Scotland wants to Keep the Pound in a (somewhat) Independent Scotland

Posted by PITHOCRATES - March 8th, 2014

Week in Review

The Greek crisis happened because there was a currency union without a political union.  The Eurozone set some pretty strict limits on deficits and debt to join.  Why?  Because people in the Eurozone would all be using the same Euro.  So they didn’t want one country running up deficits or their debt.  Because if they did they wouldn’t just be messing with their economy.  They would be messing with the entire Eurozone economy.

Well, that’s what Greece did.  They were spending so much money that they had large deficits that added to a large debt.  A euro-denominated debt.  Which meant a default would raise borrowing costs for other euro-denominated debt.  Raising the borrowing costs for the Eurozone.  So to avoid that required other Eurozone nations to help Greece with their debt.  Requiring higher taxes in the more responsible countries of the Eurozone to pay for the irresponsible spending of Greece.  Neither option (default or rescue package) being a popular option.  Especially for the Greek people.  For the rescue package came with strings.  And the big one was austerity.  They had to stop spending so much.  Which meant a lot of people lost some of their government benefits.  Making them very unhappy.  Leading to some rioting in the streets.

Had there been a political union this would not have happened.  For there would have been only one entity borrowing and spending Euros.  One entity taxing the Eurozone nations.  And one entity printing money.  Much like the federal government in the United States.  And London in the United Kingdom (see Scotland’s referendum: Salmond says independence will benefit whole UK posted 3/4/2014 on BBC News Scotland Politics).

An independent Scotland with a strong economy would benefit the whole of the UK, First Minister Alex Salmond has told a gathering in London…

“I believe George Osborne’s speech on sterling three weeks ago – his ‘sermon on the pound’ – will come to be seen as a monumental error.

“It encapsulates the diktats from on high which are not the strength of the Westminster elite, but rather their fundamental weakness.

“In contrast, we will seek to engage with the people of England on the case for progressive reform.”

But Tory MP Mr Mundell said that Mr Salmond was saying that a choice to leave the UK and become independent “means staying exactly the same as we are now”.

He added: “By definition, that simply cannot happen.

“No one should be under any illusion that voting for independence means getting independence, which means becoming a new country outside the UK.

If the Eurozone sovereign debt crisis has taught us anything it’s that a currency union without a political union is not a good thing.  An independent Scotland would eliminate the political union there is now.  And the reason why England does not want a currency union with an independent Scotland is because of what happened in the Eurozone.  It doesn’t work.  At least, it doesn’t work well.  Which begs the question why do they want independence but not complete independence (keeping the pound)?

One can only surmise so they can have more autonomy over their taxing, borrowing and, of course, spending.  Perhaps to spend more.  Creating larger deficits.  And a greater pound-denominated debt.  Which would be of great concern to other holders of pound-denominated debt.  The rest of the United Kingdom.

It is unlikely that independence would lead to a stronger Scottish economy.  Or a stronger UK economy.  If it did then the whole point of the Eurozone would be a lie.  To create a larger economic zone to compete with the large economic zone that is the United States.  Because bigger is better.  At least in terms of GDP.  The British Empire was bigger than the United Kingdom is now.  And the United Kingdom is bigger than a United Kingdom without Scotland.  And an independent Scotland would be smaller than all of the above.  So if you want to maximize GDP you would want to maximize the size of your economy.  Not shrink it.  Which leads one to believe that the reason for independence is something other than economic.  Because the UK is too English?  Perhaps.  Whatever the reason let’s just hope everything works out for the best.  For the United Kingdom did make the world a better place.  With great people like Adam Smith from Scotland.  And John Locke from England.  To name only two of the greats to come from the United Kingdom.


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Britain and Scotland disagree over Scottish Currency in an Independent Scotland

Posted by PITHOCRATES - February 16th, 2014

Week in Review

The Eurozone was a grand idea to make an economic zone that could compete against the United States.  A United States of Europe, if you will.  But the Eurozone has suffered a sovereign debt crisis that was unavoidable.  As many analysts have identified the problem causing the Eurozone all its sovereign debt woes.  The lack of a political union.

