Is 'Profit' a dirty word?
By Henry Lamb
October 5, 2009
To anti-capitalists, "profit" is a dirty word. Karl Marx hated profit - which he considered to be "surplus value from the exploited proletariat." Despite the spectacular collapse of the Soviet Union, a nation constructed on Marx's theory, there are still people who think "profit" is a dirty word. Many of these people are in Washington, D.C.
Senator John Rockefeller issued a statement claiming that "...insurance companies are awash in profits." In reality, the health insurance industry stands 35th among Fortune magazine's profitability rankings, with an average profit of 2.2%.
Senator Chuck Schumer doesn't think much of profit, either. He has proposed fees (taxes) that will extract $75 billion from private insurance companies over the next decade. Since taxes, or fees, are a cost of doing business which is simply passed along to the consumer, Schumer's idea is nothing more than an indirect tax that individuals will have to pay. But by applying the tax to insurance companies, Obama's promise not to increase taxes for people earning less than $250,000 can go unchallenged.
It is clear that Rockefeller, Schumer, and the majority of Democrats want to reduce the cost of health care by squeezing profit out of the health insurance industry. This, of course, would kill the health insurance industry, and leave the task of providing health care services up to the government. This is the ultimate goal. Whether it's called "public option," "co-op exchange," or "single-payer," the goal is the same: get rid of the profit private companies earn, and let government provide the service.
Conservatives in the Senate, in the House of Representatives, and across the country know that the solution to the rising cost of health insurance is more competition. Obama, and his Congressional minions, claim that some form of a government-controlled "public option" will increase competition.
What nonsense! Government-controlled or government-subsidized not-for-profit organizations offering health insurance is not competition, it is confiscation of the industry. Government does not level the playing field for private competitors; it levels the competitors. Unlike private insurers, a government program does not have to cover costs to stay in business. Examine other government programs, the Post Office, or Amtrak, for example. When the costs of operation exceed the revenue, Congress ups the national debt limit, borrows more money, and the government-run program continues.
Medicare and Medicaid are often held up by Democrats as great examples of government-run health care programs that all Americans want. They are, indeed an excellent example of government's ineptness at operating a business that should be left to the private sector. According to the calculations of the Medicare Trustees, Medicare is operating at a deficit every year, and to fund the program over the next 75 years at the current level of service would require $38 trillion -- that's with a "T" - which amounts to 260% of GDP.
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