The Redistribution of Wealth in Obamacare

Posted by PITHOCRATES - December 30th, 2013

Economics 101

“Wait a tic.  Blimey, this redistribution of wealth is trickier than I thought.”

Monty Python is a British comedy troupe.  Starting off with a television show in 1969.  And ending their run together with a movie in 1983.  With some other stuff along the way.  They became about the biggest stars ever in comedy.  They redefined comedy.  And have influenced some of the biggest names that followed them.  Part of the reason why Monty Python is so funny is that they are so serious when being silly.  And they are very well educated.   With some members having degrees from Oxford and Cambridge.   Which helps make their humor different.  Such as their take on Robin Hood with a character they called Dennis Moore.

Dennis Moore, Dennis Moore
Galloping through the sward
Dennis Moore, Dennis Moore
And his horse Concorde
He steals from the rich
And gives to the poor
Mr. Moore, Mr. Moore, Mr. Moore

This is the opening verse of a song in the sketch Dennis Moore.  The character steals from the rich who have more than they need.  And gives it to the poor who don’t have enough.  A classic example of redistribution of wealth.  Something the American left is all about.  Being Dennis Moore.  Or Robin Hood.  But in the sketch Dennis Moore takes it to the extreme.  Stealing so much from those who were originally rich that they have nothing left but their underclothes.  While those who were originally poor have everything the rich had.  And the formerly poor (now rich) get ever more demanding of Mr. Moore for better stuff.  As he rides off to please these formerly poor (now rich) we hear the following verse.

Dennis Moore, Dennis Moore
Riding through the land
Dennis Moore, Dennis Moore
Without a merry band
He steals from the poor
And gives to the rich
Stupid bitch

Dennis Moore halts his horse.  And asks the chorus to repeat themselves.  To make sure he heard what he thought he heard.  They do.  Mr. Moore then says, “Wait a tic.  Blimey, this redistribution of wealth is trickier than I thought.”  As he discovers some of the inherent flaws in the redistribution of wealth concept.  Excessive redistribution can take large sums of money away from some.  Which doesn’t help them.  It only punishes them.  And if you’re okay with punishing the rich to help the poor note what happens to the poor when they get the rich’s money.  They become exactly like them.

Buying Votes to Win Elections works as long as you Tax the Few to Spend on the Many

This sketch is funny.  Because it’s true.  You’ve heard the expression “beggars can’t be choosey?”  Well, when it comes to the redistribution of wealth, they can.  And are.  Choosey.  They can become very demanding.  And the more they get the more they want.  And the more like the people they hate and envy—the wealthy—they get.  Mr. Moore learned that.  Where the poor he was trying to help with a hand-up didn’t use it for a hand-up.  They just used the rich’s wealth to enjoy the good life without working and earning it over time.

People may look down on those born into money but that’s only because they weren’t.  This is why poor people buy lottery tickets.  To get rich quick.  Because they don’t want to wait to have money.  They’d like to have it when they’re young.  And not wait until they’re old.  After working 20 years or so.  Which is why selling the idea of wealth redistribution is so easy.  And helps politicians win elections.  Because there are more poor people than rich people.

President Obama said those who could afford it should pay a little more.  Taxes.  To balance the playing field.  To offer a ‘hand-up’ to the poor.  This is the message of the Democrats.  Tax and spend.  Tax the rich.  And give it to the poor.  And the young.  Such as free birth control, tuition assistance, Obamacare subsidies, etc.  Things they tax the rich for.  To get the poor to vote Democrat.  It’s a working formula.  Buying votes.  As long as you tax the few to spend on the many.  Because you need the many to win elections.

Obamacare won’t Work because the Welfare flows in the Wrong Direction

The welfare state taxes the few/rich/old to spend on the many/poor/young.  Which is why it worked.  You angered a smaller group of people than you pleased.  And if you can keep doing that you can keep winning elections.  As long as you keep playing Dennis Moore.  Without being a stupid bitch.  Which the Democrats did well.  Until Obamacare.  The Affordable Care Act.

Obamacare will fail because unlike other welfare programs Obamacare is unique.  For it does not tax the few/rich/old.  It actually taxes the many/poor/young.  To pay for the health care of those who have more money than they do.  The old and sick.  Leaving the young and healthy with less money to start their families.  As they help the old and sick who already had their families.  And something just isn’t right with this picture.  The old and sick are fine with it.  While the young and healthy are calling someone ‘stupid bitch’.  Figuratively, of course.

