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Author Topic:   American Budget Cuts
Phage0070
Inactive Member


Message 58 of 350 (605826)
02-22-2011 11:20 AM
Reply to: Message 54 by RAZD
02-22-2011 10:27 AM


Re: Budget Cuts & Reality
RAZD writes:
By this argument the "fat cat" queen bees are worker bees ... "dedicated to a common goal, but its all just workers" -- which is false, so your logic is false.
Basically you are arguing that the CEO working to run a corporation isn't really "working".
So your argument is based on the logical fallacy of special pleading, rendering your logic and criticism false.

This message is a reply to:
 Message 54 by RAZD, posted 02-22-2011 10:27 AM RAZD has replied

Replies to this message:
 Message 65 by Taq, posted 02-22-2011 3:53 PM Phage0070 has replied
 Message 109 by RAZD, posted 02-22-2011 10:37 PM Phage0070 has not replied

Phage0070
Inactive Member


Message 59 of 350 (605827)
02-22-2011 11:21 AM
Reply to: Message 55 by crashfrog
02-22-2011 10:29 AM


Re: Budget Cuts & Reality
crashfrog writes:
Do you have ideas of how to do that?
Sure - have the "CEO" be paid a GS-14 salary instead of multi-million dollar salary plus bonuses.
Great. But do you think this would effect the quality of the CEO your company can attract, considering the competition it faces in the market? I think it might...

This message is a reply to:
 Message 55 by crashfrog, posted 02-22-2011 10:29 AM crashfrog has replied

Replies to this message:
 Message 62 by crashfrog, posted 02-22-2011 1:42 PM Phage0070 has not replied

Phage0070
Inactive Member


Message 60 of 350 (605831)
02-22-2011 11:34 AM
Reply to: Message 56 by RAZD
02-22-2011 10:50 AM


Re: Waste & Reality
RAZD writes:
Curiously, when public sector jobs are transfered to the private sector, service deteriorates and costs go up. There may be less waste, but there is also significantly less service for the same cost.
Two factors: They are almost certainly being transferred as monopolies which of course presents problems until meaningful competition can be developed. Second, the amount of service is certainly going to decrease because it was being held at a wastefully high level before.
RAZD writes:
Privatization of health care as an example: since the Reagan deregulation that allowed for HMOs to come into existence, they have increased costs and reduced service. When there are so many exclusions that the only people who can qualify for coverage are healthy people that don't need coverage, then there is a significant loss in general service.
So the answer is to regulate that doctors need to work for specific wages, or that medical equipment manufacturers can't sell their products above a certain price? How exactly are you going to game the system to make people provide goods and services below what they are willing to provide?
RAZD writes:
A profit margin of 40% (typical in big business) is wasted to the consumer.
So? Companies are not in business for the consumer, they are in business for themselves and their investors. This is the same for a mom-and-pop local store and a multinational corporation. Those profits either go into dividends for stockholders which attracts more investment, or is directly invested in expanding current operations. That could result in the improvement of the widget meaning more competitive advantage and increased market share, or the ability to produce more widgets to fill demand, et c.
And remember if they were perfectly capitalistic and competitive those profit margins would shrink drastically wouldn't they?
RAZD writes:
However, we STILL have the obvious point that IF we are going to discuss budget cuts, that the PURE WASTAGE of funds on overblown private sector costs for military equipment (because private production is so much more efficient?) is a good place to start.
Thats a different story. Your abject ignorance of economic issues coupled with your lacks in the field of international finance, diplomacy, and real-world critical thinking makes you a particularly poor judge of the amount of military might that is required to keep the USA safe and secure.
It is a monopoly. There is waste. You are staggeringly ill equipped to make proclamations about how to change it.
RAZD writes:
Trim the military budget and take out these plumcakes for the "private" sector -- such as eliminating all single source contracts, unnecessary specification restrictions and other cozy arrangements that do not increase the level of service for the cost.
Weren't you just criticizing making tautological statements a moment ago?
Edited by Phage0070, : No reason given.

