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Jan. 13, 2009 - Rush Limbaugh Program
35:35
January 13, 2009, Tuesday, Hour #3
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Third hour now up and running on the Rush Limbaugh program.
Thanks, everybody.
And glad to be back.
I'm so glad to talk with all of you as Rush still ensconched in the bowels of Washington, D.C. You can imagine what that's like, given Congress.
Anyway, that's a topic for a different program.
But we don't know what he's doing up there.
You know, we just know yesterday he talked about offering Barack Obama free advice, and lo and behold, he gets a call after the show.
Come on up to Washington today.
I get a call.
Can you fill in for El Rushbo?
Sure glad to do it.
We'll find out more tomorrow.
I just love the suspense.
1-800-282-2882, the contact line remains the same, as does the website, rushlimbaugh.com.
Check that out.
Always fun as we carry on here.
Now, pursuant to the last call about the recession and about the stimulus thing, there was an interesting article in Forbes.com by Brian Westberry, and he is a great economist.
I've read a lot of his stuff and I like it.
He says that the most intense period of the recession may be behind us.
Does he know that Congress is still in session?
He says the figures signal, according to his analysis, that because of deflation not necessarily being a bad thing, take a look at gasoline prices.
Frankly, if you think we ought to prop up home prices by having the government re-stimulate the housing market, maybe we should restimulate oil and gas so we can get those gas prices back up to $4 a gallon.
Wouldn't that be good for the economy?
Save jobs.
Wouldn't that be great?
That's how insane the mortgage cramdown bill is.
That's how insane the GMAC bailout was and all of that.
And Westberry says, in fact, the deflation, especially in commodities, is providing more of a stimulus than government could ever do, especially when it comes to gasoline and other things.
And that will get us out of the recovery.
Plus, there's a natural equilibrium to the American economy.
You know, the market finds its natural bottom.
You let that happen.
You do that through bankruptcy.
You do that by understanding there's a business cycle.
You know, we used to, in this country, save money for a rainy day.
That was the old metaphor for, you know, when things are going good, don't buy the next toy.
Put your money away.
So when things go bad, it will last until the next recovery comes along.
You know, self-responsibility?
You'll have to look that up because apparently nobody knows what it means anymore.
There used to be, as we were talking about during the break, a little shame in going on the dole.
And these days, the dole encompasses a whole host of things.
Well, I deserve a Pell Grant to go to college for free.
Speaking of inflation, wouldn't it be nice if some state legislator someplace grilled the board of regents of your favorite university the same way we grill oil companies?
The most massive inflation of any particular sector we've witnessed in this country over the last few decades has been the greedy institutions of higher learning.
If that isn't an oxymoron by now.
I mean, can you imagine?
They make the oil companies look like pikers.
In fact, oil companies can't control the price of gas.
Otherwise, it wouldn't be way back down to where it is today.
But institutions of higher learning with their government aid, they keep jacking up tuition year in, year out.
It's talk about massive inflation.
And yet, our friends on the left that love to grill business about price gouging and antitrust violation and collusion just seem to be AWOL when it comes to university tuition.
Their only answer is, well, we'll raise taxes to give more financial aid, which actually just encourages more tuition increases.
Because when a third party pays things, whether it's in health care or higher ed, there is no fiscal discipline imposed upon the provider.
We bail them out.
So everybody's getting a Pell Grant because they deserve it.
Everybody's getting a housing subsidy, light rail?
Well, we've got to have light rail and mass transit, which doesn't come close to paying for itself.
That's a subsidy.
We get business subsidies.
We get bailouts now.
Whatever happened to good old-fashioned American self-reliance where it was kind of, I don't know, shameful to be so eager to be on the dole.
Is that a lost aspect of the American experiment?
If it is, our framers are spinning in their graves.
That wasn't the intention of this particular nation.
This nation was an economic revolution, and the economic revolution, whether they were revolting against the Stamp Act or import tariffs and all the rest, was about flying as high as your abilities could take you without government interfering.
We ought to have a neutral policy towards economic progress.
We're not going to tax you, and we're not going to subsidize you.
We're going to let the chips fall, and the invisible hand will determine the winners and losers instead of the invisible congressman.
Anyway, Westberry goes on to say that the real danger here is that those behind the stimulus plan and big government won't create the recovery.
