Monthly Archives: June 2014

Obamacare Is A Giant Step Along The Path To American Communism

Preliminary Note- I expect that a majority of the readers of this article do not believe there is any danger that our economic system will ever be converted to communism. I hope for the sake of our great country that they are right. However, I fear that the conversion to American communism is already well on its way. Obamacare is a giant step along the path to American communism. Conversion to communism need not be effected by an uprising. It can and is being legislated as the law of the land by our elected Democrat representatives. Even though Russian and Chinese communism, are incorporating aspects of capitalism, American communism is different. Our federal government hasn’t seized outright control of production. Instead it has passed laws, rules and regulations to give itself indirect control in selected areas. It has been taking property, in ever-increasing amounts, from the middle class and the wealthy and giving it or applying it for the benefit of sick, low-income and poor people.

The development of American communism began before Obamacare. Providing free healthcare for the poor at hospital emergency rooms and recovering the cost by increasing the charges to those individuals and employers who paid hospitals for healthcare was a precursor of Obamacare. Charging a fee to cell phone users to fund free cell phones for the poor and increasing transit fares to gives free rides to the poor are other examples of American communism. Requiring the construction of wheelchair accessible bathrooms and ramps, though generally commendable, is requiring spending by those who have, for the benefits of people with disabilities.

What other moves toward American communism will Democrat liberals propose for the benefit of poor and low-income people when they next get the opportunity? Will they (i) require electric utilities to give free electricity or air conditioners, (ii) require landlords to allocate a portion of their properties to offer free housing, (iii) require bicycle renters to pay a higher payment to pay for free bike usage, (iv) require restaurants to give free meals, (v) require theatre owners to provide free access to movies or shows, (vi) require hotels to give free rooms, (vii) require airlines to give free travel, or (viii) require car rental companies to provide free rentals. They may not require such welfare benefits to be given for free. Instead, they might require discounts or provide poor and low-income folks with Obamacare type US government subsidies to be paid for by taxpayers. The Obama administration has found a way to confiscate and transfer wealth by extorting unfair or excessive settlements from banks growing out of misconduct by bankers relating to the collateralizing of mortgages, and redistributing a portion of the penalties collected for the benefit of the poor and organizations that support Democrats.

President Obama and other Democrats seeking political gains constantly complain about growing income inequality. It may be true with respect to the gap between the middle class, whose incomes have stagnated due in large part to the inept federal fiscal policies of the Obama administration, and those of us who have capital to invest and are benefitting from a rising stock market. Stock prices have been increasing in large part because of short-term interest rates that the Fed has kept near zero for years because of the failure of our fiscal policies. However, the gap is overstated because most employers have been paying increasing healthcare costs for their employees. While such payments do not increase cash compensation or take home pay, they have materially increased aggregate employee compensation. The income inequality gap between the middle class and low-income people and the poor is not growing, but is narrowing because of ever-increasing welfare benefits, including Obamacare subsidies, being given to the later groups. President Obama and liberal Democrats also complain that many of our highest income individuals or corporations pay little or no income tax because of tax loopholes. They could eliminate the problem, but because the beneficiaries of the income tax loopholes are major campaign contributors to both parties, our politicians do not eliminate tax loopholes every year as was done routinely in past Congresses.

President Obama believes that our rich Americans, even though they earned it, have much more wealth than they need. He ignores the fact that the industrialists who created great wealth for themselves during the 19th and 20th centuries, reinvested it in a burgeoning US economy and created millions of blue-collar jobs that led to the formation of the middle class. A faster growing US economy sparked by capital investment would create millions of jobs and strengthen the middle class.

Instead of concentrating on growing the economy and improving employment opportunities for the middle class and the poor to give them an opportunity to narrow the income gap, the Obama administration adopted (i) an inept fiscal stimulus plan that exploded the size of the National Debt, (ii) rules and regulations that stagnated our economy and (iii) adopted Obamacare, a communistic type law, to take property from those who are succeeding to provide underpriced healthcare for sick and low-income people.

Obamacare Is A Cancer.

