The problems with health care are more than a failure of “regulation”, though regulation has contributed to the problems. For example, if you had a heart attack, how relevant is it that there are other hospitals 30–60 minutes away. Isn’t the ambulance going to take you the closest facility regardless of cost.

Also, as you noted the US is becoming a “service” industry. Some forms of health care services are more market driven like Lasik eye surgery. It is rarely and emergency and often not cover by health insurance, so people are prepared to drive farther to access care. This greater geographical area over which providers compete forces providers to be price competitive. But others like small town specialty groups who provide emergency services are the “only game in town”. The town simply cannot economically support more than one group.

Other monopolies are created by the government including regulating hospital bed count and home health agencies in order to insure adequate demand to support the presence of these entities in some communities. Many rural hospitals are supported by municipal bonds guaranteed by the community to insure they have a hospital. Allow a surgery center to siphon off enough business and the hospital closes sticking the local taxpayers with a huge bond to pay off.

In the past I have identified seven different situations in health care including drug patents where the pricing power of providers borders on the abusive. Which is why, while I oppose Medicare for All, I do support the government establishing fair pricing for all of health care and not just for Medicare reimbursement. Providers are free to compete by offering lower prices if they choose.

I would agree with your interest rate analysis if government stays out of the picture, but it never does. Instead, interest rates today are less driven by demand for capital and more driven by government “price” setting designed to stimulate or not stimulate economic growth with monetary fiscal stimulus. What seems strange is that “stimulus” must be targeted largely at business, since the link below shows little change in the growth rate of personal consumption regardless of what happens to interest rates.

If your theory were true we would expect to see significant variations in consumption moving with interest rates. The only exception to steady growth in consumption had to do with 2008–2009 recession. So it takes a really serious recession to impact personal consumption. All other recessions highlighted in grey show almost no impact on consumption.

https://fred.stlouisfed.org/series/PCE

I believe redistributing wealth would be a disaster precisely because of what you say will happen. If we redistributed wealth and it stayed redistributed the impact would likely be marginal, but it would not stay “redistributed”, it would be liquidated through consumption and that would be a disaster.

Which nation are you thinking of when you think redistribution of wealth is good for the economy? Historically, it has always ended in disaster exactly because as you say it has gotten liquidated through consumption.

Standards of living in various countries are largely a product of accumulated wealth in an economy. Whether that wealth is deployed by the wealthy or its citizens as a whole. Simply example, how much would a pilot earn if there was no capital to support the plane the pilot flies. Even though the pilot does not own the plane, he or she benefits that someone owns it. Now if the pilot owned the plane, he or she would make even more potentially. But if the pilot was sold to another country and the wealth liquidated by the local citizenry, the pilot would be out of a job with no plane to fly.

While wealth inequality is expanding and I do agree with you that there are social issues that wealth inequality creates, the answer lies in figuring out a way to increase wealth accumulation by the majority of citizens first before you redistribute wealth.

Now as to owners of capital moving their money. Before I focused on health care for my career, I worked for Price Waterhouse and later AFLAC where I got involved in international tax planning. You are naive, it is very easy to move wealth out of reach of the tax man and to have “your cake and eat it to”.

At the corporate level, you simply move your business assets overseas and don’t repatriate them but rather grow the business overseas and ship the products to the US for sale. For individuals there are similar tax strategies to minimize taxation whether it is municipal bonds or other legal tax shelters, but whether it is overseas investing or municipal bonds and other legal tax shelters the money is pretty insulated from taxes and not always deployed in a way that will best accrue to the benefit of US citizens.

As is as a result of the overall increasing wealth of the nation (regardless of who actually owns it), the median standard of living of all Americans has gone up about 1% a year for the last 30 years. Now maybe that is not fast enough for people, but it does compound over time.

