The Conservative Cave
Current Events => General Discussion => Topic started by: captrandom on September 04, 2011, 03:27:17 AM
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The one awesome thing that separates this board from Skin's island is that people can have different points of view without the threat of a moderator messing with and deleting a post...
So anywho, what the **** is so evil about obamacare? Im 32, with a disease that HOPES those laws go into effect.
Ive stayed at my job for the last 4 years cause I can't go elsewhere cause of preexisting conditions.
What is so horrible about helping me get medical care?...And as long as there is a mortgage deduction, earned income, any every weird tax break for stocks vs. actual LABOR then I am going to bitch!
My bloodwork is 1500X4 my pills cost more then I make in a year... its 25Kplus billed to insurance... My hope is that I can find another job <without worrying about preX> making more so I can pay more into the system...And so on...
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Just by the fact of it becoming "free" the quality of healthcare will go down which will lead to rationing. All you have to do is look at Europe's NHS and CAnada to see that happening. Why do you think so many Canadians and Europeans come over here to get treatments? I'm sorry about your illness, and this is going to sound callous and I don't mean it to, but I don't want the government controlling my healthcare. It's my belief, if the government controls that, they control you. Instead if they would get out of the way and let me pick the kind of health coverage I want instead of paying for things I don't need, then costs would go down. If you stop the incentive then you stop the innovation. Why work harder when you won't get compensated for it? I can understand how you feel. Been there, its tough. There's a difference in helping you get healthcare and forcing me to buy a product that I don't want. When people say they want free this and free that, its not really free. It costs someone something.
I assume you have health insurance through your work? If so, then your out of pocket shouldn't be that much, relatively speaking.
And besides, everytime the government steps in to make something better, it only makes it 8x worse.
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I assume you have health insurance through your work? If so, then your out of pocket shouldn't be that much, relatively speaking.
Actually every year I go on the 'fifty a month' plan.. My med bills are such that I have consolidated them into a fifty dollar a month plan so I can deal with the,..
I would just like to know why TEA party people who have benefited from rural electrification, roads, hospitals, fire, etc over the years want to stop spending when THEY are benefiting from from this crap
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I would just like to know why TEA party people who have benefited from rural electrification, roads, hospitals, fire, etc over the years want to stop spending when THEY are benefiting from from this crap
I believe this to be a popular misconception some people have of the fiscal conservative.
Speaking for myself - I'm not opposed to such things as imposed levies on things like Fire, roads and such forth. My "rates" notice includes a fire levy , and my electricity account includes an Ambulance levy (which pays for your care and transit to a hospital).
I pay registration fees on my vehicles which go towards road maintenance and construction.
Of course over here we have a "free" healthcare system. In non metro areas like where I live the service is ghastly and slow. Imagine waiting several hours parked on the ramp at the ER, or if you're a walk-in patient you can wait upwards of 8 hours.
If you need something done right, and when you want it done you pay to go to a private practice to have it done. You can claim back a proportion of the spend on tax.
I really have no problem with there being a safety net - but that net shouldn't be intended to provide long term support to those with no intention of contributing to it, and it shouldn't be available as an exclusive option. Private paid practices must be allowed to exist and operate as they desire within the limits of rational-self-interest.
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I like to call it "Obamadon'tcare" because Obama and friends will get the best care available for the rest of their lives. ... and you and I will get the crumbs.
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There are some things about it that I don't find objectionable at all, or even good or at least reasonable ideas in three or four cases (Coverage to 26 for people who would otherwise almost certainly just go uninsured and take their chances, pre-exisiting condition mandatory coverage, etc.), as well as some with which I have a huge problem (Total failure to address portability from State to State which is a huge cost driver, penalty fee or whatever you want to call it).
It's an unintegrated hodgepodge of conflicting directions, but my biggest problem with it is that it was passed based entirely on transparent lies and accounting chicanery that make it IMPOSSIBLE to actually work in a fiscal sense. It had to be costed out over ten years, but the CBO cost estimates were forced to be based on a law that does not start delivering benefits until the fifth year of the ten. So what happens when the NEXT ten year cycle picks up, which Congress DIDN'T have to look at in deciding whether it was affordable? In THAT ten year period, benefits have to be paid ten out of ten years. It is completely unsustainable then.
