Insurance, Homes, and College Education

Guest Post by Mickey Ellison

Insurance, Homes, and College Education

Most people say that some things in life are just “so” expensive and the cost of those things will just continue to rise no matter what. If we want to buy a house, thank God there are banks and mortgage companies to give us a loan to make those houses a reality for us. There is also college tuition. Man, those costs are skyrocketing, and without student loans, very few would ever be able to afford college. And of course there is the cost of healthcare. If I didn’t have access to health-care insurance, I could never afford healthcare. Healthcare has gotten so expensive that it took a literal act of Congress to make it affordable for all of us.

What if I told you none of that is true, and that the very thing that you and I assume are making homes, healthcare, and college a possibility is what is making three things cost so much. Let’s take houses, healthcare, and college one at a time.

Houses:
Why has the cost of buying a home increased so much? Does it really cost more money to build a house that cost $20,000 in 1970 that now costs $200,000? Think logically about this. Has technology improved since 1970? Is it easier or harder today to chop down a tree, send it to a lumberyard, and cut it into two by fours? Did it take more time in 1970 to build a house than it does in 2014? I’ll answer those questions. Technology has improved significantly in the last 44 years. It’s easier to turn a tree into a two by four today than it was in 1970 and it definitely takes less time to build a house today than it did four decades ago. If one thinks logically, shouldn’t those three things alone make it cost less money to build the house? So why is it so expensive to buy a house today? Debt! Who benefits more from debt when buying a house, the bank or the borrower?

It’s really pretty simple to understand why a house costs so many more dollars today than it did in 1970. We deposit $1000 into the bank, and they magically loan out $10,000 that didn’t exist before you made the deposit. If today there was only $1000 available to buy the house, but tomorrow there was suddenly $10,000, do you think I could charge more for the house? That drives the cost of the houses up making need for more loans that continue to drive the cost of houses up even more, making even bigger loans necessary to buy a house. The solution is also simple. Stop borrowing money. This wouldn’t be good for the banks, but it would definitely bring down the cost of a home. We saw that exact thing happening in 2008, but the Federal Reserve and government put a stop to that by bailing out the banks for making bad loans, and the Fed has continued to make more and more money available to drive those prices back up. Would the price of a home dropped to a level where we could buy the home without a loan? We will never know since the bankers and politicians distorted the market.

College Tuition:

It appears to be a given that the cost of college is going to increase every year no matter what. Even the cost of a home dropped from 2008 to 2010, but according to USA Today, the average tuition at a 4 year public university increased by 15%. In one of the presidential debates in 2012 President Obama boasted about how he was making college educations more attainable by making Federal Student Loans easier to get and keeping the interest rates down. Has anyone stopped to think that the loans may actually be what is causing the cost to go up so much in the first place? Let’s see, if I have a product, say education, where the government is going to give out unlimited amounts of money in the form of student loans, what is my incentive to keep the price down? What a great thing if you run a college or university? What a great thing if you get to collect the interest on those loans for the next 20 years? What a great evil it is to tell our children that they must have a college education to succeed, then provide them unlimited money at age 18 to get that education, and make them slaves for much of their adult life to debt that they can’t even write off should the declare bankruptcy! Just like the houses, stop borrowing money for college and in time the price will go down!

HealthCare:

Now this is a hot topic today since we have ObamaCare! While I’m no fan of The Affordable Care Act, the law is nothing more than a symptom of the problem, and the central planners have never seen a symptom that they couldn’t fix. Except, they typically make the problem worse. I believe the problem is that most of us have no idea what medical care actually costs since we have all been told that we have to have health insurance most of our lives. Is the problem really that insurance premiums are too high or that the cost of medical services are too high. Seeking to “make” healthcare insurance more affordable does nothing to treat the problem. In fact, making insurance more available might cause the problem, the cost of healthcare, to become worse.

In healthcare there is what I call the “Unholy Trinity” of big government, big insurance, and big medical. Let’s think hypothetically here. If my focus is on the cost of my insurance, who’s focus should be on the cost of healthcare? You would think the insurance company would want to keep the costs down as much as possible right? Wrong! To keep it simple let’s say that I have an operation. On my insurance statement it shows that the surgery would have cost me $100k, but my insurance company was able to negotiate the price down to $50k which is what they pay. This is great because of the great negotiating power of my insurance company right? When in reality the surgery only really cost $10k, the hospital got paid $50k, and the hospital was able to write off the $50k that they didn’t get paid maintaining their not for profit status. The insurance company can make their money through premiums that we pay even though they paid $40k more for the surgery than it really should have cost. Visit www.surgerycenterok.com to find out what it really costs for many operations when they only take self-funded insurance plans and cash. This is a simplified version of the “Unholy Trinity”. The disease can never be cured if we only focus on the symptoms.