The argument of education is an interesting one. Many of today’s billionaires never graduated college including people like Bill Gates and Michael Dell. I have run companies with as many as 42,000 employees and ran numerous companies before retiring. Vocational skills are important, whether you are a doctor, lawyer, CPA, plumber, truck driver, or teacher. But only a small fraction of today’s educational spend is devoted to vocational skills. For example Germany “manufacturers” a doctor in six years, in the US we spend over ten. The difference is the non vocational spend. Germany treats education like a “factory” designed to manufacture workers with particular skills. We don’t till the very tail end of our educational spend.

A friend of mine, a teacher, who is involved with a woman pursuing a PhD in education (as a policy, not as a teacher) made an interesting and somewhat compelling argument. His argument was Germany starts with Germans and then produces we workers. In American we start with people from all over the world with very different cultures and the first thing we do is try to “produce” citizens and then we produce workers. Our diverse society requires that our educational system address trying to meld us into “a people” through courses focused on values as much as skills. Interesting thought.

We will always produce plenty of unskilled jobs. The only reason we have fewer than we did in the past is that we are making unskilled jobs “expensive”. A single mother on TV the other day complained that Seattle’s recent minimum wage hike caused her employer (a restaurant) to close. Initially, she thought no big deal, she had a second job as a server also, so she would ask for more hours there. But then it closed. So she applied to another restaurant in town, but before she heard back about the job, she heard it was closing also. In other words, we “priced” the job out of the market.

As an aside, I do support a more robust earned income credit for low wage workers rather than high minimum wages. It does effectively redistribute income, but it does so without eliminating a job for a low skilled worker and thus low skilled workers contribute to the economy as a whole. Providing services we all want instead of eliminating those services by making them unaffordable.

But even as we debate education, there are millions of good paying jobs going unfilled not because we are not educating people, but unlike Germany we are doing a bad job of educating people for the jobs we have and instead are paying literally trillions to educate them for jobs that don’t exist.

For example my daughter and her husband both have Masters Degrees in Music that combined with their undergraduate degrees cost more than $250K. Neither could make a living with those high priced degrees. My daughter went back and got a combined community college/four year college BS degree in Nursing and my son in law went back and got a computer certification in network management at a tech school. Total cost for both degrees under $25K. My daughter works in the Intensive Care Unit of Mayo Hospital and my son-in-law works for Apple in one of their massive data centers. They both have good incomes today and combined they are quite comfortable.

So would “society” have been better off to spend $250K less on their education and get them into a program that had a job at the end that only cost $25K? The problem was the lack of focus in education not the lack of money. My brother was Secretary of Education for the State of New Jersey and now is the founder of a Charter School in Jersey City. For significantly less money his school educates poor inner city school children and they perform far better on state tests. He only qualifies for state funding if the students at his school outperform the public school system results… not a problem. So again I see a huge disparity between educational spending and outcomes.

I have mentioned my background in health care and that I was a CPA by “training and formal education”. But my focus was on starting new health care entities including what is referred to as “roll ups” where you to try to consolidate an industry to gain economies of scale while reducing competition and turning around failing ones companies. My solutions was never based on spending more (not an option), but rather on spending wisely or finding the “value” proposition as it relates to profitability and customer satisfaction.

So what does that look like in education. What exactly is education trying to produce? The Germans (I admire how efficient their education system is even if there are aspects I do not like) know exactly what they are trying to achieve. They are manufacturing a society of workers with the skill sets they expect to need by the time each child graduates (at whatever education level is required). Because of the centralized planning nature of what they do, they do get it wrong sometimes and have to import skills or retrain workers, but they are far better at it than the US is.

What do I dislike about the German system is that it while I agree with their “societal” goal of producing workers with the right skill sets for their economy, I also view education as “entertainment”. I love to learn about stuff that has nothing to do with the skills I need for a job and here it the key… I am willing to pay for that entertainment… to me it is a form of conspicuous consumption. With that distinction, I believe our government spends more than enough on the first goal (we spend more than any other nation in the world on education per capita). So we ought to get better results first before we start spending more.

As for the second purpose of education… entertainment. I believe whatever people want to spend for their pleasure of learning something new is perfectly fine if they are willing to pay for it. I think by blending the two forms of education we have overpriced education as far as what the “societal burden” should be.