Stimulus and Upcoming Bank Bailout Redux
Posted by eemilla on February 15, 2009
With all of the ongoing discussion about the economy and the soon to be signed stimulus bill, I wanted to throw my two cents into the mix.
My first and biggest issue with the impending bank bailout is the same I had with the first, and my complaints may be premature as the plan hasn’t been released yet. However, based on the press conference Secretary Geitner held, it sounds like the goal is to purchase the toxic assets from the troubled banks. As with the former administration’s plan, this keeps the profit private and nationalizes the risk. Not being an economist, I may be missing something obvious, but it seems to me that it would be better to reward the banks that are not in trouble. If, as President Obama states, America has too many bank for a nationalization plan to work, why not help the good banks purchase pieces of the bad banks rather than allow the bad banks to fix themselves? They have already proven they can’t be trusted to do the right thing with their TARP payments. If the good banks are too hesitant to purchase the toxic assets, couldn’t the TARP redux funds be used to help them grow their market share and fill in the gaps created by the bad banks stepping out of the credit market?
On the other hand, it might be better to make those toxic assets less toxic by stopping the foreclosures. If we have too many banks to nationalize, couldn’t the bailout funds go to municipalities and counties to purchase homes that are in danger of foreclosure? These homes could then be leased or rented back to their current occupants with the federal government eating the difference between the current value and the loan amount. In my humble opinion this would put a floor on the housing market collapse while helping local governments create affordable housing units. However, it might be better for the funds to be used to refinance homeowners out of bad mortgages into reasonable ones without involving the local governments. The government backing would probably make it easier for credit unions and other stable banks to provide the financing. Funds would still need to go to the local governments to purchase the vacant homes; these homes could hopefully be priced for low paid government employees like fire fighters, police officers, and teachers. The current stimulus bill does allocate over eleven billion to rural housing loans. If bad behavior is going to be rewarded then at least reward those without the MBAs for their poor financial decisions.
Finally, I have to wonder what Representative Tom Price from Georgia was thinking when he decried the creation of a national healthcare review board. I agree that beginning work on the healthcare system isn’t a direct stimulative to the economy. However, when insured Americans have seen a rise in the health insurance premiums more than two times the rate of inflation, I would say healthcare and its cost have a major bearing on most households in America, especially as job losses and cuts in pay are on the rise. Mr. Price states that this board, which is looking to standardize care and costs, would greatly jeopardize the patient doctor relationship and eliminate freedom of choice in an individual’s healthcare. Mr. Price is a doctor so I am sure he has dealt with private health insurance before, but maybe because he has the option to have the wonderful healthcare provided to members of Congress he doesn’t realize that private healthcare has already removed the individuals’ freedom of choice in their own healthcare. Neither my husband nor myself have the option of choosing our own healthcare providers; well to be fair we can chose any doctor approved by our insurance companies. If we decide we prefer a provider not approved by our health insurance provider then we have to pay out of network costs; this means the twenty-five dollar copayment becomes the full cost of the visit. If we decide that Western medicine and drugs have not produced the desired remedies, we have the option to seek other providers at our own expense. Most policies whether they are group or individual exclude all experimental treatments even if your insurance company approved doctor thinks it would be best course of treatment.
The benefit of standardized cost approach would benefit the uninsured the most as they would know what to expect before arriving for treatment. Additionally, it would help the insured because an office visit with doctor A would cost the same as an office visit with doctor B. I hate receiving a bill from a doctor who charges more than my insurance company thinks should be charged. First I have to visit a doctor they approve, but then they can’t even agree on how much services should cost. The insurance companies say the doctors are overcharging, and the doctors argue the insurance companies are low balling. The uninsured end of picking up the bill for this dispute because they don’t have the power of the insurance company to refuse to pay $180 dollars for fifteen minutes of a doctor’s time. The biggest irk about those extra bills I get weeks after my appointment is that I have to take an afternoon off to visit the doctor for my annual exam. If I schedule my appointment at two, I might see the doctor between three thirty and four, and after waiting all that time, I will have a five minute talk about anything that has changed with my life or health then I will poked and examined for another five then we will have a post exam discussion for another two minutes or so. I don’t have a medical degree or anything, but my time is worth more than spending an hour plus in the waiting room for maybe fifteen minutes of actual treatment. I guess I should just bite the bullet and schedule early in the morning before the schedule has enough time to get over an hour behind.
I have big hopes that the standardization of care will have doctors writing prescriptions for more physical activities rather than more pharmies. I would love to make my insurance company pay for the gym membership contingent upon my weekly use of it. It would also be exciting to take a payment from them for the harvest from our victory garden; it is undeniable that home gardens provide both physical activity and more fresh, whole foods. Organic gardens are preferable, but any home plot would be superior to Mal Wart produce. It is shameful that my current health policy excludes coverage for nutritional counseling, when our poor diets contribute so much to diseases that require a lifetime of pill popping.
I know we are fortunate to even have healthcare coverage even as the cost keeps rising and service keeps diminishing. I don’t really want to see the end of private health coverage, but I do want major changes within the private market. I want my insurer to pay the costs of the treatment I find works for me; this could be using any doctor trained in Western medicine (not just those in the network), visiting an acupuncturist, a chiropractor, a nutritionist, or attending a yoga class. I feel fine being told that after using my preferred methods I will have to follow their recommended course if I am not healed. I agree with the industry that there should be some penalty for not being insured (after all the healthy continuously insured subsidize the sick insured), but there should also be a safety net provided or subsidized by the government that would prevent people from having to choose between healthcare and housing or food. I like the idea of healthcare not being tied to employment but buying healthcare in bulk often eases underwriting and rating.
Here’s to the future! I hope this works, and I hope we have the foresight to not follow the same path anytime soon.