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Why Is The Cost Of Living So Unaffordable?

Discussion in 'Topical Discussions (In Depth)' started by Scorpio, Mar 9, 2017.



  1. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    Why Is The Cost Of Living So Unaffordable?
    Charles Hugh-Smith

    [​IMG]


    Strip away the centralized power that protects and funds cartels, and prices would plummet.

    The mainstream narrative is "the problem is low wages." Actually, the problem is the soaring cost of living. If essentials such as healthcare, housing, higher education and government services were as cheap as they once were, a wage of $10 or $12 an hour would be more than enough to maintain a decent everyday life.

    Here are some examples from the real world. In 1952, it cost $30 to have a baby in an excellent hospital. If we adjust that by official inflation as measured by the Bureau of Labor Statistic's inflation calculator to 2017, the cost would be $275. ($1 in 1952 = $9.16 in 2017).

    What does it cost to have a baby delivered in a hospital today? $5,000? $10,000? Who even knows, given the convoluted billing process in today's sickcare system?

    The pharmaceutical cartel jacks up medication costs per dose from $3 tp $600, even when the medication has been around for decades: the Pinworm prescription jumps from $3 to up to $600 a pill Parents, doctors angry over drug price gouging (via John F.)

    My father paid 1.8% of his wages for "hospital group insurance" in the early 1950s (for a household of four kids and two adults.) For someone earning $1,000 a week, the equivalent today would be $72 a month out of a monthly gross income of $4,000.

    My spouse and I pay $1330 a month for barebones healthcare insurance in today's sickcare system. Factor out subsidies paid by the employer or state, and minimal healthcare insurance costs tens of thousands of dollars per household annually.

    Here's a chart that illustrates the breathtaking rise in healthcare costs. Wages are the nearly flat line:

    [​IMG]

    In the early to mid-1970s, my university tuition was $89.25 per semester (the University of Hawaii was a two-semester system), and student fees were $27 a semester, for a grand total of $232.50 per year. Books added another $170 per year, for a total cost of $400 to $450 for a university education.

    $1 in 1975 = $5.51 today, so if tuition, fees and books had gone up along with official inflation, it would now cost $1,800 to $2,000 to attend a large state university annually--including tuition, fees and books.

    An entire 4-year university education would cost $8,000. Instead, students now borrow $50,000 and up just to attend state university.

    [​IMG]

    I've covered the skyrocketing cost basis of everyday life for a decade:

    Lowering the Cost Structure of the U.S. Economy (August 29, 2008)

    My recent exploration of soaring costs for everyday items, The Burrito Index: Consumer Prices Have Soared 160% Since 2001 (August 1, 2016), received quite a bit of interest, along with the companion piece on the source of much of the higher costs: Inflation Hidden in Plain Sight (August 2, 2016) Can we be honest and say that many of the reductions in value, quantity and quality are actually instances of fraud?

    No Wrongdoing Here, Just 6,300 Corporate Fines and Settlements (May 2015)

    Here's a snapshot of urban rents. Recall that wages for the bottom 90% have been flatlined for decades.

    [​IMG]

    Apologists claim these services have improved greatly in the past 30, 40 and 50 years, but this is only occasionally valid; university education, housing, burritos and conventional preventative care have often declined in quality and quantity, not gotten better.

    Other apologists claim that Baumol's Cost Disease explains all these tremendous increases in price; while this may be a factor in some price increases, it is more an excuse than an explanation.

    Here's what's going on: cartels that have government backing can jack up prices at will, year after year, decade after decade, while wages have stagnated. Cartels have zero pressure to raise wages, while their immense profits fund vast propaganda/public-relations machines that translate into equally vast political influence.

    [​IMG]

    Have you ever seen a non-profit foundation or a politico that didn't support "more funding for healthcare and higher education"? Of course not. The healthcare, defense industry, Federal Reserve/banking sector and higher education cartels are all entrenched and self-serving.

    The cartels have unlimited power to raise their prices, while the average wage-earner has essentially zero power to create non-cartel alternatives or influence central-state/central bank support of rapacious, parasitic cartels.

    The "consumer" is supposed to have power, but that power only exists in an environment that enables level playing fields and transparent competition. Cartels buy political influence so the central state protects their pricing power and funds their rentier skims.