But when it naturally occurs in the business cycle, when things hit bottom and we start to go back upward, that the politicians will take credit for big government intervention.
Now, there's no doubt that that's true, although I'm not 100% certain they're going to get away with it.
And here's why.
When the recovery does come back, and it will, when the recovery does occur, what will happen is, instead of people loaning money to the government for their stimulus plan at 0%, naturally in an economic recovery, the demand for capital goes up.
More businesses open.
People want to make investments.
They want to borrow.
You're going to get the crowding out effect.
You're going to get people saying, gosh, should I loan to this guy or should I loan to this guy?
And the interest rates are going to be bid up because there's going to be more people wanting a loan than there is capital out there.
Right now, there's more capital because of this investment paralysis or recession of uncertainty.
And when that happens, guess what's going to happen to interest rates?
The federal government, if they keep wanting their stimulus package, will have to, in fact, let interest rates go up so they keep getting creditors, whether they be foreign or domestic, to loan them money.
And when interest rates go up, that'll kill the recovery.
Or they can say, well, we won't borrow anymore.
We're going to raise taxes.
That will kill the recovery.
Or they could actually abolish the stimulus plan altogether, but that would get rid of all those government makework jobs.
You see, there's no real way out of here if you're going to rely on big government.
The best thing we could have done is rely on the marketplace, which has been cajoled, been regulated, been taxed enough.
Let me reiterate.
This was a failure of government intervention.
This was a failure already of a government stimulus program for housing.
And we're recovering from that hangover right now.
Take a couple of aspirin, a glass of water, let it pass, take a nap, and we'll be fine.
But if, in fact, we keep treating the hangover with a little more of the hoo-ha, all we're going to do is exacerbate things.
And I'm afraid that's what might happen going forward.
We shall see.
Not to mention all of the fiat money we've created.
I mean, imagine if the economy starts to really turn around and people start shopping again, start borrowing again, well, all of that money that's going into treasuries now is going to be going in to bid up the price of services.
All of that money that has no velocity right now is going to be turning over very quickly.
I'm no economist, but I play one on the radio, and I will tell you, my impression is going to be this.
You're going to see a slight blip in some of the economic numbers with the stimulus plan, but it's not going to be much.
They'll improve a little bit.
And then you're going to see as the economy really recovers, as people get more confidence, you're going to see inflation rear its ugly head.
And you may see stagflation.
You may see the economy stagnate or stop, but inflation keep going.
It's for what it's worth.
Healthcare, also in the news, has Secretary.
Oh, by the way, Hillary Clinton getting her first statement for her confirmation in front of the Foreign Relations Committee.
I'm wondering, how is Hillary Clinton going to negotiate with a foreign leader when that foreign leader was hit upon by Bill?
No, no, no, not that way.
Was asked by Bill for contributions for the Clinton Foundation.
Is there a conflict of interest there?
Is this the change we really need from Barack Obama?
What was the mantra?
Change you can believe in, I guess.
That was the mantra from Barack.
Barack Obama said not long ago when he was campaigning, you understand that in this election, the greatest risk we can take is to try the same old politics with the same old players and expect a different result.
You have shown what history teaches us, that at defining moments like this one, the change we need doesn't come from Washington.
Change comes to Washington.
That was Barack's acceptance speech at the Democratic National Convention.
So he wins the election, and whom do we get?
Let's see, Vice President Joe Biden, okay, change.
No, he's been there.
Hillary Clinton, Secretary of State, change.
No, she's ensconced in politics in Washington.
Tom Dashell, speaking of the new health czar, no, Tom's been around for a while until the folks of South Dakota wised up.
Eric Holder, Clinton lackey.
CIA Leon Panetta, Clinton holdover.
Rahm Emanuel, the Clinton administration.
Bill Richardson, well, for a while, the Clinton administration.
Lawrence Summers, former Treasury Secretary.
Carol Browner, the socialist EPA chief.
Apparently has a membership to a socialist group overseas.
Did you know that about Carol Browner?
Where is this change you can believe in?
It sounds like the same old, same old.
Well, the next thing you know, they're going to go back to their old tax and spending ways.
Well, they've already done that.
Oh, I'm a little late on that one.
There's no change here.
This was the greatest con perpetrated upon the American people.
The only thing that's different is the American people in many ways, not you great self-reliant conservatives, of course, but too many of us have gone soft.
