If you prefer video, watch the 1998 PBS piece Nerds 2.0.1: A Brief History of the Internet. I won't link to it because I'm not sure if the site is legit, but I just re-watched a few minutes of it and it's funny to look back at the hype in that era.
It's complicated. The US spends more per capita (PPP) than any other country by good margin [1]. Of that, the US government pays roughly 50% of the total cost [2]. The net effect is that the US government already pays as much per capita as many European countries with socialized medicine.
In short, we have a cost problem that's not being tackled. Pharmaceuticals are often targeted, but they're about 8% of our total healthcare costs. We really need politicians that will tackle the other aspects of cost.
The countries that finance public healthcare have tax systems that are considered regressive by US standards. Some states have sales taxes, but we have no national VAT. As I understand it, some countries like Sweden have income taxes on lower income workers, whereas in the US, roughly 45% of households pay no federal income tax.
You can only squeeze so much money out of the wealthy, but the numbers don't add up to cover the projected costs of nationalized healthcare in the US. Taxes would need to be raised across the board. It's easy for campaigning politicians to propose pie-in-the-sky plans, but proposing a financially plausible one would be political suicide.
They are are already paying twice as much as any other developed nation with a "free-market" approach to healthcare. I do not understand the mental gymnastics to reach the conclusion that citizens as a whole would pay more in a single-payer system.
They might pay more taxes indeed, but their private insurance costs would disappear overnight.
As for healthcare costs inflation, that would quickly disappear with the transparency mandated by a single-payer system. One of the arguments explaining the always-rising healthcare costs in the US is a complete darkness from the consumer side on the actual price of the healthcare they are getting, thus allowing gouging at every level.
>I do not understand the mental gymnastics to reach the conclusion that citizens as a whole would pay more in a single-payer system
The reasoning goes like this:
The entrenched well funded (and money loosely translates to political power) interests influence the legislators doing the implementing in order to ensure a regulatory capture that allows them to continue swindling people at their current level but because it is now proxied through the additional overhead of government the net cost to the citizenry is greater than the current "get swindled directly" system and we have little/no net change in outcomes.
Basically people don't trust the government to not screw it up so badly that it actually costs more. I'm sure the cost would come down over time but with the high cost and uncertainty involved that's a tough sell.
Socialized healthcare doesn't mean doctors are a government employees. It's still private profit driven companies running their businesses. It's just the government instead of your insurance company paying.
A good deal of that cost is due to private insurance. The free market approach has resulted in middlemen inserting themselves into the healthcare pipeline and leech dollars from consumers.
It isn't the only reason, but it is one of the biggest.
US spent $3.65T on healthcare in 2018. or 3650 Billion.
Insurance Net Income was 23 billion. Or 0.63% of total US healthcare expenditures was 'profit' for insurance.
"But, public option will save the costs/salaries/buildings/etc that you pay to insurance." Yes, but not all costs. You'll need to make up a small difference.
But, let's assume we only count money paid to 'care'.
If we ignore all other costs associated with insurance and just pass the 'care' portion through. Insurance REVENUE was 706 bil - 600 bil (What was paid for care). or 106 bil.
So a maximum savings of 2.9%. So rather than spending $11,172 per person we're down to $10,836 per person for healthcare. A savings of $336. Still far and ahead above what other countries spend.
So realistically we'd see a savings of 0.6% to 3% savings.
> US spent $3.65T on healthcare in 2018. or 3650 Billion.
> Insurance Net Income was 23 billion. Or 0.63% of total US healthcare expenditures was 'profit' for insurance.
Profit is not the main source of the expense imposed by private health insurance, administrative costs are; Administrative costs are estimated at around $1.1 trillion nearly a third of the total, much of which, particularly billing and insurance-related (BIR) costs which account for about half of admin costs, would be eliminated in a single-payer or even public option systems, since the BIR costs imposed in current US public programs are far lower than private insurance (and some of those are still due to interaction with private insurance—e.g., coordination of benefits—and so would be erased even for public programs in a single-payer system.)
>since the BIR costs imposed in current US public programs are far lower than private insurance
Which is why I included this piece.
>If we ignore all other costs associated with insurance and just pass the 'care' portion through. Insurance REVENUE was 706 bil - 600 bil (What was paid for care). or 106 bil.
>So a maximum savings of 2.9%. So rather than spending $11,172 per person we're down to $10,836 per person for healthcare. A savings of $336. Still far and ahead above what other countries spend.
Last year insurance spent $92 Bil on admin. Even if we 'save it by half' (comparing the 56 bil from your link) our best case savings of 106 bil drops to 60 bil. Or a reduction of 1.6% in healthcare spending or ~$160 per person.