The solution they say is for member states to give up some of their sovereignty and allow a Eurozone government have more control.  Like the United States of America has.  Which means putting even stricter controls on member states when it comes to their spending.  Which, in turn, would limit their deficits.  And their borrowing needs.  Which brought on the sovereign debt crisis in the first place.  Excessive spending beyond their ability to pay for with taxes.  Normally not a problem for other countries when another country spends itself into oblivion.  Unless, of course, there is a currency union with that country.  Which makes their problems your problems.  Problems that are impossible to solve without a political union.

The Eurozone sovereign debt crisis illustrates that a currency union without a political union will not work.  Which makes the movement for Scottish independence very interesting (see Britain warns Scotland: Forget the pound if you walk away by Belinda Goldsmith, Reuters, posted 2/13/2014 on Yahoo! News).

Britain warned Scotland on Thursday it would have to give up the pound if Scots voted to end the 307-year-old union with England, declaring the currency could not be divided up “as if it were a CD collection” after a messy divorce…

The message was aimed at undermining the economic case for independence and one of the Scottish National Party’s (SNP) key proposals – that an independent Scotland would keep the pound…

The debate has intensified in recent weeks with Bank of England chief Mark Carney cautioning that a currency union would entail a surrender of some sovereignty…

The SNP [Scottish National Party] has indicated that if London prevented a currency union, an independent Scotland could refuse to take on a share of the UK’s 1.2 trillion pounds ($1.99 trillion) of government debt which Britain has promised to honor…

Osborne said the nationalist threat to walk away from its share of UK debt would mean punitively high interest rates for an independent Scotland and was an “empty threat”.

“In that scenario, international lenders would look at Scotland and see a fledgling country whose only credit history was one gigantic default,” Osborne said.

Currently there is a political union between Scotland and England.  The United Kingdom (UK).  And Scottish independence would go contrary to what some analysts say is needed to save the Eurozone.  Political unity.  The problem in the Eurozone is that no one nation wants to give up any of their sovereignty and have some distant power tell them what they can and cannot do.  The way some in Scotland feel about London.  That distant power that governs the United Kingdom.

The British pound is one of the world’s strongest currencies.  A product of the powers in London.  Because they have political control across the UK.  If they lose their political control over Scotland will it damage the British pound?  If the Eurozone is any measure of a currency union without a political union, yes.  So it will be interesting to see what happens between these two great nations.  Whose people made the world a better place.  People like the great Scotsman Adam Smith.  And the great Englishman John Locke.  To name just two.  So whatever happens let’s hope it’s in the best interest of both countries.  For countries everywhere enjoying economic freedom and human rights can thank these two countries for their contributions to the British Empire.  Which helped spread the best of Western Civilization around the world from the United States to Canada to Australia to Hong Kong.  And beyond.


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Green Energy Policies raise the Cost of Heating this Winter in the UK

Posted by PITHOCRATES - October 19th, 2013

Week in Review

You can either fight ‘manmade’ global warming or you can have low energy prices.  But you can’t have both (see British Gas to raise prices by 9.2% posted 10/17/2013 on BBC News Business).

British Gas is to increase prices for domestic customers, with a dual-fuel bill going up by 9.2% from 23 November.

The increase, which will affect nearly eight million households in the UK, includes an 8.4% rise in gas prices and a 10.4% increase in electricity prices.

The company said it “understands the frustration” of prices rising faster than incomes. The average annual household bill will go up by £123 [$198.89]…

The company said that the cost of buying energy on the global markets, delivering gas and electricity to customers’ homes, and the government’s “green” levies, were all factors in the decision to put up prices.

With a focus on renewables we bring fewer fossil fuels to market.  Coal, oil and natural gas.  And with the war against clean nuclear power we’re shutting down our reactors.  So instead we focus on the more costly wind and solar power.  Because it takes a lot more costly infrastructure to capture the ‘free’ energy from the sun and the wind.  So much that the taxpayer has to subsidize them.  To bring us that ‘free’ energy.  When the sun is shining and the wind is blowing, that is.  Which brings us to that costly distribution system.

