Get Ready for the Great Healthcare Bailout

We protect the big banks and Wall Street, so why not protect everyone with health care reform? Because, like the other bailouts, this will be a financial disaster.

To probably no one's surprise but against the hopes of many, the House has passed one of the costliest pieces of legislation, potentially, of the past 40 years.

What's really in the health care bill?

Over time, this bill is going to be an epic financial disaster. And the accounting by which the Obama administration claims to pay for it sets a new low in financial honesty (or, said differently, a new high in government financial chicanery).

For everyone who loves socialism and all the things that socialism can bring, over the next 20 years you're going to get the health care system in this country that you've longed for. And for those of you who don't, it won't matter. You're going to pay anyway.Msn.Video.createWidget('PlayerAd1Container', 'PlayerAd', 304, 314, {"configCsid": "MSNmoney", "configName": "player-money-4x3-articles-inline", "player.vcq": "videoByUuids.aspx?uuids= 30c82dc1-ced8-4955-9269-57c335cdca36,de9ad513-5f47-4a66-ad96-37459fd42f46,039b0062-5e90-46af-be21-7187b7cb2cdc,50564e47-7e13-4e40-ac4b-b13af606f9cf,96f21d9a-08db-415f-a038-52d6d7423f63,e48e83d2-8349-488e-b8e5-51b7fef04439,7b6e5972-a72c-4827-b07e-e461b710d2db", "player.fr": "iv2_en-us_money_article_Investing-ContrarianChronicles-inline"}, 'PlayerAd1');Msn.Video.createWidget('Gallery4Container', 'Gallery', 304, 150, {"configCsid": "MSNmoney", "configName": "gallery-money-articles", "gallery.linkbackLocation": "bottom_left", "gallery.numColsGrid": "3", "gallery.categoryRequests": "videoByUuids.aspx?uuids=30c82dc1-ced8-4955-9269-57c335cdca36,de9ad513-5f47-4a66-ad96-37459fd42f46,039b0062-5e90-46af-be21-7187b7cb2cdc,50564e47-7e13-4e40-ac4b-b13af606f9cf,96f21d9a-08db-415f-a038-52d6d7423f63,e48e83d2-8349-488e-b8e5-51b7fef04439,7b6e5972-a72c-4827-b07e-e461b710d2db;videoByTag.aspx%3Ftag%3Dmoney_dispatch%26ns%3DMSNmoney_Gallery%26mk%3Dus%26vs%3D1;videoByTag.aspx%3Ftag%3Dbest%2520of%2520money%26ns%3DMSNmoney_Gallery%26mk%3Dus%26vs%3D1"}, 'Gallery4');This is another variation of having the prudent bail out the reckless -- though more like the business owner who promises to "cheat the other guy and pass the savings on to you." For those who aren't clear on why socialism doesn't work, I recommend reading George Orwell's "Animal Farm."

(The morning after the bill was passed, I tapped "All animals are equal, but some are more equal than others" as the headline for my daily column on my Web site (subscription required). There is a follow-up below.)An intergenerational rip-off Thus, at a moment in time when the country has immense financial problems, we've now got another gigantic one -- funded, such as it is, by another intergenerational rip-off. I don't know how folks can advocate the pursuit of these policies and look young people in the eyes, telling them we're doing the right thing.

Of course, you can also ignore the next generation if what you've got is not a conscience but a heavy-duty case of crony capitalism. Yes, my views on the health care bill are deeply held, but they are just as strong regarding that version of capitalism being practiced in America.

I stated as much when the bailouts were taking place, and this week I'd like to share like-minded comments from an astute reader of my daily column:

I loved Animal Farm, and while I certainly don't like this healthcare bill either, I think the quote you used is probably more relevant to the Wall Street crowd and the bailouts it has received than the healthcare bill. I see the healthcare reform as just one more example of how slowly but surely populist anger will continue to creep into our lives in the form of entitlements for the masses (not a particularly surprising response to the widening wealth gap spawned by the crony capitalism we've been practicing in this country for the past couple of decades).

I personally blame the greedy fake capitalists (Greenspan, CEOs and their lobbyists, and the Wall St. marketing machine) that have been running this country into the ground since the mid-90's. . . . Had the pendulum not been allowed to swing so far out of balance, there wouldn't be such a high degree of anger to tap into and you couldn't sell these sorts of things to a normally conservative public.