And hospitals will still have admin as they still have to bill the government.
The administrative cost imposed by private insurance on administration is not the cost spent by private insurance on administration. The biggest share of it is the administrative cost imposed on providers for dealing with private insurance (there is also a cost, in terms of coordination of benefits, imposed on public insurers). Your analysis, unlike the source I cited, entirely ignores administrative costs imposed by the private insurance system on actors other than the private insurers themselves, which misses the bulk of the costs associated with the private insurance system we have.
> And hospitals will still have admin as they still have to bill the government.
Missed responding to this piece before, but, sure: but, from the source I cited upthread, BIR costs imposed in the US big public programs (Medicare/Medicaid) is 2-5% of total cost, in the US private insurance system, it's 17% of cost. With single-payer admin will be nonzero, but it also won't be nearly 1/3 of total health expenditures, nearly half of which is related to billing and insurance.
You are looking at the wrong number. US insurances are bloated institutions full of bureaucrats that do things that shouldn't be done. So it doesn't matter if they make some profit or lose money. They are still a big waste of money.
You won’t find the single silver bullet that will solve all problems of US health care. Pretty much all players are inefficient so you will have to reduce insurance costs and hospital costs and drug costs and a lot of other things. Also don’t forget that the insurance bureaucracy also causes a lot of cost at doctors who have to hire people who deal with billing.
A good deal is that doctors and healthcare providers in other countries don’t make well into the $300k+ range. There’s a lot of money to be made in the US versus other countries. Without the insurance companies, who would have the power negotiate pricing with the providers? Americans don’t find government intervention palatable unless the person is over 65.
Recently the head of the Oklahoma Surgical Center was on [econtalk](https://www.econtalk.org/keith-smith-on-free-market-health-c...). That center was founded in the late 90s, had all their prices on their website, no insurance works with them and get their prices are effectively lower our equal to what they were twenty years ago and lower than at a regular hospital. On top of that the doctors make more when they work for this center than anywhere else.
One thing I learned from the episode is that insurance companies get a reward for the delta between their negotiated price and the price a uninsured person would pay. This creates incentive for hospitals to raise their base price tag. Of course their is more to it. I cannot recommend the episode strong enough.
To me the bottom line is that right now we don't have free market health care and we don't have socialized health care we have the worst of both. Maybe what we have is best received as crony capitalism health care.
That is very interesting. I had always thought that price obfuscation was good for both healthcare providers and insurance companies, since any price obfuscation is an advantage for the seller while the buyer is left confused about how much they are paying for what.
> Without the insurance companies, who would have the power negotiate pricing with the providers?
Healthcare costs have skyrocketed because of the negotiators. PBMs are the middlemen who negotiate healthcare prices between insurance companies and providers. I can't speak for hospitals and procedures, but in the pharmaceutical industry, it actually has led to a system where insurers and PBMs both benefit from drug prices increasing as opposed to decreasing. They aren't driving costs down, they are directly contributing to driving costs up.
Negotiation does not cause costs to rise, it’s because of lack of price transparency that let’s insiders play games.
Make all the prices public, and watch all the excuses disappear. No insurance company will be able to answer the government or employer when they find out another insurance company was able to obtain the same medicine or healthcare for a lower price.
I posted a link in a parallel thread to a surgical center that has all their prices on their website. Insurance companies refuse to work with them, supposedly for the reasons you state. So you are correct.
I use airnow.com. The site's usability is fine, and more importantly, their AQI numbers look much more realistic than the data you're getting from PurpleAir. You might consider another data source.
Can you share the rough location where you see a discrepancy? There are various data quality issues with PurpleAir that I attempt to clean up, but after cleanup the data seems to agree pretty well. They seem to have a lot more sensors than AirNow uses so in some cases they can see more localized pollution issues.
> (1) Americans consider housing to be an investment.
Apparently I'm the lone dissenter on this, but I think for many people this is a side benefit that they may hope for, but the primary objective is simply to own a home that they can live in and raise a family.
I don't know your age, but from my experience this is a generational thing. During the great suburban expansion, houses were parroted as your greatest asset and your biggest investment.
In the modern era, if you don't own a home already you probably couldn't care less about the investment quality of a home. You just want a home to live in and call yours without an 80 minute commute.
> During the great suburban expansion, houses were parroted as your greatest asset and your biggest investment.
The "investment" should not be "I can sell this in 20 years for a boatload of profit" but rather "I don't have to pay rent when retired, only property taxes + maintenance + energy".
