Paul Krugman "hits the nail on the head" in re: Obamacare

[Listening]

Another statement with no foundation in reality. Insurance companies do and will continue to provide health insurance.

Your mistaken perception is based on false understanding of how business and economics works. Most companies do not earn a profit. They do provide imce for their employees and owners. Many are specifically designed as not for profit and non profit.

As long as people can earn a living providing insurance, companies will provide insurance.

Out of respect for what I think are rationale posts on your part, I'll try to pull some more out of these statements.

Most companies do not earn a profit ? Are you talking insurance companies or companies in general ?

Yes, companies in general. Small to large businesses. Businesses that are in truly competitive markets.

And, this shouldn't be all that surprising when we consider the details.

{I put some work into this....}

The whole concept breaks down into three parts, micro-economic theory, business accounting, and empirical data.

Micro Economic Theory

According to classical economic theory, most business shouldn't be earning a profit. Profit means that the market is not efficient or competitive. Where there are profits, then new businesses will enter the market, driving down prices to cost. At that point, no profit. Where profit exists in the medium and long term, there is market inefficiency which violates basic Adam Smith classical markets.

Business Accounting

It is, of course, important that we are working with the same definition of "profit". And, it is important that we are clear about the difference between how personal income taxes and business taxes are determined. Basically, there are no "expense deductions" in personal income taxes. I only point this out because that is what we are most familiar with and it's a bit difference for business taxes. Business taxes are calculated after costs, after expenses. Materials and labor costs are expenses. {Yeah, my comment in econ class what "You telling me that the CEO's $3 million salary is considered "not profit"? "Yes"} Interest payments on business loans are expensed. Depreciation of equipment is expensed.

It's simple enough to see if we do the accounting. By the time all is said and done,

Earnings = Revenues - costs.
EBIT {Earnings before interest and taxes}= (Price * Quantity_Sold) - (Wages * Labor Hours + Rent * Equipment_Hours)
..........{ That's the economics way of parcing it out. Facilities are lumped with equipment)

Profit is earnings after interest and taxes.
EBT {Earnings before taxes} = EBIT - interest
Taxes =t*EBT
Profit is {Earnings after taxes} = (1-t)*EBT

We can look up the terminology on investopedia and wiki. It get's a bit muddled, duplicated, overlapping, etc in real business accounting. So it is important that we have this basic set that we agree on. Business accounting concerns itself with EBIT. Economics generally doesn't care. Sometimes, accounting, finance, and economics overlap with differences. Never the less,

Wiki agrees with "In accounting and finance, earnings before interest and taxes (EBIT), is a measure of a firm's profit that excludes interest and income tax expenses."

So, the way wiki puts it, EBIT is profit before interest and taxes. That is actually a good way to put it because if we look about the definitions, there is this fuzziness in the use of "profit", "earnings", and "revenues".

For our purposes, what we are really interested in is "profit" AFTER everything. Otherwise, what are we talking about really? All companies have revenues, they must. In order to have to owe taxes, all companies must first have earnings after interest and other deductions. So, after tax "earnings", would be profit.

And, in fact, yes. Most companies do not earn a profit. Most companies just mange to make payroll. This isn't to say that the owner's don't make a nice income. They should. If they aren't, everyone else should be looking for work. Along "Main Street" where I live, most don't pay federal and state taxes. They simply don't have any earnings after expenses. They do pay sales tax, which they simply account for during the sale, and property taxes. Can't get past those because they are before expenses. But, after expenses taxes, typically they don't. That is, at least, what a new business owner has come to understand having talked with other business owners in the area. They obviously pay any income taxes on the salary they draw.

In classical theory, even high owner and CEO salary will attract competition, driving down earnings. So most companies better not be earning profits or we don't have free markets.

Yes, what you describe is a company in a completely free market.

And in that market, "no profit" does not mean the owner isn't paying himself something (he's and expense).

However, when the time comes that an owner can't make a living (on the long term), the company closes up.

In the context of our conversation, however, we are not talking free market. Another characteristic of the totally free market is "no barriers to entry". In the world of insurance, that is certainly not the case (as it would be in the case of starting an oil refinery). There are lots of barriers to entry and we call this situation (or most any other situation where a profit becomes possible) a market discontinuity.

Corporations, such as insurance companies, send that profit out in the form of stockholder dividends. If these dividends are not being sent out, the stock price drops (and when you are an overpaid, bloated CEO....you own a lot of stock or options and a dropping price could mean millions of dollars lost).