We have been so indoctrinated that we now believe that a little inflation is a good thing, the cost of college should always go up, and that medical care is too expensive. It doesn’t have to be this way, but fixing these lies will take people that are willing to question what they have been taught and start asking why and how! Why is it good for me, the individual, when my bread costs more this year than it did last year? How does paying $4 for a gallon of gas benefit me when 10 years ago, I could have bought gas for a $1? Why do I have to keep borrowing more and more money to buy a house or get a college education? Who does that benefit? Seek the answers to these questions and you will find that we have nothing close to a free market and we are being manipulated and because we have been indoctrinated so thoroughly that we believe this is all good for us. Stop borrowing money and THINK!

by Mickey Ellison

We Can’t Change the Political System Through Politics

There was a lot of enthusiasm in 2012 by people who hoped that Ron Paul could win the GOP nomination so that he would be able to debate the sitting president Obama. His campaign gained the liberty movement millions of new members — mostly young people who can see that the USA is on the road to a dystopian police state. The Ron Paul campaign was about educating people in my view and was never about wining the White House and then trying to use that office to change America back into the minimal state society that was envisioned in 1776.

I am convinced that trying to dismantle the political system by using the political system is futile. It is a fool’s errand. We all have to acknowledge that Ron Paul used the political process and by using it he changed the world-view of millions of people. He helped many discover the true nature of the state. The Ron Paul campaign was a once in a generation thing. He spent a lifetime as “Dr. No” in congress to prepare for the run — and he wanted to educate rather than win. We will not see that again in our lifetimes.

It is now time for everyone in the liberty movement, no matter one’s station in life, to help spread the word on the dehumanizing, oppressive, violent, and destructive nature of the corporate-state. It is time for us to understand that peace, liberty, prosperity, private property, and respect for the non-aggression principle is our message and our strategy. Libertarians must demonstrate, by reasoning and by historical evidence, that humans are capable of organizing and creating in spontaneous ways the technology and the social systems needed to increase our happiness and our liberty. All the state does is get in the way of this process of society working its magic. The state restrains the inventive to protect those who have access to state power and it shifts costs of goods and services for the parasites onto the backs of the productive.

i-believe-that-all-government-is-evil

I believe that trying to reform the political system, running for political office, supporting a political party, or other use of politics is counter-productive. Ron Paul was an exceptional case and I don’t believe he was trying to change the political system directly but rather was trying to change the minds of the people so that they could find a way to change the system. We need to continue his fight to change people’s minds just as he himself is doing in many ways now that he is no longer in office.

As people seek tactics and strategies for advancing libertarian principles, bear in mind the comparative advantage that our ideas have in real world. The statist programs are grounded in socialistic thought and central planning. World wide the support for central planning among intellectuals has greatly declined due to empirical evidence of the failure of planning. Just as Mises said it would, societies built on central planning just don’t work. Even the progressives’ ideas for an overwhelming regulatory system is now seen to be just a mechanism for industry to achieve their long desired cartels. The government regulations exist to serve the very people that the progressives thought they were controlling! We must pound home the idea to the people that there needs to be a separation of economy and state.

We must all do our homework in this fight for liberty. It is a fight of ideas, and ideas require knowledge.  No matter how knowledgeable think you are, you need to be a lifelong learner. Don’t let your schooling get in the way of your education! Especially read economics from the Austrian School as that is the school of thought that supports freedom, liberty, and individual rights. And also read history as the history of mankind is a testimony to the failure of the state to improve our lives: it is a testimony of the state enslaving mankind. It is important to read all the other fields as time allows: psychology, philosophy, physics, biology, chemistry, geology and so on. There are so many on-line resources these days that remaining ignorant of what is going on in the world of ideas requires one to work hard to avoid the information!

Often we work to convince one person at a time. We just counter old myths and canards with factual observations and let the person come to realize that the state is not their friend. That is the first step; the person must realize that the state is the enemy. Then we can teach them the whole of it.