This reader has made many important points that I truly agree with. The era of greed was fomented by incompetence and irresponsibility at the Federal Reserve, paving the way for reckless behavior on Wall Street (and nearly the entire banking industry), abetted by the abdication of responsibility by the so-called regulators.

Had such egregious behavior not taken place, perhaps the mentality of those who feel ripped off (probably a good portion of the country) would be different.

Continued: Bubble vortex draws in cerebral cortexMore from MSN Money

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What really broke the banks

Still printing money at full speed

Foreign versions of our coming crisis

Are investors scared of stocks?

 1 | 2 | next >

Rate this Article Click on one of the stars below to rate this article from 1 (lowest) to 5 (highest). LowThank you for rating.UGR('ratCntrl')High var avgRating=0;avgRating=7.857778; if(avgRating!=0){avgRating=avgRating/2;avgRating=Math.round(avgRating*100)/100;var sDisplayText="Average rating: " + avgRating + " from ";var usersCount=225;sDisplayText = sDisplayText + usersCount;if (usersCount==1)sDisplayText=sDisplayText + " user";else sDisplayText=sDisplayText + " users";avgRatingElem=document.getElementById("averageRating");avgRatingElem.innerText=sDisplayText;} View all top-rated articlesE-mail us your comments on this article Discuss in a message board MSN Money InsightNew Investor CenterMarket DispatchesJubak's JournalTop Stocks blogCompany FocusContrarian ChroniclesSmart Spending blogFast AnswersDecision CentersStart InvestingMutual FundsFind Hot StocksSimple StrategiesPower ToolsInvesting for IncomeReal Estate InvestingRecent Contrarian Chronicles ArticlesWhat really broke the banks 03/19/2010Still printing money at full speed 03/12/2010Foreign versions of our coming crisis 03/05/2010More . . .Contrarian ChroniclesAbout Contrarian ChroniclesLearn the Contrarian Chronicles lingoSubscribe to Market Rap on Fleckenstein CapitalFund data provided by Morningstar, Inc. © 2009. All rights reserved.StockScouter data provided by Gradient Analytics, Inc.Quotes supplied by Interactive Data.MSN Money's editorial goal is to provide a forum for personal finance and investment ideas. Our articles, columns, message board posts and other features should not be construed as investment advice, nor does their appearance imply an endorsement by Microsoft of any specific security or trading strategy. An investor's best course of action must be based on individual circumstances.Msn.Video.createWidget('Gallery8Container', 'Gallery', 500, 230, {"configCsid": "MSNmoney", "configName": "gallery-money-article-site-wide"}, 'Gallery8');msft.msn._ic.cid='0s86xd8gf939enfprhi43f6i6x9hvwrd';msft.msn._ic.pst=false;msft.msn._ic.pgn=1; Join the discussion!Add a commentShow commentsSort by:Newest firstOldest first_uc2f12('iucGo');1 - 10 of 17PreviousNextwh4tever #1Saturday, March 27, 2010 7:21:05 AMGreat commentary Mr. Fleckenstein.ReplyReport AbuseLynn X #2Saturday, March 27, 2010 9:56:10 AM

      As for the new health care bill.  Yes it can be expensive.  America doesn't have to become a third world country.  America can and will do better. 

                                             Lynn X

ReplyReport Abuseddwayne #3Saturday, March 27, 2010 1:56:42 PMBill - nice scribblings - Health Care Bill = George Orwell's "Animal Farm"? Welcome to Mr. Orwell's "1984"! Corporations own the government. You and I are cogs. Hope you are having a good day, anyway!ReplyReport Abusewhatajoke2009 #4Saturday, March 27, 2010 2:03:25 PM

30% UNEMPLOYMENT + SS+THE MEDI'S +THE BS HRC BILL = NO COUNTRY DUE TO NOT ENOUGH COLLECTED TAXES......THIS WILL NOT WORK EVER AND MOST PEOPLE SEE IT, JUST NOT THE LIBERALS/PROGRESSIVES/DEMOCRATS....

 

UNLESS THEY PLAN ON FORCING THE WORKS TO WORK FOR HARDLY ANY PAY.....AND I DONT SEE THAT HAPPENING!