People can put solar arrays on their home to use that ‘free’ solar power during sunny days.  But what about cloudy days?  And night?  Wind farms can generate ‘free’ wind power when the winds are blowing right.  But what about when they are not blowing right?  Either too fast?  Too slow?  Or not at all?  What then?  Fossil fuels.  That’s what.

Baseload power (typically coal that takes hours to bring on line) is a funny thing.  To be cost effective power plants run at full capacity 24/7.  When demand rises they can bring on some ‘peaker’ units (typically gas that are quick to bring on line) to add additional capacity.  So power companies have to maintain baseload power even if the people aren’t buying any to be available when solar and wind aren’t.  And if all the homes disconnected from the grid and ran on solar power during the day the power companies would still have to keep them physically connected to the grid.  So these homes can use their power at night.

This is why energy prices are rising.  Revenue at power companies are falling due to that ‘free’ wind and solar power while their expenses are not.  And because they are selling to fewer customers they have to charge them more to cover their expenses.

Affordable energy for the people lies with fossil fuels.  Not renewables.  Governments have to choose.  All the people.  Or their liberal base.  Less costly power from fossil fuels.  Or more costly power from renewables.  It’s that easy.  For you can fight ‘manmade’ global warming or you can have low energy prices.  You just can’t have both.


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More Doctors are Leaving Britain’s National Health Service for Better Jobs Elsewhere

Posted by PITHOCRATES - August 10th, 2013

Week in Review

According to BBC Radio 4 doctors in the National Health Service (NHS) are fed up with being blamed for all the woes in the NHS (see UK doctors ‘flee NHS for overseas’ says RCGP posted 8/7/2013 on BBC News health).

A constant barrage of negative headlines about the NHS is leading to a growing number of doctors fleeing Britain to practice abroad, according to the Royal College of General Practitioners.

Britain’s aging population is placing great strains on the NHS.  Health care spending is rising as people live longer into retirement while a smaller population enters the workforce to pay for them.  Leading to a doctor shortage.  Rationing of care.  And a lowering of the level of quality as fewer resources must cover more people.

According to this report everyone is blaming greedy doctors who don’t want to do their fair share of work.  This while the doctor shortage is so bad that about a third of the doctors in the NHS are immigrants.  And the British government is investing in more doctors to cope with the increasing pressures of these doctor shortages in the face of that aging population.  But there is no sympathy for doctors.  People say that they paid to educate and train them so it’s their duty to stay in the UK and look out after them.

So this is life under national health care.  Overworked doctors.  About a third of which will be immigrants.  As the treatment of doctors discourages others from entering the profession.  Creating a doctor shortage filled by immigrants.  And a general attitude among the people that because they pay for these doctors with their taxes that makes these doctors their bitch.

They also say these doctors are paid well.  Who earn around $150,000 (in U.S. dollars).  Which is a lot of money.  Yet there is a doctor shortage because more people aren’t leaping at the opportunity to earn those big bucks, too.  Why?  Because it’s too damn hard.  That’s why we pay doctors a lot of money.  It’s about the only way to encourage them to enter the profession.  To learn a very difficult field.  Put in more hours than most.  All while being blamed for all the woes in the NHS.

And they wonder why UK doctors want to leave the NHS?


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Long Wait Times for Doctor Appointments in UK sends People to the Emergency Rooms Instead

Posted by PITHOCRATES - May 25th, 2013

Week in Review

If you go to some American emergency rooms you could wait to see a doctor for hours.  Unless you’re close to death.  If so then you get to go to the front of the line.  While the less lucky who aren’t as close to death have to wait.  Two, three sometimes even four hours in some cases.  Because that’s how backed up an American emergency room can be.  Why?  Because we don’t have national health care.  And not everyone can afford health insurance.  Something Obamacare was going to fix.  By providing health care to everyone.  So the uninsured no longer back up our emergency rooms.  Just like in other countries with national health care.  Such as Britain (see Can no one force GPs to do their job properly? by Sandra Parsons posted 5/22/2013 on the Daily Mail).

Last week, a friend, a senior doctor in a busy A&E, found herself dealing with a young woman suffering from a urinary tract infection.

