The musings of a physician who served the community for over six decades
367 Topics
Downtown A discussion about downtown area in Philadelphia and connections from today with its historical past.
West of Broad A collection of articles about the area west of Broad Street, Philadelphia, Pennsylvania.
Delaware (State of) Originally the "lower counties" of Pennsylvania, and thus one of three Quaker colonies founded by William Penn, Delaware has developed its own set of traditions and history.
Religious Philadelphia William Penn wanted a colony with religious freedom. A considerable number, if not the majority, of American religious denominations were founded in this city. The main misconception about religious Philadelphia is that it is Quaker-dominated. But the broader misconception is that it is not Quaker-dominated.
Particular Sights to See:Center City Taxi drivers tell tourists that Center City is a "shining city on a hill". During the Industrial Era, the city almost urbanized out to the county line, and then retreated. Right now, the urban center is surrounded by a semi-deserted ring of former factories.
Philadelphia's Middle Urban Ring Philadelphia grew rapidly for seventy years after the Civil War, then gradually lost population. Skyscrapers drain population upwards, suburbs beckon outwards. The result: a ring around center city, mixed prosperous and dilapidated. Future in doubt.
Historical Motor Excursion North of Philadelphia The narrow waist of New Jersey was the upper border of William Penn's vast land holdings, and the outer edge of Quaker influence. In 1776-77, Lord Howe made this strip the main highway of his attempt to subjugate the Colonies.
Land Tour Around Delaware Bay Start in Philadelphia, take two days to tour around Delaware Bay. Down the New Jersey side to Cape May, ferry over to Lewes, tour up to Dover and New Castle, visit Winterthur, Longwood Gardens, Brandywine Battlefield and art museum, then back to Philadelphia. Try it!
Tourist Trips Around Philadelphia and the Quaker Colonies The states of Pennsylvania, Delaware, and southern New Jersey all belonged to William Penn the Quaker. He was the largest private landholder in American history. Using explicit directions, comprehensive touring of the Quaker Colonies takes seven full days. Local residents would need a couple dozen one-day trips to get up to speed.
Touring Philadelphia's Western Regions Philadelpia County had two hundred farms in 1950, but is now thickly settled in all directions. Western regions along the Schuylkill are still spread out somewhat; with many historic estates.
Up the King's High Way New Jersey has a narrow waistline, with New York harbor at one end, and Delaware Bay on the other. Traffic and history travelled the Kings Highway along this path between New York and Philadelphia.
Arch Street: from Sixth to Second When the large meeting house at Fourth and Arch was built, many Quakers moved their houses to the area. At that time, "North of Market" implied the Quaker region of town.
Up Market Street to Sixth and Walnut Millions of eye patients have been asked to read the passage from Franklin's autobiography, "I walked up Market Street, etc." which is commonly printed on eye-test cards. Here's your chance to do it.
Sixth and Walnut over to Broad and Sansom In 1751, the Pennsylvania Hospital at 8th and Spruce was 'way out in the country. Now it is in the center of a city, but the area still remains dominated by medical institutions.
Montgomery and Bucks Counties The Philadelphia metropolitan region has five Pennsylvania counties, four New Jersey counties, one northern county in the state of Delaware. Here are the four Pennsylvania suburban ones.
Northern Overland Escape Path of the Philadelphia Tories 1 of 1 (16) Grievances provoking the American Revolutionary War left many Philadelphians unprovoked. Loyalists often fled to Canada, especially Kingston, Ontario. Decades later the flow of dissidents reversed, Canadian anti-royalists taking refuge south of the border.
City Hall to Chestnut Hill There are lots of ways to go from City Hall to Chestnut Hill, including the train from Suburban Station, or from 11th and Market. This tour imagines your driving your car out the Ben Franklin Parkway to Kelly Drive, and then up the Wissahickon.
Philadelphia Reflections is a history of the area around Philadelphia, PA
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Philadelphia Revelations
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George R. Fisher, III, M.D.
Obituary
George R. Fisher, III, M.D.
Age: 97 of Philadelphia, formerly of Haddonfield
Dr. George Ross Fisher of Philadelphia died on March 9, 2023, surrounded by his loving family.
Born in 1925 in Erie, Pennsylvania, to two teachers, George and Margaret Fisher, he grew up in Pittsburgh, later attending The Lawrenceville School and Yale University (graduating early because of the war). He was very proud of the fact that he was the only person who ever graduated from Yale with a Bachelor of Science in English Literature. He attended Columbia University’s College of Physicians and Surgeons where he met the love of his life, fellow medical student, and future renowned Philadelphia radiologist Mary Stuart Blakely. While dating, they entertained themselves by dressing up in evening attire and crashing fancy Manhattan weddings. They married in 1950 and were each other’s true loves, mutual admirers, and life partners until Mary Stuart passed away in 2006. A Columbia faculty member wrote of him, “This young man’s personality is way off the beaten track, and cannot be evaluated by the customary methods.”
After training at the Pennsylvania Hospital in Philadelphia where he was Chief Resident in Medicine, and spending a year at the NIH, he opened a practice in Endocrinology on Spruce Street where he practiced for sixty years. He also consulted regularly for the employees of Strawbridge and Clothier as well as the Hospital for the Mentally Retarded at Stockley, Delaware. He was beloved by his patients, his guiding philosophy being the adage, “Listen to your patient – he’s telling you his diagnosis.” His patients also told him their stories which gave him an education in all things Philadelphia, the city he passionately loved and which he went on to chronicle in this online blog. Many of these blogs were adapted into a history-oriented tour book, Philadelphia Revelations: Twenty Tours of the Delaware Valley.
