The state senate of California has just passed a bill to enact single-payer, fully socialized medical care, in California. How is it financial lunacy? They passed the bill but have no idea as to how they will pay for it. Not a clue.

California had a total tax revenue of $112.3 billion in 2012, the latest year for which I could find this information in a short search. I have heard, but could not verify that California's tax revenue for 2016 was $200 billion. The estimated cost for their health care bill, according to the bill's sponsor, is, get this, $400 billion a year. That is more than all their yearly tax revenues combined. Far more.

This is what comes from following John Maynard Keynes thinking as he is the proponent of spend your way to wealth. Do not save. Spend, spend, spend, and when you cannot keep spending because you are bankrupt, keep on spending. It was his idea that governments can spend forever with zero consequences.

When, not if, California now begins defaulting on its debts it will be a far larger financial earthquake than when Greece defaulted as California has a GDP larger than many countries.

The Marxist democrats are determined, one way or the other, to destroy the US. No doubt about it when they do this kind of idiocy.

YOUR post was lunacy.

The basic law of economics is (in terms of the provision of public Healthcare) is that the public pays for it.

Car insurance companies do the same. They say, "We will cover all your accidents." And then they charge you a premium FAR LESS than the cost of a potential accident. How? Well, it's really very simple. They spread the cost of accidents over a large base of insurers. Everybody is paying less than the total cost of an accident, but is fully covered in case of an accident. All everyone has to do is drive safely and premiums go right down to zero.

So then, what of the California healthcare initiative? All Californians have to do instead of sitting in front of their computer, furiously commenting and growing fat, is to take a stroll through the lovely public parks, exercise a bit, chat with friends and eat healthy foods. Before long, the health insurance bill will fall to a million dollars just in case someone turns up at an empty hospital for a band-aid or two.

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If it works as James described --
people pay their medical premium cost which spreads the cost of medical care over a large base, thus no one has to pay big bucks when they need medical attention -- then it is good. That's basically how it is "supposed" to work.

Now the next question --
will it work as it is "supposed" to work?


Canada has had a medical care system for as long as I can remember -- in many ways it is a blessing, but there are major problems with the system.
We lose a lot of our best doctors to the US, because they can make more money there. There is a "lid" on how much they can charge here.

Another problem is there are often long waiting lists -----
months can go by before treatment is received.

Not sure how the California bill works --
A "single payer" -- does that mean the competitive insurance guys get weeded out and the government takes control of all the medical insurance issues?

That seems to be the case as the news reports the legislature "certainly faces major opposition from private businesses—the largest providers of health care in the country and recipients of massive health care benefit-related tax exclusions"

There seems to be concern that tax payers (not premium payers) will foot a lot of the bills)

Yet the biggest problem with "single payer" healthcare is that it eliminates the "competition" -- there are no more checks and counter checks thus allowing the "single payer" to wield considerable control.


I agree that healthful living is one of the best "insurance policies" against needing medical care -- But many don't practice that, and even many that do can still end up with medical problems, especially as they age.

Now that was funny, James. You tickled my funny bone.

California is going to have to raise all of their tax rates at least 200% just to pay for this. The Democrat's own estimate of cost per year is $400 billion dollars, and politicians are always underestimating costs so that their projects will look better than they actually are. That is more than twice their current total tax receipts for a year, and the state is already spending more than it gets in taxes before they added this cost to their list of spending.

By your answer I assume that if your income is $50000 a year you feel you would have no problem with spending in excess of $150000 a year and think you could stay solvent financially doing it.

What I'm really curious about is what is going to be the motivation that will cause 10s of millions of people to suddenly change the eating and health practices of their entire lifetimes just so that none of them will ever get sick. All Californians will now no longer eat meat. They will never eat junk food or sweets. They will all now exercise regularly, and all of this just because they now will think they don't have to pay for their own health care. It hasn't worked that way anywhere else in the world, so what makes Californians so different that they will now all become super healthy?