As the Gipper used to say, the solution to complex problems aren't complex or difficult, but they are hard.
People don't want hard anymore.
People expect in the entitlement era for everything to be easy.
Things should just go swimmingly forever and ever and ever.
Well, if it were easy, everybody could do it.
Life is not that way, but we've been conditioned from the entitlement mentality that it should be.
And I'll be the first to say, I think many of us have gone soft.
We need to man up and realize, you know what?
You can't create wealth by merely dividing it.
You can't multiply it by dividing it, as one WAG once said.
And that's all we're doing.
We've got a zero-sum plan that's going to divvy up wealth and think we're creating something.
There's only one thing that's going to, you know, in the final analysis, there's two ways for your economic station to improve.
You can increase your productivity and earn more, or you can take money from somebody else.
And this is a moral ethical crisis as much as anything.
The way you improve your own station is to improve yourself, improve your productivity, make certain capital stays in the private sector to buy the tools and all the essentials to increase your labor productivity and everybody grows.
A rising tide lifts all boats.
The other way, quite frankly, the politics of NV class warfare way is to say, I'm not going to do that.
I'm going to redistribute wealth and I'm going to take it from somebody else.
And that's how I'm going to gain.
That is not only an economic failure, my friends, that is a moral failure.
I'm Jason Lewis, in for Rush.
He'll be back tomorrow, as I say, right here on the Excellence in Broadcasting Network.
And once again, greetings, conversationalists, across the fruited plain.
I am, Minnesota is a real anchorman with talent on loan from Rush for this day, this day only, rush back tomorrow after his secret mission to Washington, D.C. Let's find out what that's all about.
We will when we tune in tomorrow to the Rush Limbaugh program.
In the meantime, one more thing on the method to their madness, and the method to the liberal madness is to placate the softening of the American spine, if you will, by getting everybody addicted to some government program.
And the coup de grace here, the mother of all government programs will always be healthcare.
That's why they keep running around saying health care is a right.
Of course, it isn't a right.
Nothing is a right through its exercise that would infringe upon somebody else's right.
You know, rights coexist.
People forget that.
My right to life, to liberty, to the property I've already acquired, that doesn't require of you one thing.
It's a non-obligation standard.
Whereas the so-called rights of the class warriors and the politics of envy crowd requires the violation of other people's rights.
If I have a right to health care, who's going to provide it?
Oh, the doctor, the provider.
Well, they don't want to provide it.
They're not going to get paid for it.
Well, what are you going to do?
We're going to make them.
You violated their rights by suggesting you have a right to health care.
You have a right to transportation, to even education.
I tend to be a bit more libertarian on this issue than most people.
You have a right to try to pursue the health care, the transportation, the education you want.
You have a right not to be interfered with in that pursuit.
You don't have a right to it.
You have a right from interference.
And we have distorted that to think we have a right to something in this country.
And all you have to do, because we have no constitutional constraints, all you have to do is get your guy elected or your gal elected, and all of a sudden, voila, your rights materialize.
Well, once they can get everybody addicted to their rights provided by the government on a program, they've got a built-in majority in perpetuity.
If you can get everybody addicted to some business bailout, if you can get everybody addicted to a health care plan, to welfare, to education, I mean, education is the greatest.
Your local school district needs more money.
They hold up your kid.
We got him, and you're not getting them back unless you pass this operating levy.
I mean, that's the ultimate.
If they can get everybody hooked in, then big government is here for eternity.
And we are perilously close to this.
If you take a look at every subsidy from Pell Grants to small business loans to outright welfare to education grants to transit, I mean, everything to vouchers for food stamps.
We are approaching over 50% of the American population on one government program or another.
How do you get out from under that?
Now, there are still a few people out there who have some sort of reluctance to go down this road, even if they might be getting a subsidy.
They say, well, I'm going to get the subsidy because it's available, but I'm not going to like it, and I realize it needs to be abolished.
And those people, in concert with others, can still repeal this unless they get 70 or 80% of the people hooked on something, which is where healthcare comes in.
And Secretary of Health and Human Services to be Tom Dashall.
God, can you talk about a nightmare?
Sylvester Stallone's got nothing on this guy.
This guy's everybody's nightmare.