While this was undoubtedly painful and potentially dangerous, it was neither an accident nor an emergency.

So why, my harassed doctor friend asked her, hadn’t she gone to see her GP instead?

The patient replied she’d dialled the number over and over again without getting through and, in the end, she went to the surgery to ask for an appointment. The earliest slot, she was told, was ten days’ time. It was at that point she’d gone to A&E instead.

She tried to make an appointment with her doctor but she couldn’t get someone to answer the phone to make an appointment for her.  So she went there in person.  And they basically said, “Okay, I see you’re in terrible pain.  We should take a look at you as soon as possible.  I’ll pencil you in for a rush appointment.  So go home, get some rest and we’ll see you sometime after two weeks to take care of your unbearable pain.  Just hope it doesn’t go septic before then.  NEXT!”

This is national health care.  As done by Britain’s esteemed National Health Service (NHS).  The same NHS they poured accolades all over in the opening ceremonies of the 2012 Olympic Games.  That one.  The treasure of the United Kingdom.  What the left says we should have here.  And it is their fervent hope that Obamacare will evolve into something very much like the NHS.  Because they say that will make health care better.  And keep people from using the emergency rooms for routine medical care because they don’t have health insurance.  Only it’s not working in Britain.  Where people are still going to the emergency room (A/E in Britain) for routine medical care.

An aberration? Far from it: this woman is one of tens of thousands who are turning up at the doors of A&E because they can’t get an appointment with their doctors. The costs involved are huge…

So emergency doctors — highly trained professionals who know how to save your life when you’re having a heart attack or have been in a horrific road accident — find themselves treating minor cuts and chest infections…

Tomorrow, Health Secretary Jeremy Hunt is due to make a speech criticising GPs for failures that include not knowing their patients’ names and hiving off out-of-hours care to outside agencies. He will also highlight the fact that admissions at A&E departments have soared as a result.

Quite rightly, he lays the blame for this on the changes Labour made to GP contracts nine years ago, which allowed GPs to opt out of night calls and rewarded them for complying with targets rather than for treating patients as individuals…

So it’s hardly surprising patients all over the country have decided they’ve had enough and are bypassing their GPs in favour of their local A&E

What he should be telling us is what action he is taking to ensure that all GPs start doing their jobs properly.

That means making night and weekend calls, the way they used to. It means ensuring that we can all make an appointment for tomorrow or the next day — not next week — or turn up and wait if we’re seriously worried. (Yes, I know a few sterling surgeries do operate like this — but too many don’t.)

It also means that when we walk through the surgery door we should not feel we’re an unwelcome interruption in the surgery’s busy day, but that we’ll be listened to and taken seriously.

The most junior A&E doctor seems to be able to achieve this on a fraction of GPs’ generous pay and with far less sleep. Why can’t GPs?

Not knowing their patients’ names?  Working banking hours?  Say what you want about the American health care system before Obamacare at least our doctors knew our names.  And worked in walk-in emergency clinics after hours.  They weren’t quite an emergency room.  But if you had the flu they could do everything for you short of hospitalization.  Including writing a prescription for you that you could pick up at any number of 24-hour pharmacies.  This was the ‘broken system’ that was in crisis that the left said we had to fix with Obamacare.  So we can have something more like the NHS.  Which sounds worse than the broken system we supposedly had.

Note the comment about their generous pay.  This kind of talk must send shivers down the spines of American doctors.  For as the government takes more control of health care and begins to rein in those high health care costs guess how they’re going to do that?  Cutting that generous pay of doctors.  Because no one should be profiting on the sickness of others.  No.  Under Obamacare doctors should answer to a higher calling.  To serve his fellow man.  Not for the money but for the satisfaction of a job well done.  Yeah, that’ll encourage high school graduates everywhere to go into great debt and work a 90 hour week so they, too, can serve their fellow man.

Americans can’t even graduate enough people with math and science degrees.  So American corporation have to rely on foreigners to fill some high-paying high-tech positions.  Are they going to do the same with our medical care because fewer American students will want to go through that Hell just to earn the wages of a UAW assembly line worker?  When it’s a lot easier and less costly to be a UAW assembly line worker?

