.

Farmland is not liquid, and is something one holds for a long haul and is not for someone who wants to make a quick buck. However it does provide an acceptable return and is generally considered a hedge against inflation.
It is important that one has patient money, and preferably purchases land with cash.
Generally an investor purchases land and leases it to sophisticated operators using a farm management company. Rents can be paid in cash, crop share, or some combination of the two.

Also it is very important that quality land be purchased,- meaning - productive soils, adequate seasonal moisture, proper drainage, flat land, proper land configuration, no land irregularities, ( ditches, water ways, etc ) and size. ( a decent size would be a 1/4 section, -- a square 1/2 mile on a side, this is not always easy to find).

Another important consideration is natural precipitation ( which is preferable ) irrigation can be problematic due to subsiding aquifers and surface water right issues.

This farmland lease arrangement can be very advantageous to a large operator, in that the farmer does not have to own all of the land farmed, allowing him to invest in sophisticate equipment thereby amortizing equipment costs over more acreage and reducing input costs.

An example of such equipment and the obvious need for quality land is illustrated by a 48 row corn planter with GPS guidance, computer controlled and an air conditioned cab.

http://www.youtube.com/watch?v=TtMsLIKv ... re=related

http://www.youtube.com/watch?v=eRpAavAL ... re=related

[Higgenbotham]

However, farmland can be more complex then it appears, and it is not for everyone.

I'll add the things that come to my mind. Both of my Grandfathers were farmers in the midwest.

The value of farmland is dependent on access to petrochemical inputs (fertilizer, diesel) that may not be accessible or accessible at prices that make the farming operation profitable.

The value of farmland is dependent on population. SInce populations have been expanding for a long time people don't normally consider what effect decreasing populations would have on farmland prices.

The value of farmland is dependent on the maintenance of international trade and shipping.

As mentioned, the value of irrigated farmland is dependent on maintaining irrigation equipment and aquifers that in come cases are depleting - the Ogallala aquifer in Kansas, for example.

The property tax has to be paid or the land will be lost after a few years. If the owner cannot receive enough income to cover the taxes, the land becomes a liability.

[gerald]

However, farmland can be more complex then it appears, and it is not for everyone.

I'll add the things that come to my mind. Both of my Grandfathers were farmers in the midwest.

The value of farmland is dependent on access to petrochemical inputs (fertilizer, diesel) that may not be accessible or accessible at prices that make the farming operation profitable.

The value of farmland is dependent on population. SInce populations have been expanding for a long time people don't normally consider what effect decreasing populations would have on farmland prices.

The value of farmland is dependent on the maintenance of international trade and shipping.

As mentioned, the value of irrigated farmland is dependent on maintaining irrigation equipment and aquifers that in come cases are depleting - the Ogallala aquifer in Kansas, for example.

The property tax has to be paid or the land will be lost after a few years. If the owner cannot receive enough income to cover the taxes, the land becomes a liability.

Those are the reasons why one invests in quality land that is well located with no debt. Lesser quality land has and is being removed from production, major sophisticated operators have been able to reduce
costs and there by reduce the risks you mention. Everything has risks, some risks one can deal with, others one can't, "you pay your money and take your chances" We all view and respond to risks differently.

[OLD1953]

Given that nobody in the world has ever applied Keynesian theory over an entire long business cycle, it's difficult to say that it doesn't work. It certainly doesn't work if you do the stimulus part and ignore the frugal parts, which is what the world's "Keynesian economists" usually do. We can't always need stimulus and deficit spending. That route will always lead to the destruction of currency and a reset of the economy. (I've never said it doesn't happen, just that it seems unlikely to me to happen to the US this particular cycle. I could be wrong, I've been wrong about lots of things.)

The obvious attraction of constant creation of money added to constant creation of credit is that politicians don't have to increase taxes to pay for whatever they think is needed. They just run up a tab.

I think Paul Farrell nailed the issues facing us in this column:

http://articles.marketwatch.com/2012-03 ... et-journal

We can't do a reset of the economy with Wall Street's help, they are fighting it in every way possible. And they'll do that until the entire economy dies.

[Reality Check]

....

Why did the health care system need to be modified?

It was a political imperative of the political leaders that had the largest ideological majority in Congress in decades,,,

What was wrong with the existing system?

The question assumes that a significant portion of the existing system has already been changed, which is the opposite of the truth.

The correct question would be what is wrong with the current system, because so far it has not been changed enough to even be worth talking about.
That question alone exceeds the scope of this forum, but just a few of the items sometimes mentioned:
1. An ever increasing percentage of the Gross National Product is expended on Health Care.
2. An ever decreasing percentage of the population has employer provided health care.
3. An ever increasing percentage of the cost of employer provided health care is paid for by the employees.
4. United States businesses are at huge disadvantage because their export products include in their cost both the health care costs of their employees and the health care costs of their European customers ( and any other customers who pay VAT tax which is used to pay for health care ).