And now he's set to create this new national health plan run by the federal government that is going to use an employer mandate enforced by a payroll tax or a fine to literally crowd out private health insurance.
What they're going to do is they're going to have a national health insurance exchange.
That's a euphemism for we're going to subsidize a government health care plan a la Medicare.
We're going to give it special advantages.
And then it's going to compete with private health care.
So Barack can run around and Dashle can run around and they can say, well, look, nobody has to end their private care if they don't want to.
Yeah, that's true, except in this paradigm, the employer is going to be faced with a big fine if they don't provide it, or they're going to pay higher premiums in the marketplace than the government subsidy can offer or the government plan can offer with subsidies.
So when they have this government plan competing unfairly with the private health insurance, individuals and businesses are going to go with a government plan.
And indeed, this goes back to what a previous caller was speaking about not long ago.
What's happened to the self-reliant businessman?
What's happened to the businessman that says, I don't need any favors and I don't want any penalties.
I want to do it on my own.
There's a group of businesses out there, and the bigger, the more nefarious they become, that would love, love universal Canadian British-style health care.
You want to know why?
All they care about is offloading their health care liabilities to the taxpayer.
You're going to see businesses backing, backing the Dashell-Obama plan.
Because all they're looking at is their balance sheet, their liabilities.
They're looking at their quarterly P ⁇ L, and they're saying, if we can pawn this off on the taxpayer, why, our P ⁇ L will look that much better to our shareholders.
I mean, don't let ethics get in the way here, gang.
So that's what's going to happen.
They're going to have this individual mandate, which will effectively be a guaranteed issue plan that's going to have the young subsidize the old.
Everybody's going to have to buy health insurance.
Health insurance makes sense.
I hate to break this to a lot of people, but health insurance makes sense for most folks, but it doesn't make sense for everybody.
Indeed, if you look at the quote-unquote uninsured crisis of $47 million, which by the way went down last year to about, what, $45?
But if you looked at this, the vast majority of the people who don't have insurance are young.
You've got about 13, 14 million people who are young, who don't have it.
You've got 14 million people eligible for Medicaid or S-CHIPS, but not enrolled.
You've got another 15 million people who make over $50,000 a year.
Some people, believe it or not, just say, well, it's not a good deal for me when I'm 20.
That's why the plan with Dashell will require them to buy health insurance, and then they're going to guarantee the older people who consume more health the guaranteed issue rate, which means the young person is going to have to subsidize the old by buying health insurance that's going to cost a lot more than a cafeteria-style plan.
It's an income transfer program, and it is not sustainable.
That's in store for us, but what they're trying to do, they're trying to get everybody addicted to this thing, and so therefore they can run in the next election cycle and say, they're going to take away your government health care plan.
You're not going to let them do that, are you?
Vote Democrat.
All right, 1-800-282-2882 to the phones we go.
I am Jason Lewis filling in for El Rushbo.
He's back tomorrow at Longmeadow, Massachusetts.
Mike, thanks for waiting.
You're on the Excellence in Broadcasting Network.
Hi, Jason.
Thanks for taking my call.
Glad to do it, sir.
I have two rhetorical questions for you.
First, if I was a bank and you were a prime lending institution, why in the world would I borrow money from you when the government's giving it away for nothing?
Well, the crisis is not necessarily in the federal funds rate.
That is, banks borrowing from member banks.
Banks, in fact, are solvent.
And that's, by the way, what I was alluding to earlier.
There's now some economic data coming out to show that there really may not have been a credit crunch as everyone thought.
But what they're talking about are getting the banks to loan to people like you, not to other banks.
They're not loaning to other banks.
Am I correct?
Well, it is true.
They're not loaning to other institutions.
Some of them are not loaning to other banks.
There's some truth to that, which is why the Fed is.
They're becoming the lender of first resort instead of the lender of last resort.
But what you really need is for capital to be made available to businesses for investment or for their payroll.
A lot of businesses go, you know, payroll to payroll, and they rely on a revolving line of credit someplace.
That's what's being supposedly snuffed out.
Right, I understand that.
But if the government is offering stimulus packages, free money, basically, they're not going to borrow from anybody else.
They'll just wait for their free money.
It's a reason why American Express decided to become a bank holding company.
They're waiting for their billions.
Everybody's a bank.
G-MAC is now a bank holding company.