Could this be the problem they’re having in the NHS?  That they’re not paying their doctors enough to encourage others to enter the profession leading to a shortage of doctors?  Forcing people to the emergency room because they just don’t have enough doctors to see patients in the doctor’s office?  You hear all the time about how we have to pay our federal employees fat salaries and give them generous benefit packages to compete with jobs in the private sector (though few jobs in the private sector enjoy the pay and benefit packages a federal job offers).  But if a doctor makes that kind of money something is wrong with that.  Because no one should profit on the sickness of others.  But a federal worker with a far easier job paid with tax dollars?  They have no problem with these people earning what a doctor earns.  Or at least what a doctor once earned.  Before Obamacare.

Once the government starts paying doctors there will be a push to unionize them.  And then everything will change.  Then the government will want to pay them more.  Cut their working hours.  Hire more doctors.  All of which will require massive new taxes.  While giving an expanding government a powerful new ally.  And a huge source of new political donations.  As they’ll collect a piece of the union dues the newly unionized doctors will pay.  And America will never be the same again.  If you worried about the IRS targeting conservatives just imagine the special treatment conservatives will get in a health care system controlled by liberal Democrats.  Of course, a non-partisan health care system would never base a treatment decision on one’s politics.  Just because the government used the IRS to target conservatives doesn’t mean they will use a national health care system to do the same.

When President Reagan was shot he joked while being wheeled into the operating room, “I hope you guys are Republicans.”  The joke broke the tension and the doctors laughed.  Then one said, “Mr. President, today we are all Republicans.”  They then went about saving the president’s life.  In the future it might be wise to ask instead, “Gee, I sure hope you guys are all Democrats.”  Just to be safe.


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The Quality of your Health Care in the NHS Depends on Where you Live

Posted by PITHOCRATES - May 12th, 2013

Week in Review

Obamacare was about providing affordable health care to everyone.  Not just to those who could afford it.  So the quality of your health care does not depend on the size of your paycheck.  Or the size of your trust.  A noble goal.  But will it work?  The odds are not good.  For the UK has the National Health Service (NHS).  Where the NHS just doesn’t make health care affordable.  It gives it away to each and every citizen.  But even the NHS can’t ensure the quality of everyone’s health care does not depend on the size of their paycheck.  Or the size of their trust (see Asthma hospital admission rates vary ‘alarmingly’ posted 5/6/2013 on BBC News Health).

There are “alarming variations” in the number of people with asthma admitted to hospital in an emergency, depending on where they live, says Asthma UK…

The figures, from the NHS Atlas of Variation: Respiratory Disease, show that the highest rate of adult emergency hospital admissions for the disease in England – 193 per 100,000 of population – was found in the London borough of Newham.

That rate was over six times higher than in Bromley, in London, at 30 per 100,000 people.

In children, aged up to 17 years, the disparity between a rate of 732.6 in Liverpool and 38.7 in Tower Hamlets was even greater…

“Quality of asthma care is of paramount importance – we estimate that 75% of hospital admissions could be prevented with the right care and management.

And to put this more into human terms.

Shannon Batt-Hilliard was diagnosed with asthma when she was a young child, living in Kent.

When she was five, the family moved to Northampton – and that’s when her mother Glynnis realised how sub-standard her daughter’s care had been.

“The difference was unbelievable. Until that point Shannon had never been given an inhaler and we’d received no care or support following her asthma attacks.

“Once we were in Northampton, she was put on nebulisers, given an inhaler and referred to an asthma nurse.

“The doctors were far more attentive and were keen to help improve and manage her asthma.

“For us as a family, relocating was the best thing we could have done health wise.”

Not exactly what one would expect under a national health service.  One would expect they would have what the Democrats in the United States say Obamacare will deliver.  The same quality of health care no matter one’s economic station.  But it’s not the case in the UK.  For the NHS can NOT deliver the same quality of health care to all its citizens.  Clearly if you live in a better part of town you get a better quality of health care.  The way it was in the U.S. before Obamacare.  And based on the experience of the NHS, the way it will be under Obamacare.  Only we’ll be paying more to get the same level of health care we once got.  That is if we’re lucky enough to keep the same level of quality we once had.