That is why I was surprized by your comment.

Now I better understand the POV of your post.

Thanks.

I will just add that when it comes to small companies, they tend to spend a lot of money above the bottom line to avoid taxes. The small company I worked for prior to being acquired used to generate 2 to 3 million a year for the owner. She usually paid taxes on nothing. She had a hell of an accountant.

Did she make a profit...technically no. Was there profit....you bet there was.

 

[Listening]

A bump.

Although, I would rather hand deliver a WHACK to the sniveling little weasel who is the subject of this thread.

 

[emilynghiem]

What I find makes the opponents so angry
is that whether or not it works, the point being missed is that govt
is forcing people to pay for INSURANCE THROUGH PRIVATE BUSINESSES.

Why not make it work by FREE WILL NOT FORCE OF PENALTY?
Why not pay for health care by REIMBURSING citizens for taxmoney wasted elsewhere
and use the taxes already paid to cover for this system?

So many other ways to MAKE IT WORK
why weren't those tried or acknowledged?

why is the government PENALIZING people and PUNISHING anyone
who would want to choose other ways of funding health care?

THAT is what is upsetting to people.

And I am upset because I thought this was the same argument and rational behind "PROCHOICE"
that it was trusting people to make the right choices without forcing them by law or threat of criminal punishment or regulation
that it was NOT about wanting to push abortion but wanting government controls and regulations OUT of private health decisions!

And now with ACA, people aren't "trusted" with the choice of how to pay for health care without forcing them by law?
THAT is what is so disturbing to me!

And together, it is triply disturbing that people keep MISPORTRAYING
what the objections are about!

Saying people who want the same free choice we had before
"don't want it to work, don't want people to access health care"

is like saying

people who want prochoice "want to abort babies and don't want responsibility"

wanting the FREEDOM OF CHOICE does NOT mean wanting failure and abortion!

This is completely convoluted. I can't believe that the same prolife people are now screaming for free choice without govt mandates,
and the prochoice people are calling them names for wanting choice, the same way they were accused themselves for wanting choice!

if this is some kind of dark comedy, some joke on all of us, I ain't laughing. this is FU sad!

Krugman is a very wise man:

Unacceptable Realities

(snip)

The hysteria over Obamacare is being well documented, of course; Sahil Kapur’s piece on “Obamacare McCarthyism” — the instant purging of any Republican who offers any hint of accommodation to the law of the land — is getting a lot of well-deserved attention. One thing Kapur doesn’t emphasize, however, is what I see a lot in my inbox (and in my reading): the furious insistence that nothing resembling a government guarantee of health insurance can possibly work.

That’s a curious belief to hold, given the fact that every other advanced country has such a guarantee, and that we ourselves have a 45-year-old single-payer system for seniors that has worked pretty well all this time. But nothing makes these people as angry as the suggestion that Obamacare might actually prove workable.

​

Why is it so hard to see that being forced to pay private insurance companies is not
the same as paying taxes to government?

WTFFFF?

^^ I think you need to take that little hammer and nail. And stick my head right there and whack a few times. Hard. Maybe I'll get this twisted arguments that make no sense at all to me! ^^

 

[dblack]

What I find makes the opponents so angry
is that whether or not it works, the point being missed is that govt
is forcing people to pay for INSURANCE THROUGH PRIVATE BUSINESSES.

Why not make it work by FREE WILL NOT FORCE OF PENALTY?
Why not pay for health care by REIMBURSING citizens for taxmoney wasted elsewhere
and use the taxes already paid to cover for this system?

So many other ways to MAKE IT WORK
why weren't those tried or acknowledged?

why is the government PENALIZING people and PUNISHING anyone
who would want to choose other ways of funding health care?

THAT is what is upsetting to people.

And I am upset because I thought this was the same argument and rational behind "PROCHOICE"
that it was trusting people to make the right choices without forcing them by law or threat of criminal punishment or regulation
that it was NOT about wanting to push abortion but wanting government controls and regulations OUT of private health decisions!

And now with ACA, people aren't "trusted" with the choice of how to pay for health care without forcing them by law?
THAT is what is so disturbing to me!

And together, it is triply disturbing that people keep MISPORTRAYING
what the objections are about!

Saying people who want the same free choice we had before
"don't want it to work, don't want people to access health care"

is like saying

people who want prochoice "want to abort babies and don't want responsibility"

wanting the FREEDOM OF CHOICE does NOT mean wanting failure and abortion!