He was a true Renaissance Man, interested in everything and everyone, remembering everything he read or heard in complete detail, and endowed with a penetrating intellect which cut to the heart of whatever was being discussed, whether it be medicine, history, literature, economics, investments, politics, science or even lawn care for his home in Haddonfield, NJ where he and his wife raised their four children. He was an “early adopter.” Memories of his children from the 1960s include being taken to visit his colleagues working on the UNIVAC computer at Penn; the air-mail version of the London Economist on the dining room table; and his work on developing a proprietary medical office software using Fortran. His dedication to patients and to his profession extended to his many years representing Pennsylvania to the American Medical Association.
After retiring from his practice in 2003, he started his pioneering “just-in-time” Ross & Perry publishing company, which printed more than 300 new and reprint titles, ranging from Flight Manual for the SR-71 Blackbird Spy Plane (his best seller!) to Terse Verse, a collection of a hundred mostly humorous haikus. He authored four books. In 2013 at age 88, he ran as a Republican for New Jersey Assemblyman for the 6th district (he lost).
A gregarious extrovert, he loved meeting his fellow Philadelphians well into his nineties at the Shakespeare Society, the Global Interdependence Center, the College of Physicians, the Right Angle Club, the Union League, the Haddonfield 65 Club, and the Franklin Inn. He faithfully attended Quaker Meeting in Haddonfield NJ for over 60 years. Later in life he was fortunate to be joined in his life, travels, and adventures by his dear friend Dr. Janice Gordon.
He passed away peacefully, held in the Light and surrounded by his family as they sang to him and read aloud the love letters that he and his wife penned throughout their courtship. In addition to his children – George, Miriam, Margaret, and Stuart – he leaves his three children-in-law, eight grandchildren, three great-grandchildren, and his younger brother, John.
A memorial service, followed by a reception, will be held at the Friends Meeting in Haddonfield New Jersey on April 1 at one in the afternoon. Memorial contributions may be sent to Haddonfield Friends Meeting, 47 Friends Avenue, Haddonfield, NJ 08033.
IN 1783 the Revolution was over, in 1787 the Constitution was written, but the new nation would not launch its new system of government until 1790. It was a fragile time and a chaotic one. Earlier, just after the British abandoned their wartime occupation of Philadelphia in 1778, Robert Morris had been given emergency economic powers in the national government, whereas the state legislatures were struggling to create their own models of governance, often in overlapping areas. While the Pennsylvania Legislature was still occupying the Pennsylvania State House (now called Independence Hall) in 1778, it -- the state legislature -- issued the charter for America's first true bank the Bank of North America, and in 1784 the charter came up for its first post-war renewal. Morris was a member of the Pennsylvania Assembly both times. Although he was not a notable orator, it was said of him that he seldom lost an argument he seriously wanted to win. Keeping that up for several years in a small closed room will, unfortunately, make you many enemies.
Tavern and Bank
Morris was deeply invested in the bank, in many senses. He had watched with dismay as the Legislature squandered and mismanaged the meager funds of the rebellion, issuing promissory notes with abandon and no clear sense of how to repay them, or how to match revenues with expenditures. There was rioting in the streets of Philadelphia, very nearly extinguishing the lives of Morris and other leaders, just a block from City Tavern. Inflation immediately followed, resulting in high prices and shortages as the farmers refused to accept the flimsy currency under terms of price controls. Every possible rule of careful management was ignored and promptly matched with a vivid example of what results to expect next. Acting only on his gut instincts, Robert Morris stepped forward and offered to create a private currency, backed by his personal guarantee that the Morris notes would be paid. The crisis abated somewhat, giving Morris time to devise The Pennsylvania Bank, and then after some revision the first modern bank, the Bank of North America. The BNA sold stock to some wealthy backers of which Marris himself was the largest investor, to act as last-resort capital. It then started taking deposits, making loans, and acting as a modern bank. Without making much of a point of it at the time, the Bank interjected a vital change in the rules. Instead of Congress issuing the loans and setting the interest rates as it pleased, a commercial bank of this sort confines its loans to a fraction or multiple of its deposits, and its interest rates are then set by the public through the operation of supply and demand. The difference between what the Legislatures had been doing and what a commercial bank does, lies in who sets the interest rates and who limits the loans. The Legislature had been acting as if it had the divine right of Kings; the new system treated the government like any other borrower. As it turned out, the government didn't like the new system and has never liked it since then. Today, the present system has evolved a complicated apparatus at its top called the Open Market Committee of the Federal Reserve, most of whose members are politically appointed. Several members of the House Banking Committee are even now quite vocal in their C-span denunciations of the seven members of the Open Market Committee who in rotation are elected by the commercial banks of their regions. Close your eyes and the scene becomes the same; agents of the government feel they have a right to control the rules for government borrowing, while agents of the marketplace remain certain governments will always cheat if you don't stop them. This situation has not changed in two hundred years and essentially explains why some people hate banks.
Seigniorage
That's the real essence of Morris's new idea of a bank; other advantages appeared as it operated. The law of large numbers smooths out the volatility of deposits and permits long-term loans based on short term deposits. Long-term deposits command higher loan prices than short-term ones can; higher profits result for the bank. And a highly counter-intuitive fact emerges, that making a loan effectively creates money; both the depositor and the borrower consider they own it at the same time. And finally, there is what is called seigniorage. Paper money (gold and silver "certificates") deteriorates and gets lost; the gold or silver backing it remains safe in the bank's vault, where it can be used a second time, or even many times.
For four days, Morris stood as a witness, hammering these truisms on the witless Western Pennsylvania legislators. At the end of it, scarcely one of them changed his vote, and the bank's charter was lost. But at the next election, the Federalists were swept back into the majority, defeating the opponents of the bank. Although, as we learn the way democracy works, still leaving them unconvinced of what they do not want to believe.