Obamacare was adopted by Democrat Congressmen at the urging of President Obama for political gain. President Obama promoted Obamacare based on deliberate lies to mislead the voters about its affect on the middle class. He did so to conceal the fact that the Obamacare mandates require the healthy middle class or their employers and the wealthy, to purchase overpriced insurance or be charged a penalty to pay for a significant portion of the healthcare offered on a highly subsidized basis to sick and low-income people. He obviously expected that once the sick and the poor received Obamacare’s subsidized benefits it would be politically impossible to eliminate them. He believes that the ends justify the means. Now that his repeated lies have been exposed he ignores them and lies about the success of Obamacare.

Obamacare is proving to be a malignant cancer that was inserted into and is causing great harm to our healthcare system, the US economy and the middle class. President Obama and the Democrats who created it knew or should have known of the terrible damage it would cause. Its thousands of pages of regulations are adding excessive costs to healthcare providers. They don’t care. Their goal was to seize governmental control of our healthcare system, expand Medicaid for the poor and create a giant new welfare entitlement to provide greatly expanded benefits for sick and low-income people. They thought they could trick the young and middle class to purchase overpriced Obamacare policies to pay for it.

Obamacare does not create a single payer system making the US government the sole payer. Instead it uses the insurance companies as the middlemen, leaving them to take the blame for the inevitable premium increases and declining quality and availability of healthcare. Obamacare mandates straight jacket insurers. It requires insurance companies to disregard pre-existing conditions and offer greatly expanded benefits, including preventive care that is exempt from deductibles. As a result, they must offer outrageously below cost coverage to sick people that requires insurers to raise premiums, deductibles and co-pays for everyone else or reduce payments to providers or some combination of both. Since low-income people receive federal government subsidies of up to 80% of their premiums, the extra costs incurred by insurers resulting from the Obamacare mandates are in large part borne by the middle class and their employers. To limit the premium increases for the older (but not yet Medicare eligible) middle class they targeted the unsubsidized young middle class for maximum increases by mandating that older people could not be required to pay more than three times the amount paid by young people. They knew, based on actuarial tables, that the rate should be five times higher. Furthermore, since most of the subsidies will be paid for by the taxpayers, the middle class (who pay the bulk of our income taxes) will ultimately be paying for most of the subsidies as well.

Prior to Obamacare, healthcare policies were designed to offer a broad range of benefits subject to cost constraints. Health insurance policies were offered for a one year term. They generally did not include catastrophe coverage that would have entitled you to coverage in later years, but would have greatly increased the premium. Various forms of insurance were available prior to Obamacare to protect against acquiring a pre-existing condition. However, few people bought such coverage. Disability insurance was available to help by providing partial income continuation, but also was purchased by only a small percentage of our population. Some people lived a healthy lifestyle that helped avoid pre-existing conditions, but for various reasons, often beyond their control, or because they made a mistake, developed pre-existing conditions. Others were born with a genetic defect, abused their bodies or took undue risks that increased their chances of becoming subject to pre-existing conditions. If you acquired a serious medical problem prior to the time of renewal of your healthcare insurance policy it was treated as a pre-existing condition. As a result your renewal premium, as determined by insurance company actuaries, may have greatly increased or become unaffordable. Irregardless of the cause, healthcare policy costs for a person or family with a serious pre-existing condition were often $100,000 or more per year.

One’s ability to purchase the best and most expensive healthcare to treat one’s medical problems, like the purchase of an expensive home, car or vacation, was available only to those who could pay. Steps were being taken at the state level to assist people with pre-existing conditions in obtaining limited coverage. Insurers in various states were offering special types of coverages to give limited relief to people with pre-existing conditions. Business group insurance with large pools of healthy workers were often able to include coverage without ratings or with limited ratings for people with pre-existing conditions. However, most people (unless they had acquired adequate catastrophe or disability insurance or had received a large damage award following an accident case) had to limit their care or spend all or a portion of their savings to pay for their healthcare costs. People were responsible for taking care of their own bodies.