You're right, because they're getting absolutely free money from the Fed to, in effect, bail them out in some of those institutions for some of those institutions.
But the credit crunch started with I understand your point because a number of these institutions, financial institutions, had a lot of exposure to the mortgage-backed security crisis.
So nobody was going to lend to them because they feared that their balance sheet was going to worsen.
They wouldn't get the loan back.
But it also extended to manufacturing companies.
It extended to businesses.
Literally, capital was frozen, so the story goes.
Okay, my other question to you is: how many times does the Fed have to hit its head against the wall before it realizes it hurts?
How many times has it lowered interest rate and the result is nothing?
Well, here's the irony.
I mean, that's an excellent point.
The irony is, how did we get into this mess?
I think it's fair to say, and I think you'd agree, that the catalyst for the mess we're in was the housing bubble, and then the housing market crashed.
Fair enough?
Yes, I agree with that.
And then all those mortgage-backed securities, those collateralized debt obligations, credit default swaps, all wrapped around mortgage securities, exacerbated the fall on Wall Street and elsewhere.
Now, how did we get into that?
Well, we got into it with the Fed having ridiculously low interest rates, as low as 1% on the federal funds rate, literally negative interest rates.
The Fed was loaning money in a negative interest rate fashion and easy money, or I should say, which made money very easy, and a government stimulus plan through Freddie and Fanny that would insure housing loans.
So we got into this mess by over-leveraging debt and easy money from the central bank.
So now what's the solution, Mike?
About raising interest rates.
If you were to say tomorrow, March 1st, the interest rate is going to be 3%, people would be falling all over themselves to get a loan now.
Well, I was being facetious, but you're right in your answer.
The solution, though, from this Federal Reserve and from this fiscal, the fiscal authorities is more of exactly the same that got us into this mess.
More debt and more easy money.
And if that would have worked, we wouldn't have had the housing crisis.
We wouldn't have had this mess you're in.
Your point's a really salient one, has the interest rates.
That is to say, if we had a market economy, naturally, when you have more defaults, when you have less creditworthiness out there, when insurance products are not insurance products, but mortgages aren't guaranteed by the government, which way should interest naturally go then?
It should go up.
It should go up.
When you have too much money floating around, we've had loose monetary policy and the Fed needs to tighten it to rein in inflation.
Which way should interest rates go?
They should go up.
So if, in fact, we had left this to the marketplace and just taken our lumps and say, look, we had an artificial bubble.
We're going to take a hit in housing.
We're going to have a recession, but we'll get through it.
Interest rates should have been allowed to naturally rise.
Instead, we're trying to prop them or prop housing up by keeping interest rates artificially low, which got us into the mess in the first place.
It's ridiculous.
When I was, you know, going back in the 70s, mortgage used to be 18 percent, and people still bought houses.
You know.
Well, their theory is everything would have crashed then.
Well, why, if you allowed interest rates to go up in September, you allowed these companies to declare bankruptcy, why, everything would have crashed.
It would have been the Great Depression all over again.
Well, do you know who the Washington generals are?
They're the people that got us into the mess.
No, sorry.
I'm talking about the basketball team.
Yes, yes, yes.
The ones that play the Harlem Global Charters, the ones that lose every time.
Well, if the outcome is the same every time, in other words, if the Fed lowers the rate every time, or best, doesn't do anything, who is going to play in the game?
Who's going to get involved?
No one's going to bet.
There's going to be no action on that game.
Because everyone knows the rate's going down, so they don't know where the bottom is.
Well, don't forget, that's true.
They're waiting for the rates to go down.
Not only that, but they're also waiting for the bailout.
On the fiscal side, if you do not allow bankruptcy, whether it's for the big three or anybody else, Bear Stones included, if you do not allow bankruptcy to wean the field, if you will, then you're right.
Nobody's going to lend to anybody because they don't know who the winners and the losers are.
Those two things have to stop.
You have to stop giving away money, and you have to stop trying to lower a zero interest rate or, you know, reach absolute zero.
So essentially, what you're saying is everything they're doing is 180 degrees wrong.
Exactly.
I couldn't agree more.
I could not agree more.
John, thanks for calling.
Yeah, thanks for calling, buddy.
I appreciate it.
Let's go to John, another one in East Lansing, Michigan.
Is that right?
You're up next on the program.
Hi.
Yes, that's right.