BIG nations gobble up small ones, so small ones band together. As George Washington observed, when you are strong the others leave you alone. But other forces sometimes make smallness seem more attractive, especially if the nation is already uniform in religion, language, and culture. Nations search for an ideal size for both War and Peace and discover they praise two incompatible sizes. Both the American Revolution of 1776 and today's struggles of the European Union fit a common formula: banding together for military security, then pulling back from declining Liberty. The American experience of a Civil War after eighty years under the Constitution suggests the margin for error is narrow. And enduring; even in the Twenty-first century, it is striking that both little Scotland and that little bit of little Belgium that is Flemish seem willing to sacrifice major economic benefits for what seems to outsiders a minor step for Liberty. But the whole point of the Constitutional Convention then seems to emerge: Nine years previously, thirteen separate sovereignties had been more or less hustled into a military alliance by the appearance of a hostile British fleet. That war was now over, the thirteen had grown accustomed to living together, but the Articles of Confederation had not foreseen a large nation clearly enough in 1776. The Articles did not even provide for an executive branch. In the chaotic conditions of 1787, a calmer choice could be made between breaking apart and unifying, for a different set of reasons based on Peace and Prosperity rather than war: Either surrender some aspects of state power to a real union or let each contentious state confront its future, unsupported. In many ways, it was the vision of Liberty which changed between times of peace and times of war. In 1860 the stakes were higher than in 1787 but the issues were mixed. Industrializing states in the northern part viewed the Union as an economic opportunity. Purely agricultural southern American states were not so sure; in the end, preferring the older set of rules, they took their leap. To the amazement of Southern leaders, the North was ready to die to preserve that Union, and so the demands of warfare reasserted themselves.
Europe
Geography doubtless imposes variable limits for both war and peaceful prosperity, anywhere. Some nations have therefore banded together for military reasons then split apart in local quarrels, more or less regularly. Thirteen American colonies had been afraid to confront Britannia alone, but somewhat overconfidently took on that challenge as a confederation. At the other extreme, little Rhode Island even refused to send delegates to the Constitutional Convention, fearing big neighbors more than remote British rule. Fortunately, similar possessiveness about local perks was unable to collect enough political power to dominate other states. After a year by the time of the state ratifying conventions, however, it was a close call. Peace and prosperity: getting bigger discourages predators, but getting smaller offers sole possession of what you have. Since the United States grew in jumps through most of its history, it probably learned intangible things from alternating episodes of being too big and then too small. Frederick Jackson Turner's thesis of the advancing frontier as a shaper of culture is not greatly different in the essence of its argument.
When ideas of Union first gained traction, both the thirteen American colonies in the Eighteenth century and the twenty-five nations of the Eurozone in the Twenty-First, were dominated by the memory of war. The American objective was the simple one of military parity with a common enemy. The nations of the European Union had a longer view; a seemingly endless cycle of bloody wars sustained their conviction that other wars would inevitably follow unless they did something innovative. National unification on the American model sounded ideal but difficult. Perhaps the habits of cooperation and trade would lead to it. The unexpected decline of the Soviet empire further reduced the fear of war. Pride may also have led to over-reaching; twenty-five is comfortably larger than thirteen, which up to that time was the largest nation merger to survive. But twenty-five is smaller and thus more manageable than the present American fifty. To begin the process with monetary union might produce quick benefits from a source too mysterious to produce much public resistance. Nobody could think of a war started by a monetary dispute.
Justice Blackmun
, Of course, the Europeans expected difficulties from speaking many languages, but they probably still underestimate how far the legal profession has already gone in confining nuanced words to a single meaning; it is essential to their trade. When many languages split off from a common stem, many unaccepted interpretations re-emerge when they are later re-combined. Even without the nuance problem, translation into many languages is a serious expense, which is at least as burdensome as currency exchanges were among multiple sovereignties. By contrast two centuries earlier, the American revolutionaries shared a single language but soon found espionage was an unusually serious problem. Even their enemy spoke English, so sometimes improved clarity itself creates unexpected problems. Indeed, in American disputes about Original Intent, we repeatedly encounter the tenacity of people believing a document says what they want it to say. Vigorous legal advocates think they are paid to marshall every argument weak or strong. Staying within the English language, the evolution of U.S. Supreme Court interpretations often turns on subtle differences in the meaning of simple words. Penumbras and emanations from the word "Privacy" in Roe v. Wade soon force our judges to decide whether abortion within a right of privacy is simply too far from a common understanding of English, in a double way. Both in the discovery of a right to privacy within a document which does not use the word, and then in the inclusion of abortion within that, Justice Blackmun clearly overestimated the capacity of excited citizens to be flexible. Much more surely, he would have overestimated public willingness to grasp his meaning in two-step translations of a foreign language. Since this famous decision is destined to stand or fall, depending on public tolerance for such wordplay, having almost every citizen confidently understanding English is at least one advantage. Parenthetically, we will need every advantage possible. The really serious box which Justice Blackmun put us in, was to invent a Constitutional mandate which thus can only be compromised in a Constitutional amendment. In almost every other conflict, the system of checks and balances permits either the Congress or the state legislatures to soften the conflict with conciliatory modification. The constitutional amendment is already difficult to achieve; inflaming the religious passions of the forty-odd bodies who must agree to amendment makes amendment nearly impossible.
Auto-de-fe
By contrast with important language confusions, "hatreds between nations" are often mentioned as an obstacle to unification but the claim seems largely bogus. Argot and slang are commonly invented to conceal the opinions of a minority group. Over thousands of years, this purpose of "jiving" a secret code among conspirators has been perfected exquisitely. It's hard to overcome, easy to teach children. But the memory of actual wars really dies out rather quickly, not least because atrocities are so hideous, mankind wants to forget them. I was seventy years old before someone told me I had ancestors burned at the stake. By whom? By someone who has also been dead for four hundred years, not likely to seem threatening to me. Over the fifty years since the Second World War, I have run into former German and Japanese soldiers; they now seem pretty benign. One American former prisoner of war was forced to stand at attention while his Japanese captor pulled out his gold teeth with pliers; he told this story with a faint smile. It is one of the benevolence of biology that we are born without memories, and a second is a biological impossibility of remembering the feeling of pain without first re-dramatizing the experience for future reference. Once actual onlookers stop grinding the grievance ax, it should be possible to get on with devising a European constitution, provided it contains a meaningful equivalent of our First Amendment.