This is completely convoluted. I can't believe that the same prolife people are now screaming for free choice without govt mandates,
and the prochoice people are calling them names for wanting choice, the same way they were accused themselves for wanting choice!

if this is some kind of dark comedy, some joke on all of us, I ain't laughing. this is FU sad!

Krugman is a very wise man:

Unacceptable Realities

(snip)

The hysteria over Obamacare is being well documented, of course; Sahil Kapur’s piece on “Obamacare McCarthyism” — the instant purging of any Republican who offers any hint of accommodation to the law of the land — is getting a lot of well-deserved attention. One thing Kapur doesn’t emphasize, however, is what I see a lot in my inbox (and in my reading): the furious insistence that nothing resembling a government guarantee of health insurance can possibly work.

That’s a curious belief to hold, given the fact that every other advanced country has such a guarantee, and that we ourselves have a 45-year-old single-payer system for seniors that has worked pretty well all this time. But nothing makes these people as angry as the suggestion that Obamacare might actually prove workable.

​

Why is it so hard to see that being forced to pay private insurance companies is not
the same as paying taxes to government?

WTFFFF?

^^ I think you need to take that little hammer and nail. And stick my head right there and whack a few times. Hard. Maybe I'll get this twisted arguments that make no sense at all to me! ^^

It is confounding. I'm tempted to assume that at the heart of that POV is a perception of powerlessness. People see themselves as perpetual pawns and seek merely to improve their rations.

 

[Listening]

What I find makes the opponents so angry
is that whether or not it works, the point being missed is that govt
is forcing people to pay for INSURANCE THROUGH PRIVATE BUSINESSES.

Why not make it work by FREE WILL NOT FORCE OF PENALTY?
Why not pay for health care by REIMBURSING citizens for taxmoney wasted elsewhere
and use the taxes already paid to cover for this system?

So many other ways to MAKE IT WORK
why weren't those tried or acknowledged?

why is the government PENALIZING people and PUNISHING anyone
who would want to choose other ways of funding health care?

THAT is what is upsetting to people.

And I am upset because I thought this was the same argument and rational behind "PROCHOICE"
that it was trusting people to make the right choices without forcing them by law or threat of criminal punishment or regulation
that it was NOT about wanting to push abortion but wanting government controls and regulations OUT of private health decisions!

And now with ACA, people aren't "trusted" with the choice of how to pay for health care without forcing them by law?
THAT is what is so disturbing to me!

And together, it is triply disturbing that people keep MISPORTRAYING
what the objections are about!

Saying people who want the same free choice we had before
"don't want it to work, don't want people to access health care"

is like saying

people who want prochoice "want to abort babies and don't want responsibility"

wanting the FREEDOM OF CHOICE does NOT mean wanting failure and abortion!

This is completely convoluted. I can't believe that the same prolife people are now screaming for free choice without govt mandates,
and the prochoice people are calling them names for wanting choice, the same way they were accused themselves for wanting choice!

if this is some kind of dark comedy, some joke on all of us, I ain't laughing. this is FU sad!

Krugman is a very wise man:

Unacceptable Realities

(snip)

The hysteria over Obamacare is being well documented, of course; Sahil Kapur’s piece on “Obamacare McCarthyism” — the instant purging of any Republican who offers any hint of accommodation to the law of the land — is getting a lot of well-deserved attention. One thing Kapur doesn’t emphasize, however, is what I see a lot in my inbox (and in my reading): the furious insistence that nothing resembling a government guarantee of health insurance can possibly work.

That’s a curious belief to hold, given the fact that every other advanced country has such a guarantee, and that we ourselves have a 45-year-old single-payer system for seniors that has worked pretty well all this time. But nothing makes these people as angry as the suggestion that Obamacare might actually prove workable.

​

Why is it so hard to see that being forced to pay private insurance companies is not
the same as paying taxes to government?

WTFFFF?

^^ I think you need to take that little hammer and nail. And stick my head right there and whack a few times. Hard. Maybe I'll get this twisted arguments that make no sense at all to me! ^^

Don't worry about it. Dottie probably gets the same buzz (or whatever people get) from reading Krugman that most people get from porn.

He only knows that it somehow makes him feel "good" and that it encourages him to disappear so he can have some alone time.

There is no rational reason to even consider Krugman's horsecrap.

 

[emilynghiem]

Can't you move to Massachusetts or Vermont?
I thought those STATES adopted singlepayer.

that is DIFFERENT from federal government operating it.