Hey, Mr. Lewis, thanks for taking my call.
Listen, I'm in the state being held hostage by the labor unions, entire state.
They put in a feckless government, governor, and we're stuck.
So I'm suggesting that maybe it's time to look for the union label and then not buy.
I think it's about the only way out of this.
Well, look, I don't have any problems with collective bargaining.
I think private sector unions are fine.
I just don't like the National Labor Relations Board serving as an arm of the union, imposing their will, imposing closed shops through a number of laws.
There are a few states that have right-to-work laws, but most of the rest of them end up with de facto closed shops, plant closing legislation, and all of this.
Look, it ought to be the strength of a union ought to be simply this.
You can negotiate with 5,000 people or you can negotiate with each one of us.
Wouldn't it be more efficient to negotiate with 5,000?
And then, if we don't like what you're doing, we may go out on strike, but you have every right to replace us without the government interfering or siding with one side.
And if in fact you do, that ought to be disincentive enough for you to replace us.
Well, the unions want more power than that.
They want government to intervene.
They want plant closing legislation because they know that a lot of people are going to say, well, I like my job here.
I'm not going to go out on strike.
And frankly, if you really want to get conspiratorial about it, that's why some say that union violence occurs because they've got to keep the troops in line.
They've got to intimidate.
If they don't, they're going to get leaks in the dam.
And so that's the problem I've got.
But even in the private sector, with all of the problems, if you have a private sector union and they overreach, it ends up hurting the company.
It ends up hurting the industry.
I used to feel the way you do now, but I'll tell you something.
With all the modern regulation of businesses and the information possibilities for everybody, unions have become pure drag.
You were talking to the gentleman about the monetary policy, monetary policy, we have full-ahead zero rates.
Fiscal policy, Washington's trying to spend money faster than they can even find ways to spend it.
The only thing left to do is reduce friction.
And it is time for this country to become a frictionless economy if we're going to compete.
Well, in the Wall Street Journal today, GM says the unions aren't budging, so they may not get their bailout money, and bankruptcy is not off the table now, once again.
Look, what I'm saying is, I'm not being an apologist for the unions.
They have overreached and they are obstinate and they don't understand the economy.
What I'm saying, though, in the private sector, if in fact they do that and the company capitulates, the company goes under.
And that's why people are opposed to the bailouts.
If, in fact, GM was giving away golden parachutes for retiree life and health benefits for retiree pensions, as far as the eye can see, why they, quite frankly, are going to go under and we ought to let them.
That's how you let the market regulate unions.
The bigger problem I see, John, is not private sector unions, which are shrinking.
The bigger problem is government unions, American Federation of State, County, and Municipal Employees, the National Education Association, because they're the private sector or market forces can't work.
If they need more money, if they get overwielding or if they overreach, guess who gets to bail them out?
They don't go bankrupt, the taxpayer.
And nobody reins in the public sector unions.
I've said it before, I'll say it again.
I don't have a problem with the private sector unions.
I disagree with them on a lot of things.
I think they overreach, but the market will penalize that.
The company doesn't dare give them everything they want.
In the government sector, in the public sector, quite frankly, there ought not to be union members.
That is a conflict of interest when politicians get huge donations from government unions, and then the politicians are supposed to negotiate with those unions on behalf of the taxpayer.
And that's what scares me, which is why they want more government unions.
They want more government employment, 600,000 new government jobs in the stimulus package.
That's the end game here, gang.
Got a break.
You're on the Rush Limbaugh program back after this.
As I say, Rush will be back tomorrow on the Excellence in Broadcasting Network.
We'll find out all about this furtive Washington trip when he returns tomorrow.
So don't miss that.
In the meantime, let's try.
Marianne in Cincinnati, you are up next on the Excellence in Broadcasting Network.
Hi.
Hi, Jason.
Thanks for taking my call.
Glad to do it, ma'am.
I was calling about your health care comments, and I'm a nurse here in the Cincinnati area.
And one thing that's really bothered me on all of the ideas about health care is that when we talk about young people supporting the old people, or we talk about healthy people supporting sick people, the problem that I have with it is that when something catastrophic happens, when a young person's in a car accident and they don't have any insurance, or say someone doesn't have insurance, they're 40 years old,
they find out that they have a glioglastoma.
Nothing that has to do with what they've done as far as smoking or being overweight or anything like that.