Heck, for all I know maybe that was originally the idea. Buying a place that you'll live for 30-50 years is absolutely an investment in your future, regardless of the paper value of your property.
But when property values are wielded as arguments to beat down proposals for growth, for transit, etc, it's clear that this isn't the meaning in use.
Exactly, you know your earnings are going to go down dramatically at retirement; slowly paying off a mortgage over 30 years was the accepted way to make your costs go down dramatically as well in the end.
Unless you end up getting a reverse mortgage, in which case I guess you were renting all along.
You pay taxes on the funds used to maintain the property. So unless you're in a market with obscene growth rates, you still lose money even if you earned capital gains on the transaction.
I just put together a spreadsheet assuming 1% maintenance, 1% tax rate, and 3.5% mortgage rate on a 250k house. You still would need a 5% annual rate of return to make money. After 15 years you would have hit your $250k capital gains limit, but you'd only have $70k in profit after taxes, interest and maintenance. At 3%, you lose money until well after the house is paid off.
I believe with proper documentation remediation is tax deductible in that you can raise your cost basis when you sell.
Further, your mortgage interest up to $750K is also tax deductible, and you have to index the whole thing to inflation. Once you do all that the costs are either nominal or negative on a 3.5% 30 year fixed deducted from a Bay Area income. Until Donny took us for a ride property taxes were deductible too.
In many places of the U.S. house prices don't really jump up that much to call it anything more than a temporary holding vessel for money, much less an investment. The suburbs of Cleveland are an example, where you can still buy houses for 50k within 20mins of downtown. Demand has been low so prices have been constant.
In California, demand is high, and prices have been inflated by constraining supply due to a lack of upzoning. It also doesn't help that CA has proposition 13, which locks you into your purchase price tax rate in perpetuity. You should see wilshire country club's property tax bill, it's like a couple buttons and pocket lint.
But it also decreases turnover. Say its 1970, you buy a house in LA for 50k, have your kids, they move out, you are old and want a smaller place, it's 2019, and your house is worth 1m but your taxed as if it was worth 50k. You can cash out, but if you want to continue to live in LA in another 1m property, you pay taxes on that 1m.
It's like rent control for homeowners only you can also give your house and that sweet sweet 1970 tax burden to your kids, perpetuating the landed aristocracy at the cost of the working class.
I think most of this comes down to the fact that Americans generally had little savings outside of their home equity. This only became relevant in the 90-00s when home equity loans/LoCs took off and were widely available to almost anyone. Suddenly, it mattered how much equity you had in your home because you could spend it.
There's another group of people that look at their parents' home and realize that it has doubled in value since the early 90s. But these people usually don't account for interest, tax, and maintenance payments over those 20 years.
Simple inflation too, the value of a dollar in 1990 was twice as much as now. But for most owners, inflation works in your favor since it negates some of the mortgage interest.
Or interest tax deductions, property tax deductions and the fact any renovations you do can be used to raise your cost basis to offset some of those gains. Also your mortgage inflates away over time too.
I always like to say that everyone is short a house, and your first property is just covering that short position. It's only properties after that first one that are investments.
Except you need cash flow or savings to afford a house, even a paid off one. If you don't pay your mortgage or tax bill, then someone is going to evict you.
Houses aren't great protection against homelessness because they don't address the root cause of being homeless: having no money or income. They can provide a buffer because it's harder to foreclose on a person than it is to evict them. While this additional time may certainly make a difference, in all likelihood the outcome of losing a job and not being able to find another one is probably the same.
You can't liquidate any built up equity either, since you probably need income or assets to get a rental or equity loan. So it's completely possible that you lose any built up equity in the event of a foreclosure too.
That's quite catchy. But nonetheless, people can "cover" by renting or buying. And in particular, to the degree that mortgage payments are greater than the equivalent rent, one is indeed investing in the real estate market. This is often good, but it can actually turn out much worse than (say) simply parking the money in an index fund.
This is more meant to attack the idea of a primary residence being an "investment". If people insist on calling it an investment, then it's fair for me to insist that it's only covering a short position, because you need somewhere to live.
I think, if anything, this position is actually supportive of making an educated rent vs buy comparison, by discarding any kind of "investment" potential on the buy side.
This doesn't cover many many people for various reasons. Ie I own 2 properties and I live in neither (house that I bought for my parents 1500km away, investment apartment in the mountains). I rent, because a) it doesn't make much sense to buy a property in traditional sense here where I live, too costly; b) we're not yet stabilized on location with first kid coming, and pinning us down to specific place before this is clear might be a huge mistake on many levels and massive stressor for our lives and relationship. We might end up not buying anything else till rest of our lives, dunno now.