Helen of Troy
It's an important point for a proposal unifying two dozen different priesthoods and a number of nations wholly defined by a single religion. A workable constitution for them must contain a strict separation of church and state, because ballads, epic poems, and traditions are synthetic, quite different from actual experiences. Helen of Troy may or may not have had a face that launched a thousand ships, but Homer's Iliad certainly glorified more hatred than she did; who can say whether the poem portrays the truth? That's the war side of things; the Odyssey is powerful in evoking the special virtues leading to prosperous nationhood. Because you can't argue or reason with epic myth, it is the many exaggerated glorifications and exaggerated condemnations by them which supply endurance to patriotic myths, easily reducing macroeconomists of the European Central Bank to tears of frustration. Because the best of these epics stand alone as powerful literature, their propaganda strength is all the more difficult to deconstruct with mere logic. Quoting Arnold Toynbee, it is not weaknesses, but overextension of their finest qualities, which usually brings nations down.
Euro Zone
While true grievances seldom pose obstacles of their own, they do often misdirect political leadership from what is best for their countries. European Unification had a primary goal of eliminating future wars, but its leaders decided the peace goal was achievable only by indirection and began first with monetary tools for prosperity. That takes a long time; America was still fumbling monetarily until the end of the Civil War. So while starting with small victories seems a plausible route to big victories, in fact, it drains much of the idealism out of revolutions by avoiding the cataclysmic issues which justify great sacrifices. Even worse, it here made the financial disaster of the Euro symbolic of tawdry hazards on the road to Prosperity, raising issues of corruption and self-advancement, rather than idealistic sacrifice. At least when you struggle for national security, every day you survive is another victory. There is, of course, no room in past struggles for Americans to gloat over their superior approach to permanent Union. But a defeat is a defeat, and the Euro mess could become a big defeat.
Congressman Ron Paul
From a commentator's perspective, currency matters are difficult to understand and explain. For contrast, the Battle of Normandy is thrilling and awe-inspiring; every death is the death of a hero. But rises in productivity and the risk implications of volatility, seem hopelessly confusing to an economics beginner. Worse still, there exists real uncertainty among experts. We now have a currency which has no backing in precious metals and is really just a book entry. That's useful for transactions, less certainly useful for a storehouse of value. Mr. Ron Paul ran for President of the United States challenging the whole Federal Reserve concept, and a possibility must be admitted that his speeches have a grain of truth. We trust our bankers to devise a workable system of exchange without gold and silver, and readily admit that Mr. Bernanke knows more about it than we do. But. But the world economy nearly collapsed utterly a few years ago, and you know, Dr. Ron Paul might just have a valid point or two. Europe has not yet emerged into a fit environment for enjoying a monetary Crusade to a World Without War. For a striking contrast, just go to any Civil War movie. And watch those teenaged soldier boys charge up the hill, ready to die for the Union.
REFERENCES
A Study of History Arnold J. Toynbee ISBN-13: 978-0195050806
Big nations easily gobble up small ones, so small ones band together. As George Washington famously observed, when you are strong the others will leave you alone. Other circumstances sometimes make smallness seem attractive, especially if the nation is already uniform in religion, language, and culture -- until a bigger aggressor begins to growl. Most nations then discover that survival comes first. Both the American Revolution of 1776 and present struggles of the European Union fit a common formula: banding together for military security, then later pulling back for greater independence. The American experience of a Civil War eighty years later suggests the margin for error is narrow.
Europe
Geography doubtless imposes limits for both peace and prosperity. Some nations have therefore banded together for military reasons then split apart in local quarrels, more or less regularly. The thirteen American colonies had been afraid to confront Britannia alone, but somewhat overconfidently took on that challenge as a confederation of thirteen. We began by talking about Taxation Without Representation. but ended eight years of warfare united for Independence. This conversion was hastened after lawyers explained it meant the difference between negotiating a treaty for Peace and being hanged for a rebellion. At the other extreme, little Rhode Island even refused to send delegates to the Constitutional Convention, for fear the other twelve would want to share its toll revenues from the coastal road. Similar possessiveness has not yet been reported about the narrow defile through the northern end of the even smaller State of Delaware. At least they are not morally superior in Delaware, which for decades protected its secrets of mushroom cultivation. Everyone wants Peace and Prosperity: getting bigger discourages predators, but getting smaller offers sole possession of whatever you happen to have. Since the United States grew in jumps through most of its history, it probably learned intangible things from alternating episodes of suddenly too big and then gradually too small. Frederick Jackson Turner's thesis of the frontier as the shaper of culture gropes for a fairly similar model. Our treatment of minorities is not ideal, but better than most; we can be moderately proud of our business ethic. These are flawed arguments. We did our best, and it somehow worked out. And while we suffered, we escaped hanging.
When ideas of Union first gained traction in two distant continents, both the thirteen American colonies and the twenty-five nations of the Eurozone were afraid of another war. The simple American objective was rough parity with a common enemy. Centuries later, the nations of the European Union had an even longer view; a seemingly endless history of bloody wars sustained their conviction that other wars would inevitably follow unless they did something new. National unification on the American model would be ideal, and perhaps the habits of cooperation and trade would lead to it. The unexpected decline of the Soviet empire reduced the immediate threat to peace. Pride may also have led to over-reaching; twenty-five is comfortably larger than thirteen, which up to that time was the largest nation merger to survive. But twenty-five is smaller and thus more manageable than the present American fifty. To begin the difficult process with only monetary union as a start, should produce quick benefits from a source too mysterious to produce much public resistance. Nobody could think offhand of a war started by a monetary dispute. No doubt the postwar weakening of local governments made this a good time for experimentation.
