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Thursday, March 22, 2012

The New American Dream: Two-and-a-half houses; hold the picket fences

House in suburbia. White picket fence. The “American Dream.”  In the face of the gravest economic crisis since the Great Depression, it’s now being questioned. Is it still a realistic goal for every hardworking American?

The question is moot.

Consider: the median home price in the US was $156,600 in February this year[1]. With a 5% down and interest rate of 4.25%, a corresponding monthly payment (including principal and interest, property taxes and various mandatory insurance) amounts to about $966[2]. Not bad.  Beats renting!

Now, the average monthly cost of health insurance for a family of four is ... wait for it ... $1,420[3].

The cost of health care is now roughly one-and-a-half the cost of home ownership!

So, the notion of saving for a down payment to achieve the American Dream of home ownership—while helped by the crash of the housing market—is nonetheless rendered impossible because of the stratospheric cost of health care.  The American Dream now requires the ability for a hardworking American to earn enough to buy the equivalent of two-and-a-half houses.

So, quite frankly, yes, the American Dream is clearly out of reach of the hardworking middle class American. This is nothing less than a national disgrace.

The incontrovertible fact is that the U.S. has the worst health care system in the industrialized world.  Nearly 200,000 Americans die each year from readily curable medical maladies simply because they have no health insurance.

And all the while, Republicans and Tea Partiers rally to the cry of “Repeal Obama-Care!”
Let’s not pull any punches here. The Affordable Health Care Act is indeed, in all likelihood, a cure worse than the disease. But this is largely the fault of Republican obstructionism.

A Republican talking point holds that Obama-Care was “rushed through Congress” without adequate time for examination and consultation. Nonsense. It took a year, and the Republican Party had one simple strategy: obstruct. Oppose everything in any and every possible way, at every step. Force as many compromises as possible so that the final result would be so laden with exceptions and various crap that it would be too onerous and unwieldy to pass.

A nice strategy. It almost worked. All but the last part: it passed. And so we have Obama-Care.  And no single-payer alternative of last resort (thanks to Joe Lieberman).

Full disclosure: I am not, by any stretch of the imagination, a nanny-state loving, entitlement-demanding liberal. I believe that in order to get the economy going we must not merely hold down spending and simplify the tax code, but also begin reversing state control over business, as well as personal, enterprises; that is, greatly reduce government regulation, both at the federal and local levels. We need anti-legislators in Congress and our Statehouses, politicians who will campaign on erasing laws and regulations, not drafting new ones to “improve” things. We must generate new wealth if revenues are to catch up with our ungodly deficits.

So how can I advocate for replacing the private insurance system with a single-payer? Because we are the point where there is no longer any alternative. No market reforms and/or tort reform is going to reduce that monthly healthcare premium from its present obscene value of $1,420 to a reasonable expense that Americans should be expected to pay for healthcare insurance, something comparable to a car insurance payment, perhaps $200 per month, tops. It’s too late. If anything can justify “moral equivalence of war” hyperbole, it’s this.  This needs to be fixed now.  We can no longer endure the predations of the healthcare industry which as many experts recognize creates the worst of all worlds: encouraging needless procedures, ridiculously expensive prescriptions, an absurd perversion of market forces in which doctors themselves have no clue about the actual cost of treatments they recommend, the needless deaths of uninsured people who cannot get the treatment they need, the countless bankruptcies people are forced into, the endless waiting times in emergency rooms...  I could go on ... and on ...

Once we get this monkey off our backs, the wealth of Americans will be available to do things that actually grow an economy, like buying houses. Nothing spreads money through an economy like purchasing a home. Businesses will be able to compete better internationally when healthcare costs are on par with those overseas, not to mention the vast savings in legacy costs.

Those Americans who have been drinking the ‘Repeal Obama-Care’ Kool-Aid, who really believe that the British, Canadians, Europeans, South Koreans, Taiwanese, etc., all suffer under their inferior healthcare systems need to take off their blinders. It’s really quite simple. In any of the civilized nations of the world one doesn’t lose his house and go bankrupt because he gets ill and can’t pay the doctor’s bill. And one doesn’t need to be able to afford two-and-a-half homes to actually own one.   

[1] www.worldpropertychannel.com
[2] trulia.com mortgage calculator: Principal and interest payment:$731.86; property taxes:$130.50; hazard insurance:$39.15; private mortgage insurance:$64.47

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