You can look at the populations (especially prisons/immigration) in
Texas and California vs. other states, and see why
public health needs to be managed locally by STATE to cover diverse demands.

I want single-payer like Israel has anyway.

Unacceptable Realities

That’s a curious belief to hold, given the fact that every other advanced country has such a guarantee, and that we ourselves have a 45-year-old single-payer system for seniors that has worked pretty well all this time. But nothing makes these people as angry as the suggestion that Obamacare might actually prove workable.

 

[Listening]

Can't you move to Massachusetts or Vermont?
I thought those STATES adopted singlepayer.

that is DIFFERENT from federal government operating it.

You can look at the populations (especially prisons/immigration) in
Texas and California vs. other states, and see why
public health needs to be managed locally by STATE to cover diverse demands.

I want single-payer like Israel has anyway.

Unacceptable Realities

That’s a curious belief to hold, given the fact that every other advanced country has such a guarantee, and that we ourselves have a 45-year-old single-payer system for seniors that has worked pretty well all this time. But nothing makes these people as angry as the suggestion that Obamacare might actually prove workable.

Well, what you asks makes to much sense. It means that the people of that state have bound together to provide some kind of "universal" health care which they have defined. If you don't like it you can move out.

As it is, there is no place to move if you don't want BigAssed Brother running your life when it comes to health insurance.

 

[billyerock1991]

I want single-payer like Israel has anyway.

Unacceptable Realities

That’s a curious belief to hold, given the fact that every other advanced country has such a guarantee, and that we ourselves have a 45-year-old single-payer system for seniors that has worked pretty well all this time. But nothing makes these people as angry as the suggestion that Obamacare might actually prove workable.

Move to Israel. Problem solved.

Take Krugman with you. He's Jewish and should fit right in. One of America's problems solved.

how is a problem solved when all we hear from you moronic righties is move out... thats not a answer thats a wish on your part...

 

[billyerock1991]

Can't you move to Massachusetts or Vermont?
I thought those STATES adopted singlepayer.

that is DIFFERENT from federal government operating it.

You can look at the populations (especially prisons/immigration) in
Texas and California vs. other states, and see why
public health needs to be managed locally by STATE to cover diverse demands.

I want single-payer like Israel has anyway.

Unacceptable Realities

Well, what you asks makes to much sense. It means that the people of that state have bound together to provide some kind of "universal" health care which they have defined. If you don't like it you can move out.

As it is, there is no place to move if you don't want BigAssed Brother running your life when it comes to health insurance.

how is BigAssed Brother brother running your health care ??? I hear this from you right wing whack jobs all the time ... but not one of ya can tell us all here how is BigAssed Brother running your life ... you can choose not to have anything to do with the health care system and Quietly pay your tax for it... so why the whine ...

 

[Listening]

Can't you move to Massachusetts or Vermont?
I thought those STATES adopted singlepayer.

that is DIFFERENT from federal government operating it.

You can look at the populations (especially prisons/immigration) in
Texas and California vs. other states, and see why
public health needs to be managed locally by STATE to cover diverse demands.

Well, what you asks makes to much sense. It means that the people of that state have bound together to provide some kind of "universal" health care which they have defined. If you don't like it you can move out.

As it is, there is no place to move if you don't want BigAssed Brother running your life when it comes to health insurance.

how is BigAssed Brother brother running your health care ??? I hear this from you right wing whack jobs all the time ... but not one of ya can tell us all here how is BigAssed Brother running your life ... you can choose not to have anything to do with the health care system and Quietly pay your tax for it... so why the whine ...

Hey stupid....did you see all those people who lost their insurance because they were on "junk" plans ?

Well, I had some family on those plans and they were not junk. Now I am paying more for coverage I don't want and there are requirements in that coverage I don't want.

So GFY. That's how.

Moron.

 

[longknife]

I've wondered why the Libtards adore this guy so I checked out his bio. Here's part of what it says:

As a commentator, Krugman has written on a wide range of economic issues including income distribution, taxation, macroeconomics and international economics. Krugman considers himself a liberal, calling one of his books and his New York Times blog The Conscience of a Liberal.[11] His popular commentary has attracted considerable comment, both positive and negative.[12]

So what? He's got a lot of awards and decorations - all awarded him by socialist, liberal, leftist organizations. That makes him the final word on economic theory?

You can believe what you want. Me? I'd rather ask the local self-employed plumber, gardener, or retail store owner if I want the REALITY of economics.