We must recognize that the patient must have some skin in the game to encourage wellness, prevent the cost of healthcare from becoming prohibitive and avoid long waiting periods for treatment. We should require significant co-pays. Healthcare needs are often discretionary. If a person has to pay for a portion of a treatment or procedure he may choose to forgo it. Similar consideration should be given to modifying Medicare to make it viable in the long run, instead of the multi-trillion dollar burden it will soon become.

President Obama and the Democrat leadership saw an opportunity for political gain by offering greatly expanded benefits for everyone, including people who had pre-existing conditions. They knew that low-income individuals would be unable to afford to pay the required increases in premiums needed to pay for the trillions of dollars of additional costs to take care of the sick and to cover the Obamacare mandated benefits over a 10 year period. They therefore included very high subsidies for the people they affectionately refer to as low-income folks. The subsidies are so large that they cover not only the increased costs resulting from the Obamacare mandates, but also cover a large portion of the remainder of their premiums, thereby creating a gigantic new welfare program for low-income people. They expected such generous subsidies to be available within a few years, after the employer mandate kicked in and many, if not most, employers dropped coverage, for a majority of all Americans. They knew that if they told the American people the truth about the enormously increased healthcare costs which would have to be paid by everyone who did not receive a large subsidy, namely the middle class, the employers and the rich, Obamacare would never have passed.

President Obama with the assistance of the Obamacare draftsmen  and paid advisers like Gruber carefully concocted a plan of deception to prevent the American people from learning the truth about the cost of Obamacare and who was going to pay for it. They started by creating new types of insurance plans and named them after valuable metals to fraudulently give them the appearance that purchasers were getting a meaningful choice between good healthcare plans. In fact, the exchange offered plans available to most people require them to buy very expensive mandated coverage they may not want or need. Choices between plans deal with choices between higher premiums and lower deductibles and vice-versa. The differences between the plans are meaningful only to people who will be receiving large subsidies or who can reliably predict their healthcare needs.

President Obama and the draftsmen knew that the aggregate of the premium charges, deductibles and co-pays for all of the plans, to be determined by the insurance companies, would have to be substantially higher than prior plans that did not have to meet the very expensive Obamacare mandates. They took money from Medicare and adopted 18 new taxes to pay for a portion of the governments’ administrative costs and the cost of providing the subsidies for low-income people and expanded Medicaid benefits for the poor. Some of the Obamacare taxes will be passed on to consumers and further increase healthcare costs. The revenues from the new capital gains tax are treated as Obamacare revenues, but have nothing to do with Obamacare. They are merely a supplemental income tax on upper income taxpayers allocated to Obamacare to make it appear to be costing the US government less. Few people realize that the Obamacare capital gains tax, coupled with the expiration of the Bush tax cuts, increased marginal income tax rates on upper income taxpayers by almost 10% in one year. Yet, many economists wonder why the recovery in the American economy is so tepid.

Obamacare was passed by left-wing Democrats who didn’t understand and didn’t care how it would work. At the urging of President Obama, who withheld the truth from them, they rushed to adopt Obamacare while they had the minimum votes for passage. President Obama is still lying to prevent the middle class from learning the truth about Obamacare. The middle class is only beginning to understand that it is required to pay for (i) the very expensive benefits Obamacare gives at way below fair market rates to people with pre-existing conditions, (ii) the greatly expanded and costly to provide benefits mandated (mainly for political reasons) for all Obamacare exchange offered policies and (iii) the subsidies for low-income workers.

Prior to the passage of Obamacare we were making progress in solving our healthcare problems. It had been determined years ago that the poor needed medical care, and a compassionate America was giving it to them. Everyone who lived within a radius that enabled them to reach a hospital emergency room had access to quality healthcare. Emergency rooms were required by law to treat everyone. You didn’t need to have insurance coverage or be able to pay. The use of emergency rooms became a healthcare safety-net entitlement. Although emergency rooms were not the most efficient way to provide run-of-the-mill healthcare in most cases, over time people who lived near hospitals, including illegal immigrants, used emergency rooms for their routine healthcare needs. However, the federal and state governments didn’t offer to pay for the new welfare benefit. To recover their emergency room costs, hospitals charged higher fees for patients who had insurance or could afford to pay. Such charges and the cost of newly developed treatments, procedures and drugs were rapidly increasing aggregate healthcare costs that were driving up the cost of healthcare insurance. When we look back we can see that providing free healthcare for the poor at emergency rooms resulted in the middle class and the employers indirectly paying for the cost of providing healthcare for the poor.