ReplyReport Abusegregony #5Saturday, March 27, 2010 6:35:22 PMI've looked over what the bill does, and to be honest, I don't really see where its going to cost as much money as people say. Look at it this way - you don't have insurance - you go to the hospital - it costs 1000 bucks- you can't pay because you don't have any money, Medicaid picks up the cost. This is the way it is now. In the future, you go to the doctor with your govt paid Medicaid, the govt pays 60 bucks, you go to the drug store and get the 5 dollar antibiotics, and you don't have to go to the hospital. The amount of money America spends on health care is the amount of money America spends on health care. It's somewhat finite. It increases from year to year, but it probably won't go up much as a result of everyone having insurance. The big debate is who should pay for it. Unfortunately, being wealthy costs money. Most people can't afford to pay for it. The reason most people can't afford to pay for it is because the rich people took all the money. Money is another thing that's finite (unless your the CBO). Well, the funny thing about a democracy is that "most people" is the government, and rather than go without health care, they're going to just take some of the money (that they used to make, but now that CEO's and such take so much more than they used to) and use it to pay for the part of health care they can no longer afford. Coming to a theater near you. "Social Security 2020". Bet we see more of the same. The gravy train is gonna run a little slower for some folks.ReplyReport Abusejoeorton #6Saturday, March 27, 2010 9:33:04 PMthis troubles me1.George Orwell was a socialist,his animal farm was written about totalitarianism and how it is human nature for noble and honest ideas to eventually give into corruption. His qualms with the Russians was the needless slaughter of millions and fear of everyday people to express themselves.2. one night I fractured my elbow and had to go to the hospital. It was x-rayed  and I was prescribes some vicodins given a sling(no cast) and went home home.my dad paid a 100 dollar deduction and bought the vicodin and believed all else would be covered by his insurance months later he receives a letter explaining that he would have to pay another 400 dollars before his insurance would pay the remainder. the remainder being 200 bucks. his insurance is through his work and it is blue cross blue shield. he makes 11 dollars an hour and must support me my brother and mom who lost her job in the recession.3. why is it that the workers get fired yet the uppers who gambled with their company's earnings get a pat on the back ReplyReport AbuseFIRSTCALL #7Sunday, March 28, 2010 5:27:17 AMHey Bill, I don't think fiscal policy was too bad 10 years ago. I guess you forgot already that it was the Bush Boys who drove the Country into massive debt. This was done intentionally because they hate Social Programs and thought that driving the Country into debt would prevent the Democrats from passing Social Legislation. Guess what? It did not work. Obama and Pelosi and Reed were not born yesterday and they got the job done. Congratulations to them.ReplyReport Abusebudulinek #8Sunday, March 28, 2010 8:55:40 AMBill,I consider you as rare voice of sanity in this crazy world. So i am a bit surprised when you throw socialism and Animal Farm around when relating to this healthcare thing. This looks more like those fear-mongering jokers from Fox than you.I almost suspect that you haven't seen whats in the bill at all. I do not think this bill is even close to perfect but would you please support your claims and tell me by a way of example how exactly this healthcare bill makes my live comparable to the Animal Farm world? I am keen to learn new things - being from Europe and living more than 10y in U.S. ...Thanks in advance.....ReplyReport Abusewh4tever #9Sunday, March 28, 2010 10:36:20 AMbudulinek - Animal farm is more about totalitarianism than it is about socialism. And this bill which is forcing people into contracts with the health insurance companies stinks of totalitarianism. The health insurance companies have just been handed 39,000,000 customers to gouge. IMO it will not be a free market with competition, as it is mandated it will turn into more of a shared monopoly.ReplyReport Abusewordfrominside #10Sunday, March 28, 2010 11:37:44 AM

People who scream about the bill have no idea what is in the bill. I have been reading the highlights and the "takeover" that the far right and libertarians are so insanely apoplectic about? I just don't see it.

 

All the bill did was ban some of the worst abuses in the insurance industry; forced everyone to pay their share of the healthcare costs in this country (including a lot of people who currently don't buy insurance and think they have a right to off-load their health costs to everyone else when unexpected things happen) and created a platform where (over time) we would transition to a model where the pressures in the market would force the healthcare industry to correct the sloppy, ineffective and expensive way it deals with care in this country.

 

As long as you only see the problem through the prism of MONEY, you will never solve the problem. The real issue is that people (including those in industry) are trying to off-load their responsibilities in this society to everyone else (i.e. externalized costs). Every time we try to make them actually hold up their end of the bargain, they moan and whine incessantly like a 5-year old. There has been too much of this in the past 30 years.

 

Are there things I don't like in the bill? Hell yeh! The bill has all of these confusing exclusions, exceptions, limits and conditions. It will take an eternity for some of the provisions to come into being. It is not any different than the Credit Card Bill where the financial industry put in all these little exemptions and limitations so they can squirm their way around it. But it is better than nothing and the chaos that has ensued in our out-of-control system (which is what we have now). Only an ideologically minded twit would refuse to see that.