    Strip away the centralized power that protects and funds cartels, and prices would plummet. I explain how this would work in higher education in my book The Nearly Free University and the Emerging Economy: The Revolution in Higher Education. The same dynamics would radically transform the cost structure of housing, healthcare, defense and everything else currently controlled by monopolies or cartels.





    [​IMG]

    At readers' request, I've prepared a biography. I am not confident this is the right length or has the desired information; the whole project veers uncomfortably close to PR. On the other hand, who wants to read a boring bio? I am reminded of the "Peanuts" comic character Lucy, who once issued this terse biographical summary: "A man was born, he lived, he died." All undoubtedly true, but somewhat lacking in narrative.

    I was raised in southern California as a rootless cosmopolitan: born in Santa Monica, and then towed by an upwardly mobile family to Van Nuys, Tarzana, Los Feliz and San Marino, where the penultimate conclusion of upward mobility, divorce and a shattered family, sent us to Big Bear Lake in the San Bernadino mountains.

    The next iteration of family took us to the island of Lanai in Hawaii, where I was honored to join the outstanding basketball team (as benchwarmer), and where we rode the only Matchless 350 cc motorcycle on the island, and most likely in the state, through the red-dirt pineapple fields to the splendidly isolated rocky coastline. In 1969-70, this was the old planation Hawaii, where we picked pine in summer beneath a sweltering sun.

    We next moved to Honolulu, where I graduated from Punahou School and earned a degree in Comparative Philosophy (i.e. East and West) at the University of Hawaii-Manoa. The family moved back to California and I stayed on, working my way through college apprenticing in the building/remodeling trades.

    I was quite active in the American Friends Service Committee (Quakers) and the People's Party of Hawaii in this era (1970s).

    I next moved to the Big Island of Hawaii, where my partner and I built over fifty custom homes and a 43-unit subdivision, as well as several commercial projects.

    Nearly going broke was all well and good, but I was driven to pursue my dream-career as a writer, so we moved to the San Francisco Bay Area in 1987 where I worked in non-profit education while writing free-lance journalism articles on housing, design and urban planning.

    Within a few years I returned to self-employment, a genteel poverty interrupted by an 18-month gig re-organizing the back office of a quantitative stock market analyst. I learned how to lose money in the market with efficiency and aplomb, lessons I continue to practice when the temptation to battle the Monster Id strikes.

    Somewhere in here my first novel was published by The Permanent Press, but alas it fell still-born from the press--a now monotonous result of writing fiction. (Seven novels and I still can't stop myself.)

    I started the Of Two Minds blog in May 2005 as a side project of self-expression, and in an unpredictable twist of evolutionary incaution, that project has ballooned into a website with about 3,500 pages that has drawn almost 20 million page views.

    The site's primary asset may well be the extensive global network of friends and correspondents I draw upon for intelligence and analysis.

    The blog is #7 in CNBC's top alternative financial sites, and is republished on numerous popular sites such as Zero Hedge, Financial Sense, and David Stockman’s Contra Corner. I am frequently interviewed by alternative media personalities such as Max Keiser, and am a contributing writer on peakprosperity.com.





    charleshughsmith.blogspot.com

    http://www.silverbearcafe.com/private/03.17/unaffordable.html
     
  2. Someone_else

    Someone_else Gold Member Gold Chaser

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    This started out pretty good info, but I decided not to give it approval as I got closer to the end.
     
  3. Area51

    Area51 Silver Miner Seeker

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    The out-of-control healthcare debacle is an American phenomenon.

    It's amazing to see how badly Big Pharma has duped Americans into believing universal health care is evil.

    US government spends more per capita on health care than any other country in the world - - and despite this millions of Americans are bankrupted by medical bills.
     
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  4. GOLDZILLA

    GOLDZILLA Harvurd Koleej Jeenyus Midas Member

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    The powers that be need their debt to be made manageable (cheaper) by devaluing the money. If we are lucky the game for us lasts about 70 years. The governments game goes on for hundreds of years or more. Something that never dies can prepare way better than someone who does. We pay debts that were taken on before we were born and if we reproduce enough, we get to lay our debts on the future unborn and make arbitrary rules for them to follow long after were pushing up daisies. The state will do anything in its power to achieve the following:

    1) Endless ability to spend other peoples money.
    2) Population increase necessary to produce food, weapons, cannon fodder and entertainment for elites.
    3) The unwashed masses kept as poor as possible so they will keep reporting to their jobs.