A large portion of employee healthcare insurance costs was (and is currently) paid for by employers. As a consequence, employers were not increasing cash compensation and in many cases were passing along an increasing portion of the costs to employees in the form of policy limits, premium contributions, deductibles and co-pays. Healthcare insurance for individuals was seeing similar cost increases. As a result of Obamacare, businesses are increasing employee deductibles and co-pays, eliminating full-time jobs and creating part-time jobs, outsourcing or delaying hiring as they grapple with Obamacare regulations and costs as a result of or in some cases in preparation for the delayed employer mandate.

Hospitals were permitted to require proof of insurance or payment before providing treatments and procedures requiring patient admission to the hospital. Expensive surgery and treatments were often not sought or were unaffordable because of cost constraints in cases where there was no insurance or high deductibles or co-pays. Nevertheless, using capitalist principles and relying on American exceptionalism, we were able to develop the world’s best healthcare system and provide ever-improving healthcare to increasing numbers of people.

President Obama and the Democrats fraudulently claim that when everyone has insurance it will lower the cost of providing healthcare by reducing emergency room visits. It is true that clinics that can be staffed with nurses and other trained medical personnel are being established at or near hospitals to perform routine procedures at lower cost. The use of clinics is an important step in lowering the cost of providing good healthcare for the poor. However, that was being accomplished independently of Obamacare, financed, in large part, by charitable contributions to hospitals from rich donors. But, where is a parent going to take their ill child if a doctor or a clinic is not readily available after office hours or because of increased waiting time to see a doctor? Moreover, the savings (particularly if clinics remain open 24 hours) will barely dent the outrageous costs of the Obamacare mandates.

Instead of honestly acknowledging the outrageous burden on the middle class, President Obama took to the airwaves as the chief salesman for Obamacare and deliberately lied (beginning before its passage) about the effects of Obamacare by stating repeatedly that your premiums would decline, and if you liked your doctor, or if you like your plan, you could keep them. He apparently believed that low-income people would accept having to use another plan, doctor or hospital when they learned they were paying reduced premiums as a result of their subsidies. He obviously felt that a significant number of young middle class liberals, who were attracted by his promises of hope and change and blindly supported him, would be confused and prevented by the Obamacare lies from understanding that Obamacare provides for a transfer of wealth from the middle class, their employers and the rich to sick, poor and low-income people and that they were deliberately targeted to pay for President Obama’s new welfare program. The repeated failures of the Obamacare websites and the lack of criticism from the liberal press served as a further barrier that prevented the middle class from learning the truth about Obamacare. However, the VA, IRS and numerous other scandals that even the pro-Obama press are finding impossible to ignore, have caused them to question the truth of statements from and the competency of the Obama administration.

The draftsmen made all preventive care exempt from the deductibles. Therefore, many people will not discover that they their coverage is subject to a deductible or co-pay until after they have a medical need which is subject to them. We do not yet know how many low-income people chose lower premium plans because they did not know they were subject to higher deductibles. Nor do we yet know how many people are being denied treatment for failure to pay a deductible in advance or what will happen if hospitals, doctors and other healthcare providers provide services and the deductible is not paid. Many people, whether or not their premium is subsidized, will elect not to have a treatment or procedure if they have to pay out-of-pocket for all or a significant portion of its cost. Hospitals may elect to perform expensive surgery, even if the deductible or co-pay prove to be uncollectible, because the insurance companies will be obligated to pay all charges in excess of such amounts.