This message is a reply to:
 Message 56 by RAZD, posted 02-22-2011 10:50 AM RAZD has replied

Replies to this message:
 Message 221 by RAZD, posted 02-27-2011 7:57 PM Phage0070 has replied

Phage0070
Inactive Member


Message 63 of 350 (605863)
02-22-2011 2:31 PM
Reply to: Message 61 by crashfrog
02-22-2011 1:34 PM


Re: Budget Cuts & Reality
crashfrog writes:
The private sector has a profit motive to gain control of legislature, not to increase competition and drive down prices.
So does the public sector.
crashfrog writes:
Except that everyone working at the company gets paid and all the investors get their expected return on investment.
That's not a response to the dilemma I posted.
You didn't post a dilemma.
crashfrog writes:
For a health insurance company, premiums are income and health care expenditures are costs. Therefore, maximizing profit - which is income minus costs - means maximizing premiums and minimizing costs. That means increased premiums, establishing a client base consisting only of the healthiest, most affluent clients, and generally denying medical care or cancelling coverage where contractually permissible.
Yes, but it also means providing payouts when required. If they didn't they wouldn't be offering an attractive insurance plan; who is going to buy a policy with high premiums and no payout? Competition forces those companies to provide the best balance between payouts and premium; the profit margin on most plans is quite small.
You do recognize that there needs to be a balance between payouts and premium, right?
crashfrog writes:
It's the "adverse selection" problem - people generally need either no medical care, or need an expensive amount of it. Most people who make claims have not paid premiums in excess of their claims (otherwise they'd just have used a savings account.) Therefore the most profitable way to run a health insurance company is to collect premiums from people who never get sick.
And thats why the whole "insurance" thing works. You are paying a fee to cover risk. People who are healthy and present little risk can demand low rates.
On the other hand you can also be profitable by insuring the riskier unhealthy people by simply demanding appropriately higher premiums to account for the risk. In fact this is more profitable on a per-customer rate because the same profit percentage is applied to a larger premium.
crashfrog writes:
No, it's the most profitable, because the marginal costs of providing medical care - pharmaceuticals dispensed, bandages used, bedpans cleaned - are larger than the marginal costs of paying doctors to stand around and do nothing - coffee and magazines, basically - and then bill insurance companies or the government for it.
This might be surprising to you, but nobody's insurance company is going to pay out on a policy where the policy holder didn't receive treatment. And doesn't mentioning billing the government for subsidies just shoot your argument in the foot? Thats the government just throwing money away.
crashfrog writes:
The only measurable "benefit" to a private school education is as a market signal that you were "good enough" to pass a more selective admissions filter.
So you are saying colleges have no demand or benefit? Or does something inherently change when you cross an arbitrary threshold?
crashfrog writes:
The profit basis in running a private prison is in informing the government that a certain number of beds are filled, not in actually having prisoners in those beds, or being fed, or living in a safe and clean environment. Since private prisons aren't actually paid for any of that, they have no reason to do so.
So you are arguing that the government does a crappy job of ensuring they get the service they are employing people to perform.
You know crashfrog, the way this is supposed to work is you try to support your position and I try to argue against it, not the other way around. Maybe I should just sit back and let you tear yourself apart here.
crashfrog writes:
Why not? The government runs the Post Office, and then there are at least three private-sector competitors that deliver less efficient, less effective service at about ten times the price. (Don't know how they stay in business, honestly. Probably huge government subsidies - another example of the private sector's profit motive working directly against efficiency.)
I'll keep that in mind the next time I decide to open up my private courthouse. Also those competitors to the Post Office stay in business despite having much higher prices simply because they provide a higher quality of service. The Post Office is being slowly out-competed even despite its governmental connections.
crashfrog writes:
They earned it, and I get to tell them how to spend it.
Funny, I thought you earned your paycheck.