    I'm sure there are more if anyone feels like adding.
     
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  5. GOLDZILLA

    GOLDZILLA Harvurd Koleej Jeenyus Midas Member

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    This is one way to keep people poor in perpetuity. In socialized healthcare the weekly docking of their paychecks keeps them poor -- different methods same reason same end effect except for the moral hazard added by socialization that requires people who take care of themselves to pay for those who do not.
     
  6. Area51

    Area51 Silver Miner Seeker

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    As a Canadian, I can assure you there's no "weekly docking" for healthcare that keeps people poor.

    Check your facts, my friend. Take a good look at US government per capita healthcare spending compared to Canadian government per capita healthcare spending.

    Where do you suppose governments get their healthcare spending money?
     
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  7. Area51

    Area51 Silver Miner Seeker

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    Please explain how universal health care presents a "moral hazard". I realize you're talking out of your ass with such laughable rhetoric, but I'd be amused to hear your explanation.

    Here's the cold hard reality, my friend - - the US spends far more tax dollars than does Canada on a per capita basis for healthcare.

    Would you rather pay more for healthcare and know that some poor suckers is going without, or would you rather pay less and know that everyone has equal coverage?

    Seems like a no brainer for me, but I suppose it could be a "moral hazard" for those incapable of logical reasoning beyond what Big Pharma and insurance companies have fooled them into believing.
     
  8. GOLDZILLA

    GOLDZILLA Harvurd Koleej Jeenyus Midas Member

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    1) Americans want what they pay for. If I can go to the doctor for free you can bet I am going to go there for every little thing. Headache -- go to E.R. -- hangnail -- go to E.R. Eat too much and have gas ? Give me an MRI. Want a doctors excuse to avoid a week of work so I can party at the beach -- its free -make up some symptoms -- Why Not?



    2) No reason to keep fit or exercise or eat within reason because I will get free stuff and never have to work again if I get too fat. Might as well start smoking too, so I can get the benefits I am having to pay for. Why work until I am 72 when I can destroy my body at 40 and get paid to watch tv for 25 years on someody elses dime ?

    Then on the flip side you get draconian laws like soda tax, fat tax, salt tax and tax on every thing that makes their system more expensive. Doctors become agents of the state and start comitting people for owning guns or not taking their advice etc...

    ---------------------------------------------------

    I have been to a doctor maybe 5 times my entire life, but I could arrange weekly/monthly visits if they were free.
     
    Last edited: Mar 10, 2017
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  9. GOLDZILLA

    GOLDZILLA Harvurd Koleej Jeenyus Midas Member

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    Now I will say I would have no problem with a state run healthcare scheme so long as no one is forced to join by force of law and anyone could opt out at any time with no penalties. This would force them to give more than they take so you know that will never happen.
     
  10. GOLDZILLA

    GOLDZILLA Harvurd Koleej Jeenyus Midas Member

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    Then you got poor people who sell their free pills for spending money. Many men might choose a free sex change especially if they are facing prison time so they can get put in womens prisons, win basketball chamionships/scholarships or affirmative action jobs. The list could go on and on.
     
  11. Area51

    Area51 Silver Miner Seeker

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    Such long winded rambling and you still didn't answer my question. Are you trying to avoid it? I'll ask again,

    Would you rather pay more for healthcare and know that some poor sucker is going without, or would you rather pay less and know that everyone has equal coverage?

    It's a very simple question. Either you're happy to pay more because you take comfort knowing that some can't afford it and are forced to go without, or you'd prefer to pay less and have everyone with equal coverage.
     
  12. GOLDZILLA

    GOLDZILLA Harvurd Koleej Jeenyus Midas Member

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    http://www.huffingtonpost.ca/nadeem-esmail/canada-free-health-care_b_3733080.html

    In 2013, a typical Canadian family of four can expect to pay $11,320 for public health care insurance. For the average family of two parents with one child that bill will be $10,989, and for the average family of two adults (without children) the bill comes to $11,381. As a result of lower average incomes and differences in taxation, the bills are smaller for the average unattached individual ($3,780), for the average one-parent-one-child family ($3,905), and the average one-parent two-child family ($3,387). But no matter the family type, the bill is not small, much less free.