Justice Blackmun
In addition, the Europeans would expect to cope with the difficulties of speaking many languages. That weakened unified resistance. The American colonies mostly shared a single language. Even their enemy spoke English. In this particular, the Europeans seem to have underestimated the language-induced difficulties of maintaining a common understanding of what their Constitution meant to people. Indeed in American Judicial disputes about Original Intent, we repeatedly encounter the tenacity of people to believe a document says what they want it to say. Staying within a single English language, the inflammatory evolution of U.S. Supreme Court interpretations often turns on subtle differences in the meaning of simple words, since vigorous legal advocates think they are paid to marshall every argument weak or strong. For example, penumbras and emanations from the word "Privacy" in Roe v. Wade force our judges to decide whether the inclusion of a right to abortion within a right of privacy is simply too far from a common understanding of English. Both in the discovery of a right to privacy within a Constitution document which does not use the word and in the inclusion of abortion within that, Justice Blackmun overestimated the capacity of citizens to understand what they did not want to understand. How much more surely, then, would he have overestimated public willingness to grasp his meaning in two-step translations from a foreign language. Since this famous decision is destined to stand or fall, depending on public tolerance for such wordplay, having almost every citizen confidently understanding English has at least some advantage in persuasion about its wisdom.
Auto-de-fe
By contrast with important language confusions, the "hatreds between nations" so often mentioned as obstacles to unification, seem largely bogus. Argot and slang are commonly invented to conceal the opinions of minority groups. Over thousands of years, this purpose of "jiving" a secret code among conspirators has been perfected exquisitely. It's difficult to overcome, easy to teach children. But the memory of actual wars really dies out rather quickly, not least because atrocities are so hideous, mankind wants to forget them. I was seventy years old before someone told me I had ancestors burned at the stake. By whom, I'm not certain? By someone who has also been dead for four hundred years, not likely to seem threatening to me. Over the fifty years since the Second World War, I have run into former German and Japanese soldiers; they now seem pretty benign. One American former prisoner of war was forced to stand at attention while his Japanese captor pulled out his gold teeth with pliers; he told this story with a faint smile. It is one of the benevolences of biology that we are born without pain memories, and a second is the impossibility of remembering the feeling of pain without first dramatizing the experience for future reference. Once actual onlookers stop grinding the grievance ax, it should be possible to get on with devising a European constitution, provided it contains the equivalent of our First Amendment.
Helen of Troy
It's an important point for an E.U. proposal unifying two dozen different priesthoods and a number of nations wholly defined by the remit of a single religion. A workable constitution for them must contain a strict separation of church and state, because myths, epic poems, and traditions are synthetic, quite different from actual experiences. Helen of Troy may or may not have had a face that launched a thousand ships, but Homer's Iliad certainly glorified more hatred than she did; who can say whether the poem portrays the truth? That's the war side of things; the Odyssey is powerful in evoking the special virtues leading to prosperous nationhood. Because you can't argue or reason with epic myth, it is the many glorifications and condemnations which supply endurance to patriotic myths, easily reducing macroeconomists of the European Central Bank to tears of frustration. Because the best of these epics stand alone as powerful literature, their propaganda strength is difficult to deconstruct with mere logic. Quoting Arnold Toynbee, it is not weaknesses, but overextension of their finest qualities, which usually brings them down.
Euro Zone
While true grievances seldom pose true obstacles on their own, they do often misdirect political leadership from what is best for their countries. European Unification had a primary goal of eliminating future wars but decided the peace goal was achievable only by indirection and began first with monetary tools for prosperity. That takes a long time; America was still fumbling monetarily until the Civil War. So while starting with small victories seems a plausible route to big victories, in fact, it drains much of the idealism out of revolutions. Even worse, it here made the 2010 financial disaster of the Euro symbolic of hazards on the road to Prosperity, which itself merely seems preliminary to a moderate Peace. At least in a struggle for national security, every day survived is another victory. There is no room in past struggles for Americans to gloat over their superior approach to permanent Union. But a defeat is a defeat, and the Euro mess is a big defeat.
Congressman Ron Paul
From a commentator's perspective, currency matters are difficult to understand and explain. For contrast, the Battle of Normandy is thrilling; every death is the death of a hero. But rises in productivity, the risks of volatility, even the way the value of bonds goes down when their interest rate rises seem hopelessly confusing to a beginner. Worse still, there exists real uncertainty. We now have a currency which has no backing in precious metals and is really just a book entry. That's useful for transactions, less certainly useful for a storehouse of value. Mr. Ron Paul is running for President of the United States challenging the whole Federal Reserve concept, and a possibility must be admitted that he has a grain of truth in his speeches. We trust our bankers to devise a workable system of exchange without gold and silver, and readily admit that Mr. Bernanke knows more than we do. But. The world economy nearly collapsed utterly a few years ago, and you know, Mr. Ron Paul might just have a valid point or two. There has not yet emerged any fit environment for enjoying a monetary Crusade to a World Without War. For a striking contrast, go to any Civil War movie and watch those teenaged soldier boys charge up the hill, ready to die for the Union.
IT was spoken hurriedly, and I don't remember who said it. But the gist was that Philadelphia had been the richest city in the world in 1900. In the World, mind you. I can scarcely believe that, but the way it stuck with me shows it had some substance. Rather than comparing Philadelphia with London, New York City, or Paris, I must now compare that exuberance with the dirty, dejected, defeated old wreck of a Philadelphia I first encountered in 1948. Baltimore, Newark and a dozen old American cities sort of crumbled into dust after 1929, but Philadelphia briefly seemed to be picking up in 1948. Richardson Dilworth was getting ready to run for Mayor, and the town's newspapers even enjoyed the idea of a Philadelphia revival. But then the Pennsylvania Railroad collapsed, and after that, we just struggled along, neither dying nor recovering. Some of both, perhaps, but more dying than recovering, and making it credible to believe that Philadelphia just never did recover from the 1929 crash. Just think of that; from top to bottom in thirty years. There just had to be some better explanation than bad management of one railroad.
