It is not too old, but it is also certainly wrong - interest a very efficient way to lend capital. Banning interest is banning investment.
Debt in general has very ugly side-effects and incentives, specially when it is levered, but banning interest altogether would basically destroy modern capitalism.
It is amusing to read on hacker news how money it is wrong to use money as a medium of exchange, how it is supposed to be used to to extract wealth from others just by having it.
>It is not too old, but it is also certainly wrong
Even according to Marx money is only supposed to be a medium of exchange, the fact that it bears interest means that money isn't a neutral medium of exchange whatsoever. What interested me most about money is the fact that this problem isn't even new, founders of religions knew about the problem thousands of years ago. If anything this means they know more about money than we do today. The idea that they are wrong can only be justified by the fact that our method of eliminating liquidity preference is superior to theirs, e.g. because we run permanent inflation to erode exponentially growing debts.
>interest a very efficient way to lend capital.
Maybe in a growing economy but interest is only efficient when it is equal to the growth rate. In any other context the optimal interest rate is always zero because any higher than that prevents investments due to artificially high profitability requirements beyond what is available in the real economy.
>Banning interest is banning investment.
The good news is that neutralizing liquidity preference does not require banning it, anyone who has spent time thinking about liquidity preference knows that banning it is pointless. The obvious solution to neutralizing liquidity preference is to just eliminate the lower bound on interest rates. If liquidity preference is 3% and there is a zero lower bound of 0% you get positive interest even if the economy isn't growing which is highly inefficient and leads to artificial scarcity and underemployment or even unemployment if people pile up jobs onto fewer and fewer people. If the interest rate on cash were -3% or even -6% then the lowest possible interest rate would be 0% or -3% after accounting for liquidity preference.
This is just a floor, just because the interest floor is negative doesn't mean the interest savers get on their deposits must be negative, it just means they have to deposit their money in a less liquid form.
>but banning interest altogether would basically destroy modern capitalism.
Eliminating liquidity preference in the way I argued above would effectively result in the end of modern capitalism and would replace it with something better.
Interest existed for 100's of years before the fiat model.
Interest is not paid on money, its paid on time of allocated capital. If you dont have money you can still collect interest in the form of goods - I give you 100 seeds, you return 1000 seeds to me next year. Without interest there is certainly not lending, so the owner has to invest themselves or consume the capital.
It would definitely be better that investment were not issued as debt and were always equity to prevent many ugly side-effects, but thats not a configuration applicable to everything, so this is what you get.
> In any other context the optimal interest rate is always zero because any higher than that prevents investments due to artificially high profitability requirements beyond what is available in the real economy.
This is mixing macro-economics with micro-economics. Even in a contraction economy you have growing businesses, which mean there is demand for capital for production itself. 0% interest rate means there is no demand for capital, which is not true even in North Korea.
Interest is just a price, like any other good in the economy.
Simple - money for votes requires registered voters. My scheme - erm, "business plan" - just needs unregistered immigrants! Way easier to enact, because they're undocumented to begin with!
I have had PPO high deductible health insurance for 14 years, and I have been able to see whatever doctor I want whenever I want.
Obviously, I need to pay out of pocket until I meet the deductible, but it all counts toward the annual out of pocket max and I get the negotiated pricing between doctor and insurance company. After I meet the deductible, however, the insurance still pays for a consult for anyone I want to go see. Not necessarily for any procedure though, without justification. But that applies in any situation, PPO or not.
Because they don't know it yet. They audit and review each claim a an office sends, which starts a negotiation process to see if each claimed item by the physician was warranted and done properly. All that information is codified then into a level of visit, which changes the amount it will be payed out.
It is grotesquely complex, but the core issue here is that patients want to consume their healthcare through insurance, because it is tax advantaged. Thus it is impossible to make a cash business that would cut through all this bullshit for the majority of healthcare.
Congress has been considering transparent, prior authorization legislation in the realm of CMS. I don't know much about it, but they did publish an RFI recently[0]. I hear it has bipartisan support (that's obviously hearsay, but a lot of this recent healthcare legislation that has been passed has not been divided along party lines, AFAICT)
> Progress isn't profitable enough according to the Excel spreadsheet.
It's precisely the opposite. Its a racket but its not for profit. If you made a health care service that didn't have any of this cruft and just provided great care, it would not be used, because it would not be compliant with insurance, and employees would not get the tax benefit of using it.
Yes, the fact that literally all health care goes through insurance is a big part of the problem. As my dad says, if you had to get all car maintenance done through your car insurance, changing your oil would cost $5,000.
This has been well understood in policy circles. The problem is that the employer insurance payment is tax deductible. This subsidy, along with scale, locks people into employer-based care through insurance. The Obama administration attempted to reform this by reducing the deduction on "Cadillac" health care plans but even that modest reform has since been scraped. (Insurance companies framed it as a "tax increase" when really it was closing a loophole.)
It is not like that at all in countries like Germany and France, where really literally all health care (for a lot of people) is covered (mostly) by general medical insurance. The pricing explosion is exclusively an US problem.
(Germany has private insurance and France as well in parallel, but the main system is "sozialised")
The healthcare systems in Canada, the UK, France, Germany and Switzerland are all distinctive (they’re main commonality I suppose is that they somehow deliver quality healthcare at a fraction of the US cost.). But to hear Americans say we should “do it the way it’s done in Europe” is to understand that the person likely don’t know how the healthcare systems operate in different countries.
The other frustration in talking about this is the tendency to “It’s just” the problems. If this were a simple problem with an obvious solution it likely would have been solved. We are where we are because of a century of organic, and often idiosyncratic, growth. Well intentioned policies of decades ago have come back to bite us with unintended consequences as likely are our best ideas today.
I don’t say we should throw up our hands and give up, but when anyone says there is an easy solution - we just need the political will to let them do what they want - I do see snake oil.
Yeah. A lot of flamewars have happened: "regulation bad!" vs "no, regulation good!".
But in reality, good regulation is good, and bad regulation is bad.
It sounds silly written out because it's a tautology, but if more people internalized it we could have much more productive conversations. Instead of going back and forth on whether regulation is good or bad, we should try to figure out which regulations are good and which are bad, and then try to get rid of the bad ones and pass more of the good ones.
I’d argue that the underlying system that makes the regulation in US is broken. So you aren’t going to end up with many good regulations without changing the system. Which looks nigh impossible until some black swan event.
>But in reality, good regulation is good, and bad regulation is bad.
No one brick in the road to hell is bad. But you can definitely pave a road to hell with the accumulation of "positive" changes. People tend to define positive over too short a timeline or too narrowly.
No one square meter of nature is bad. But you can definitely doom people to horribly die because there is a natural swamp between them and the hospital. People tend to define 'natural' too narrowly, forgetting that 'things that are natural' includes cocaine, tapeworms, rape, birth defects, the Plague and cancer
I am always amazed by these "no-regulation" arguers - how are you doing to resolve disputes?
Suppose I want to sell my product, and find a company willing to buy, a middle manager signs the contract. When the company recieved my product, it refuses to pay, says this person was not authorised to sign the contract on behalf of the company.
Must the company prove the purchase was unauthorised, or must I prove the employee was authorised? Suppose employee was unauthorised, is it my or the company's problem if this guy 'took initiative', who eats the loss?
What if they already used my product and only realised after the bill came due? What if the deal was overpriced like 10x from market average? What if the guy's title says 'Head of procurement' but the company swears their bylaws don't allow him to authorise purchases?
Debt in general has very ugly side-effects and incentives, specially when it is levered, but banning interest altogether would basically destroy modern capitalism.