Paul Krugman's mention of the "death spiral" health insurance co's are caught in leads to the thought that they aren't the only ones. Remember the definition?
[P]rivate health insurance only works if insurers can sell policies to both sick and healthy customers. If too many healthy people decide that they'd rather take their chances and remain uninsured, the risk pool deteriorates, forcing insurers to raise premiums. This, in turn, leads more healthy people to drop coverage, worsening the risk pool even further, and so on.
Now, what WellPoint claims is that it has been forced to raise premiums because of "challenging economic times": cash-strapped Californians have been dropping their policies or shifting into less-comprehensive plans. Those retaining coverage tend to be people with high current medical expenses. And the result, says the company, is a drastically worsening risk pool: in effect, a death spiral.
Whether this is just another insurance scam rationalization or an actual truth is beside the point. The question is, doesn't that process - creating a situation out of sheer greed that then gets out of control - sound awfully familiar? It should. It's precisely what Wall Street and the Bushies have done to the country: set in motion an economic death spiral.
Take, for example, the deficit. The current deficit is a direct result of bad conservative policies, fiscal and political as well as economic. The Bush Tax Cuts alone will be responsible for a full one-third of the deficit by 2019, and that's only if they're allowed to expire. See, there's a few conservaDems who are going all weak in the knees at the prospect of having to take the heat from the Right for "raising taxes" if they let the old pre-Bush-giveaway rates return. (Via Avedon Carol)
As The Hill reported yesterday:
Reps. Bobby Bright (D-Ala.) and Mike McMahon (D-N.Y.) asked members in a "Dear Colleague" letter Thursday to support extending the tax cuts, which passed in 2001 and 2003 and are set to expire this year, for at least another two years. Specifically, Bright and McMahon are asking lawmakers to sign a letter to Obama asking him to include the tax cuts in his budget plans for 2010.
"Allowing these tax rates to expire during this recession runs the risk of curtailing economic expansion just when it begins to pick up and could lead to a 'double dip' recession," says the letter to Obama.
Questioning Treasury Secretary Tim Geithner last week, Reps. Gerry Connolly (D-VA) and Harry Mitchell (D-AZ) made clear that Bright and McMahon are not alone. While Geither contended that "I don't think that would be good policy for the country," Connolly argued, "I think there is a certain logic to leaving well-enough alone for now, given the fragility of the economic recovery."
Yes, of course. By all means let's "let well enough alone" and make the dangerous deficit - which we think is so bad we're ready to cut SocSec and Medicare - even higher because we'd rather face the wrath of the Grey Panthers of main Street than the wrath of the Greenback Men of Wall Street. The endlessly debunked myth that higher taxes produce a weaker economy when the truth is the opposite of that is what's operating here, along, of course with the reality that Corporate America has bought the Dems as well as the Pubs and conservaDems won't go against their corporate owners' agenda.
By the same token, we are facing a major and very long-term Depression as a result of corporate policies that have moved millions and millions of jobs overseas to low-wage countries where trade unions are unprotected, vulnerable, or non-existant.
Economists fear that the nascent recovery will leave more people behind than in past recessions, failing to create jobs in sufficient numbers to absorb the record-setting ranks of the long-term unemployed.
Call them the new poor: people long accustomed to the comforts of middle-class life who are now relying on public assistance for the first time in their lives - potentially for years to come.
Yet the social safety net is already showing severe strains. Roughly 2.7 million jobless people will lose their unemployment check before the end of April unless Congress approves the Obama administration's proposal to extend the payments, according to the Labor Department.
We are looking at a "recovery" which desperately needs to get money into the hands of people who need it and will spend it but where instead all the jobs that might have sparked that have been moved to Indonesia or Honduras to push up profits, and the piddling amount of stimulus money has gone mostly to banks who fed it out in bonuses to a few execs. With no domestic jobs left, and no money being spent by either the govt or private industries to create them in any numbers even marginally close to making a significant dent in the failing superstructure, what we are facing is a "death spiral" where corpo's cut the wages of remaining workers even further and they stop buying anything because they can't afford to eat, which in turn puts even more pressure on the govt to provide services for the new starving and homeless,which in turn raises the deficit even higher which squeezes taxpayers even more...
Well, you get the picture. And at the state level, it's just a rehash. Revenues are down, demands are up, long-term unemployment is growing. There won't be any relief coming locally.
Although the national economy has begun to bounce back, governors said Saturday that the worst was yet to come at the state level, where revenues are still falling short of projections.
"State revenues continue to deteriorate, as most states are witnessing monthly totals lower than their recent forecasts, which have been revised downward," said Gov. Jim Douglas of Vermont, the chairman of the National Governors Association, which opened its winter meeting here on Saturday.
Mr. Douglas, a Republican, said the fiscal situation was "fairly poor for most states around the country." And a report issued by the association predicted that the fiscal year starting July 1 would be "the most difficult to date."
Yah, well, it was your party and their relentlessly pro-corporate, anti-tax policies that created the situation, Jim. You need to talk to them. Bring a baseball bat with you when you do, though.
It isn't that this is a hopeless situation. It isn't. The fix is difficult but clear enough.
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Stage 1: End the ridiculous Oil War that only Dick Cheney and Big Oil love.
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Stage 2: End the Bush Tax Cuts and start taxing corporations again (some 80% of corpo's with more than $10M/yr in revenues pay no taxes at all)
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Stage 3: Stop subsidising and instead penalize corpo's that move or have moved their manufacturing operations overseas to escape unions, exploit Third World workers, and dodge taxes.
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Stage 4: Stop paying Wall Street blackmail money. "Too big to fail" is an absurd reason to pay what is essentially "protection" money. They tried the same ploy on FDR and he let a few of 'em go down. We survived and so did the country. We may NOT survive Wall Street's next scam. No more TARP, no more bail-outs.
There, now, was that so hard to figure out? No. It's simple to explain, obvious on its face, and relatively simple to carry out considering the alternative: massive poverty, hunger, and homelessness in what used to be - and still would be - the richest nation on the face of the earth. But it isn't going to happen because BOTH parties are owned and operated by Corporate America.
A third party is going to have to do it. Ready for that?
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