Until recently, I had accepted the general wisdom that stock market crashes are followed by depressions. Perhaps I am a little slow, but there never seemed to be any question of that analysis, since all major crashes really were followed by recessions, going back to 1792 when Philadelphia had the first American version, and the first financier villain, someone named William Duer. Or maybe it was Robert Morris. Or maybe it was Thomas Mifflin, but in any event, it was someone very rich who did something very reprehensible which toppled the stock market and plunged the rest of us poor victims into protracted suffering. In other scenes of carnage, it had been John Bull, or William Whitney, or Nicholas Biddle. Or J.P. Morgan, that monster. In the 2007 crash, it wasn't so much one villain as one company, Goldman Sachs, or maybe Lehman Brothers. Since the recent crash was so recent, and news coverage so rapid, it might be easier to trace out who the villain was. But there was no one real villain, and even if we found one, it was hard to see why a few days of choked markets would still be causing unemployment seven years later. No one seemed to know, or at least no one wanted to tell me, why stock market crashes cause depressions. They are certainly followed by depressions.
And then suddenly I realized, or maybe someone just broke the news to me, that I had it all backward. Market crashes don't cause depressions, depressions cause market crashes. First, the markets get overheated, everyone gets uneasy, but everyone is making the most money in his life. Suddenly, someone sells out, like shouting "fire" in a crowded theater, and everyone tries to get out the door at the same time. The catastrophe makes everyone see that stocks or real estate, bonds or tulip bulbs, had become ridiculously overpriced, so nobody will buy them at any price. But let's not get down into the weeds of market technicality; prices got disconnected from real values. We overproduced something or even everything, and things wouldn't improve until somebody needed something he had stopped needing, several years earlier. Maybe there were villains, there are always plenty of villains. But we wanted somebody to blame because otherwise, everybody has to take some blame. We needed, in short, a scapegoat.
So let's ask the question again: what caused the great depression of the thirties? And the best answer to come back was the First World War. Philadelphia was the arsenal of democracy, the maker of ships and gunpowder and uniforms. The great transatlantic ocean port, the embarkation point. If we weren't sending troops we were sending tanks and airplanes. The duPonts were sending gunpowder to France, a way of paying back Beaumarchais for sending gunpowder from France to the Battle of Trenton. After their wars were over, one Frenchman went back to making wristwatches and writing plays, and the other munition maker swore off gunpowder and concentrated on nylon stockings. That's far too simple. Philadelphia had expanded and expanded to exploit its wartime advantages. When the war was over the boom was over, but the Roaring Twenties roared. They built mansions, clear out to Paoli and beyond. Movies were written about our hero, who left their jewelry in the vaults of the Girard Bank after the opera while they went back to the horse country at four in the morning. It seems a virtual certainty that no one who acted like that knew what every MBA from Temple now knows: real estate is just about the only link for ordinary people between interest rates and consumption. All assets contribute somewhat to the "Wealth Effect", but real estate is usually the only channel the average person can find, as a way to translate major assets into consumer goods. And since a stock market crash will lower interest rates, the ensuing low cost of mortgages stimulates a real estate boom. Office buildings in the city, mansions in the horse country. But then the city loses its postwar boom and soon loses a million or more population. Result: empty office buildings, empty mansions. Along Spruce and Pine Streets, people moved out of the grand houses and into the servants' houses in the back alleys. Easier to heat.
A friend of mine, whose occupation is locating real estate for businesses, tells me the startling news that land around Philadelphia is too expensive for factories. It seemed hardly credible that real estate could seem so hard to sell, with "For Sale" signs lining the curbs, and yet seem too overpriced for a company to locate here. Suburban Philadelphia house prices were depressed during the Depression so that a seven bedroom Main Line house couldn't find a buyer, but the land was still too expensive for a factory, and anyway, the zoning wouldn't permit a business. Our suburban and exurban land got chopped up into residential real estate, streets were built, sewer lines were extended for miles, trees and ornamentals were planted. Schools and shopping centers were built, maybe some museums and hospitals. But none of that was attractive for a business, and you can't attract an executive to residential real estate without a place to go to work. The features attractive to his wife were not enough to attract him and his business. He wants cheap open land to build factories and vast parking spaces for employees. He doesn't want to get fifty miles away from the port that made Philadelphia prosperous. And he particularly doesn't want to spend his time going to protest meetings about smoke and pollution or go to court to defend his ownership of what someone else polluted, a century earlier. He particularly doesn't want to go to Planned Parenthood meetings with his wife, in order to be hassled about carbon fuels or greenhouse gases in China. Sorry, he's going to build his new plant in North Carolina. And the residential real estate couldn't be made cheap enough for that purpose without tearing down the house, and the schools, and maybe the shopping center. Once the land becomes dedicated, you have to choose: either a nice suburb or a place favorable for a business.
A former President of a Federal Reserve Bank located a thousand miles from Philadelphia was recently here for a conference, and at loose ends for someone to chat with. To my astonishment, he exploded with rage when he contemplated Mr. Obama's refusal to sign permission to build a pipeline from Canada to the Gulf of Mexico. To him, it was obvious that the main thing holding back the American economy was a refusal of American businesses to invest in new plants and equipment. The banks were stuffed with money, but the business refused to borrow it. The Federal Reserve was powerless to stimulate an economy that didn't want to expand, forever pointing to uncertainties of expanding in the face of a regulatory authority which seemed determined to thwart them, to browbeat and humiliate them in front of the TV. It isn't personal, it is serious; because the quarrel is ultimately about important economics. A dollar in 1913 when the Federal Reserve was created, is now worth a penny, and there is every indication of administration eagerness to see the present dollar only worth a penny, far sooner than a century from now. The man speaking was obviously sincere and deeply upset, and what seemed to bother him most was the perception that "the environmentalists" are equally sincere, and thus equally unready to give an inch. The economist regarded the argument of the environmentalists as irrelevant to what was really important, just as surely as the environmentalists were heedless of any legitimacy in the arguments for savaging wildlife. Neither side saw this in terms of the city versus suburbs, or agriculture versus commuters. Neither seemed to acknowledge that a city based on concentric rings had to break the ring pattern in order to maintain a harmonious balance between living well and making a living. That is until the two sides recognize they are talking about the same problem on some level, it will be a dialogue of the deaf, offering no possible resolution except war to the death. It's become a religious conflict, with both sides heedless of things vital to the other side.