Just to ice the cake, the cost estimates on which the penalty charge are based are wildly wrong and the business world has already figured out that it'll be far cheaper to pay the penalty than to provide group insurance. Individuals have figured out the same, and due to the way the pre-existing coverage works, have also figured out they really donn't need insurance until they come down with something chronic or critical.
The whole thing is almost designed to fail and force everyone onto a government fallback system, I'm sure several of the backers are actually pleased about this, but most of Congress just seems too dimwitted to even understand it.
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I'm certainly not an expert on the ups and downs of the bill, but a few things bother me.
The mandate for all businesses to provide insurance must not be a good thing, it must be an onerous burden, or there wouldn't be so many who got exemptions.
From hearing from healthcare workers in other countries, there are limits placed on how many patients can be seen, how many of certain supplies can be given to each area. I read and hear complaints about services and supplies be given to regions based on political preference and could see both parties doing that here.
I have friends who use the Indian Health Services in the west and that is a total mess. Some real good providers trying to care for their patients and finding themselves up against lack of supplies, impregnable processes resulting in unrepaired buildings and equipment, and some terrible co-workers whom are impossible to fire. I see increased government management of health care as taking us all to that place.
I work in a healthcare field, and am in favor of the increased requirements meant to reduce fraudulent payments. I think much in money and resources that could be saved, but it would take a huge culture change.
ETA: I'm sorry about your illness. My middle child was very ill in childhood, and even with insurance the travel costs for treatment and non-covered medications left me a large debt that I just finished paying off two months ago. But, with government regulations, I fear some of the choice I had would have been eliminated.
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The one awesome thing that separates this board from Skin's island is that people can have different points of view without the threat of a moderator messing with and deleting a post...
So anywho, what the **** is so evil about obamacare? Im 32, with a disease that HOPES those laws go into effect.
Ive stayed at my job for the last 4 years cause I can't go elsewhere cause of preexisting conditions.
With employer sponsored insurance, if you currently have insurance that covers your pre-existing condition, then you will be covered by the next insurance company as long as you haven't gone without insurance for any length of time. If you are currently uninsured, then your pre-existing condition won't be covered until you've paid for insurance for 2 years.
In fact, some people would switch jobs every few years because the next company would be required to cover the pre-existing condition when their former company had paid out to the limit of coverage.
Since Obamacare fails to recognize that safety net, employer sponsored coverage looks to be doomed. This means that people like you, with pre-existing conditions, will have to find your own insurance and pay the entire cost of it instead of paying only the portion your employer does not cover. This could end up raising your health insurance costs to well over $600 a month, while you would still be required to pay your deductibles and co-pays. If your insurance is typical, your out-of-pocket costs will skyrocket when your employer decides to just pay the penalty instead of covering your insurance.
What is so horrible about helping me get medical care?...And as long as there is a mortgage deduction, earned income, any every weird tax break for stocks vs. actual LABOR then I am going to bitch!
My bloodwork is 1500X4 my pills cost more then I make in a year... its 25Kplus billed to insurance... My hope is that I can find another job <without worrying about preX> making more so I can pay more into the system...And so on...
Everyone that currently pays insurance is helping you keep medical care. Without the huge pool of those paying more for their insurance than their own healthcare would cost, your company couldn't afford to pay for your care.
In fact, insurance companies are keeping our entire medical system alive. Medicare pays an average of 65% of the cost of a medical treatment. This is not 65% of the bill, it is 65% of what it costs the medical center to provide the service. The other 35% of the cost is covered by raising the costs to insurance companies and uninsured individuals (those that actually pay bills.)