    And the bill is getting bigger over time. Before inflation, the cost of public health care insurance went up by 53.3 per cent over the last decade. That's more than 1.5 times faster than the cost of shelter (34.2 per cent) and clothing (32.4 per cent), and more than twice as fast as the cost of food (23.4 per cent). It's also nearly 1.5 times faster than the growth in average income over the decade (36.3 per cent).

    ========================

    For me that would mean a 25% lower paycheck multiplied by my life expectancy not accounting for inflation a loss of about a third of a million dollars sucked from my personal control. Just guessing on how inflation might play out that could turn out to be well over $1.25 million removed from my paychecks. Now imagine those millenials who will pay into it over a lifetime ?

    Is it worth it ?
     
  13. GOLDZILLA

    GOLDZILLA Harvurd Koleej Jeenyus Midas Member

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    As an individualist I think everyone should be responsible for themselves - especially if their behavior brought on their problems - fat/ smoker/drinker/dope fiend/ riding the cc etc.

    Some are born sick/mentally ill and cannot help it and that is what churches/pantries and donations to charities are for. In America these people already have disability/welfare.

    I would prefer to not pay anything so long as I can and save up for when I need to pay for my own.

    We are lucky. You have what you want and for a short while so do I.
     
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  14. GOLDZILLA

    GOLDZILLA Harvurd Koleej Jeenyus Midas Member

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    As an individualist I think everyone should be responsible for themselves - especially if their behavior brought on their problems - fat/ smoker/drinker/dope fiend/ riding the cc etc.

    Some are born sick/mentally ill and cannot help it and that is what churches/pantries and donations to charities are for. In America these people already have disability/welfare.

    I would prefer to not pay anything so long as I can and save up for when I need to pay for my own.

    We are lucky. You have what you want and for a short while so do I.
     
  15. GOLDZILLA

    GOLDZILLA Harvurd Koleej Jeenyus Midas Member

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    My solution to the problem is very simple and I have posted it here before.

    1) Stop limiting the amount of doctors allowed to graduate from medical school. Start churning them out in numbers that they will have to compete for patients. If you cannot call them and get seen the same day within 15 miles of your home there are not enough of them. Maybe 1 doctor for every 30 patients ?

    2) Change patent laws so that anyone can produce any medicine ever invented in generic form at any price so long as they pay a royalty to the inventor. set it at maybe 1 dollar per 31 pills (month supply)? and make it last until 20 years after the inventor dies -- then it becomes public domain.

    These 2 things alone could make a doctors visit as cheap as a meal at Mc Donalds.
     
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  16. Area51

    Area51 Silver Miner Seeker

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    Regardless of how hard you try to spin things, the indisputable fact is that the US governments spends far more per capita on healthcare than any other country in the world - - including Canada.

    I hate to break the bad news to you my friend, but when your government spends money it comes out of your pocket.
     
  17. Hystckndle

    Hystckndle Daguerreotype Fanatic Site Mgr Site Supporter ++

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    Deficit spending.
     
  18. nickndfl

    nickndfl Midas Member Midas Member Site Supporter ++

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    Canada has a VAT. Yes, their healthcare is good, but it's not free. Somebody pays for it. It's Bernie Sanders free.
     
    Last edited: Mar 11, 2017
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  19. latemetal

    latemetal Platinum Bling Platinum Bling

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    Quit smoking and drinking and gambling and sugar, better health and more money in your wallet/purse. I'm keeping bacon.
     
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  20. GOLDZILLA

    GOLDZILLA Harvurd Koleej Jeenyus Midas Member

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    True, but right now it is spending 28% of my money vs the 50% it would be spending with socialized medicine.
     
  21. southfork

    southfork Mother Lode Found Mother Lode

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    Inflation a joke, they exclude taxes and the things that really drive the cost of living
     
  22. platinumdude

    platinumdude Gold Chaser Platinum Bling

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    I didn't know I was considered rich.
     
  23. tom baxter

    tom baxter back from 2004

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    I don't know what the author is on about? I've dug so many holes to bury bullion my property looks like the bakken.
     
  24. Area51

    Area51 Silver Miner Seeker

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    Not free, but certainly much less expensive than US healthcare.
     
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  25. jiikoo

    jiikoo Seeker Seeker

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    How about those "investors" who demand dividents? who have done nothing.
     

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