Monday, October 7, 2019

Asking Poor Countries To Limit Greenhouse Gas Emissions Will Do More Harm Than Good

Below is an excellent article about why climate alarmists, such as the 16-year-old girl, Greta Thunberg, have many ideas that will do much more harm than good. The article is long, yet it is worth reading. Be sure to read the Scientific American article that I'll give here: "Should We Chill Out About Global Warming?" This can be found at https://blogs.scientificamerican.com/cross-check/should-we-chill-out-about-global-warming/.

Tim Farage

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Greta Thunberg To Poor Countries: Drop Dead

  • thunberg_0.PNG

09/26/2019 


On Monday, celebrity climate activist Greta Thunberg delivered a speech to the UN Climate Action summit in New York. Thunberg demanded drastic cuts in carbon emissions of more than 50 percent over the next ten years.

It is unclear to whom exactly she was directing her comments, although she also filed a legal complaint with the UN on Monday, demanding five countries (namely Argentina, Brazil, France, Germany and Turkey) more swiftly adopt larger cuts in carbon emissions. The complaint is legally based on a 1989 agreement, the Convention on the Rights of the Child, under which Thunberg claims the human rights of children are being violated by too-high carbon emissions in the named countries.
Thunberg seems unaware, however, that in poor and developing countries, carbon emissions are more a lifeline to children than they are a threat.

Rich Countries and Poor

It's one thing to criticize France and Germany for their carbon emissions. Those are relatively wealthy countries where few families are reduced to third-world-style grinding poverty when their governments make energy production — and thus most consumer goods and services — more expensive through carbon-reduction mandates and regulations. But even in the rich world, a drastic cut like that demanded by Thunberg would relegate many households now living on the margins to a life of greatly increased hardship.

That's a price Thunberg is willing to have first-world poor people pay.

But her inclusion of countries like Brazil and Turkey on this list is bizarre and borders on the sadistic — assuming she actually knows about the situation in those places.

While some areas of Brazil and Turkey contain neighborhoods that approach first-world conditions, both countries are still characterized by large populations living in the sorts of poverty that European children could scarcely comprehend.

Winning the War on Poverty with Fossil Fuels

But thanks to industrialization and economic globalization —  countries can and do, climb out of poverty.

In recent decades, countries like Turkey, Malaysia, Brazil, Thailand, and Mexico — once poverty-stricken third-world countries — are now middle-income countries. Moreover, in these countries, most of the population will in the coming decades likely achieve what we considered to be first-world standards of living in the twentieth century.

At least, that's what will happen if people with Thunberg's position don't get their way.

The challenge here arises from the fact that for a middle-income or poor country, cheap energy consumption — made possible overwhelmingly by fossil fuels — is often a proxy for economic growth.

After all, if a country wants to get richer, it has to create things of value. At the lower- and middle- income level, that usually means making things such as vehicles, computers, or other types of machinery. This has certainly been the case in Mexico, Malaysia, and Turkey.

But for countries like these, the only economical way to produce these things is by using fossil fuels.

Thus it is not a coincidence that carbon-emissions growth and economic growth track together. We see this relationship in Malaysia, for example:


malaysia.PNG

And in Turkey:

turkey.PNG


We no longer see this close a relationship between the two factors in wealthy countries. This is due to the fact many first-world (and post-Soviet) countries make broader use of nuclear power, and because high income countries have more heavily abandoned coal in favor of less-carbon intensive fuels like natural gas.

It is thanks to this fossil-fuel powered industrialization over the past thirty years that extreme poverty and other symptoms of economic under-development have been so reduced.

For example, according to the World Bank, worldwide extreme poverty was reduced from 35 percent to 11 percent, from 1990 to 2013. We also find that access to clean water has increased, literacy has increased, and life expectancy has increased — especially in lower-income areas that have been most rapidly industrializing in recent decades. In spite of constant claims of impending doom, global health continues to improve.

Just as carbon emissions track with economic growth in middle income countries, child mortality tends to fall as carbon emissions increase.
We see this throughout the developing world, including in India:

ndia_mortality.PNG

And in China:

emissions_mortality_china.PNG

Industrialization isn't the only factor behind reducing child mortality, of course. But it is certainly a major factor. Industrialization sustains modern health care amenities such as climate controlled hospitals, and it increases access to clean water and sanitation systems.