Others might have other reasons for similar state.
I think jdmichal’s point was that if you don’t own a property, you’ll lose money (in the form of increased rent) if the real estate market goes up. In effect, you are born with a short position on the market just by needing a place to live, and owning your primary residence gets you to neutral.
I mean, I guess I could refine it to say "primary residence" instead of "first property"? Otherwise, yea it's an analogy and it will break down at some point.
This is more meant to attack the idea of a primary residence being an "investment". If people insist on calling it an investment, then it's fair for me to insist that it's only covering a short position, because you need somewhere to live.
There is no home in LA county that didn't see price rise in an arbitrary 10 year period. Flip that house is a real thing in the rat race real estate markets in the U.S.
I'm with you. Granted, I do consider it an investment in the sense that every month I pay off part of the principal and thus I can get some money back when I sell it whereas I'd get nothing if I was renting but I don't expect greater than inflation appreciation on the house.
However, this could just be because I grew up in Chicago where there is endless farmland that can be developed and thus expecting greater than inflation appreciation on your house is foolish as someone else can just develop some farmland and sell it for the cost of building the house thus forever increasing the supply at the marginal cost of building a house.
> but I don't expect greater than inflation appreciation on the house.
Even expecting the house to hold its value is rather strange. You would naturally expect the value of a home to decrease by some amount each year. Most of us would prefer a modern home to an older home. The only reason it does not is because supply of new homes is restricted.
In well functioning markets like Tokyo, that's exactly what we see: homes tend to lose value each year until around 25-30 years most are simply torn down and re-built.
So in Tokyo, not only is the average rent sharply lower than a city like San Francisco, the housing is also more modern. The average age of a home in Tokyo is 20 years. More than half of Tokyo's housing stock has been built since the year 2000.
In San Francisco, more than half of the housing stock was built before 1940.
"You would naturally expect the value of a home to decrease by some amount each year."
If you deduct maintenance from your home value, it more-or-less does. I don't see why a maintained home "should" decrease in value, though. A lot of the value of a home is in the structure, which tends to wear much more gracefully than, say, a car's body.
There is little that maintenance can do to prevent a 100 year old foundation from 'settling' in a pretty precarious way. Or finding out one day that the water pipe is a 100 year old wooden pipe that is now rotted through. As a house gets older, maintenance ($) turns into renovation ($$) then critical overhaul ($$$), even in the houses with good bones.
I'd expect the value of a properly built and maintained house to decrease very slowly (e.g. the building I live in is ~110 years old and not that much worse than when it was built), and while that's still a negative, on the other hand the value of the land would appreciate even (and especially if) there's active building of new homes, so the total value of house+land can be quite stable even if supply is not restricted. It won't skyrocket, though.
Wasn't a big issue for us at least as we have double decker commutator trains. The one that ran through my town has 3 tracks even so the train only has to stop at a few stations and then it hops onto the middle track and drives the rest of the way downtown. Only took 30 minutes to go 20 miles downtown and going out further doesn't add much time as your just adding distance traveled at top speed.
> better town
Not sure what metric you are interested in that regard but if it is school wise, I went to one of the highest rated public schools and you could still find smaller more affordable homes in the school district. While there were plenty of wealthy people, I had some friends whose parents were firefighters and USPS delivery men.
No, OP is painting with an extremely broad brush. There are a lot of reasons to own a home that have nothing to do with its investment potential. I don’t care how much my home is worth because I don’t plan to sell it until I retire.
The problem is that even if it is a minority contingent, it is a loud, high-turnout contingent, and local politicians generally do not want to get turfed out.
We have been. Real (inflation adjusted) median household income has been going up in recent years, from ~$57k / household in 2014 to ~$63k / household in 2018:
I may be reading this wrong, but it looks like that chart (combined with the OP charts) says that median hourly income is just a hair over where it was in 1999. The trend is positive, but it looks like the median income is basically going up because people are working more hours (i.e. and not because of significant wage inflation).
> This is not to say that all women who appeared in public were assumed to be sexually available, nor that middle-class women were forbidden from the streets. The streets enabled a wide variety of encounters, dependent on the particular circumstances in which they occurred.
Another interesting one is Hickory (NC) Furniture Mart. It started as a drive-in restaurant and pivoted over time into a mall with over 100 furniture stores.
I saw Scott Hanselman speak, and he said he has impostor syndrome. I thought to myself, great, if Hanselman has impostor syndrome, I'm not even qualified. I must be an impostor-syndrome impostor.