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The Problems in the Eurozone may Influence Scottish Voters in their Independence Referendum

Posted by PITHOCRATES - April 27th, 2013

Week in Review

During the Roaring Twenties the American economy was giving the economies of Europe a run for their money.  The Europeans, accustomed to running the world for so long, looked at the economic prowess of America with concern.  And began to talk about a United States of Europe to compete with the economic juggernaut across the pond.  But when Calvin Coolidge chose not to run for a second term the progressives got back into power.  And Herbert Hoover put an end to that surging economy.  Causing a stock market crash.  And throwing the country into recession.  Which FDR turned into the Great Depression.

So there was no United States of Europe.  But there would be a European Union one day.  And after that, a currency union.  The Eurozone.  To compete against the economic prowess of the United States.  But a currency union without a political union.  Without a single fiscal and monetary policy to support that currency union.  Which turned out to be a problem.  For without that political union the currency union was only as strong as its weakest state.  In the Eurozone that state was Greece.  Whose unrestrained government spending caused a debt crisis that threatened to bring down the entire Eurozone.  Unless the other members stepped in to bail out Greece.  Which they have.  But the crisis hasn’t gone away.  For the central governing authorities can only ask Greece to cut their spending.  Which there is a lot of opposition to in Greece.  Putting a lot of pressure on the Euro.

Greece isn’t the only problem.  There was Ireland.  Spain.  Portugal.  And Cyprus.  All sovereign nations.  Sharing a common currency.  Making it all but impossible to maintain a uniform fiscal policy throughout the Eurozone.  Like they can in the United States.  Because the United States of America is a political union.  With one central government.  One central fiscal authority.  And one central monetary authority.  Making it hard for any one state to undermine the currency.  (Though California is making a valiant effort.)  Which is the problem they’re having in the Eurozone.  Many of the states are threatening to undermine the common currency.  Making a very strong case against future currency unions without a political union.  Which is something they are considering with an upcoming referendum on Scottish independence (see UK says “no clear reason” to let independent Scotland use the pound by David Milliken posted 4/23/2013 on Reuters UK).

The euro zone’s experience of countries sharing a currency but not a government shows there is no clear case for an independent Scotland to use the pound, the Treasury said on Tuesday.

The nation of 5 million will hold a referendum on September 18 next year to decide whether to split from the United Kingdom, at the instigation of the Scottish National Party that runs the country’s devolved government.

Pro-independence campaigners want Scotland to keep sterling, at least in the early years of independence, and then to decide later whether to switch to its own currency.

But in a report on Tuesday, the Treasury said there was no clear case for the United Kingdom to agree to a formal currency union with an independent Scotland, which would have an economy of a similar size to New Zealand’s…

“The recent experience of the euro area has shown that it is extremely challenging to sustain a successful formal currency union without close fiscal integration and common arrangements for the resolution of banking sector difficulties,” it added.

Scotland and England have a long history.  Not all of it good.  But if we’ve learned anything from history it is that large economic blocs do better than smaller counties.  As the United States demonstrated.  And as the Eurozone tried to duplicate with their currency union.  But as that experiment showed us a currency union without a political union is a recipe for disaster.  If Scotland breaks from the United Kingdom they will have to go all of the way.  And leave sterling.  Which will make independence more difficult.  Having to set up a new currency with everything else they will have to do.  (Such as dealing with separating their military forces from the UK’s.  And providing for their own defense.  Or forming a military union with the UK.  Which will tie them closely to the UK.  Something many Scots no doubt will consider before voting in the referendum.)

Of course if they do and they devalue their new currency it would make their exports cheaper to those nations with a stronger currency.  But that weak currency will make anything they import more expensive.  As Scotland exports and imports a lot of stuff they won’t get a clear advantage in devaluing their new currency.  So they may peg their new currency to sterling.  The next best thing to keeping sterling.  Which will tie them closely to the UK.  Something many Scots no doubt will consider before voting in the referendum.  Perhaps choosing to stay in the UK.  As Quebec chose to stay in Canada in their past referendum.  Who had less in common with the rest of Canada than the Scots have with the UK.  For they don’t even speak the same language.