Thunberg, unfortunately, ignores all of this, mocking the idea of economic growth as a "fairytale." But for people in the developing world, money and economic growth — two things Thunberg apparently` thinks are contemptible — translates into a longer and better life. In other words, economic development means happiness for regular people, since, as Ludwig von Mises pointed out, "Most mothers feel happier if their children survive, and most people feel happier without tuberculosis than with it."

Thunberg's blithe disregard for the benefits of economic growth is not uncommon for people from wealthy countries who are already living in an industrialized world built by the fossil fuels of yesteryear. For them, they associate additional economic growth with access to high fashion and luxury cars. But for the billions of human beings living outside these places, fossil-fuel-driven industrialization can be the difference between life and death.

And yet, Greta Thunberg has seen fit to attack countries like Brazil and Turkey for not more enthusiastically cutting off their primary means to quickly deliver a more sanitary, more well-fed, and less deadly way of life for ordinary people.

The Chinese know the benefits of economic growth especially well. A country that was literally starving to death during the 1970s, China rapidly industrialized after abandoning Mao's communism for a system of limited and regulated market capitalism. But even this small market-based lifeline — sustained by fossil fuels — quickly and substantially pulled a billion people out of a tenuous existence previously threatened regularly by famine and economic deprivation.

Today, China is the world's largest carbon emitter — by far — with total carbon emissions double that of the United States. And while the US and the EU have been cutting emissions, China won't even pledge to cap its emissions any time before 2030. (And a pledge doesn't mean it will actually happen.) India meanwhile, more than doubled its carbon emissions between 2000 and 2014, and its prime minister refuses to pledge to cut its coal-fired power generation.

totalemissions.PNG

And who can blame these countries? First-world school children may think it's fine to lecture Chinese factory workers about the need to cut back their standard of living, but such comments are likely to fall on deaf ears if climate policy means destroying the so-called "fairytale" of economic growth.

As one Chinese resident said in response to Thunberg on China's social media platform Weibo: “If the economy doesn’t grow, what do us people living in developing countries eat?” 

Measuring Net Costs of Global Warming

Advocates for drastic cuts in emissions might retort: "even if our policies do make people poorer, they'd be a lot worse off with global warming!"

Would they though?

At the UN, Thunberg thundered, "People are suffering. People are dying [because of climate change.]" But that isolated assertion doesn't tell us what we need to know when it comes to climate-change policy.

The question that does matter is his: if the world implements drastic Thunbergian climate change policies will the policies themselves do more harm than good?

The answer may very well not be in the climate activists' favor. After all, the costs of climate change must be measured compared to the costs of climate change policy. If economic growth is stifled by climate policy — and a hundred million people lose out on clean water and safe housing as a result — that's a pretty big cost.

After all, the benefits of cheap energy — most of provided by fossil fuels — are already apparent.

Life expectancy continues to go up — and is expected to keep making the biggest gains in the developing world. Child mortality continues to go down. For the first time in history, the average Chinese peasant isn't forced to scratch out a subsistence-level existence on a rice paddy. Thanks to cheap electricity, women in middle income countries don't have to spend their days cleaning clothes by hand without washing machines. Children don't have to drink cholera-tainted water.

It's easy to sit before a group of wealthy politicians and say "how dare you" for not implementing one's desired climate policy. It might be slightly harder to tell a Bangladeshi tee-shirt factory worker that she's had it too good, and we need to put the brakes on economic growth. For her own good, of course.

And this has been the problem with climate-change policy all along. Although the burden of proof is on them for wanting to coerce billions into their global economic-management scheme, the climate-change activists have never convincingly made the case that the downside of climate change is worse than the downside of crippling industrializing economies.

This is why the activists so commonly rely on over-the-top claims of total global destruction. One need not waste any time on weighing the options if the only choices presented are "do what we want" or "face total global extinction."

But even climate change activists can't agree the Armageddon approach is accurate.  Last year, for example, Scientific American published "Should We Chill Out About Global Warming?" by John Horgan which explores the idea "that continued progress in science and other realms will help us overcome environmental problems." (If click on the link doesn't work, paste the URL: https://blogs.scientificamerican.com/cross-check/should-we-chill-out-about-global-warming/).