The problem with Obamacare is that it will end up causing so many employers to drop coverage. Without the employers paying in, insurance companies will have a much harder time showing a profit, and they will have to negotiate for cheaper pay-outs to hospitals and doctors. More and more actual costs will end up being placed on individual payers, so more and more people will end up on government sponsored care, or truly going without medical care at all (something that is actually pretty rare today.) Even with this shift in billing, smaller hospitals and clinics are sure to go bankrupt as time goes on, no business can stay open when they only recoup 65% of their costs for delivering a service. More and more rural people and those in poorer neighborhoods will be forced to travel farther and farther for even basic healthcare. Where I grew up, it was already 30 miles to the closest doctor. If those little rural healthcare clinics and hospitals go out, it will be a minimum of 90 miles to the closest doctor. Of course, this will reduce rural population, one of the left's stated goals...
Another problem with Obamacare is the 80+ new taxes imposed. I hope you don't own a house, because when you sell it, you'll have to pay a tax for the sale. http://www.newsmax.com/GroverNorquist/obamacare-taxes/2011/01/14/id/382849
Yet another problem is all the unknowns....exactly how this will all shake out as different regulations are taken to court and challenged. Employers at this time have very little idea what their costs will be per employee looking just 5 years down the road. As an aside to Obamacare, Obama has also constantly threatened to raise taxes on small businesses and business owners. Along with our very high current corporate tax rate, the current uncertainty as to future taxes and future employee costs are keeping many businesses sitting on their cash instead of investing in growth. Those that are big enough are growing overseas, where they have more certainty as to costs and possible profits. Remember, no one will invest a bunch of his own money in a business with no or little hope of profit, so the more Obama "criminalizes" profit, the less will be invested in business...and the fewer jobs there will be.
Overall, thanks to Obamacare and Obama's handling of businesses and taxes, businesses don't grow. No growth equals no jobs. No jobs equals more people on government benefits and fewer paying taxes. And the cycle of economic depression continues.
The worst part of it all is that 90% of the few good points about Obamacare could have been provided to people through simple regulation and allowing insurance companies to sell across state lines. This simple approach - suggested repeatedly by the GOP (though never really explained in our MSM), would have reduced the overall government burden on the backs of taxpayers instead of giving Uncle Sam an extra layer of obesity that we and our children will have to struggle under.
If Michelle really cared about obesity, Sam would be her target, not little kids.
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So anywho, what the **** is so evil about obamacare? Im 32, with a disease that HOPES those laws go into effect.
Ive stayed at my job for the last 4 years cause I can't go elsewhere cause of preexisting conditions.
I think you first need to educate yourself on the laws that are already in effect that protect you. If you presently have health insurance that is more than for just catastrophic coverage (meaning an actual health insurance policy), and you go right to another job with no break in between, then the new insurance carrier cannot claim preexisting condition.
It is only applied to those who go from no coverage, or break in coverage to a new plan. Honestly, I can't blame the insurance carrier for wanting such protection from being mandated to cover an individual with a serious illness because why would anyone get insurance if you are allowed to just sign up when you need it? It would be the equivalent of calling to get auto insurance coverage two minutes after your accident.
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I guess my problems with ObamaCare are far more philosophical........
1. Nowhere in the Constitution does it state that healthcare is a "right" guaranteed to all citizens (without distorting out of all proportion, the actual meaning and intent of the "General Welfare Clause"). Providing (or mandating others to provide) healthcare to all, is simply far outside of the authority of the federal government, an anathema to our founding principles, as well as an enemy to our liberty. Why is ObamaCare an enemy to our liberty? A fair question......if healthcare is either mandated or provided through the federal government, that same federal government has the ability to control what a citizen can or cannot do in his/her own life, under the guise of "it COSTS the public too much for you to engage in this activity"........we are already seeing this play out in the "obesity" issue, the government wanting to become involved in our diets and personal activities.......is this the way the founders envisioned a "free people" to be governed?....I think not.....
2. Specifically regarding "health insurance", I have no problem with laws requiring that it be made available to all, even those with preexisting conditions.......however, I DO expect that just like a person purchasing a home on the Atlantic coast of Florida, in "hurricane alley", those having expensive ailments should have to pay a premium that is significantly higher than those who are healthy. Persons have little to no control over whether or not they contract an expensive ailment, however they should not have an expectation that others should be penalized for that fact so that they can be treated "fairly", or in a manner that is "equal". Life ain't fair.......not my (individual) problem. I have an ailment whose treatment falls outside of the parameters of my "health insurance" (thanks to ObamaCare), and I fully expect to write a check for the necessary treatment. When ObamaCare is fully implemented I will lose the right to pay for my own care (because it wouldn't be "fair"), and my treatment for that issue would be either nonexistent or half-assed. Certainly not cutting edge, which is my choice.