This message is a reply to:
 Message 61 by crashfrog, posted 02-22-2011 1:34 PM crashfrog has replied

Replies to this message:
 Message 80 by crashfrog, posted 02-22-2011 7:04 PM Phage0070 has replied

Phage0070
Inactive Member


Message 66 of 350 (605890)
02-22-2011 4:36 PM
Reply to: Message 64 by Taq
02-22-2011 3:48 PM


Re: Budget Cuts & Reality
Taq writes:
If you are a worker I would think twice about the idea that a corporation has your best interests at heart.
If you are a worker you would be a fool to think a corporation has your best interests at heart, and the same goes for a customer. Its the worker or customer's responsibility to have their own best interests at heart; to go to the best job they can get and buy the best product they can find at the lowest cost.
Its this heartless approach by the consumer and worker that allow the whole balance to work. More efficient companies cause investors jump ship to the better company, pilfer workers from their ranks, and customers switch without a second thought.
Compare this to a public organization formed on the idea of benefiting the public. Do you think it might be a little naive to assume that it has *your* best interests at heart? What if they seem to be pandering more to the sickly people who consume a lot of medical care rather than to you? What options do you have for an organization thats more attractive to you? None.

This message is a reply to:
 Message 64 by Taq, posted 02-22-2011 3:48 PM Taq has replied

Replies to this message:
 Message 67 by Taq, posted 02-22-2011 4:43 PM Phage0070 has replied

Phage0070
Inactive Member


Message 68 of 350 (605893)
02-22-2011 4:44 PM
Reply to: Message 65 by Taq
02-22-2011 3:53 PM


Re: Budget Cuts & Reality
Taq writes:
Basically you are arguing that the CEO working to run a corporation isn't really "working".
Is the CEO working 100 times harder than the employee making 1/100th of the CEO's salary?
Why would how hard an employee is working be at all relevant?
The question is, does the CEO's work at the company provide 100 times the benefit to the company than the average worker? In most cases it is those decisions which are making or breaking the success of the company with billions of dollars riding on them being good ones. And if they didn't pay as much could they get the same quality of work?
Someone can dedicate 12 hours a day of backbreaking labor digging ditches by hand for a company and never make the money that a skilled worker can make with a few clever keystrokes. The skilled worker is going to be compensated more than the first and for good reason. We don't reward based on effort; are you still in kindergarten?

This message is a reply to:
 Message 65 by Taq, posted 02-22-2011 3:53 PM Taq has replied

Replies to this message:
 Message 70 by Taq, posted 02-22-2011 4:58 PM Phage0070 has replied

Phage0070
Inactive Member


Message 69 of 350 (605894)
02-22-2011 4:51 PM
Reply to: Message 67 by Taq
02-22-2011 4:43 PM


Re: Budget Cuts & Reality
Taq writes:
Then the workers and customers should work toward creating public systems that answer to their needs, correct? If we had our best interests at heart we would work towards public, single payer health care, right?
No, we would cultivate a private sector free market that allows us to select a healthcare package which fits our needs. This allows specialization, the core of civilization, to flourish.
We all need to eat. We all need to have shelter. We all have some needs, but in addition to variation within those needs we have others which are unique. Rather than having everyone constantly working to construct one super solution to every possible food supply need, shelter need, clothing need, etc... just let each person do whatever they do best. It might be working in a nail salon, or growing wheat, or telephone tech-support. Then they can turn around and pick the best fit for them personally from the wide array of options in a private sector free market.

This message is a reply to:
 Message 67 by Taq, posted 02-22-2011 4:43 PM Taq has not replied

Phage0070
Inactive Member


Message 71 of 350 (605900)
02-22-2011 5:29 PM
Reply to: Message 70 by Taq
02-22-2011 4:58 PM


Re: Budget Cuts & Reality
Taq writes:
It would seem to me that the need for profit takes all of the effeciency out of the corporate model.
Yet you don't seem to be able to articulate exactly how or why.
Taq writes:
Of course, the benefit you speak of is profit, not a benefit for society in general.
Sure. Why do you go to work in the morning, for personal profit or the benefit of society?
Taq writes:
So who is benefitting the most from massive defense spending? It isn't Rosie the Riveter. It's the corporations and the fat cats that run them.
Corporations with investors. Investors like Rosie the Riveter's grandmother. Are you saying those investors are not part of society?
Taq writes:
...instead of lining the pockets of CEO's and fat cat investors.
I think you are! You begrudge the wealthy of their money and the ability to use it to make more money for themselves!
Now that your motivation has been bared, don't you feel silly for ranting against greed? It seems to be your driving force.