Specifically, Horgan looks at two recent writers on the topic, Steven Pinker and Will Boisvert. Neither Pinker nor Boisvert could be said to have libertarian credentials, and neither take the position that there is no climate change. Both assume that climate change will lead to difficulties. Both, however, also conclude that the challenges posed by climate change do not require the presence of a global climate dictatorship. Moreover, human societies are already motivated to do the sorts of things that will be essential in overcoming climate-change challenges that may arise.

That is, pursuing higher standards of living through technological innovation is the key to dealing with climate change.

But that innovation isn't fostered by shaking a finger at Brazilian laborers and telling them to forget about a family car or household appliances or travel at vacation time.

That isn't likely to be a winning strategy outside the world of self-hating first-world suburbanites. It appears many Indians and Brazilians and Chinese are willing to risk the global warming for a chance at experiencing even a small piece of what wealthy first-world climate activists have been enjoying all their lives. 

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Ryan McMaken (@ryanmcmaken) is a senior editor at the Mises Institute. Send him your article submissions for Mises Wire and The Austrian, but read article guidelines first. Ryan has degrees in economics and political science from the University of Colorado, and was the economist for the Colorado Division of Housing from 2009 to 2014. He is the author of Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre.

Saturday, March 9, 2019

Save us from Leftists

By definition, Leftists want the government to control much of their money and lives. Governments are run by politicians, which have a favorability rating around 15–20%. Who wants them to control the economy or our lives?

If you do, look around at the numerous countries that have tried this. They invariably get corrupt and their people become poor.

I’m not against programs that give money to parents to educate their children as they see fit. I’m also not against programs that give money to each of us to provide for medical expenses. But this money should go to all equally so that we have ‘equal rights before the law’.

If structured properly, these programs don’t allow Congress to control our lives because parents would be able to choose the school for their children.

And adults could choose their doctors and hospitals for them and their children.

Leftists such as United States Senator Elizabeth Warren, “Unveiled a proposal (in February 2019) outlining the Universal Child Care and Early Learning Act, a comprehensive plan to provide millions of families with free, high-quality child care and early learning options and to ensure that every family in the country can affordably access these services.”

Notice the use of the word ’free’. Leftists love to use that word. ‘Free’ means to them, “Paid for by you from a tax or deficit increase”.

What about if a family would like the mother to stay home and raise their children? Would they get the equivalent amount as a child-care subsidy? Nope. Their taxes would go up making it harder for mothers to raise their children without having to work for money. Is this really what we want?

Senator Elizabeth Warren also wants to break up companies such as Google, Amazon and Facebook, because they are too big and dominate the markets. That’s all we need is some politicians deciding what companies are “too big” and how to control them.

It gets worse.

Newly elected United States Rep. Alexandria Ocasio-Cortez, (nicknamed AOC), said, “The world is going to end in 12 years if we don't address climate change”.

OMG. Current projections are that the atmosphere will increase in temperature by an average of about 0.2 degrees Celsius in 12 years. I’ll take bets of any amount about the world ending in 12 years.

Later she said, “Our planet is going to hit disaster if we don’t turn this ship around, and so it’s basically like, there’s a scientific consensus that the lives of children are going to be very difficult. And it does lead, I think, young people to have a legitimate question, you know, ‘Is it okay to still have children?'”

Great. Let’s stop having children. Then maybe the Earth can ‘heal itself’. But I do think that people who actually believe AOC should not propagate.

Please save us all from Leftists. I beg of you.


Tim Farage is a Professor and Graduate Advisor in the Computer Science Department at The University of Texas at Dallas. He writes about mathematics, computer science, physics, chemistry, the reconciliation between science and spirituality, Intelligent Design, and the application of Natural Law to our various systems such as education, government and economics.

Thursday, February 21, 2019

Why we have not had extraterrestrial visitors?

The first big problem is that interspacial distances are surprisingly vast.

For instance, it will take us about 6 months to get to Mars. At that same speed, the time it would take to get to the nearest star (aside from the Sun) would be 40,000 years or so. Even a huge generational ship is likely to fail over that time period.

What if the aliens have faster than light travel? Well, Einstein’s relativity has been around for about a century and there is no theoretical way of traveling faster than light. But even if we could travel at c, it still would take hundreds of years to possibly get to a planet that might have intelligent life.

Recently, we have found that there are more reasons for not having aliens come to Earth.