We will beat the state. When? I don’t know when, but I know we need to prepare the people for what comes next before the collapse of the state. (and the collapse of the USA looks to be coming sooner rather than later) If we don’t prepare people now, then the coming “revolution” may yield an even worse result than we have now if that is possible. We need to convince people that no state is our friend. Only freedom and liberty allows peace, progress, and the pursuit of happiness.

Join the fight now. Do what you can to support liberty and freedom.

Why do people submit to governments?

One of the most important insights is that all political states, benign or tyrannical, exist on a foundation of popular consent. The state is a coercive, aggressive monopoly managed by a committee of armed parasites. Rothbard’s “gang of thieves writ large”. Governments are populated by the power hungry who consume looted wealth and give us war, murder, disorder, senseless regulations, and victimless criminal statutes instead of voluntary, mutual cooperation. Inevitably any government grows consuming and blocking private production and services until no production is left to deliver on the promises that politicians make. As we approach the point where the promises are impossible to fulfil more and more people will begin to see the fraud.

There is a battle shaping up in the world driven by the ever increasing failure of governments to give the populous the booty that they have promised and instead given them slavery and poverty. On one side we see the forces of archy (statism) which is political rule and authority. On the other side we see its only alternative which is anarchy; the absence of political rule. Some have said that this battle is the battle between individualism and collectivism, between liberty and the state, between freedom and slavery.

voluntary-society

There are only two sides to the question of the state; you are for it or you are against it. It does you no good to try to be in the middle and call for a “small state”. It is true that a small, weak state is better than a strong, powerful one but it is still a gang of thieves writ large. Experiment after experiment tells us that any attempt at a middle ground between archy and anarchy is doomed to failure. It is our job to educate our fellow citizens of the world to the true nature of the state; to turn them into enemies of the state and all it represents.

Roy Childs once wrote:

It is my contention that limited government is a floating abstraction which has never been concretized by anyone; that a limited government must either initiate force or cease being a government; that the very concept of limited government is an unsuccessful attempt to integrate two mutually contradictory elements: statism and voluntarism. Hence, if this can be shown, epistemological clarity and moral consistency demands the rejection of the institution of government totally, resulting in free market anarchism, or a purely voluntary society.

But in general, the people do not realize that there are only the two options. They don’t realize that there is any alternative to having a government at all. Many of our “civil liberties” friends on the left who are aware of the growing draconian nature of the American Empire want to “fix” the government not eradicate it. Why? Why do people agree to be looted and otherwise oppressed by government and its minions? It is that they do not see that there is no way to constrain the power and scope of a government and that they believe in government’s inevitability.

In the 1500s Étienne de La Boétie wrote about this central problem of political theory: Why do people consent to their own enslavement? Why do people, in all times and places, obey the commands of the government, which always constitutes a small minority of the society?

La Boétie observed:

I should like merely to understand how it happens that so many men, so many villages, so many cities, so many nations, sometimes suffer under a single tyrant who has no other power than the power they give him; who is able to harm them only to the extent to which they have the willingness to bear with him; who could do them absolutely no injury unless they preferred to put up with him rather than contradict him. Surely a striking situation! Yet it is so common that one must grieve the more and wonder the less at the spectacle of a million men serving in wretchedness, their necks under the yoke, not constrained by a greater multitude than they…

Governments must have this mass submission to be one of consent or at least resigned acceptance rather than only fear. The government can not use fear alone as that would lead to revolt. Governments once used the Church to convince the people to believe in their rulers, but with the power of the Church on the wane for centuries now, they use ideology supplied by their willing minions in the intellectual class.

… Shall we call subjection to such a leader cowardice? … If a hundred, if a thousand endure the caprice of a single man, should we not rather say that they lack not the courage but the desire to rise against him, and that such an attitude indicates indifference rather than cowardice? When not a hundred, not a thousand men, but a hundred provinces, a thousand cities, a million men, refuse to assail a single man from whom the kindest treatment received is the infliction of serfdom and slavery, what shall we call that? Is it cowardice? … When a thousand, a million men, a thousand cities, fail to protect themselves against the domination of one man, this cannot be called cowardly, for cowardice does not sink to such a depth… What monstrous vice, then, is this which does not even deserve to be called cowardice, a vice for which no term can be found vile enough … ?