They still have to be taken care of.
So because of that catastrophic event, we still end up taking care of them through Medicaid.
And there's free health care all over the United States right now through Medicaid.
There's free health care for illegal immigrants because of a Supreme Court decision going back a few years ago.
That's a fair point.
Now, you've got to understand, as I'm certain you do, that insurance or the health insurance market just doesn't pool risk.
I mean, the idea behind insurance, and I get this from people all the time as, well, you've got to understand healthy people have to pay in to subsidize the sick, and that's how the insurance works.
It pools risk.
But it also prices risk.
And that's the regulatory aspect of insurance.
And the beautiful thing about the insurance market, whatever kind of insurance you have, is it regulates behavior without the government being involved.
We don't need seatbelt laws.
If your insurance company says you wear a seatbelt, you get a premium discount, that tends to encourage people to do this or a smoking premium or what have you.
Now, what we don't do in health insurance, however, is we don't allow insurance companies to price risk.
And by that, I mean, you ever heard of guaranteed issue, Mary Ann?
No.
All right, guaranteed issue and community rating are terms in the market and government speak that say, look, first of all, we're going to tell these big bad insurance companies they've got to insure everybody.
So if you're sick and you've already got cancer, you've already got heart disease or what have you, you want to go get insurance now, you waited until you were sick, well, you can't be declined.
Well, that's not insurance because you're not pooling any subsidy there or pooling risk.
You're waiting until you're sick.
Well, if that's the case, we're going to have guaranteed issue.
I'm going to wait till I get sick.
I'm not going to buy insurance until after that.
And that's part of the plan.
The other aspect is the community rating system that says in order to avoid discrimination against people who might be ill, or we can't, you know, it's not their fault, right?
We're going to make certain that the rate cannot fluctuate with the consumption.
That is, if you've got car insurance or any other kind of insurance for that matter, and you end up in a number of car crashes, guess what?
You're on high-risk insurance and your premium goes where?
Well, it goes up.
It goes up.
We don't do that with health insurance.
And under this plan, we're not going to allow them.
So young people will have to buy in a community rating that will allow seniors or people in their middle ages who consume much less health, excuse me, who consume much more health, they will have a discount subsidized by the young person.
I would not be object, well, I would be, you know, I would rather have the market handle it, but I wouldn't object as much to a mandate if we allowed, if we didn't have a community rating so that I'm a young person.
I'm 21.
Cancer is a disease of the old age.
Probably not going to get into an accident.
All I need is catastrophic coverage.
I don't need acupuncture.
I don't need treatment for drug addiction or AIDS or anything else.
And I can buy a cafeteria-style health insurance catastrophic plan, and I can get it very cheaply, which you could if that were the case, then that's fine.
That's not what the mandate's going to be.
The mandate is going to be you have to buy all the bells and whistles.
It's got to be a Cadillac rate.
And because we're not going to allow the market to raise their price for people who consume more health care, i.e., they're sicker more often, you're going to have to make up the difference as a young person who's healthy.
Well, I don't want people to have to subsidize people that are sick or elderly people.
My thing is, is that they're all the time saying that there's no health care, you know, people are uninsured.
Well, if there's a catastrophic event, that person gets taken care of.
That takes place no matter what.
Yeah, the cost shifting.
The cost shifting can be overblown.
You'd be surprised that it's not as high as people think.
But go ahead.
But my other concern is that we've got people who are on Medicaid and they run to the emergency room because they're going to cough or they run an emergency room because they've hurt their toe.
And personally, I think if you were to mandate that that person go to a clinic and not use that high-end services and using the emergency room for things that they shouldn't be, and also at the same time, the doctor, when the patient comes in with a headache, they're having to run all these extensive tests because they don't want to get sued.
Look, your diagnosis of the symptom is spot on.
What I'm saying is the problem is government is pricing people out of the insurance market.
It's pricing people out of the insurance market because they have mandates they've got to cover.
They've got community rating, and that's why a lot of people do not buy insurance.
You know, the point I was trying to make with Mary Ann, she's right about some of these problems, but the government, once again, exacerbates things.
Most states have mandates on what a traditional indemnity insurance product has to cover.
You know, acupuncture, port wine stain removal, drug abuse.
You know, now we've got that at the federal level for self-insured.
That just drives up the price.
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