Origin-of-life researchers are finding it to be much more difficult than they thought 50 years to figure out how life started on Earth. There is evidence for single-celled life from over 3.5 billion years ago. The Earth is about 4.5 billion years old, so life started fairly soon after the Earth was cool enough for it to form. And yet, we don’t have a clue about how life could have started through naturalistic processes. The bottom line is that finding any life in the universe many be rare.

Second, the evolution of complex organic structures presents many problems. It is very difficult to get complex organic structures to form through natural selection operating on random mutations. There has never been even one demonstration of this.

Third, the evolution of an intelligent species that will be able to attain space travel may be extremely rare as well. The well-known futurist, Ray Kurzweil, used the Drake equation to estimate the number of intelligent species in the universe, and he came out to 1. This is rather startling given that there are an estimated 300 billion galaxies in the Universe and 300 billion starts in each galaxy. So we may be alone, or close to it.

Thus, it appears now that it is very unlikely that aliens have ever visited Earth, or will ever visit us. The issues of having few, if any, intelligent species out there, along with the problems of having to travel for thousands of years appear to be insurmountable.

I’m afraid the bottom line is that you will never get to meet Mr. Spock.

Tim Farage is a Professor and Graduate Advisor in the Computer Science Department at The University of Texas at Dallas. He writes about mathematics, computer science, physics, chemistry, the reconciliation between science and spirituality, Intelligent Design, and the application of Natural Law to our various systems such as education, government and economics.

Thursday, May 10, 2018

Free-Market Economics is the only Moral Economic System


Usually, when we talk about ‘markets’, we are referring to ‘free markets’.

If someone is referencing economic exchange, then we can use the term ‘free-market economics’.

Think about an open-air market where merchants are selling their goods. You walk by a merchant whose product you want, and if you agree on a price, you buy it. If not, you don’t. No one can make you buy anything. And no one can stop you from being a merchant.

(Although the government may require health and safety regulations).

This is a good example of free-market economics.

In the United States and most other developed countries, free-market economics is the norm. You can buy cars from whomever you wish if you agree upon a price. You can buy coffee from McDonald’s or Starbucks.

Here is something I consider essential: Free economic markets are the only moral basis for an economy. Why? Because if you can’t choose with whom to do business, or if you can’t open up your own business, then someone else (e.g. the government) is deciding for you.

What right does anyone have, even the government, to tell you what goods and services you can have? Or what business you may start?

The United States’ Declaration of Independence has what might be the most profound words written in the English language:

“We hold these truths to be self-evident: that all men are created equal; that they are endowed by their Creator with certain unalienable rights; that among these are life, liberty, and the pursuit of happiness.”

Because it is our God-given right to be free, no one has the legal right to infringe on our freedom.

(If a person infringes on another’s life or liberty, it is appropriate for the government to prosecute that person).

It’s interesting to see that a free-market economic system is not an economic system at all. It just allows people to freely trade with one another.

Some people mistakenly call this Capitalism, but that is a misnomer. It is a word used my Karl Marx pejoratively, and we know how well Communism has turned out wherever it has been tried.

If we use the term ‘markets’ more broadly, it can refer to the freedom we have in all of the aspects of life. For example, we have a free market in friendship: You can be friends with anyone who wants to be friends with you.

We even have a free market in our food choices: eat whatever you wish.

The only sustainable society is one that allows free markets.

This is why there are so few Communist countries left. Even China, which is a Communist country, has started to prosper because they are allowing more and more free economic markets.

Freedom is essential to any good society. 

But in order to have an enlightened civilization, most people must use their freedom to improve themselves, and make the world a better place.


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Tim Farage is a Professor and Graduate Advisor in the Computer Science Department at The University of Texas at Dallas. He writes about mathematics, computer science, physics, the reconciliation between science and spirituality, Intelligent Design, and the application of Natural Law to our various systems such as education, government and economics.

Thursday, December 21, 2017

Is it possible to program benevolence into an AI?

Benevolence is really an emotion, just as are anger, enjoyment, and other emotions

We have no idea as to how to program a computer (or AI which is a computer program possibly controlling some hardware) to have feelings. We have no idea as to how to program a computer to be self-aware or to care about anything.

There is a debate about this. Some computer scientists think that we’ll eventually be able to program AI’s to have feelings and be self-aware and some computer scientists don’t think so.

And if they do become self-aware, would that be bad? More than a few scientists think so.

