August 30, 2012

Ayn Rand Shrugged Medicare, Medicaid, Social Security And Health Care For All


By Melvin J. Howard

The famous extreme capitalist Ayn Rand, who once said, "If money is the root of all evil, then what is the root of all money?" Alan Greenspan, the last Chairman of the Board of Governors of the Federal Reserve, worked with her extensively on her book "Atlas Shrugged", released in 1957, which many claimed to be the most influential book at that time. In subsequent years Greenspan also contributed to Rand's publication "The Objectivist". Since money has become the backbone of so much of our social fabric and well-being. Then we should know a little something about the beliefs of those that run our governments and our financial system. Mr. Greenspan rigorous training in Ms. Rand’s philosophy, which is known as "objectivism" and whose fundamental features seem to overlap extensively with today's so-called neo-liberal economic policy. This philosophy of objectivism largely rejects the idea that capitalism and capitalists should have any social goals at all, and promotes the idea that all acts and intentions should be purely selfish. Not surprisingly Rand's work was a huge hit with the far right in America at the time, this was right after the McCarthy era when he accused everyone and their grandmother that they were a communist. In coming up with her rather extreme, theories it appears that Ms Rand had no interest in the field of physics.

If she had looked into the developments in Physics that took place in the early 1900s in the form of Quantum Mechanics and Special Relativity it would have been clear her philosophy would have hit a few stumbling blocks. Both of these radical developments in physics shook the foundations of Western thought premised on objectivity, independence of objects, the absolute nature of time, and certainty. Gradually this new way of looking at the world, replaced the old Newtownian (or classical) mechanics way of looking at the world, I call it Quantumnomics. Not only are today’s mainstream economic theories, and philosophies like objectivism, outdated by being based on the Newtonian or classical worldview, but also these same outdated views are reflected in our current monetary system. Nothing illustrates this better then what has happen to the financial system over the last 20 years.

The House Republican budget unveiled by Rep. Paul Ryan of Wisconsin leads me to suspect he is a pupil of Ms. Rand’s. For starters he would repeal President Barack Obama's health care overhaul in its entirety. The plan would slash federal spending by about $5 trillion over 10 years. Mainly by changing the fundamentals of Medicare and Medicaid. Here is how he would do it:

  • _ People now 54 and younger would not get the same Medicare coverage their parents and grandparents have. Instead, future retirees would get a fixed amount from the federal government to buy insurance from a range of regulated private plans. The federal payment would go directly to the health insurance plan. Starting in 2022, the eligibility age for Medicare, now 65, would be gradually increased until it reaches 67 in 2033.

  • _ Seniors already on Medicare and people within 10 years of retirement would be able to go into the traditional program as it exists today. Once the new program is set up in 2022, beneficiaries in traditional Medicare would be free to switch, but they would be under no obligation to do so.

  • _ The government Medicare payment – called "premium support" by Ryan and a voucher by critics – would be adjusted so that beneficiaries whose health gets worse would receive more. Wealthier retirees would get a lower subsidy, and lower-income beneficiaries would receive extra help with their out-of-pocket costs. The payments would be indexed for inflation, but at a level that's expected to be lower than the current rate of increase in medical costs. Medicare now covers about 47 million retirees and disabled people.

  • _ Medicaid, which covers about 50 million low-income and severely disabled people, would be turned over to the states. Washington would send each state a lump sum to cover services from prenatal care for low-income women to nursing homes for Alzheimer's patients. The block grant would allow each state to design its Medicaid program according to local needs. Low-income people would lose their current federal right to Medicaid. Safeguards would be spelled out in subsequent legislation, but that’s no guarantee states could stop accepting new applications in an economic downturn.

As I mentioned in earlier entries in the coming years, more and more of society's resources will be going towards supporting retirees and increasing medical expenses for society as a whole (both workers and non-workers alike). This will be true whether benefits are funded in the public sector or the private sector, or both. Thus, Private Savings accounts and privatizing Social Security cannot solve the problem and discussion of these as a solution should also not be allowed to distract debate from the real issues. It is the increasing share of national expenditure devoted to healthcare. This effects all of Medicare funding, Medicaid funding, private medical funding. In fact, putting current contributions into private accounts will make the current funding situation worse, because these funds are now used to pay for current retirees and not "saving" for future retirees. In response to Rep. Ryan House proposal Senator Baucus has introduced a bill. The express the sense of the Senate that Medicare should not be dismantled and turned into a voucher program bill:

1st Session
S. 789
April 12, 2011
Mr. BAUCUS (for himself and Mr. NELSON of Florida) introduced the following bill; which was read twice and referred to the Committee on Finance

To express the sense of the Senate that Medicare should not be dismantled and turned into a voucher program.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
(a) Findings- The Senate makes the following findings:
(1) The Medicare program has been providing affordable health care for elderly and disabled Americans for decades.
(2) Forty-seven million Americans currently rely on the Medicare program for their health care.
(3) The Congressional Budget Office has stated that under the House Budget Committee fiscal year 2012 budget resolution ‘most elderly people would pay more for their health care than they would pay under the current Medicare system’.
(b) Sense of the Senate- It is the sense of the Senate that--
(1) Medicare should not be dismantled and turned into a voucher or premium-support program;
(2) deficit reduction should not be achieved by simply passing on the costs of health care to Medicare beneficiaries;
(3) guaranteed Medicare benefits should be preserved;
(4) medical decisions should be made by seniors and their doctors, not insurance companies; and
(5) deficit reduction should be achieved by lowering health care costs through delivery system reforms.

This disconnect into modern physics, while talking about the relationship between a capitalist society and the poor, may seem rather odd. Nevertheless it brings home my point that money is a social and psychological factor and so the beliefs and "science" adopted by those that create money and control the monetary system must take this into account. These changes in perspective, force us to think about things differently, to always acknowledge the interconnectedness of everything, and to recognize the ever-present uncertainty in everything. The capital markets of today do not operate in this fashion. Rather they treat people and objects as independent economic units, and discount the future as less important than the present. Furthermore they have limited mechanisms for coping with uncertainty as from financial crisis past.

Under this old or classical worldview central bankers use more or less traditional techniques for exercising some control over the economy, and a large part of this is maintaining the confidence of the markets in the monetary system. So people that don’t have much money don’t factor into central bankers decisions very much at all. This is a big mistake. Now on the surface many might think that there is no relationship between Central Bankers and the poor to speak of. However this ignores a very important fact the interconnectedness of everything and this is perhaps best considered within the context of the "Zero Sum Game". As income and wealth gaps have widened few people have more money, and the majority of those people are getting less. What have we learned over the past 50 years is this that economies that function as central governments or central planning are time bombs waiting to happen. And extreme capitalist or free market systems unrestrained are time bombs waiting to happen. Globalization is a fact of life whether we like it or not. We are all inter-connected and the classical models simply will not work. The ever-present uncertainty in everything is a reality. We need to solve the problem as a nation not as divisions of sound bites and political propaganda. If we keep ignoring these laws of Physics we should not be surprised of the catastrophic events that  follow. If you jump from a 30-story building you are going to fall and it will probably be fatal Physics 101.