3. I'm old enough to remember when there was no such thing as widespread "health insurance" availability, either through employers or privately purchased......everyone paid for their own healthcare......if you couldn't afford a specific treatment, terms were worked out, and even during those "dark days", the streets were not littered with the corpses of those dying for lack of treatment.
Summarizing, there are many excellent arguments stated by members earlier in this thread (I particularly like MrsSmith's comments), however it simply boils down to the fact that although we certainly have sympathy for your condition, it may seem crass, but for the most part I don't see it as something that we (as a group, through taxes) should be forced to pay for, either directly or indirectly. In our system, if left unmolested by ObamaCare, there are alternatives available to you.
doc
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My whole deal about health care and medical insurance is that one has all the control one wishes, to have over one's own condition.
Those times even when I had the best possible insurance (working for an insurance company two times naturally brought that), I used it minimally, if at all. At present, I have only catastrophic medical insurance (because of the premiums), and it's been money down a black hole, because I can't seem to get catastrophic.
So I currently pay cash out of the pocket, but given that my situation's been clearly explained, it's copacetic with the medical care providers. In fact, since I pay cash right there, right now, I'm sure I get a discount of some sort. I dunno what the going rate for removing possibly-cancerous moles is, but I pay $80 cash, no fee for the physician visit. Just a straight $80 per, no other charges.
When the ulcer in the throat burst open two years and a month ago, I was stuck with a $2400 medical bill (because the neighbor, alleging I looked as if I'd sustained a major gunshot wound, took me to the emergency room rather than where I wanted to go), and it's been a trial taking care of that, but it's being taken care of.
Every time I see a physician about something, my first question, after describing the condition is, "Okay now, what can I do about this?"
It seems to startle them, as if it's something they don't hear from patients.
In all instances in my adult life that I can recall, it turned out I had near-total control of the condition--ranging from the ulcers to physical therapy after broken bones (being deaf, this happens a lot) to broncho-pneumonia to that women's problem (bladder infection).
It appears the only thing I can't do anything to ameliorate is the persistent appearance of possibly-cancerous moles (I had two of those in 1997; fortunately it worked out well). Simply avoiding the sun doesn't appear to be enough.
And I have control over other medical conditions. I come from a family terribly afflicted with things such as diabetes, high blood pressure, kidney problems, melancholia, high cholesterol, and somesuch--what I call "the ailments and afflictions of a too-affluent, too-comfortable life."
The "potential" for such things to develop is there, and it's real.
Yet, none of it's happened.
Life-style choices are not as strong as genetic propensities, but they do have an impact. I suspect in my individual case, it's mixing substantial manual work (paid or at home) with desk-sitting. I will go out of my way, for example, to use a hand-saw rather than a power saw, or to use a 1906 Sears, Roebuck lawn-mover rather than the 2004 John Deere riding lawn-mower used by others here.
My father died at 59, my mother a year later at 54. I had six older brothers and sisters, who died at the ages of 57, 48, 40, 34, 51, 61. Thus far I've outlived three of them. (I had a younger brother who died at 17, when I was 19, but that was an automobile accident, not from ailments and afflictions).
(Other than the younger brother), these were people who always put everything into the hands of medical science, thinking they themselves didn't have to do a damned thing (and remember, I come from a medical family).
Well, it appears I had, and continue to have, the last word on that.
Medical science is a good tool, a convenient tool, but it's not all it takes.
In fact, it's not even 1% of all it takes. All the rest is up to the individual.
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I too am no expert. And others here have already provided excellent examples. To sum up my view of 'Obamacare', I would simply add that (in my mind), it’s rather an imprudent choice to provide the government with a financial incentive to prefer to see you dead rather than ill.
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I need to add that there are special circumstances in my case, which may not apply to others.
I'm single, no spouse or dependents, no one but the cats reliant upon me.