Young people don’t have a problem with tax and spend.  As long as they are the recipients of those welfare transfers.  So they vote Democrat.  And they also vote Democrat because they are the opposite of their parents.  Who never tell them they can’t do this or that.  But, instead, tell them they should do whatever they feel like doing.  Which they like.  A lot.  But the Affordable Care Act is a whole different animal.  Where Democrats are being like parents.  Telling the young Democrat voters that they can’t do everything they want to do.  Because they’re forcing them to buy something they don’t want.  Which isn’t their parents’ welfare program.  From the few/rich/old to the many/poor/young.  But more of a welfare program for their parents.  Making it more difficult for the young Democrat voters to embrace Obamacare.  Which is why they aren’t.  And why the math won’t work for Obamacare.  Because the welfare flows in the wrong direction.

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FT102: “Unlike welfare benefits health care costs are transferred to the young, not the rich.” -Old Pithy

Posted by PITHOCRATES - January 27th, 2012

Fundamental Truth

An Undereducated and Inexperienced Electorate benefits Democrats

Tax and spend liberals tax the rich to help the poor.  Something the rich don’t completely object to.  For many rich people are in favor of a safety net for those falling on hard economic times.  The rich just object to the growing welfare state.  Where the governments take ever larger sums of money out of the private economy to spend for political purposes.  To buy votes.

A lot of these feel-good welfare programs appeal to the young.  Who don’t understand policy.  Economics.  Or the effect of high taxes on the economy.  They don’t know.  Because no one taught them.  Their public school education has, instead, taught them about the perils of global warming.  And the evils of capitalism.  Which makes them staunch Democrat voters.  Until they start earning a living.  And begin raising a family.  When a lot of them become Republicans.  Which is why Democrats characterize the Republican Party as nothing but a bunch of old rich people who hate poor people.  Which they’re not.  They’ve just grown up.  And now understand things economic.

That’s why the Democrats need this youth vote.  And even floated the idea of lowering the voting age to 16.  Interesting considering the legal drinking age is 21 in most states.  Which begs the question if they are too irresponsible to drink until they reach the age of 21 why would anyone think they’re responsible enough to vote at 18 let alone 16?  But clearly an undereducated and inexperienced electorate benefits Democrats.  Who will vote for them without any idea of the consequence of their policies.

Obamacare will Require the 97% of Young People who don’t Consume Health Care Benefits to Pay for those who Do

The young support Obamacare.  And national health care.  Because they don’t understand health care.  Or the fact that more than 40% of all patients in the health care system are age 65 or older.  While they, those age 18-29, make up just 3% of all patients.

This is different from all other welfare programs.  Where we tax the rich to help the poor.  Many of the rich also happen to be age 65 or more.  So we’re basically taxing rich old people to help the poor.  Now note the difference with health care.  We’re not ‘taxing’ rich old people to help sick people.  We’re ‘taxing’ young healthy people to pay for sick old people.  And the vast majority of the young are not rich.  They are just at the beginning of their careers.  But they are healthy.  Which brings us to a very critical point in the health care debate.  Healthy people don’t see the doctor.  Because they don’t need to.  Which makes many of these young people choose not to buy health insurance.  Because they don’t need to.  Not when only 3% of them are consuming health care services.  Which is why health insurance is so expensive.  The only people who want to buy it are the biggest consumers of health care services.  That would be like people buying auto insurance only after their car was stolen.  Which doesn’t spread the risk over many policies for a small fee.  It doesn’t spread the risk at all.  And the cost of one insurance policy must approach the cost to replace a stolen car.  Which is not insurance in any sense of the word.

Obamacare includes an individual mandate to purchase health insurance.  Which means the 97% of young people who don’t consume any health care benefits will pay for those who do.  Including the more than 40% age 65 and older.  Which makes it the only government program to transfer costs to those who can least afford them.  Those just starting their careers.  Those age 18-29.

The Youth will Understand Obamacare Forcing them to Buy an Expensive Insurance Policy

The Democrats usually can count on the youth vote.  Because they are undereducated and inexperienced.  And vote for their policies without understanding the consequences of these policies.  But they will understand Obamacare forcing them to buy an expensive insurance policy.  Especially if they have to give up using their smartphone to pay for it.  Which will educate and experience them fast.  Making them responsible grownups.  And Republicans sooner rather than later.

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