This message is a reply to:
 Message 70 by Taq, posted 02-22-2011 4:58 PM Taq has replied

Replies to this message:
 Message 75 by Taq, posted 02-22-2011 6:12 PM Phage0070 has replied

Phage0070
Inactive Member


Message 79 of 350 (605916)
02-22-2011 7:03 PM
Reply to: Message 75 by Taq
02-22-2011 6:12 PM


Re: Budget Cuts & Reality
Taq writes:
Sure. Why do you go to work in the morning, for personal profit or the benefit of society?
Actually, the latter. If it was about profit I wouldn't have chosen to be a scientist.
Then you are an extremely rare breed. I assume you also make your purchasing decisions based on what aids society rather than what provides the best value?
Taq writes:
How does the massing of wealth in a minority of society help the society over all?
Thats not quite the same thing. Its helpful to society to allow individuals to amass wealth for themselves and their descendants as it is a powerful incentive to be productive. Overall though it aids society because the most successful people gradually gain access to more resources allowing them to leverage whatever it was that made them successful.
Wealth isn't a static resource that is simply spread around. The rich getting richer doesn't imply that the poor are getting poorer.
I think you are! You begrudge the wealthy of their money and the ability to use it to make more money for themselves!
Taq writes:
I begrudge the fact that this is done on the backs of the middle class. Do you think it is moral for a health insurance CEO to buy yachts with money gained by denying medical coverage to a 5 year old with leukemia?
Again, no health insurance company ever made money denying coverage. They may have avoided losing money, but you haven't provided an argument for why a company should be compelled to bet on a losing prospect. You are just trying to paint an unrealistic emotional picture to justify something you can't honestly defend.

This message is a reply to:
 Message 75 by Taq, posted 02-22-2011 6:12 PM Taq has replied

Replies to this message:
 Message 81 by crashfrog, posted 02-22-2011 7:10 PM Phage0070 has replied
 Message 83 by Taq, posted 02-22-2011 7:19 PM Phage0070 has replied

Phage0070
Inactive Member


Message 85 of 350 (605923)
02-22-2011 7:31 PM
Reply to: Message 80 by crashfrog
02-22-2011 7:04 PM


Re: Budget Cuts & Reality
crashfrog writes:
quote:
Greed, as it turns out, is not consistent with free-market capitalism, contrary to popular perception. In a perfectly capitalistic and highly competitive market sector, the competition drives the price of a widget down to the marginal cost of producing a single widget, and nobody makes any profit.
The profit motive creates inefficiency, it doesn't result in efficiency. That's because profits are inherently inefficient.
And as I pointed out, and heck *you* pointed out, a perfectly competitive environment would tend to drive profits down to zero. Thus minimizing that "inefficiency" of profit and completely contradicting your point.
crashfrog writes:
Yes, but it also means providing payouts when required.
Right, so naturally, insurance companies try to find new ways to avoid putting themselves in contractual obligation to pay out. That can mean lifetime coverage caps, involuntary arbitration, overbroad interpretation of "pre-existing conditions", or outright rescission of contract the first time you attempt to make a claim.
All of which essentially constitute not selling a product. So either they have effectively removed themselves from the market or are engaged in fraud. Are you really going to base your argument upon the assumption that every company is going to not deliver their product or honor their agreements?
crashfrog writes:
And, of course, you don't know that you're getting "no payout" insurance until it comes time for them to pay you.
It looks like you are. Well two can play at that tactic; your position is invalid because governments are always totalitarian monarchies despite what the Constitution and people say. Therefore despite what these public sector organizations were created to do they are clearly more wasteful because they only serve the interests of the dictator.
crashfrog writes:
No, competition forces those companies to insure the least risky client pools as possible.
There is always insurance available provided the premium is appropriate. I defy you to define a situation so risky that one cannot find insurance.
crashfrog writes:
How are they supposed to pay premiums that are higher than they can afford?
Ahh, there is the issue isn't it? They can't pay for something they want. Whats your solution to that I wonder? Just taking other people's wealth by force is it?
We are back to that same basic issue. You want other people's wealth for use in your own goals.
crashfrog writes:
So you are saying colleges have no demand or benefit?
I'm saying that the benefit of college is known not to be the instruction - there's no evidence of college being a fundamental "value-add" for students beyond the prestige of simply having been admitted.
Well I'm glad nobody seems to care if you graduated. Of course you *might* be wrong there.
crashfrog writes:
Also those competitors to the Post Office stay in business despite having much higher prices simply because they provide a higher quality of service.
How so? What's better about it?
Speed. Reliability. Care. And do you really think people are just wasting their money on an option if they don't think its worth it? Or if you accept that they do think it is worth it, do you think UPS or FedEx has somehow perfected mind control?