This gives me the time and the luxury to contrive permanent fixes rather than quick fixes; those with others dependent upon them, might not have that time and luxury.
I'm deaf.
This means I'm more or less immune from the stresses hearing people have, and although I've never heard myself, I'm sure hearing people deal with a lot of stress, both inner- and outer-inspired.
So I suppose, when compared with others, those two things give me the time to have more control over my body.
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Ooops, and of course my point being: money and technology doesn't solve everything.
Any expectations that government (i.e. taxpayer) funded medical care will heal the sick are nonsense.
So I'd just as soon the government stay out of medicine.
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Has anyone dug through the 2,000+ pages of Obama care and listed all the new taxes it imposes on citizens?
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I assume you have health insurance through your work? If so, then your out of pocket shouldn't be that much, relatively speaking.
Actually every year I go on the 'fifty a month' plan.. My med bills are such that I have consolidated them into a fifty dollar a month plan so I can deal with the,..
I would just like to know why TEA party people who have benefited from rural electrification, roads, hospitals, fire, etc over the years want to stop spending when THEY are benefiting from from this crap
One of the misconceptions about the TEA party is that we are against ALL taxes. We're not. We understand that taxes have to be levied to make the country work, but when you have over half of the populationthat doesn't pay ANY tax at all with some even getting back more than they pay in then it starts to get unfair. So when the Dems start saying the rich need to pay their fair share they're absolutely lying. All of the ones screaming to tax the producers into oblivion want all the government to give them everyrhing for free while they don't want to pay a dime to help. Then there's all the governnment waste. Get rid of all the waste and you won't have to raise taxes. Besides, you can't tell me with a straight face that the government can run healthcare efficiently. The TEA party also knows we need government for necessary services, police, fire, roads, etc but we don't want them to run every aspect of our lives. The libs are the ones who think the government is the be all end all. Too big brotherish for me. Too many people today are totally dependant on the govermment. Look at hurricane Katrina, they had 4 days to take care of themselves and get out of the city and they couldn't do that yet I have to pay for their dependancy through more taxes. The aftermath was even worse with poorly run programs and A LOT of waste. So tell me again at how efficiently the government will run healthcare. I'll take my chances on private run thank you.
Sorry my reply is so long, couldn't stop myself, lol.
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The requirement for everyone to purchase health insurance is a slippery slope to the government forcing people to purchase other commodities. What is to stop the government from forcing people under color of law to buy products from a party's largest political donors or from services where politically connected unions would benefit? Benito Mussolini would be proud.
Beyond that, it will lead to the rationing of every other nationalized healthcare system as well.
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I would just like to know why TEA party people who have benefited from rural electrification, roads, hospitals, fire, etc over the years want to stop spending when THEY are benefiting from from this crap
I think you may be laboring under a false impression on why conservatives want spending reduced. As such, I have a question for you: Do you know what TEA actually stands for?
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I would just like to know why TEA party people who have benefited from rural electrification, roads, hospitals, fire, etc over the years want to stop spending when THEY are benefiting from from this crap
If all that is crap, what do you call welfare, foodstamps, government housing, section 8 housing and grants for stupid shit.?
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I would just like to know why TEA party people who have benefited from rural electrification, roads, hospitals, fire, etc over the years want to stop spending when THEY are benefiting from from this crap
we dont want NO govt. If all that is crap, what do you call welfare, foodstamps, government housing, section 8 housing and grants for stupid shit.?
if all THIS bullshit was fixed, we would have plenty money to pay for the important stuff like... bridges... fires... etc.
there is no reason our govt couldn't meet todays NEEDs for $2 trillion, except for the business as usual which needs to end ASAP. that would give us a REAL surplus in 2011 which would start paying down the $15 Trillion Debt.
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if all THIS bullshit was fixed, we would have plenty money to pay for the important stuff like... bridges... fires... etc.
There would be low unemployment and there would be very, very few illegal alliens doing the jobs Americans refuse don't have to do.
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I would just like to know why TEA party people who have benefited from rural electrification, roads, hospitals, fire, etc over the years want to stop spending when THEY are benefiting from from this crap
Have you ever actually sat down and looked at the federal budget over, say, the last 50 years? Or your state budget over the last 25 or so?