Stephen Hawking, for example, has stated: “I think the development of full artificial intelligence could spell the end of the human race.”

Bill Gates, the founder of Microsoft, is equally concerned: "I am in the camp that is concerned about super intelligence. First, the machines will do a lot of jobs for us and not be super intelligent. That should be positive if we manage it well. A few decades after that though the intelligence is strong enough to be a concern. I agree with Elon Musk and some others on this and don’t understand why some people are not concerned."

And this is what Elon Musk, CEO of Tesla, a US car-maker, said: "I think we should be very careful about artificial intelligence. If I were to guess like what our biggest existential threat is, it’s probably that. So we need to be very careful with the artificial intelligence. Increasingly scientists think there should be some regulatory oversight maybe at the national and international level, just to make sure that we don’t do something very foolish. With artificial intelligence we are summoning the demon. In all those stories where there’s the guy with the pentagram and the holy water, it’s like yeah he’s sure he can control the demon. Didn’t work out."

Basically, these gentleman are worried are a “Rise of the Machines”, or SkyNet”, or “Terminators” run amok. Seriously.

I’m in the opposite camp. So far, no matter how fast a computer computes, and no matter how cleverly it is programmed, there is not even a semblance of emotion or self-awareness. So it is not possible to extrapolate as to when AI’s will be programmed to achieve these, if ever.

Yes, I know you’ve heard that such AI’s will be created by 2045 or some such year, but these are guesses without a factual foundation.

Consider what Richard Socher has to say. He is the chief scientist at software maker Salesforce and a computer science lecturer at Stanford. Socher is ideally positioned to resolve the debate between the humanists and the Terminators. He’s firmly in the humanist camp. “There’s no reason right now to be worried about self-conscious AI algorithms that set their own goals and go crazy,” he says. “It’s just that there’s no credible research path, currently, towards that. We’re making a huge amount of progress and we don’t need that kind of hype to be excited about current AI.”

Let’s look at self-driving cars. Commercial production of such vehicles is expected to begin in just a few years. GM says they will have completely self-driving vehicles commercially available by 2020.

Programming these vehicles is a monumental task. Their top priority is to get their occupants safely from point A to point B. So they will be programmed to avoid getting into crashes. And if they are in a situation in which they are going to hit either a dog or a human pedestrian, they will be programmed to not hit the human.

Are self-driving cars programmed to care about humans? No, because they don’t ‘care’ about anything. If someone changes their programming to hit a human rather than a dog, that is what they will do.

Furthermore, we already have military drones that can be ordered by a person to drop a bomb. Again, the drone doesn’t understand or care what it’s doing. Could someone program a tough, military robot to kill the enemy? Certainly. But it will not be because the robot ‘wants’ to kill.

We can program what looks like benevolence to us. For instance, if you observe self-driving cars long enough, you might think they were programmed to be benevolent, because they appear to be careful with human life. But they are not benevolent, nor are they hostile.

They are just machines.


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Tim Farage is a Professor and Graduate Advisor in the Computer Science Department at The University of Texas at Dallas. The views expressed herein are those of the author. He writes about mathematics, computer science, physics, the reconciliation between science and spirituality, Intelligent Design, and the application of Natural Law to our various systems such as education, government and economics.

Friday, August 18, 2017

Will mankind survive overpopulation, resource shortage and climate change?

I’m going to reduce the anxiety in your life. Here’s how:
  • Overpopulation is not a problem
  • We’re not running out of resources
  • “Climate Change” may be disruptive, and it may even be better for humanity
Let’s take these one at a time.
  • Overpopulation
In 2017 world population is about 7.5 billion. Here is a UN graph of the projected population until 2100:


So it seems Earth’s population will top out this century between 9 to 10 billion people. Modern countries can easily feed, provide clothing and housing, etc., to its citizens. Developing countries have a problem because their governments are corrupt and don’t allow its citizens freedom, especially free markets. As countries modernize they get richer. Notice the growth of China, for instance, because its government has been allowing free enterprise.
  • Natural Resources
Reports of running out of natural resources have appeared for decades and maybe a century ago. Instead we’re finding more and more natural resources. Fracking has allowed countries to inexpensively obtain more natural gas than we thought possible. And China has many untapped resources.

Resources such as aluminum, iron, manganese, chromium, etc., never get used up - they don’t leave the Earth. With the exponential advances in technology and robotics, we’ll be able to recycle these and never run out of them.