This message is a reply to:
 Message 80 by crashfrog, posted 02-22-2011 7:04 PM crashfrog has replied

Replies to this message:
 Message 87 by crashfrog, posted 02-22-2011 7:43 PM Phage0070 has replied

Phage0070
Inactive Member


Message 86 of 350 (605925)
02-22-2011 7:39 PM
Reply to: Message 81 by crashfrog
02-22-2011 7:10 PM


Re: Budget Cuts & Reality
crashfrog writes:
Almost everybody makes decisions on the basis of more than mere love of money
Oh certainly, but I suspect you would go to a job that was identical in every way except that paid twice as much without a second thought. I also suspect that if you stopped getting paid you wouldn't be willing to work there anymore. See what I mean? Its not the only factor... but its an important one.
crashfrog writes:
No. But the rich are getting richer as the poor get poorer. That's objectively happening,
Really? Can you cite some data showing that the poor are poorer than they were 50 or 100 years ago?

This message is a reply to:
 Message 81 by crashfrog, posted 02-22-2011 7:10 PM crashfrog has replied

Replies to this message:
 Message 94 by crashfrog, posted 02-22-2011 8:22 PM Phage0070 has replied

Phage0070
Inactive Member


Message 88 of 350 (605927)
02-22-2011 7:46 PM
Reply to: Message 83 by Taq
02-22-2011 7:19 PM


Re: Budget Cuts & Reality
Taq writes:
I prefer to buy a hamburger from the local mom and pop for a dollar more than I would pay at one of the big chains.
But thats... *wait for it*... wasteful! Money represents your effort, and you just spent more effort for that burger than you needed to. Your frequenting the local mom and pop joint was just an overall waste for society.
Think about it, the benefit from your daily effort is symbolized by the money you are paid. You could have spent that dollar on some widget from another hard-working person except that you decided to give it to mom and pop, who either make more money from the transaction than the larger chain or have somehow frittered it away in having less efficient operations. Maybe their supply chain could be optimized, who knows. The point is you didn't help society overall at all; you helped mom and pop at the price of society.
crashfrog writes:
Overall though it aids society because the most successful people gradually gain access to more resources allowing them to leverage whatever it was that made them successful.
"Whatever it was" can turn out to be practices with questionable morality.
Question away, I'm all for making dishonesty illegal.
crashfrog writes:
Again, no health insurance company ever made money denying coverage.
Umm, yes they do. Where do you think that money goes? Do you think it just disappears?
What money, that money that was paid for no coverage? Or are you still assuming that the company isn't paying for an eventuality they said they would cover?
Or are you saying the company should pay for something they didn't say they would cover because... something emotional?