They say the main function of real estate brokers is to maintain high prices for property values. But in the long run, if a region isn't prosperous, its residential property will lose value, not gain it.
The Duchess of Windsor was reported to say, a woman can never be too rich or too thin. Perhaps, but with insurance you state -- in advance -- how much insurance you can buy, best not expect more. In healthcare, it's my hunch something drastic would have to change before the American public voted an assessment for more than $3300 per person, for every working year from age 26 to age 65. In fact, if it went much higher, many people would probably look for a way to escape the burden. Perhaps we could supplement 3% per year, the historical rate of inflation for the past century. That's fair because although it would reach $10,000 at age 65 instead of $3300, everything else would have readjusted to give it the same financial impact. Similarly, asking people 26-65 to pay for all ages is more palatable if it's arranged as your own childhood and retirement to be supported.
Excluded: Past debts and Custodial Care. In any event, any payments for past debts, for health or otherwise are not envisioned in the following plan. The term "fixed income" reminds our debt and equity obey different rules, and the premise is the income supplement of this calculation will be based on equity, common stock. Furthermore, we know the National Debt, but how much of it once paid for health services, is fuzzy. When I started this analysis, I really never dreamed all of the current healthcare costs might be covered by investment income from common stocks, and it's going to take some experience to be sure even that is reasonable. It allows us to take a stance: if it won't pay current costs, at least it will pay for some of them. If it more than pays for them, annual deposits should be reduced, never confiscated. To avoid circumvention by changing definitions, it might be well to state custodial care costs are not included, either, because they are treated as retirement income.
Medicare. Making it easier to explain, let's begin at the far end of the process, the day after death, looking backward. This proposal didn't initially include a Medicare proposal, but the accumulation of its unpaid debt has become so alarming, considering Medicare within Health Savings Accounts could fast become a national priority having no other solution. In addition, most factual health data come from Medicare, so the reader gets accustomed to hearing about it. So, while the Medicare situation is fraught with political obstacles, we might have to risk them. While debt overhang from earlier years continues to grow, Health Savings Accounts cannot be confidently promised to rescue Medicare by itself. But perhaps at least the Savings Account discussion could put a stop to going deeper into debt. Even a stopgap would have to get started pretty soon, but there is also a chance an improving economy might partially reduce the indebtedness.
Medicare-HSA Overlaps. At present, Catastrophic coverage is required for Health Savings Accounts, but its premiums are not tax-exempt. To extend HSA for the life expectancy, therefore, requires an additional average of 18 years of after-tax premiums. We have split lifetime HSA into two parts at age 65 and assume a single-premium ($80,000) exchange for Medicare, possibly traded for partial forgiveness of premiums and rebate of payroll taxes. It is important not to count the $80,000 twice if it assumed to be self-financed. One quarter from payroll taxes, one quarter from premiums, and a half from the $80,000 which used to be from the taxpayers. If pre-payment begins at an early age, Medicare costs might be quite modest after growth from income. Even when we show all the costs, including double payments, using an HSA at conservative rates like 4% will reduce the Medicare cost by 75%. Better performance depends heavily on approaching 12.7% by passive but hard-boiled investing. To pay down the existing debt back to 1965 is not contemplated by this proposal. At present, it grows by 50% of annual costs by addition; and an unknown amount by compounding. The amount of debt service is probably going to depend on the national ability to pay it down, regardless of its written terms. The same is likely to be true of subsidies for the poor. Ultimately, both of these decisions are political, limited by the ability to pay. Because of the long time periods, comparatively modest interest rates could convert this impending disaster into a manageable cost, but it should not be contemplated until net investment returns approach 12.7 %. The outcome of these intersections is that the terms and benefits become largely a matter of political choice. That has been true for a long time, yet no effective corrections have been made. It is perhaps unbecoming of a citizen to say so, but the political system needs some steps taken to increase its sense of urgency.
Disintermediation of Investment Returns. By this reasoning, the rescue of Medicare depends on the political choice to do it, and the avoidance of a collision with the financial industry. Without a solution to the Medicare problem, a solution to paying for healthcare at younger ages becomes quite feasible, but it would be useless. Conversely, solving Medicare would be possible if the problems of younger people were ignored, but that is equally unlikely. To solve healthcare financing for all ages depends on introducing some new feature, and the easiest solution to imagine is to raise effective net interest rates. Interest rates are unusually low at present, and the Federal Reserve probably feels it would be dangerous to raise them. However, that's the easy part, because interest rates are certain to rise, eventually. What's much harder to envision is to flow the improved rates and the transaction-cost efficiencies through the financial system without wrecking it. What's hard to imagine is not hard to seem feasible, however. It is to take investments averaging 12.7%, flowing 10% past the intermediaries to the investor; and keeping it up for a century. Disintermediation, so to speak.
Rationalizing Fragmented Payments The transition to a solvent system could be greatly eased by the present premiums and payroll deductions, which are largely age-distributed, and can, therefore, be forgiven in a graduated manner for late-comers to the program. Most redistribution of high-cost cases should be handled through the catastrophic insurance, which is well suited for invisible and tax-free redistribution. Because of hospital internal cost-shifting, inpatients are overpriced, rapidly heading toward underpricing. This distortion of prices is achieved by squeezing inpatient prices with the DRG to shift costs and overpricing to hospital outpatients. In the long run, distorting prices has the effect of raising them. This will more immediately affect the relative costs of Catastrophic and Health Savings Accounts and should be more carefully monitored, with an eye toward re-achieving equilibrium.