In 1961, the federal government had a budget of just under $100 Billion. Adjusted for inflation, that comes out to a little over $720 Billion in 2011 dollars. So where did the need to increase the size of the federal government by almost SIX TIMES its current size come from? Most of the federal budget goes to "human resources" spending--meaning SS, Medicare, welfare and unemployment payments to the states, etc. IOW, the government did in fact become so big as to give people everything, and big enough to take everything away.
Ah, but didn't GDP grow as well? Surely it did. In 1961, GDP was a touch over $500 Billion. Today it approaches $15 Trillion. So really, we have growth relative to GDP between 1961 and now, but not as stunning: 18 percent then versus just over 25 percent now.
But the debt--ah, the debt. In 1961, it was $280 Billion, or about 50 percent of GDP. In 2011, it is just under $15 Trillion (actually 98 percent of GDP). This is Greece-type debt. Nationalizing 1/6th of the economy will not alleviate that debt. To the contrary, it will make it much, much worse.
And your state? Well, I can say this about my state--a few years ago, it was revealed that over 2/3 of the gas taxes, which were SUPPOSED to go solely towards roads and other infrastructure, were in fact going towards social spending and pensions for retired state workers. Not a very frugal use of my tax dollars, now was it? California has had a spate of retired or double-dipping public employees with nearly seven-figure pensions. Even here in supposedly frugal New Hampshire, the number of six-figure public retirees is quite substantial. How to justify increasing already high property taxes to pay for the Portsmouth police chief's $225K/year retirement?
And Illinois--ah, here's a great example. Just the top 100 educators (mostly administrators) in Illinois have incurred pension obligations of...(drum roll please)...ONE BILLION DOLLARS. For 100 people. That's $10 Million EACH, in case you're not up to the math.
In ONE school district in California (LAUSD), there are 20 people making over $250K a year. There are over 3500 making over $100K a year. This is a school system with a graduation rate of--ready?--38 percent. Abysmal by any measure.
I could go on all day.
I think you see our point.
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^5's to everyone.
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There's one of those ironclad laws of economics--I forget it specifically--that says whenever the cost of something is passed on from an individual to "other people," its price goes up, because of the human propensity to get while the getting's good.
"Insurance" (of some sort) does that.
And then when the government has a part in it, it happens even more.
During the earlier part of the Reagan administration, federal aid to college students actually increased (despite what the Democrats were saying), but fewer and fewer students were finding college affordable.
This was because while federal spending in this area increased, the attitude among colleges and universities was "well, there's more money available now, so we can hike our rates."
Please notice the sudden inflation in hospital charges after Medicare went into effect in 1965, an inflation that far outstripped regular or average inflation. The government was pouring more and more money into the program, and so everyone was getting while the getting was good.
I realize this sounds 19th-centuryish, and is just a pipe dream any more, but the government should not be in medical care at all, period. The government (i.e., the taxpayers) cannot afford to solve every problem, ease every misery. And money confiscated through taxation discourages real economic growth.
This may sound cruel--but remember, not only do I believe it, but I live it, always lived it--but the individual has more control over his own health and medical issues than is commonly supposed, and so it's up to the individual to deal with it, not "other people."
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One of the others that I've heard and tweaked to my own uses is, "If people are willing to 'pay any price' for a good or service, then that's what they'll usually pay."
At some point, the cost of "any price" items like healthcare, education, etc., will simply create an implosion because the quality and quantity of product simply doesn't justify the exorbitant cost.
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In a similar vein ...
