I just received the $1,200 stimulus check from the US government. This is the most stupid pandering effort I’ve ever seen. But guess what... That check paid for exactly what my monthly health insurance premium was, so basically... poof! It’s gone. Meanwhile most of the western world offer health care for free, so how is this actually helping?
Before I get into this rant in more detail, I want to openly say that I’m just one in over 320 million Americans who are suffering through this pandemic and the economic collapse that it brought on. And I’m sorry for anyone going through stress, heartache and most importantly if you have lost someone in this pandemic, you are in my prayers. Money isn’t important here. Life is. Being unconstrained isn’t about being rich & wealthy. It is about being free and that means not being restricted, suppressed or infirmed. So take a moment to hug someone near to you, because in these times we are all in this together.
I’ve said for a long time that the economic collapse was coming - I predicted it back in January before this whole thing kicked off, based simply on the laws of the balancing in the universe. Yet while people were seeing double digit percentage gains on their 401K, no one wanted to hear. I don’t blame them. It is always better to focus on positive things.
However today the world looks entirely different to those few short months ago. Although there are still some stalwart opponents to reality out there, thinking that things will just go back to normal, I think finally the vast majority of Americans know that it won’t. That the economic and political news outlets have an agenda to spread the message to go out there and spend, and yet I’m here to tell you that this is not the time to be anything other than “financial prepper” in your world.
What a stupid idea it is. Let’s pretend that nothing is happening. It was so obvious to me how out of touch those leaders in their ivory towers are, when Treasury Secretary, Steven Mnuchin, went on public television to say that this $1,200 check should be a “bridge” that will give about 10 weeks over financial support to the average American. WTF?
This is a guy who has more money than 99.5% of the “Average Americans”, travels on private jets and lives the Lifestyle of the Rich & Famous life. These people are so out of touch it is reminiscent of the lords & the serfs of medieval times. If you live in your ivory castle I guess you never really know what it is like down on the ground. Well it sure isn’t a world where $1200 will cover 10 weeks of financial needs.
Some perspective - the average cost of rent for a 1 bedroom apartment in Los Angeles is about $2,500 a month. And there are many more expensive areas than that. But if you start to look across ALL regions, it averages out to about $800 a month. I know these things - I own a lot of rental property. And I am in constant contact with our tenants and I see what they have to go through to get through each month. The cost of power, food, fuel, gas, clothing, education, day care, etc. It is VERY expensive to live in the USA, and for that matter the western world.
But here’s the real kicker.... I work for myself and we have a family of three. Myself, my wife and our daughter. I don’t have an employer so the cost of buying health insurance for our family lands on my desk. The monthly costs of health insurance in the USA is astronomically high - probably 5-10x more expensive than other countries. I saw that up close and personal last year when I went to Guadalajara, Mexico to get major shoulder surgery done there. I researched the cost of this in the USA (it was a pre-existing condition that my health insurance would not cover), and I was quoted $126,000 for the surgery and hospitalization. I got that same procedure done in Mexico for $9,000 complete. And it was perfect. My outcome far exceeded what I was expecting.
So why is that important? Well the one thing that we are all coming face to face with in a global pandemic is our mortality. We are just biological organisms and as we are seeing, we are vulnerable to diseases that will destroy biological organisms. We’ve become so habitually used to our science & inventiveness getting us out of problems. But with this one, we don’t have a solution yet. So more people get sick, more go to the hospital, we overload our health care infrastructure and unfortunately a percentage die. As I write this, that represents over 70,000 Americans who have died due to this pandemic. And the number will get higher. These deaths are gruesome and those that die, die lonely to this virus. They are in total isolation from families - no last words, etc. You just hope if they put you on a ventilator that you get taken off it still alive.
All of us are dealing with this. We are realizing our own mortality. Many are just able to pretend it away and ignore it. Many are more realistic. In the same way that I’ve come down hard on those that pretend away bear markets in economics, because they are hypnotized by the mainstream media who want to tell you to just keep going out there and spending money, when the markets crash they are the ones shouldering massive debt loads and the first to succumb to it.
Here’s the interesting thing that came immediately to mind for me. The $1,200 check that I got is almost exactly the same as my monthly health insurance premium. So in this microscopic example, the US federal government just gave my family free health insurance for 1 month.
You see, if you lost your job, you lost your health insurance with it. The exceptions would be that you are below the poverty line and your state provides some Medicaid coverage for you, but few qualify for that. Or you are over the age of 65 and you qualify for Medicare. But if you fall between those two goal posts, you are on the hook for it yourself. If your employer has been providing that to you as part of your compensation package for given them your undying attention during the majority of your waking hours, often at the expense of your family, your freedoms and your wallet, they have been paying probably double what I am paying. That would have been money in your pocket if they didn’t have to pay it. Just remember, you just have been working for a $25K discount in your salary.
But now you lost your job, so you are on the hook for health care. What if you need ongoing care? Diabetes? Coronory disease? Cancer? etc. What if you need help to live? Sorry, you have to pay. But don’t worry - you got that $1200 check, right?
You see how damn stupid this is? The government is paying 5-10x more by this uber-stupid medical system. People can’t afford to go to see a doctor - not because they can’t afford the consultation, but if the doctor finds something that needs intervention, the cost of that will likely bankrupt most Americans and if your insurance company finds some way to weasel out of paying it, you are on the hook for it. That’s why I jumped the border and went to Mexico to get it done. For me, it worked out brilliantly.
What no one wants to admit is that if they provided adverse/chronic care as part of our tax policy, like they do in most other western countries, the individual could afford their own preventative or elective medical care. A real free market would emerge where supply/demand and price discovery would be alive and well. But rather than addressing that, in which we would all have FAR more than $1200 in our pocket (I’m talking hundreds of thousands that we would all get by not giving it away to insurance companies), we would all be far better off.
But for now, you have to pay your rent, get food, etc. $1200 isn’t going to cut it. Even if you are in the average $800 a month rent, you are going to have to elect not to have something with the balance left in that check. And my prediction is that people will put their own health lower on the list than food & rent. They will choose to not get medicine they need or see the doctor, etc. because they can’t afford it. And that will not end well.
This disease has not only infected over 70,000 Americans (and counting), but it has infected the economy. What we need to do is to take a step back from this and realize we can’t keep lying away the truth and we can’t keep putting our own health second to making banks & insurance companies richer. It is time for there to be a health care revolution in this country.
If you went out to protest and demonstrate to “Re-Open America”, you should have spent your time to protest to “Heal America” because re-opening a dying country full of disease is probably the worst thing we could do right now. Let’s start to find cures not just to COVID19, but also to the stupidity that runs this country and more so the stupidity that people have to make choices to put their own health second to their wallet. You are no good to any one (including yourself) if you are dead with a big bank balance.
The unconstrained know that freedom comes in many forms - money is just one of them. The most important freedom you can have is your health. Stay safe and be careful because it is a minefield out there in more ways than one.
In previous articles, I have stated that the concept of FI (Financial Independence) is flawed. Although the pursuit of it is admirable, the fact is that few FI followers have been able to do this through bear markets. Consequently putting yourself on that path has some dangers. I prefer to concept of "financial sustainability" and this article gives you tangible steps to take to achieve that.
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