Similarly, water never leaves the Earth. It just takes technology and energy to make it potable.

The only natural resources we’ll eventually run out of are the fossil fuels - and we shouldn’t need them for energy by the end of this century, because of renewables and nuclear power.
  • “Climate Change”
Here’s a NASA graph of the current rate of climate change. This does not depend on the many non-validated climate models. It is actual satellite data:

Note the trend line of 0.16C per decade. This comes out to less than 2C per century. Now with technological advances still increasing quickly, does it seem like we can’t handle a 2C increase over 100 years?

Actually, the Earth is getting greener because we are emitting more CO2 into our atmosphere. Who knows what the optimal plant/human/animal CO2 level is?

And if you’re worried about sea-level increases, here’s another graph for you from NASA:

So this gives a rate of 3.16 mm per year. This turns out to be about 12.5 inches per century, or about 1 inch per decade. Not quite the “20 feet” that Al Gore said would happen soon. So none of these concern me much.

What does concern me is man’s inhumanity to man. This is unlikely to destroy a significant fraction of humanity. But it sure does make life miserable for a large portion of humanity. 

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Tim Farage is a Professor and Graduate Advisor in the Computer Science Department at The University of Texas at Dallas. The views expressed herein are those of the author. He writes about mathematics, computer science, physics, the reconciliation between science and spirituality, Intelligent Design, and the application of Natural Law to our various systems such as education, government and economics. You are welcome to comment upon this blog entry and/or to contact him at tfarage@hotmail.com

Friday, March 31, 2017

A way to have pretty good health care for all Americans

What is the current state of health care in the U.S. 

Currently our government is subsidizing health care in many ways, such as with the programs of Medicare (for those of retirement age) and Medicaid (for the poor), and other health-care laws passed by Congress, such as Obamcare. In addition most people still get heath insurance from their employer.  And anyone who walks into a county hospital can get medical care. 

Medicaid is not a very well-run program.  The amount it reimburses doctors is so low that many doctors do not take Medicaid patients.  My doctor takes Medicaid patients but only if they pay up front for the services provided.  The patient can then send the paperwork to the government to get reimbursed.

There are a number of unworkable and undesirable other things about the way the health care is handled.  One is that these programs are underfunded by over $40 trillion.  This means that the government has made health care promises but eventually not enough income to meet them, so some changes will have to be made.  Even so, not everyone is covered.  And we spend about 16% of our Gross Domestic Product (GDP) on health care, higher than almost all other countries in the world.

Most people receive health-insurance subsidies from their employer, which creates its own sets of problems.  For instance, if a person quits their job or is fired, they must find another company to work for, or they must soon find their own health insurance. And if they have any pre-existing health conditions, this insurance could be prohibitively expensive.  

The only reason employers got involved with providing health insurance for its employees was that during World War II, the government made it a tax write off, as an encouragement to employers.  It no longer makes any sense to have employers involved with health insurance It creates many inefficiencies and problems.

On the other hand, most Americans are happy with the quality of health care that they receive. Therefore, we want to maintain at least the same quality, while providing good health care to all, and at an affordable price to the taxpayers. 

Therefore, for the foreseeable future, I think that health care, like education, should be subsidized for all Americans (and permanent residents).  And Americans should be able to choose their own doctors, chiropractors, osteopaths, ophthalmologists, dentists, etc., that they believe best meets their needs. 

What is the best way we can provide pretty good health care for all? 

My proposal will 1) Provide health care for all Americans, 2) Do so affordably using taxes, 3) Remove the pre-existing condition problem, and 4) Be fully funded, so that we don't pass on more debt to our children.  

The essence of the proposal is to provide and fund a Health-Care Account (HCA) for each American adult, paid for through taxes.  Some of this amount would be used to purchase a high-deductible health insurance policy, and the rest would be used to pay for medical services until the deductible is met. For most people, in most years, the deductible won't be met.  Keep in mind that money for the deductible is part of the HCA and would be paid for using a patient's HCA card. 

How much money should our government spend on healthcare?

Most of the advanced countries spend 9 to 12% of the U.S. Gross Domestic Product (GDP) on healthcare. I suggest the government take 12% of GDP, which grows virtually every year, and provide an equal amount of this to every adult (age 18 or older).  With a GDP in 2017 of about $20 trillion, and 240 million adults, this comes out to over $10,000 per year per adult that the government would provide as a subsidy. 

Each adult would use their HCA card buy a $6,000 per year (in 2017 dollars) high-deductible health-insurance policy, and would have $4,000 per year to spend, using their HCA card, for their deductible. This very high deductible greatly helps to keep the insurance premium down.  Also, the health-insurance companies that wish to be involved in this would also be required to provide insurance for any children the adult may have. 

Here's an example as to how this would work. We'll assume that all Americans and permanent residents already have been given their HCA card.  You have the flu and go to the doctor of your choice.  Say the doctor charges $150 for a visit.  You would provide your HCA card and $150 would be deducted from your $4,000 deductible.  And that's it. It costs you nothing, and your doctor gets paid immediately.

Now suppose that something catastrophic occurs, such as a fall resulting in two broken legs and a concussion.  Say the medical costs would be $12,000. The hospital would first use whatever deductible was left on you HCA card, and then your insurance company would pay the remainder of the costs at 100%.  

This would provide very good coverage for all, and would save money at the same time, since we would be spending 12% of GDP on health care instead of 16% which we currently spend. And it would still keep the advantages of a free-market in health care, because patients could choose their own doctors, hospitals, insurance companies, etc.  This is what would make it better than the "single-payer" plans that most developed countries have, because they dictate the cost of doctor's visits, as well as the costs of various procedures, and lead to many delays in obtaining health care. 

What would health-insurance companies need to do to qualify to be part of this program?  

The United States Congress would certify participating insurance companies who would have to agree to accept the amounts given above and would have to agree to accept any person, regardless of any pre-existing conditions.  They would also have to agree to insure any children of the covered adult. As is true now, they would also have to be fiscally sound. 

Also, once a person has met the deductible, their insurance company would have to agree cover 100% of covered medical costs.  There would be no more co-payments for the year.

Would health insurance companies want to participate in this program? 

Yes.  Keep in mind that these payments start at age 18.  Usually, people up to the age of 40 or 50 would not meet their deductible, but the health-insurance companies would be getting premiums during this time.  People who are older or are frequently ill would be using the insurance most years, and so essentially insurance companies would be making money on most young or healthy people, and losing money on older or less healthy people.  The difference should provide a reasonable profit for an insurance company, so that many would want to be a participant in this program.  This cushion of starting to get premiums at age 18 should also provide enough money to be able to handle the costs of pre-existing conditionsThe specifics as to what is covered and what isn't would need to be worked out so as to insure that insurance companies would want to participate. 

Q and A's

Since this would be a new government program, would it require a tax increase?

All things being equal, it would require a tax increase. But the overall cost to individuals would decrease. This is because they would no longer be paying their part of the health insurance provided by their employer.  Also, companies would be saving money because they would no longer be providing health insurance, and they would no longer have to have large human resource departments to deal with this.  Thus, they could afford to give raises to their employees.

Would eye care and dental care be covered?

Yes, this would be required of all participating insurance companies. 

Would all medical conditions and procedures be covered, and would coverage be unlimited? 

No. Just as now, certain conditions are not covered by Medicare, certain conditions would not be covered by this plan.  For example, a heart transplant would likely not be covered.  Similarly, cosmetic surgery would not be covered, although one could use the cash portion to pay for it. Also, a person could accumulated cash in their account which they would be able to use this for such procedures. 

Probably a lifetime maximum of around $1 million would be in place.  It's important to get good coverage for all, so some limitations must apply for this to occur.  

Would this program replace all other government health-care programs?  

Yes, and that is one way the government will save money on health-care programs.  No programs such as Medicare and Medicaid would be needed.  Taxpayers would also save money because they would no longer have to pay for county hospitals because everyone would be covered. (A possible exception is that veterans who are injured in the line of duty would not have the limitations mentioned above.  They would have the same essential plan but any injuries they sustained would be covered, and the lifetime maximum would be increased.  There would be no more need for Veteran's Hospitals, since veterans could get their health care at any hospital). 

Studies have shown that people who take care of themselves physically spend less on health care.  Would there be incentives in place to encourage this?  

The government would not directly apply such incentives, but insurance companies would be allowed to.  For instance, an insurance company could say, "If you keep your weight in the ideal range for your age and sex, and if you keep yourself reasonably fit, and if you get regular physical, eye-care and dental checkups, we'll refund a portion of your monthly payment, and you can use that money anyway you wish."

This would be a valuable incentive to keep ourselves physically healthy.  And of course there would be the additional benefit that healthier individuals are happier and more productive. 

Are you sure it would be a good idea to sever the relationship between employment and health care? 

Very much so.  Economist Albert Brenner has said this about health care: “ Industry and commerce are not well-served by a labor force unwilling to change jobs for fear of losing health-insurance benefits.  I have seen little discussion of this issue in connection with health care reform, but health-insurance benefits are a major reason for individuals to accept employment and to continue their employment even if they are not satisfied, challenged, or motivated by their job.  The current system thereby promotes an inefficient utilization of labor by restricting labor mobility.  This inefficiency reduces productivity, profits, and economic growth and output.  Since labor costs are by far the single largest resource cost in the production of goods and services, a reform that promises to make labor utilization more efficient promises to improve productivity and to increase economic output.” 

Would health-insurance co-operatives be allowed to participate? 

Yes, as long as they meet the same regulatory standards that for-profit health-insurance companies must meet.

(Health insurance co-operatives are owned by those who purchase health-insurance policies through them.  Any profits made can be returned to the policy owners, or can be used to reduce premiums.  Thus, they may wish to provide additional incentives for its members to be physically fit). 

What could a person do with money that accumulates in their HCA? 

They could do a number of things.  A person could choose to get a refund each year for any deductible money they did not use. This would provide an incentive to find good, yet cost-effective doctors and hospitals. 

Also, they would be allowed to transfer their money to another's account.  This could be useful if, for example, a family member needed a heart transplant, or something that wasn't covered by the insurance policy.

And they could stipulate in their will that any excess money be given to another person(s).  This would add more incentive to take care of oneself physically. 

Could a person use their own money to get additional benefits by increasing their health-insurance premiums?

Certainly.  This must be the case in a free country. 

Can the well-off do something to lessen the cost of this program? 

Yes. There should be an easy way for someone to opt out of this program, and those that are well-to-do would be encouraged to do so.  For instance, the government might ask those families who earn over $150,000 to opt out of the program and pay for their own medical care.  As our country becomes more prosperous, more people would be able to opt out, saving the government money.  The government could send a nice thank-you letter each year to individuals who opted out, to show their appreciation. 

Would this program be constitutional? 

Although the Supreme Court would likely rule it to be, I don't think it would be constitutional. There is nothing in the Constitution about the government providing health-care subsidies. Therefore, I would want a Constitutional Amendment passed to allow for this program. The amendment would specify that up to 12% of GDP could be used for the subsidy, and that sufficient taxes should be levied so that no debt would arise as a result of it. 

It would also state that this subsidy is not a right. This is because I don't believe one can have a right that requires someone else to pay for that right. 

As an aside, are there other subsidies that you’d like the government to provide? 

Yes.  Until our civilization advances enough, I believe that government should subsidize both education and health care for all.

Additionally, I’ve previously described a Natural-Resource Dividend.  This is an amount of money that would be given each month to every American adult, to compensate for others’ use of our common natural resources. Lately, this idea has been called a Universal Basic Income (UBI).

If each adult got a $1000 per month UBI, a family of four would be getting about $2000 per month from the Natural-Resource Dividend, plus government-subsidized health care and education.  These should provide a reasonable economic base for families, and would also allow most mothers of young children to not have to work for money.

Between these subsidies and the Natural-Resource Dividend, we can eliminate all other subsidies that the government provides, both to businesses and individuals.  This would save a large sum of money by eliminating all of the bureaucracy involved in these programs. 

Note also a very important point: every American would be given the same amount of money for each of these subsidies.  This will save money by reducing the bureaucracy involved, and will satisfy the “general welfare” clause of the Constitution as well as the 14th Amendment, which are both meant to have laws that apply equally to all citizens. 

Conclusion 

Having a health-care subsidy that a) provides good health care to all Americans without going into debt; b) that saves money as well; c) that encourages us to take care of our physical health; and d) that still allows individuals free choices as to how to obtain their health care, is a plan that we should adopt as soon as possible.

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Tim Farage is a Senior Lecturer in the Computer Science Department at The University of Texas at Dallas. You are welcome to comment upon this blog entry and/or to contact him at tfarage@hotmail.com.

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