They could join the Eurozone.  But recent events in the Eurozone does not make that option as appealing as setting up a new currency.  Or staying a part of the UK.  It would probably be best for the rest of the world if Scotland remained part of the UK.  For the world will need at least one strong reserve currency.  As the Euro is making itself less attractive by the day.  The U.S. dollar may hit the wall soon with the amount of debt the Americans are racking up.  And the Chinese are likely to go the way of Japan before the decade is out.  And have their own Lost Decade with all their malinvestments.  The ultimate cause in the fall of state-capitalism.

Now the UK has its problems.  But their decision to stay out of the Eurozone was clearly sound as a pound.  And pound sterling may grow even more attractive as a reserve currency as these other countries continue to rely on easy credit and debt to pay for their burgeoning welfare states.  And/or their malinvestments.  But one thing the UK is doing that none of these other bloated states are doing is making real cuts in spending.  Even in their venerated NHS.  Giving the UK the edge in responsible governing these days.  And really making a strong argument against Scottish independence at this time.  Even for those who hate England.  For it is better to deal with the devil you know than the devil you don’t.  Especially during uncertain times.


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The US without Obamacare is in the same Financial Mess as the UK who already has the NHS

Posted by PITHOCRATES - March 17th, 2013

Week in Review

The British Empire ruled the world for a century or more.  And they did that with representative government.  Capitalism.  And free trade.  Making the empire very wealthy.  And strong.  Allowing it to rule the world.  The devastating costs of World War I pretty much put an end to that.  And after World War II they nationalized health care.  With the NHS.  And some industries.  Becoming a social democracy.  Like much of Europe.  Labor strikes and power outages were so common in the Seventies they called it the British disease.  It was difficult to see the greatness that was once the British Empire.  The great nation that modernized the world.  Farming advances.  Representative government.  The Industrial Revolution.  Capitalism.  The things that built the great nations of the world today.  Things you didn’t think about when you looked at Britain in the Seventies.  Lady Thatcher brought some of that greatness back.  Improved the economic well-being of the nation.  But it didn’t last (see Osborne must make tax open and honest by Matt Sinclair posted 3/17/2013 on The Telegraph).

The Government is still spending nearly half of our national income. No country has ever financed that except by imposing punishing taxes on families making quite ordinary incomes. The alternative of making the numbers balance by taxing the “one per cent” just isn’t grounded in reality. First, there aren’t enough of them. Second, they won’t sit around like obedient little cash cows, and placidly continue to invest in this country, as we confiscate their incomes or levy swingeing property taxes on their homes.

Then there is the longer-term problem of demographics. Everyone is worrying about economic growth in the next quarter. But as the population continues to get older, none of our leaders seems to be asking how we are going to pay for the big NHS and pensions bills that are likely over the next quarter of a century.

Public spending has already reached its limits: our levels (at 49 per cent of GDP in 2012, according to the OECD) are higher than those in Germany, and could soon eclipse those of Sweden. The extra pressure caused by an ageing population means the existing system is unaffordable.

Sounds familiar.  Currently total government spending in the U.S. at all levels of government is approximately 40%.  Government at every level is trying to raise taxes. Even on those making ordinary incomes.  The government talks about making those who can afford to pay more (the 1%) should pay more.  But there aren’t enough of them.  Even if you take everything they earn.  We have an aging population, too.  And we have a system that is unaffordable as well.  There is really only one difference between the UK and the US.  The UK has national health care.  They have the NHS.  While the US is working towards a national health care.  Starting with Obamacare.  Which means things will get far, far worse in the US.  Far worse than they are in the UK.  Especially with the US having five times the population the UK has.