MOST ACADEMIC PARTICIPANTS IN the ongoing debate over income redistribution are aware that it is not possible, ever, for government to tax one set of persons and redistribute the same amount to a set of subsidy recipients. Some fraction of each dollar taxed will always be absorbed in wages and salaries of the administrative bureaucracy, costs of purchasing, powering, maintaining and replacing equipment, buildings, etc., and other overhead costs. Only the remainder will actually be received by the target population in the form of cash or in kind payments. Many advocates of compulsory income redistribution have tended to ignore this inconvenient fact altogether in their writings, however. >>>
Of course it is also true of private charities dependent on voluntary donations that they have costs absorbing part of their revenue, but there is a huge difference in the efficiency with which they operate relative to government. Contrary to Okun, public income redistribution agencies are estimated to absorb about two-thirds of each dollar budgeted to them in overhead costs, and in some cases as much as three-quarters of each dollar. Using government data, Robert L. Woodson (1989, p. 63) calculated that, on average, 70 cents of each dollar budgeted for government assistance goes not to the poor, but to the members of the welfare bureaucracy and others serving the poor. Michael Tanner (1996, p. 136 n. 18) cites regional studies supporting this 70/30 split.
In contrast, administrative and other operating costs in private charities absorb, on average, only one-third or less of each dollar donated, leaving the other two-thirds (or more) to be delivered to recipients. Charity Navigator (www.charitynavigator.org), the newest of several private sector organizations that rate charities by various criteria and supply that information to the public on their web sites, found that, as of 2004, 70 percent of charities they rated spent at least 75 percent of their budgets on the programs and services they exist to provide, and 90 percent spent at least 65 percent. The median administrative expense among all charities in their sample was only 10.3 percent.
The basic reason for this large differential in costs between private and public agencies is not difficult to see. Depending largely on voluntary contributions, most private agencies are under strong pressures to operate efficiently and keep costs low. Benevolent citizens naturally wish a large fraction of their donations to reach the needy, and many will not keep donating to an agency that does not accomplish that. Donors can select among private nonprofit charities, and competition between charities for donations tends to insure efficiency. Public aid agencies, in contrast, are budgeted their funds by Congress, which obtains them through compulsory taxation. These agencies are not under competitive pressures to keep costs down that are remotely equivalent to those of private charities. Indeed, their incentives may be much the opposite, as Niskanen (1994) has argued. Yet another factor promoting efficiency of private charities is that those operating at levels of inefficiency comparable to the average government agency are often prosecuted—by the government (which never applies the same standards or threat to its own agencies)—for fraud. Pressure on private charities to avoid such prosecution, and the bad publicity and loss of public trust resulting, is strong.
In fact, the average cost of private charity generally is almost certainly lower than the one-quarter to one-third estimated by Charity
Navigator and other private sector charity rating services, for at least two reasons. For one, many are either run by or affiliated with religious organizations, where much of the labor is donated, further reducing overhead costs. Charity Navigator does not even include
religious charities in its huge sample, focusing instead only on tax exempt 501(c)(3) organizations required to file informational tax returns. Perhaps more important, an unmeasured but certainly very large fraction of private charitable aid is administered directly to recipients by kin without any institutional intermediation at all. This widespread private family charity (and similar gifts) is the only case in which dollar-for-dollar charitable income transfers can occur.
HELPING SOME BY HARMING OTHERS—A LOT
One implication of the high cost of government income redistribution comes into focus when costs are understood correctly as alternative opportunities forgone. If a government agency delivers only one-third of each dollar budgeted to it as subsidy to its target population, then it must be budgeted three dollars for each dollar so delivered. Assuming that the cost of collecting the tax revenues to be budgeted to redistributive agencies is zero, then for each dollar delivered to a subsidy recipient, whether in the form of rent subsidy, food stamps, welfare, prescription medicine, or whatever, the taxpayers who had earned that money productively in the market must be deprived of three dollars worth of the things they want.
CONTINUED --- PDF ...THE COSTS OF PUBLIC INCOME REDISTRIBUTION AND PRIVATE CHARITY (http://mises.org/journals/jls/21_2/21_2_1.pdf)
(SUMMER 2007)
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In a similar vein ...
Using government data, Robert L. Woodson (1989, p. 63) calculated that, on average, 70 cents of each dollar budgeted for government assistance goes not to the poor, but to the members of the welfare bureaucracy and others serving the poor. Michael Tanner (1996, p. 136 n. 18) cites regional studies supporting this 70/30 split.
In contrast, administrative and other operating costs in private charities absorb, on average, only one-third or less of each dollar donated, leaving the other two-thirds (or more) to be delivered to recipients.
^5 :II: :clap: :exactly: