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Tuesday, August 13, 2019

CNN's Chris Cuomo erupted at a man in public who apparently called him "Fredo," in a wild moment caught on video that went viral Monday night. read more


And this is why our healthcare system is broken - insurance is only part of the problem but the one that gets 95% of the focus in any discussion. The problem is the underlying cost of care - in terms of facilities and salaries for nurses and doctors. Compare healthcare salaries - nurse, family doctor, surgeon, other specialist in the USA vs. Canada or Europe. Our salary structure is much, much higher - it can routinely be 2x the cost. Why is that? Well - that blame falls on the AMA. For a vast, vast majority of tasks you don't need the specialist training that the AMA forces on all medical professionals with the sole purpose of limiting labor supply and keeping wages high - that is the difference between a doctor and a dentist.

If we want to lower medical costs - the primary thing we need to do is break the AMA to increase the number of available professionals AND introduce automation. AI is coming for this in a big way - especially for machine learning for scanning MRIs and x-rays for identifiable patterns. We are going to see a huge pushback on AI in medical applications and my guess will be the Dems demanding AI is limited use while screaming that medical costs are too high. Just a matter of time until a nurse takes your vitals, feeds them into a computer and have AI give a diagnosis (Taiwan already uses IBM's Watson) with difficult cases upleveled to a 2nd opinion from a doctor in a low cost geography like India. Right only, it is only the fear of getting sued and the AMA which is stopping this.

Lastly, it is no secret that hospitals vastly inflate costs to cover for non-payers and government services which are cost losers (a lot of Medicare services) so most stay in business by inflating costs to those with insurance.

I had a friend that owned a low end autoparts sales business. He was uninsured and had a heart attack. He agreed to pay in cash and the hospital gladly agreed to take 50% of what their initial bill stated. Maybe there was goodwill in the reduction, but I suspect that was much closer to the true cost of the service provided.

"The stock market does not CREATE wealth. It just moves it around. It is an EXCHANGE."

That is not true. The stock market only serves to price assets at a 'market rate' efficiently.

"In 2017 The NYSE averaged 32 Billion in Stock transactions a day. The only time capital is generated is when a company sells stock rather than an individual. That is done via IPOs. The total capital generated by IPOs in 2017 was $41 Billion. "

You don't understand equity, IPOs, or company valuation then. The amount generated by the IPO only reflects a very small part of the actual capital raised in a practical sense. Most IPOs will sell 5-10% of the total equity of a company. The 5-10% sale sets a market price by which the remaining 90-95% of the shares retained by current shareholders are valued. So, the amount of 'capital creation' by $41B in IPOs is closer to $400 - $800B. While that 95% of shares might not change hands immediately, it can be used to acquire other companies via stock based transactions, get bank financing by pledging the shares, etc.

Another huge piece you are missing is employee stock options. These shares serve to avoid paying direct cash compensation so they are definitely capital of the business but are not reflected in your comment. From your comment, it sounds like you are still in school and don't have direct knowledge of working with a company in any type of treasury position.

"The rest of the transactions were between shareholders and did not generate any capital for the companies. in 2017 fortune 500 companies paid out $419 Billion in dividends.

As pointed out above, that statement is patently false.

"we've to conclude how Social Security holdings will become 0% by 2032 and if 30 year olds are time-travelers?"

The only existing asset that the SS Fund has is US government debt resulting from the overpayment of SS taxes during the baby-boomers' working years relative to expenditures. Prior to that accumulation of overpayments, the assets were effectively $0 - and this was by design. SS is not taking your own money and saving it in an investment account like a pension or a 401(k). It works on taking the money from current workers and paying it to retirees within the same year. If all worked out perfectly (life expectancy does not change and population is flat), these numbers would perfectly balance each year and SS fund would hold no assets. However, that does not work in practice because life expectancy continues to increase - and more importantly - increase faster than the actuarial estimates used to determine payroll tax amounts and benefit payouts.

Currently the SS Fund has $2.9T+ in assets (held as interest bearing US government securities). 2019 will mark the last year where payroll tax collects + trust fund interest will surpass expenditures. www.ssa.gov After this, it will sell off securities from the trust fund to cover shortfalls until 2035 - at which time the fund will be gone. Once the fund is gone, the yearly obligations surpass the expected payouts to the tune of a 20%+ annual shortfall. And this assumes some rosey projects as far as employment is concerned.

This is not opinion - this is how SS works.

"If only we could have prevented shenanigans and made every citizen it's investor"

That is not possible - and that was by design. Other countries have a sovereign wealth fund which does this. SS started making benefit payments immediately to people that didn't really contribute because it was meant to be a welfare program for deadbeats. As such, it was always using new investor money to pay old investors back rather than work on investment returns.

"You mentioned "de-population"? Is that something you invest in?

Without immigration, the US population is already decreasing. We have immigration due to employment opportunities - you would agree with this - yes? So, then the burden is on you to state how automation does not decimate our labor force as 50% of jobs are automated away in the next 30 years. Andrew Yang is the only guy asking this question and it is one that needs to be addressed as we continue to attract illegal aliens that are low skilled - basically, the people most likely to have their professions automated.

"Which is COMPLETELY different from, say, assets held in a 401(k), in several ways, including accessibility and legacy."

Depends. If your 401(k) has US bonds, then it is the same. Both backed by full faith and credit. However, 401(k)'s have other risky assets while SS Trust Fund is forbidden from investing in those asset classes.

As for as 'accessibility' - that has nothing to do with the safety or definition of the assets. I don't know how you can't get this through your head. SS is not run like and 401(k) because besides for the SS Trust Fund that was created to fund the boomer bubble, it has ZERO assets. It is a ponzi scheme which requires new investors to pay back old investors using the new investor's contributions as opposed to the old investors contributions + capital gains. YOU DON'T HAVE AN SS ACCOUNT - which is why SS cannot be privatized - because it doesn't have assets to distribute now.

" Or if you died, what residual value of those IOUs do you get to leave your heirs?

Again, you can't seem to understand the assets of the fund are not what differentiate it from a 401(k). It is NOT a pension fund like CalPERS or CalSTRS or TIAA CREF, or the Airline Pensions. By law, those need real assets and a projected return to calculate a % funded ratio. If CalPERS shuttered today, they could distribute $300B in assets to pension holders. In 2032, if SS shutters, that will be able to distribute $0 in assets to SS 'investors'. Again, this is why it is a ponzi scheme. Outside of the trust fund - it has no assets (by design) - which again, is why it is a ponzi scheme. And you want to throw an extra 20% annually into that pit....

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