For political reasons, the effectiveness of many of the Obamacare provisions (including the required purchase of a Obamacare policy) were delayed until after the 2012 presidential election so that the Obamacare lies would not be exposed until after the election. Since the Democrats didn’t have the votes in the House of Representatives to modify Obamacare, President effected such delays by issuing executive orders, that are likely to be found to be unconstitutional. President Obama knew that the unfair treatment of the middle class would be discovered over time, after the presidential election. However, he expected that so many low-income people would sign up for the new welfare benefit that it would be political suicide for Republicans to try to take away the subsidies. Being an entitlementist, he believed that the new welfare program would gain more votes for Democrats than it would lose. Now, President Obama stresses the millions of people who have gained coverage because of Obamacare. Many of them have signed up for expanded Medicaid programs which are free and paid for by the federal and state governments and should not have been linked to Obamacare. They were included in Obamacare to coerce the states into creating Obamacare exchanges and give the federal government control of healthcare. Large numbers of low-income people will flock to Obamacare after the employer mandate kicks in and they lose their full-time jobs and their employer paid coverage. However, they may not do so, and will be left with no coverage, if they are unable to receive a subsidy because their state in one of the majority of states that has not established a state Obamacare exchange. In an attempt to coerce the states to create Obamacare exchanges, Obamacare specifically limits subsidies to people who sign up on a state established exchange. However the Obama administration that wants to grant subsidies to as many people as possible to encourage Obamacare sign-ups, has chosen to ignore the very precise wording of the Obamacare law and is granting subsidies to people signing up on the federal exchange. Such subsidies are being challenged in a case to be heard next year by the US Supreme Court. Unless the Supreme Court finds the Obama administration’s payment of subsidies to low-income people signing up on the federal Obamacare exchange to be unconstitutional, we can expect Obamacare premiums for the middle class to rise substantially. If the US Supreme Court rules that no subsidies can be paid to purchasers on the federal exchange, then the number of uninsured individuals will skyrocket.

The draftsmen of Obamacare knew that when the middle class discovered the extent that they were being overcharged for a Obamacare policy many of them would refuse to purchase or refuse to renew a Obamacare policy and go without coverage. Why should anyone pay for insurance coverage they were unlikely to need knowing that if the became ill or injured and needed coverage, they would be able to obtain coverage at the next enrollment period? They therefore included a penalty (that the Supreme Court called a tax) that increases over each of the first three years, rising to 2.5% of income, to trap the middle class into paying an unfair amount whether or not they purchased a Obamacare exchange policy. Whether you call it a penalty or a tax, it is designed to force the middle class to pay to help subsidize the greatly underpriced benefits offered to the ill and to low-income folks. The president (who claims repeatedly that he is a champion of the middle class) continues to deliberately deceive the young middle class people he needs to sign up for Obamacare exchange policies to keep premium increases from going through the roof. He told them it will cost no more than a monthly phone or cable bill. That is just another Obamacare lie unless you are a low-income person or family eligible for up to an 80% subsidy.

We do not yet know what percentage of the Obamacare exchange policy purchasers are healthy or young middle class people who get no subsidy or whose policies will prove to be worthless because of high deductibles and co-pays. We do not know how many people lied about income to be eligible for subsidies or were illegal immigrants who lied about being US citizens. President Obama and the HHS won’t tell us. Nor are they telling us whether people who signed up for Obamacare policies have paid their premiums or are paying their required deductibles to the healthcare providers. Since they make selective disclosures to make it appear that Obamacare is succeeding, it is obvious that President Obama and the Democrats are trying to withhold certain relevant information until after the mid-term elections. They are being aided in their efforts by the failure of the liberal press to talk about the Obamacare faults.

President Obama and the Democrats attempted to get insurance companies to participate in the Obamacare exchanges and to minimize premium increases during the first three years by including a provision in Obamacare (that the president, HHS and the liberal press do not talk about) that provides for subsidies for insurance companies to cover their losses during the first three years. Many insurance companies have nevertheless excluded the services of many of the best available doctors and hospitals from their groups of providers, to limit their costs of providing Obamacare policy services. They are also talking about raising premiums next year. Because, as was predictable, the insurance company losses are now expected to exceed the amount available, the administration has announced that the subsidies shall be reduced proportionately as necessary. We can expect that when the quality and availability of healthcare has declined significantly, the Democrats will blame it on the “greedy” insurance companies and demand a single payer system. We should not forget that Medicaid ad Medicare are basically single payer systems and that an increasing number of doctors are refusing to treat Medicaid or Medicare patients.

