More on the bailout

Writing about Healthcare now is akin to reporting about the NBA during the fall, and I'm not JA Adande. Part 2 of my universal healthcare will have to wait.

As you know the bailout failed to get the votes needed to pass congress on Monday. My opinion about the bailout has not changed and I am pleased it didn't pass in it's current form.

As pointed out in a previous post I believe it was irresponsibility that led us to this point. The blame is being placed on a select few because it's easy to point the finger at the rich greedy investment banks, but they are just a scapegoat for western society as a whole. We live in a giant debt bubble. Debt got us here and I'm just not too happy that the best solution to the problem is for the government to conjure $700 billion in credit to purchase beaten down securities. I have never traded on margin and I don't plan to (I don't feel comfortable with the thought of buying securities with borrowed money, more on that in a future post), yet this is exactly what the President, and half of congress wants us to do.

Unlike many out there I believe stocks are overvalued. The correction following the internet bubble lasted just long enough for us to enter the real estate bubble. A lot of people lost their shirts when so many useless internet companies went under because they made poor financial decisions.

The next little while is going to be difficult for many without a bailout, but for the sake of the future it just can't happen. The institutions that granted so many poor loans will not change for the betterment of society should they receive a bailout. The mortgage holders will not learn from their mistakes if it turns out that the mistakes actually benefited them.

There are good banks out there and they won't be receiving any government aid. The failure of a few giant firms will have drastic consequences but the void will be filled with better alternatives.

In the end I fear the bill will pass and when President Obama takes office he will raise taxes for those in the higher tax brackets to pay for the purchase. Ironically this will not have much affect on many of those who are defaulting on their mortgages because they either don't earn enough to be affected by a tax on the wealthy or they make their money flipping houses meaning most of their income is taxed as capital gains leaving them under the highest tax brackets.

At least the accountants of the world can rejoice in their increased job security.

As always I welcome your comments should you agree or disagree with me on this topic.

Do we need universal healthcare? Part 1

My views concerning a national healthcare system have changed over the past 7 years. I am neither for or against a national healthcare system as I have spent some time pondering over the pros and cons of the system. Obviously my views are not without bias because while I, like any other American, want and need health insurance for myself and my family I am also a physician and my bottom line stands to be drastically affected by and change in the healthcare reimbursement system.

There are too many people in America without health insurance. There was a time when I held it against these people for not having health insurance. I thought it was irresponsible for anyone not to have insurance for their family. Those who didn't qualify for government funded programs should find a way to put it in their budget to get their own policies. Part of me still feels that way, but I also know that health insurance for a family is not cheap and gets more expensive with each passing day.

The burden of the unisured is felt by all. My insurance premiums go up each year, in part, because of the millions of healthcare visits by the uninsured that are written off by all the hospitals and clinics in the country. Each time an unisured citizen gets a CT scan there is a bill to be paid and more often than not that bill is written off as a bad debt. Unlike the government, hospitals and clinics cannot opperate with a deficit so somebody has to make up the difference. Prices go up to offset the bad debt and insurance companies pass that price increase on to the insured in the form of increasing premiums.

Universal healthcare will solve the problem of the unisured. The argument goes that the cost to the nation will be offset by the benefit to the healthcare system as a whole. Everyone will get the care they need. Preventative medicine will actually take place and help us to avoid many of the expensive hospitalizations and procedures that occur because of lack of preventative medicine. Physicians will not lose money because they will have a much higher percentage of paying patients.

Doesn't everybody win with Universal Healthcare?

Do you agree with the bailout?

The following is a poll on CNNMoney.com. At the present time there have been 83626 participants in the poll.

1. What's your view about granting taxpayers stock in any company taking part in the proposed $700 billion bailout?

It's needed to approve the plan	43%
The plan should be approved with no conditions	7%
No bailout in any form	50%

I understand that the people who read CNNMoney.com are hardly a good representation of the country as a whole. Still, why do so many of these people think the bailout is such a bad idea. Is it because they hate the President (I think for some that may be the only reason)? I don't know why so many people oppose the bailout, but I do know why I voted for no bailout. I'm just starting my career. I have a lot of investing years in front of me and a market correction at the beginning of my earning years would be very good financially for me. That said many of those I care for are nearing the end of their earning years and a correction would not be so beneficial to them.

I just don't think flushing more money into the system is a good idea. I'm not one for nationwide suffering, but if the government bails out the banking institutions for making bad loans and those loans are written off giving all those businesses and individuals a free lunch what keeps them from making the same decisions next year? If it turns out good this time why not next time as well? At some point in time bad financial decisions need to run their course.

Why our economy stinks

We've all heard about how everybody in the nation is losing their homes because of the mortgage crisis. That led to the government to put a freeze on foreclosures. So we have mortgages not getting paid this lead us to banks with bad debt at risk of failure which could theoretically ruin our entire economy. In steps the government to bail out the banks with close to a trillion dollars that appears out of thin air. This leads to drastic inflation as the dollar plummets. Japan and China then buy massive amounts of US stock and the idea of buying American joins the ranks of other long last dreams such as honest politician, and affordable gasoline.

How did we get here? I'll tell you how we got here, we stopped heeding the warnings of those people who lived through the depression. Those words are no longer heard because most of those people are dead. The generation that suffered through the depression learned first hand what it meant to work for a living. They were so afraid of hitting hard times again that they spent the rest of their lives preparing for that possibility. They didn't accumulate debt for a new flashy car or plasma screen TV. They didn't spend 50% of their income on a mortgage payment. They also didn't spend a couple grand on power tools after graduating from school but before receiving a paycheck from their first real job.

I don't have a solution to the current financial crisis, but I certainly don't think that a $700 billion band aid is going to fix things. Maybe we are destined to have another depression if for no other reason than to burst the debt bubble that is Western Society.