Does Obamacare address the supposed deficiencies?

1. No.
2. No.
3. No.
4. No.

Why did the health care bill need to be so complex?

Again, this single question exceeds the scope of this forum.
A few of the reasons include:
1. Getting 60 U.S. Senators, including 100% of Democrat U.S. Senators, and none of the Republican Senators, required making the bill APPEAR TO DO things, it did not do; and making it APPEAR TO NOT DO, things it did do, for political reasons ( attempting to get moderate and conservative Democratic Senators re-elected after the bill passed and before it was implemented ).
2. The bill repeatedly modified existing law and then modified itself, over and over again, just so they could get it through all the committees in Congress( the reasons for this alone again exceeds the scope of this forum).
3. The Democrats lost their filibuster proof majority in the Senate before it was passed which required the bill to become much more complex ( the reasons for this alone again exceeds the scope of this forum).
4. The bill changes vast parts of existing federal law in order to implement all the sources of revenue needed to implement this bill.
5. The bill modified vast parts of existing federal law to create the legal environment that would allow the federal government to control over 15% of the 15 Trillion dollar United States economy in a manner that might withstand constitutional challenge.
6. The bill had to dictate by law what the statistical results of implementing the law will be so that the Congressional Budget Office would be forced to accept economic assumptions used by the politicians who promised the bill would not cost more than one (1) Trillion dollars over 10 years. Basically the law repeals the laws of supply and demand, and replace them with dictated results that assume independent actors will ignore economic incentives.

What will be the cost to implement it?

The number varies by Trillions of Dollars over 10 years depending on the assumptions you use and which of the laws of supply and demand you wish to ignore.

How much money will it save?

None, unless you buy the argument that massively increased demand for a product with limited supply will decrease costs.

Alternatively, if you buy the theory that the health care law will be used as an excuse to massively deny health care to people on Medicare it might decrease costs. Many studies point out most of health care costs occur in the last six months of life, so denying most of the health care now given to old people who are dying would save money, but the authors of the bill promise this will never happen.

[aedens]

"Tucked into the 138 page bill was a clause exempting the Old Order Amish, and any other religious sect who conscientiously objected to insurance, from paying Social Security payments, providing that sect had been in existence since December 31, 1950. After Senate approval in July, the signing of the bill by President Lyndon B. Johnson on August 13, 1965, made it official and canceled tax accounts of some 15,000 Amish people amounting to nearly $250,000."

[Reality Check]

The Amish case was about insurance. [/i]."

The Amish exception falls under the category of things that were intended to appear to be in Obamacare, but really were not.

Obamacare care includes in the legislative portion of the law a section on "religious exemptions" that was intended to imply broad exemptions in the legislative law for religious conscience, but in reality limited that exemption only to the smallest of churches such as the Amish. If you are not a member of one of these tiny churches the legislative "religious exemptions" are not for you. Sorry Catholics, your religious beliefs are not religious enough to be worth a legislative exemption.

This should not be confused with the the regulatory laws authorized by Obamacare for every other religion. These can be written, and re-written endlessly by Federal government employees without a vote by congress. These regulatory laws apply to all religions except those favored few, like the Amish, who are covered by legislative exceptions.

The catholic church is suing over the regulatory laws that have already been issued excluding the vast majority of all Catholic institutions and Catholic Church members from any exceptions for religious conscience.

[aedens]

I do not know if you were walking the earth when the Amish land grab was going on in the 60's in Michigan. It went like this. Your children will be educated in our State schools or you will be imprisoned. Many moved to Indiana and Ohio from our area. Nobody "few" stood for my friends family's. The conversation was the Unions will be next since they lost the way. Alot of the "others" complained about it as the people left the area persecuted. Later when Unions got affected in there scope they passed the ERISA laws which was the catholics and methodists at least in our area. You can see how the layers work. We know who, what , when, were and why. No one "get's it" until they get you. I have a very diverse life from the Amish way and they are our Customers on our surviving generational farm. One thing I can convey point blank is the vast majority have no idea what is truly going on. I have lived and worked both ends the spectrum in my life time and citizens have no clue what is already here. It has got to a point even reality will not permeate the gradualism of effect. The point is now many will never see since they never knew anyway. Few understand the shadow they even stand in and less even see the danger. Everything I remember them saying has been true to this day and unfolding. I have a few in medical studies as mentioned before and hopefully when I graduate to the next step no one decides other than those who understand.

[Higgenbotham]

Does Obamacare address the supposed deficiencies?

1. No.

I can't find any evidence that it does (or will) either. If the supposed "problem" is that there are a lot of uninsured, Obamacare may address that. But addressing that particular "problem" does not necessarily have any outcome other than sending an income stream to the health care industry or to the government in the case of the tax. It doesn't guarantee more overall access to care.