Obamacare Is Destroying The Quality And Availability Of American Healthcare.

Because Obamacare mandates will increase insurance company payments by hundreds of billions of dollars annually, insurers are squeezing healthcare providers by reducing payments for treatments and procedures. Many doctors and some of our greatest hospitals are being excluded from or are refusing to participate in Obamacare provider networks because insurance companies selling Obamacare exchange policies are seeking to contain costs to limit premium increases. The added costs of complying with Obamacare regulations and the failure of Obamacare to deal with outrageous malpractice claims are driving additional doctors from private practice. Many of them, who have or will become hospital employees, will find their compensation reduced because hospitals are paid inadequately by Obamacare exchange qualified insurers. Because of Obamacare, the number of malpractice claims and the cost of malpractice insurance are going to grow due to the increased number of patients that doctors are going to have to treat (at lower fees per patient).

We have not yet seen the expected surge in demand for healthcare services from the sick, the poor (who receive Medicaid) and low-income individuals who are eligible to receive free or highly subsidized insurance coverage under Obamacare. Healthcare expenditures during the first three months of 2014 were less than expected. This is probably due to the confusion caused by the inept Obamacare rollout. The covered benefits, that include preventive care, not subject to deductibles or co-pays, will, within a short time frame, overburden the healthcare system. It will in most cases, because of reduced payments and increased costs, make it less profitable to practice medicine unless you work longer hours. Obamacare’s adoption comes at a time when the aging of our population is also going to add demands for healthcare services from Medicare beneficiaries that will put further pressure on healthcare providers. We only have to look at the treatment of our veterans, whose service earned them premium healthcare, but have for decades received inadequate coverage despite annual funding increases, to know it is inevitable that patients will in a few years incur long waiting periods for appointments and treatment under both Obamacare and Medicare. Obamacare will make it difficult to make a doctor’s appointment or arrange for a timely hospital procedure, thereby effectively rationing healthcare (even for those who are not entitled to a subsidy and pay excessively for coverage) and subject its availability to political considerations. As in Europe and Canada, the rich will not subject themselves to the inadequate healthcare offered under Obamacare (or Medicare which is following the same path) and will pay independently for high quality healthcare. Medical groups are already offering concierge plans to provide improved quality healthcare covering a broad range of healthcare needs at an affordable price for those who decline to purchase an Obamacare policy.

We Should Repeal Or Phase Out The Obamacare Mandates And Subsidies ASAP.

The Democrats claim that Obamacare can be fixed. Like most laws, Obamacare has some provisions and regulations that can be improved, but it is impossible to fix the main flaws of Obamacare. We must start by recognizing that we simply cannot afford (i) the elimination from consideration of pre-existing conditions which may enable an individual or family to receive a million dollars or more of treatments and procedures annually and (ii) the mandate that all insurance policies provide very broad politically motivated benefits for everyone. If we taxed the rich at close to 100% of income, which even Democrats most left leaning members would not dare to propose, the remainder of the cost of the Obamacare welfare will have to be borne by the middle class.

Republicans are faced with a dilemma. They opposed the adoption of Obamacare and have from time to time demanded its repeal. However, the Obamacare cancer has already caused major changes in the healthcare system which are irreversible. We cannot repeal all of Obamacare, but we can repeal its most harmful provisions. We must, as soon as possible, repeal the Obamacare provision that prohibits taking pre-existing conditions into consideration and repeal or phase out many of the other Obamacare mandates.

Irreparable harm is occurring daily as people with pre-existing conditions take advantage of the Obamacare windfall to obtain virtually free benefits that are not paid for the the US government, but instead are paid for in large part by the middle class through increased premiums. Democrats will immediately bash Republicans for any attempt to reinstate the consideration of pre-existing conditions as a callous attack on the sick who will be deprived of needed healthcare. Since most Americans sympathize with the needs of those Americans who are suffering from untreated medical problems, it is critical that Republicans carefully explain why Obamacare is a communistic law whose benefits are being paid for by the middle class and destroying the medical profession. To do so they must remind Americans of all of the misleading and fraudulent statements and outright lies made by President Obama relating to Obamacare.