I guess what your argument really is boils down to the idea that once socialism is the law of the land everything will turn completely rosy, nothing will ever go wrong, nobody will ever get sick, and bills will just magically get paid. It's what Friedrich Hayek calls the politics of "hope". He says the socialists hope socialism works. They hope everything will be rosy. They hope all the laws of economics will somehow be suspended. They hope money will just grow on trees, so all they have to do is stroll around and collect it.

Yes, dedication. The government is going to pick up 100% of the tab for all the health care of every person in California. No one will pay for anything, except in much higher taxes of course. But, hey, what are greatly increased taxes when you are getting something for "free"?

When Obama was pushing his "healthcare" plan he said it would save the average family $2500/yr. Well, costs skyrocketed and then he said, well, I meant they would have risen another $2500/yr on top of what the increase has been since my plan started. Last year if I had bought an Obamacare plan the plan would have had a $3500/yr deductible plus copays on all office visits, procedures, blood tests, etc.... Plus the cost of medications such as insulin would have cost me around $700/month over and above what insurance would have paid. This year the premiums doubled. The deductible went from $3500/yr to $6000/yr. The copays on medications, office visits, procedures, blood tests, etc... went up and my cost on things like insulin would have been more than $800/month.

You just cannot trust what politicians tell you. How anyone ever bought into the idea that millions of people could be added to Medicaid, which is free to those living in dire poverty, and the costs come down at the same time is beyond me. It just doesn't add up. It's more blue sky thinking like what James is doing.

dedication,

It won't work that way, but that is beside the point.

California is already $459+ billion in debt. They are already spending more than their total revenue in taxes, somewhere between $112 and $200 billion in revenue, every year. That is without the added expense of this bill. This bill will cost them an additional $400 billion a year over and above what they are already spending. That $400 billion is the Democrat's own estimate of the cost per year to do what they want to do, and you can bet they are looking the costs and being as generous with themselves as they can. Meaning of course that they are underestimating the real costs.

Let's give them the benefit of the doubt on income and say they have $200 billion a year in revenue as it gives us nice round numbers to work with. The state already spends $200+ billion a year. Now they are going to spend $600+ billion a year on the same income as they haven't figured out anything at all as to how they are going to pay for this. That means an increase in their debt, every year, approximately equal to their current debt of $459 billion. Think that is sustainable?

If they are already taxing their citizens at $200 billion a year they are now going to have tax them at a rate 3 times higher on all forms of taxes just to break even at the estimate of $400 billion. California already has some of the highest tax rates in the nation, and now they are going to have to triple them. How many people do you think will leave the state rather than pay those kinds of taxes? I say a lot of Californians will soon be calling Oregon, Arizona, New Mexico, Washington, etc... their new home. There will be a mass exodus of the wealthy from California and that will lower their tax base causing the state to raise taxes even more. And that will cause even more of those paying high tax rates to leave. It will be a death spiral in economic terms.

Now, let's look at the effect on business. Having to pay triple the taxes that they do now will force them to raise prices on everything the business produces. Prices will probably have to rise around 30% just to pay the taxes being levied. What do you think a 30% rise in prices will do to the poor? They will simply starve to death because there is no way poor people can absorb a 30% rise in the cost of living. That means the state will have to be paying out more in every social welfare program the state runs, meaning they will have to increase taxes again to pay for the increase in costs in food stamp programs, rent subsidies, etc.... The numbers of people below the poverty line will explode under this. There will be an additional problem too. With the great rise in prices due to the taxes people will be buying less of everything. Disposable income will be much less than it is now. Meaning, of course, that businesses will not be able to sell their products and have to lay off employees. That reduction in employment will cause both a lowering of the tax base and an increase in unemployment payments and more people on welfare.

Now let's look how just this increase in taxes will affect people. The sales tax will have to rise from 7.5% to 22.5%. The 13% income tax will have to rise to 39%. Gas taxes, property taxes, all forms of taxes, will have to rise the same percentage. What kind of effect will that have on people's ability to purchase what they need to live on? A devastating effect. You add this type of tax increase to the rise in prices that must happen to pay for all the new tax rates on businesses and this will absolutely kill California's economy.

