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Health, Dom Pérignon & Caviar

Spot the link? Trump doesn't. Not yet...

"The DONALD" – still in Manhattan, and still largely ignorant of the nasty critters and perverse ecosystem on the banks of the Potomac – is catching whiffs of swamp gas, writes Bill Bonner in his Diary of a Rogue Economist.

Talking to the New York Post, the president-elect said he expected to repeal Obamacare "sometime next week."

Its replacement, he said, would come "very shortly thereafter."

In the business world, you can get things done like that. But in the world of the Deep State, it won't happen.

America's health care system is bread, butter, meat, potatoes...and Dom Pérignon with caviar...to a substantial and growing part of the elite.

Here's why...

When we were growing up, we had no health insurance. When we had to go to the doctor – which was rare – we paid the bill in cash. (When we needed an operation in 1961, we negotiated with the hospital and the surgeon to pay in installments.)

Back then, the total yearly cost of health care ran about $600 per family of four. Last year, it was more than $40,000.

By comparison, a basic Ford F-150 pickup truck cost about $4,000 in 1961. Today, it costs about $27,000.

Today's pickup truck and today's health care are probably better than they were in 1961. But how come the former is only seven times more expensive...while the latter is 66 times pricier?

The answer is simple: The feds – with their zombie-crony allies – are far more active in health care than they are in the auto industry.

The auto industry is lean, global, and competitive; the health care industry is fat, domestic, and heavily controlled to avoid price competition.

Through regulation, paperwork, third-party payment systems, lawyers, licensing, tax incentives, subsidies, and crony deals with insurance companies and the pharmaceutical industry, the feds have created a glutton that now devours more than 17% of national GDP – up from just 5% in 1961.

That represents $36 trillion in excess spending over the last 55 years. And it's a large part of the reason federal debt is slated to go from $20 trillion this month to $30 trillion a decade from now.

Another softball question: What happens to the money?

Little of the extra spending pays for better health care. Instead, it goes to middlemen and parasites, the cronies in the medical-pharmaceutical-insurance-legal complex.

In Baltimore, for example, billboards invite people to imagine they have been victims of medical malpractice – a jackpot for the law firm, if not for the victim.

TV ads offer myriad new drugs, available at someone else's expense. Even though the lifestyle habits of much of the Baltimore population are so bad, offering "health insurance" to them is like offering fire insurance in Atlanta just as General Sherman marched into town.

Mr.Trump and the Republican Party say they will provide a "better deal" for Americans.

But how?

Any cut to health care must come out of the pockets of the elite who run the system. They'll fight hard – in the media, in Congress...and in the swamp – to protect their gains.

And that's just the beginning of the problem. Obamacare has enrolled 20 million new people, lowering the uninsured rate to 9% from 16%. The newly insured, too, will fight to protect their benefits.

The same phenomenon is at work in France.

The Financial Times reports that the frontrunner in the country's presidential election this year, François Fillon, has touched the dangerous "third rail" of French politics.

He dared to suggest reforming French health insurance – or Sécu – to cut costs.

The idea set off such political blowback that Fillon was forced to retreat. He promised he would never dare to privatize the French health care system...not even a little of it.

No matter where you are, it's hard to renege on solemn lies. And once underway, some things – war, empire, fake money, and real love – are almost impossible to back away from.
 

Bill Bonner has co-authored a number of New York Times Bestsellers including Financial Reckoning Day, Empire of Debt and Mobs, Markets and Messiahs. In his own opinion, Bill's most recent title, A Modest Theory of Civilization: Win-Win or Lose, is his best work yet. Bill also founded The Agora, a worldwide community for private researchers and publishers, in 1979. Financial analysts within the group have exposed and predicted some of the world's biggest shifts since that time, starting with the fall of the Soviet Union back in the late 1980s, to the collapse of the Dot Com (2000) and then mortgage finance (2008) bubbles, and more recently the election of President Trump.

See full archive of Bill Bonner articles

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

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