Democrats argue that Republicans have no alternative proposal to replace Obamacare. Merely eliminating the mandates would represent a major corrective step. We can then reconsider pre-existing conditions and the other mandated benefits, ab initio, using healthcare experts who understand the importance of free-market capitalism, not political entitlementists who lean toward communism. We can encourage insurance companies to offer new types of coverage that will offer various forms of limited catastrophe coverage. We can also expand former efforts to give help to people with pre-existing conditions. To reduce administrative costs and make the providing of healthcare more efficient, we should eliminate federal government involvement in healthcare administration and encourage the mergers of insurance companies with hospital and other healthcare provider networks. The Obamacare rules, that encourage healthcare providers to focus on outcomes, can be retained to improve outcomes and by so doing, reduce costs.

President Obama is now arguing that Republicans are trying to take health insurance away from millions of Americans who have signed up for Obamcare. He ignores the equal or greater number of people who have already lost or are paying excessively for their coverage, or will lose their employer paid coverage after the employer mandate becomes effective. He also ignores the tax benefits from receiving employer paid coverage that will be lost when employees receive a small wage increase (that Democrats will claim credit for) and have to pay for their own coverage on the exchanges.

If left unchanged Obamacare may destroy American capitalism. Eliminating the Obamacare mandates will greatly reduce premium costs and materially increase the disposable income of the middle class and increase business investment and hiring. Instead of working 20 to 30 days a year to pay for the healthcare of non-family members and people they do not know, young middle class people will be able to pay off their college loans, buy a car or home, or put the money in an IRA that will be worth a million dollars or more when they reach retirement age. If we can grow the economy, as is likely to happen if the burden of Obamacare is removed, the percentage of disposable income spent on healthcare will likely decrease over time.

This article is one of a number of Obamacare related articles that have been published on this blog.

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The Twitter Stock Price Roller Coaster

In the short time period since the Twitter IPO its stock price has performed as if it was riding a roller coaster.  Various factors have contributed to its meteoric rise to a peak, followed by a rapid decline. Market factors unrelated to the fair market value of Twitter shares have influenced the price movement. Prior to the Twitter offering, IPOs were in a state of great demand (which occurs from time-to-time) with investors of most IPOs being allocated less shares than requested. Many investors were purchasing  the unallocated portion of their subscription as soon as the IPO commenced trading. The Twitter offering was highly glamorized by the financial press. Twitter shares like those of many other IPOs immediately skyrocketed in price. Twitter has many loyal users who were unable to obtain an allotment on the IPO and they and other investors for various reasons elected to buy the shares in the after market. Chart theorists added fuel to the fire as they determined buy points as the Twitter stock price rose and gathered momentum. As the stock price rose far above the IPO price it attracted short sellers. However, as ofter occurs when short sellers sell into a rapidly rising market, they get squeezed and panic, one-at -a-time, and cover their shorts at ever increasing prices, thereby driving the stock price higher. 

When the price of Twitter shares peaked and started to decline, various factors, acting in a manner similar to the way that gravity effects a roller coaster car, precipitated the decline. Some analysts withdrew their support based upon market capitalization and recommended sale . Stop loss orders, which have become fashionable and which were placed at various levels during the share price increase, began to be executed at declining prices, creating selling pressure. Chart theorists interpreted sell signals. Short sellers, who follow the analyst reports, know about the existence of stop loss orders and understand chart theory, exacerbated the decline by selling short at declining prices. As the stock declined, margin calls and tax loss considerations came into play and some unsophisticated stockholders sold in panic. 

Like a roller coaster the ride will stop at the bottom. If Twitter can generate revenues and profitability from its large number of followers, its shares will begin to rise again. If, as I expect, the rise occurs, the SEC should conduct an investigation as to when every short sale took place to try to determine the role of short selling in exaggerating stock market declines.