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Scottish Woman with Swine Flu airlifted to an English Hospital 250 Miles Away

Posted by PITHOCRATES - February 24th, 2013

Week in Review

The UK’s National Health Service (NHS) has been suffering from the costs of an aging population.  People are living longer into retirement thanks to extensive medical care.  While fewer people are entering the workforce to pay the taxes that pay for that extensive medical care.  Resulting in longer wait times.  Shortages of doctors and nurses.  Rationing.  And the closing of hospitals.  Or transferring specialties to centrally located hospitals to achieve some economies of scale (see Scottish flu victim airlifted to Leicester hospital posted 2/24/2013 on BBC News South Scotland).

A Scottish woman is in intensive care at a specialist hospital in Leicester after contracting a suspected form of swine flu.

Jennifer Scott was transferred by helicopter from Dumfries and Galloway Royal Infirmary after she was diagnosed with a serious “flu-type illness”…

A spokeswoman for University Hospitals of Leicester NHS Trust said the patient had been flown to Glenfield as it was one of a limited number of hospitals in the UK that had specialist equipment required for her case.

Note that they transferred this Scottish woman to an English hospital.  Where one of the limited hospitals with specialist equipment was located.  But this wasn’t just a stone’s throw over Hadrian’s Wall.  Dumfries, Scotland, and Leicester, England, are about 250 miles apart.  Boston and New York City are just a little closer to each other.  Can you imagine a patient coming down with swine flu in Boston having to be airlifted to New York City?  To a hospital with the appropriate specialist equipment?  Of course not.  But, then again, you haven’t lived under the fully implemented Obamacare yet.

There’s a reason why they had to airlift this woman some 250 miles.  The cost of national health care just doesn’t permit building hospitals like Glenfield Hospital in all of their cities.  The U.S. has an aging population, too.  And will follow the NHS example to cut costs under Obamacare.  Where there will be an ongoing effort to do more with less.  Which will lead to moving specialties to fewer hospitals.  For what is a few hours of travel compared to the cost savings?


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Bad Health Care in Obamacare will be as Inevitable as it is in the NHS

Posted by PITHOCRATES - December 29th, 2012

Week in Review

As Obamacare kicks off in January what can we expect from the greatest overhaul of the American health care system?  A step towards national health care?  Well, the best way to understand what’s in store for us is to look at a populous nation with national health care.  The UK.  Which has only 1/5 the population the US has.  Where bad health care in their National Health Service (NHS) is, to quote someone from the UK, inevitable (see Bad care is inevitable in the NHS by Harry Mount posted 12/24/2012 on The Telegraph).

… the appalling neglect of 38 patients at the Alexandra Hospital in Redditch is the logical result of the NHS’s untenable management structure.

Imagine if everything at Tesco’s [a British grocery and general merchandise retail store like Wal-Mart in Europe, Asia and North America] was free but rationed, and subject to delivery delays of several months. Then throw in the fact that there are no other free alternatives. You would have a nightmare on your hands – huge queues, attracted by the free goods, then further stretched by the long delays.

Imagine how the staff would then behave – harrassed by the limitless demand of customers, but also in a tyrannical position of monopoly power, because there is no alternative provider. They can be as rude as they like, knowing that the customer has nowhere else to go; knowing that, without their services – food in the Tesco’s case, life-saving healthcare in the case of NHS – you will die.

On top of all this, imagine that the government ran Tesco’s, with absolutely no previous skill or experience in running supermarkets.

This is not to say that the people in the NHS are bad.  It’s just that when you put good people in bad situations they tend to lose their empathy.  Because they are forced to deal with the shortages and rationing on a daily basis.  And are powerless to do anything about it.  For this is national health care.  Trying to do more with less.  The costs of caring for their aging baby boomers are overwhelming the NHS.  As the baby boomers have left the workforce and no longer pay income taxes.  And who are now consuming the lion’s share of their limited health care resources.  Less revenue.  And more costs.  A recipe for disaster.

This is the future of American health care.  Only with 5 times the population the shortages and rationing will be 5 times worse.  And if we ask someone who knows a thing or two about national health care what they think Obamacare will be like we can guess their answer.  Bad health care in Obamacare will be inevitable.  For if the British can’t negotiate the aging population problem at a 1/5 scale what chance do the Americans have at trying their struggling system at full scale?  It’s a recipe for disaster.  Heavy on the disaster.


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