Saturday, August 15, 2009

A discussion on this blog brings out some interesting points, I think

A regular reader of this blog posted the following in the comments area and I responded.

In the article, published Tuesday, Mackey (he's the Whole Foods CEO) called for less regulation of the insurance industry. He also said programs such as Social Security and Medicare are leading to unsustainable government deficits.

"The last thing our country needs is a massive new health-care entitlement that will create hundreds of billions of dollars of new unfunded deficits and move us much closer to a government takeover of our health-care system," Mackey wrote.

This was my comment...

Yes, there's no such thing as an "unfunded" deficit under a system of floating FX, non-convertible currency. It's an oxymoron. The gov't spends by crediting bank accounts and that spending equates to added demand (and income, savings, etc) to the private sector. The health industry is already a big part of our economy and the only private sector industry that has continued to create jobs through this entire downturn. Investing in it makes sense as it will lead to new technologies, medicines and other life-saving and life-improving innovations. And if you accept that humans are the most important capital of a nation (the human capital), then investing in the maintenence of that capital is far more important than investing in the roads, bridges and other infrastructure that supports commerce. We do the latter, so why is he so against the former?

1 comment:

googleheim said...

i = f(S)
investment is a function of Spending

s = f(i)
savings is a function of investment