As I have been pounding on the Healthcare takeover I have grown ever more frustrated that no pundits are discussing one of the truly serious issues facing our country if the (D)emocrat/Socialists conquer.
COR, is the ratio of claims paid to premiums collected and industry wide it runs about 1.02, or $1.02 in claims & administrative costs are paid out for every premium $1 collected. Efficient insurance companies dodge the burdensome state level regulation by staying close to this ratio and thereby expand their book of business by spreading the risk over ever more policy-holders through good underwriting practices.
So you say... No. No Insurance company is going to run at a loss. But they do. Why? Well... Billions of premium dollars flow in and the lag time between the payment of those premiums and the coverage of claims provides a float to the Insurance industry making them the largest capital investment source in America at... yes... 2%.
Wouldn't you borrow money at 2% if you could for reinvestment?
Now. Take a deep breath and let it sink in. Has the light bulb gone off yet?
What happens if the (D)emocrat's National Socialization project takes over the Health Insurance industry? What happens to all that capital?
It goes away.
Without those dollars what happens to the Stock Market?
It goes down. Way down.
What about the credit markets? Remember the last panic that justified the stampede that rationalized the 3/4 Trillion in TARP dollars, and the 1/2 Trillion dollar government spending expansion, and the 1 Trillion dollar stimulus? What will happen when the dollars behind 20% of the entire American economy are no longer available for capital investment in American business?
End game.
Cross Posted at DANEgerus
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