La Boétie was opposed to the tyranny of government and to the people’s consent to their own enslavement as do the radical libertarians of today. The central fact that we must teach the public is that the state, any state no matter how ruthless and despotic, rests in the long run on the consent of the majority of the public. Give up on hoping that the state schools or state funded intellectuals will divulge this insight since they are part of the parasitic class themselves. In the words of the sci-fi novel “Dune”, the sleepers must awaken.

Libertarian theorist Lysander Spooner observed:

The ostensible supporters of the Constitution, like the ostensible supporters of most other governments, are made up of three classes, viz.: 1. Knaves, a numerous and active class, who see in the government an instrument which they can use for their own aggrandizement or wealth. 2. Dupes – a large class, no doubt – each of whom, because he is allowed one voice out of millions in deciding what he may do with his own person and his own property, and because he is permitted to have the same voice in robbing, enslaving, and murdering others, that others have in robbing, enslaving, and murdering himself, is stupid enough to imagine that he is a “free man,” a “sovereign”; that this is a “free government”; “a government of equal rights,” “the best government on earth,” and such like absurdities. 3. A class who have some appreciation of the evils of government, but either do not see how to get rid of them, or do not choose to so far sacrifice their private interests as to give themselves seriously and earnestly to the work of making a change.

Some writers call the people “sheeple” or “zombies” because most people are brainwashed to love and adore their state; to love the most vicious predators and threats to society. The State and its loyal flunkies are mankind’s eternal enemy.

Our prime task is one of education. We must teach the people that that the government is the enemy. We must “deprogram” them. We must overcome the propaganda of the state that tells them that there must always be a state of some sort. We must understand that the state rests on the consent of the slaves to their enslavement and then we must teach the slaves this essential truth.

What if Ray Kurzweill and Coursera makes higher education free on-line?

Ray Kurzweill invented the technology that reads text and converts it into spoken language and he has written an article on the revolution in online college education that tells of a wild new future in the making. M.I.T., Stanford, Harvard, University of Texas University System, Berkley, and dozens of other schools are looking to offer free or very inexpensive on-line, full credit college courses. The Coursera organization is leading the way in free on-line courses. And edX, a $60 million MIT-Harvard effort to stream a college education over the Web has plans to teach a billion students. A billion students with a “B”! Now this is uncharted territory.

If you have young people in your family this is news you need to know!

Article from kurzweilai.net:

Education is about to change dramatically, says Anant Agarwal, who heads edX, a $60 million MIT-Harvard effort to stream a college education over the Web, free, with plans to teach a billion students, Technology Review reports.

“Massive open online courses,” or MOOCs, offered by new education ventures like edX, Coursera, and Udacity, to name the most prominent (see “The Crisis in Higher Education”) will affect markets so large that their value is difficult to quantify.

A quarter of the American population, 80 million people, is enrolled in K–12 education, college, or graduate school. Direct expenditures by government exceed $800 billion. Add to that figure private education and corporate training.

At edX, Agarwal says, the same three-person team of a professor plus assistants that used to teach analog circuit design to 400 students at MIT now handles 10,000 online and could take a hundred times more.

Coursera, an alliance between Stanford and two dozen other schools, claims that it had 1.5 million students sign up.

Changing the world

The rise of the MOOCs means we can begin thinking about how free, top-quality education could change the world.

Khan’s videos are popular in India, and the MOOC purveyors have found that 60 percent of their sign-ups are self-starters from knowledge-hungry nations like Brazil and China. Nobody knows what a liberal application of high-octane educational propellant might do. Will it supersize innovation globally by knocking away barriers to good instruction? Will frightened governments censor teachers as they have the Web?

The eventual goal isn’t to stream videos but to perfect education through the scientific use of data. Just imagine software that maps an individual’s knowledge and offers a lesson plan unique to him or her.

Now that would be something! No spending $35,000 a year to get a piece of paper that might mean you are educated or might not. Now the lower class might have a chance to compete with the rich children. Maybe a homeschooling mother will become a Doctor of Economics while she is teaching her kids about fractions. What a wild ride the near future might be.

Note that the portable devices needed to take such online courses are about to get a huge boost as Intel announced that it is distributing 100 of the experimental 48-core chips that will turn Tablets and portables into supper-computers with not dual core processors but ones with 48 cores! Interesting times indeed.

(note: I first noticed this article in a post by the great economist Dr. Gary North)