All of this is what the Democrats have ignored in passing this bill. This is why I call this bill lunacy.

• Funny bones aside, you must surely be wearing a scowling face and speak with gnashing teeth as you pay your car and fire insurances.
   
• Your anger must know no bounds as you stroll through the supermarket lanes and observe how cheap and easy food has become compared to if you had to grow it yourself.
   
• Why, you must be downright self-righteously blowing the top should you see a poor beggar who has fallen victim to a heart attack, be taken in the best ambulance to the best hospital to be fitted with the best pacemaker FOR FREE! In fact, you would cause a riot and demand that the poor man pay IN FULL, won't you?
  
  --- Mat. 18:23-35

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LOL. James, I am a poor man. I'm just not a stupid poor man, nor a poor man who thinks money grows on trees or just magically appears.

Let's look at reality here for California residents. For a married couple making $55,000 a year their total tax burden in California right now is 26% of their gross income. The following link shows this quite clearly. https://smartasset.com/taxes/california-tax-calculator#qn2oUQ59GL Now, if you look at this you will see how the numbers work. What will happen to those numbers is that the State income tax number will triple from $1865 to $5595. The sales tax will triple from $1413 to $4239. Their fuel taxes will triple from $414 to $1242. Their property taxes will triple from $1983 to $5949. That means their total tax burden will go from $14647/year to $25999/yr. That is 46.7% of their gross income. How many people do you know that make $55,000 a year can absorb an increase in costs of more than $11,000/yr without causing them immense financial hardships? It will force almost everyone I know of who makes that type of income into bankruptcy in a very short time as this is an increase in spending of approximately $1000/month. The money a couple like this will have to live on will go from $44,849/yr to $29,687/yr. Now, when you add to that the increase in prices of almost everything they need to live because of the great increase in business taxes, that must be passed on to the consumer or the business goes out of business pretty rapidly, what do you think the result will be for a couple like that who was once fairly comfortable financially? In a state like California that already has a very high cost of living index this is going to push many people into bankruptcy who weren't even close to being bankrupt before.

If they own a small business their tax burden will be twice that as California taxes many small businesses twice. The business gets taxed like that and then the owner pays taxes on that same income. California hits them with double taxation because they have the skills and ambition to work for themselves. Really fair? Right?

And if you think the poor are somehow going to not have to pay for this too you are vastly mistaken. The price of everything they have to buy to survive is going to rise. And the cost of the sales taxes on everything they buy is going to triple. Instead of the tax being $7.50 per every $100 spent the tax is going to be $22.50 for every $100 spent. That means a poor man who makes $20000 a year and spends $8000 on taxable items is now going to have to pay $1800/year in sales tax rather than $600/yr. Where is he supposed to come up with the extra $1200/yr? That is the equivalent of a net 6% increase in his cost of living, and that doesn't even take into account his extra costs in fuel taxes, income taxes, and and rent increases required to pay for the increase in property taxes, nor does it account for the necessary rise in prices that comes from tripling the taxes on businesses. The poverty stricken individual is going to suffer far more than anyone else due to this law.

More financial consequences for the poor man. Let's say his car breaks down or he gets in a wreck and has to buy another one. The guy who earns $20K a year might buy a $10000 car so he can have something that is going to be at least reasonably reliable and efficient. So, lets look at the costs associated with that $10K car. His costs right now are $750 in sales tax. $24 in CHP fees. $46 in registration fees. And his vehicle license will cost him $65. That's a total of $835 in addition to his purchase price. Under the new taxation scheme he will pay $2250 in sales tax. He will pay $72 in CHP fees. He will pay $138 in registration fees. And he will now pay $195 in vehicle licensing fees for a total additional cost of $2655. That means his costs just increased by $1820. Where is he supposed to come up with that from? To say that won't happen is ridiculous for the poor man drives older cars that have to be replaced more often because of major mechanical failures, and his costs for replacement have gone up almost 11%. Real easy on the poor man, isn't it?

I don't see how much more "help" he can afford to be given. All this "help" is driving him even deeper into poverty.

And should he fall sick?

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