This message is a reply to:
 Message 83 by Taq, posted 02-22-2011 7:19 PM Taq has replied

Replies to this message:
 Message 89 by crashfrog, posted 02-22-2011 7:48 PM Phage0070 has not replied
 Message 92 by Taq, posted 02-22-2011 8:15 PM Phage0070 has replied

Phage0070
Inactive Member


Message 91 of 350 (605935)
02-22-2011 7:59 PM
Reply to: Message 87 by crashfrog
02-22-2011 7:43 PM


Re: Budget Cuts & Reality
crashfrog writes:
Right. That would be perfectly efficient. Thus, the profit motive is to avoid being in a perfectly competitive environment and thus avoiding efficiency by such means as regulatory capture, rent-seeking, and other forms of anti-competition.
So you are advocating that an organization be constructed which has a complete monopoly and retains its revenue flow by force, instead of a system where companies must continually fight to avoid being so gosh-darn efficient.
Well that makes perfect sense.
crashfrog writes:
Yes, fraud. Until last year perfectly legal fraud. The profit motive is one that leads to fraud, because fraud is the best possible profit mechanism - all of the income of selling something with none of the fixed costs of actually making the sale.
And being government-run prevents fraud how exactly? Is there some sort of secret switch that makes laws apply more effectively in that case?
crashfrog writes:
On the private market? "Being older than 65" and "serving in the military."
AARP. Risk pools. Heck, just negotiate an individual plan with a financial institution. The fees may be high, but did you really expect something for nothing?
crashfrog writes:
Right, the issue is that people should receive the medical care they need without being limited by their ability to pay.
I understand you feel that way. But also understand that you are proposing to take people's money, the fruits of their labor, and give it to other people who you think deserve it more.
crashfrog writes:
Of course, the pharmaceutical companies and medical professionals who deliver that care deserve to be paid to do so, so the question becomes how we get doctors paid when they treat people who can't afford to pay them.
Your solution appears to be "At the point of a gun."
crashfrog writes:
Clearly, that's not something the free market can deliver
Its not really something the public sector could deliver either. Its paying a bill in an intrinsically unfair manner.
crashfrog writes:
The Post Office is faster, more reliable, and cares more than any of its private competitors, in my experience.
The free market disagrees with your assessment.

This message is a reply to:
 Message 87 by crashfrog, posted 02-22-2011 7:43 PM crashfrog has replied

Replies to this message:
 Message 93 by Taq, posted 02-22-2011 8:18 PM Phage0070 has replied
 Message 98 by crashfrog, posted 02-22-2011 8:31 PM Phage0070 has replied

Phage0070
Inactive Member


Message 95 of 350 (605944)
02-22-2011 8:22 PM
Reply to: Message 92 by Taq
02-22-2011 8:15 PM


Re: Budget Cuts & Reality
Taq writes:
I don't consider it a waste to have my money go to people who care about their employees and their community.
Thats an emotional argument, not an economic truth. Its an inefficiency no matter how good it makes you feel.
Taq writes:
When the consumer becomes ill they no longer insure them,
So you are still arguing that they don't fulfill their contracts. Some people cheat others by saying they will sell them something and then after being paid don't deliver. Is that a criticism of the idea of selling things?
Taq writes:
Or are you still assuming that the company isn't paying for an eventuality they said they would cover?
There is plenty of that as well.
Apparently that is what you are arguing. The fact that sometimes people break the law and cheat people doesn't qualify as a criticism of the proper system of exchange.

This message is a reply to:
 Message 92 by Taq, posted 02-22-2011 8:15 PM Taq has replied

Replies to this message:
 Message 101 by Taq, posted 02-22-2011 8:35 PM Phage0070 has replied

Phage0070
Inactive Member


Message 96 of 350 (605947)
02-22-2011 8:28 PM
Reply to: Message 94 by crashfrog
02-22-2011 8:22 PM


Re: Budget Cuts & Reality
crashfrog writes:
Can you cite some data showing that the poor are poorer than they were 50 or 100 years ago?
Sure, that's how I know it's true:
All of those graphs and charts show that the richer are getting richer, and that the gap between the rich and poor is growing. But the real income of the lowest 5% of the population still increased over the last 50 years.
So you either didn't understand the data or misrepresented what it indicated.

This message is a reply to:
 Message 94 by crashfrog, posted 02-22-2011 8:22 PM crashfrog has replied

Replies to this message:
 Message 100 by crashfrog, posted 02-22-2011 8:35 PM Phage0070 has replied

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