 

Wherever you have well-paid interests, there is always going to be this junk going on. IMHO, this is not the last of the changes that will need to happen. The system is still busted. It is just less busted than before.

 

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(The morning after the bill was passed, I tapped "All animals are equal, but some are more equal than others" as the headline for my daily column on my Web site (subscription required). There is a follow-up below.)An intergenerational rip-off Thus, at a moment in time when the country has immense financial problems, we've now got another gigantic one -- funded, such as it is, by another intergenerational rip-off. I don't know how folks can advocate the pursuit of these policies and look young people in the eyes, telling them we're doing the right thing.

Of course, you can also ignore the next generation if what you've got is not a conscience but a heavy-duty case of crony capitalism. Yes, my views on the health care bill are deeply held, but they are just as strong regarding that version of capitalism being practiced in America.

I stated as much when the bailouts were taking place, and this week I'd like to share like-minded comments from an astute reader of my daily column:

I loved Animal Farm, and while I certainly don't like this healthcare bill either, I think the quote you used is probably more relevant to the Wall Street crowd and the bailouts it has received than the healthcare bill. I see the healthcare reform as just one more example of how slowly but surely populist anger will continue to creep into our lives in the form of entitlements for the masses (not a particularly surprising response to the widening wealth gap spawned by the crony capitalism we've been practicing in this country for the past couple of decades).

I personally blame the greedy fake capitalists (Greenspan, CEOs and their lobbyists, and the Wall St. marketing machine) that have been running this country into the ground since the mid-90's. . . . Had the pendulum not been allowed to swing so far out of balance, there wouldn't be such a high degree of anger to tap into and you couldn't sell these sorts of things to a normally conservative public.

This reader has made many important points that I truly agree with. The era of greed was fomented by incompetence and irresponsibility at the Federal Reserve, paving the way for reckless behavior on Wall Street (and nearly the entire banking industry), abetted by the abdication of responsibility by the so-called regulators.

Had such egregious behavior not taken place, perhaps the mentality of those who feel ripped off (probably a good portion of the country) would be different.

Continued: Bubble vortex draws in cerebral cortexMore from MSN Money

 1 | 2 | next >

      As for the new health care bill.  Yes it can be expensive.  America doesn't have to become a third world country.  America can and will do better. 

                                             Lynn X

30% UNEMPLOYMENT + SS+THE MEDI'S +THE BS HRC BILL = NO COUNTRY DUE TO NOT ENOUGH COLLECTED TAXES......THIS WILL NOT WORK EVER AND MOST PEOPLE SEE IT, JUST NOT THE LIBERALS/PROGRESSIVES/DEMOCRATS....

 

UNLESS THEY PLAN ON FORCING THE WORKS TO WORK FOR HARDLY ANY PAY.....AND I DONT SEE THAT HAPPENING!

People who scream about the bill have no idea what is in the bill. I have been reading the highlights and the "takeover" that the far right and libertarians are so insanely apoplectic about? I just don't see it.

 

All the bill did was ban some of the worst abuses in the insurance industry; forced everyone to pay their share of the healthcare costs in this country (including a lot of people who currently don't buy insurance and think they have a right to off-load their health costs to everyone else when unexpected things happen) and created a platform where (over time) we would transition to a model where the pressures in the market would force the healthcare industry to correct the sloppy, ineffective and expensive way it deals with care in this country.

 

As long as you only see the problem through the prism of MONEY, you will never solve the problem. The real issue is that people (including those in industry) are trying to off-load their responsibilities in this society to everyone else (i.e. externalized costs). Every time we try to make them actually hold up their end of the bargain, they moan and whine incessantly like a 5-year old. There has been too much of this in the past 30 years.

 

Are there things I don't like in the bill? Hell yeh! The bill has all of these confusing exclusions, exceptions, limits and conditions. It will take an eternity for some of the provisions to come into being. It is not any different than the Credit Card Bill where the financial industry put in all these little exemptions and limitations so they can squirm their way around it. But it is better than nothing and the chaos that has ensued in our out-of-control system (which is what we have now). Only an ideologically minded twit would refuse to see that.

 

Wherever you have well-paid interests, there is always going to be this junk going on. IMHO, this is not the last of the changes that will need to happen. The system is still busted. It is just less busted than before.

 

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