Dual Reimbursement Systems are Better Than One At present costs, statisticians estimate average lifetime healthcare costs at about $325,000 in the year 2000 dollars; we could discuss the weaknesses of that estimate, but it's the best that can be produced. Women experience about 10% higher lifetime health costs than men. Roughly speaking, how much the average individual somehow has to accumulate, eventually has to equal how much he spends by the time of death. At this point, we must work around one of the advantages of having separate individual accounts. On the one hand, individual accounts create an incentive to spend wisely, but it is also true that pooled insurance accounts make cost-sharing easier, almost invisible, and (for some) tax-free. Therefore, linking Health Savings Accounts with Catastrophic insurance provides a way to pool heavy outlier expenses, while the incentive for careful money management resides in the outpatient costs most commonly employed (together with a special bank debit card) to pay outpatient costs. Such expenses are much more suitable for bargain-hunting anyway because dreadfully sick people in a hospital are in no position to bargain or resist.
Internal Borrowing. Furthermore, there is a significant difference between mismatches of aggregate revenue-to-expenses of an entire age group, and outliers within the same age cohort, the latter much likelier to be due to chance. To put it another way, somebody has to pay these debts, and the plan has been designed to break even as an entirety. Surely we must have a plan about who should pay them when enough revenue is not yet present in a new account. Surely some groups are always in surplus, other groups are always in arrears; the two should be matched, at low or zero interest rates. Borrowing between sick outliers and lucky good people within the same age cohort should pay modest interest rates, and borrowing between different cohorts for things characteristic of the age (pregnancy, for example) should pay none. Unfortunately, some people may abuse such opportunities, and interest must then be charged. Until the frequency of such things can be established, this function of loan banking should be part of the function of the oversight body. When it's limits become clearer, it might be delegated to a bank, or even privatized. While it is unnecessary to predict the last dime to be spent on the last day of life, incentives should be identified by the managing organization, separating structural cash shortages from abusive ones. Much of this sort of thing is eliminated by encouraging people to over-deposit in their accounts, possibly paying some medical bills with after-tax money in order to build them up. Such incentives must be contrived if they do not appear spontaneously. User groups can be very helpful in such situations. People over 65 (that is, those on Medicare) spend at least half of that $ 325,000-lifetime cash turnover, but just what should be counted as their own debt, can be a matter of argument (see below.)
Proposal 10: Current law permits an individual to deposit $3300 per year in a Health Savings Account, starting at age 25, and ending when Medicare coverage appears. Probably that amount is more than most young people can afford, so it would help if the rules were relaxed to roll-over that entitlement to later years, spreading the entire $132,000 over the forty-year time period at the discretion of the subscriber.
Bifurcated Health Savings Accounts. When Health Savings Accounts were first devised, it never seemed likely that Medicare might be supplanted. However, Medicare has grown both highly popular and severely under-funded, probably running at a large loss. The rules should be modified to permit someone who has health insurance through an employer to develop a Health Savings Account which the funds but does not spend while he is of working age. The funds would then build up, enabling him to buy out Medicare on his 65th birthday or thereabout, with a single-premium exchange at present prices, (exchanging about $100,000 funded by the forgiveness of Medicare premiums and some portion of payroll deductions from the past). He would have to purchase Catastrophic coverage at special rates. If this approach proved popular, it might supply extra funds for loaning to HSA subscribers in the outlier category. While there is no thought of phasing out Medicare against the subscribers' will, Congress would certainly be relieved to have subscribers drop out of a program which must be 50% subsidized.
Proposal 11: The present closing age for HSA enrollments at the onset of Medicare should be extended a few years older. And single-premium buy-outs of Medicare coverage, including the possible return of payroll deductions where indicated, should be permitted as an option.
Proposal 12: Congress should create and fund a permanent Health Savings Account Agency. It should have members representing subscribers and providers of these instruments, with the power to hold hearings and make recommendations about technical changes. It should meet jointly with the Senate Finance Committee and the Health Subcommittee of Ways and Means periodically. It should be involved with the appropriate Executive Branch department, to review current activity, detect changing trends, and recommend changes in regulations and laws related to the subject. On a temporary basis, it should oversee inter-cohort and outlier loans, leading to recommendations concerning the size and scope of this activity.
Single-Premium Medicare, age 65 Hypothetically, if anyone could live to his 65th birthday without spending any of the accounts, a prudent investor would have accumulated $132,000 in pure deposits on his 65th birthday. He only needs $80,000 to fund Medicare as a single-payment at age 65, however, so he can even afford to get sick a little. If he starts later than age 25, he has already paid for Medicare somewhat, with payroll taxes. That could be considered payment toward reduction of the Medicare debt.
If someone makes a single deposit of $80,000 on his/her 65th birthday, there will accumulate $190,000 in the account over the next 18 years, the present life expectancy if he spends nothing for health and invests at 5%; and $190,000 is what the average person costs Medicare in a lifetime. Since the average person spends $190,000 during 18 years on Medicare, enough money will accumulate in Medicare to pay its expenses, and after some shifting-around, this should make Medicare solvent, in the sense that at least the debt isn't getting bigger because of him. Furthermore, index funds should be returning 10-12% over the long haul, so there should be some firm discussions with the intermediaries about some degree of dis-intermediation. Please don't do the arithmetic and discover that only $40,000 is needed. That seems plausible, but that's wrong because the costs remain the same , and previously the government has been borrowing half the money from foreigners. In effect, the subscribers have been paying the government in fifty-cent dollars, while claiming the program is entirely self-funded. There has been an exchange of one form of revenue for another, so the required revenue actually does demand $80,000 for a single deposit stripped of payroll deductions and perhaps premiums. An end would be put to further borrowing, but the previous debt remains to be paid. I have no way of knowing how much that amounts to, but it is lots. All government bonds are general obligations, mixed together, while access to Medicare reports back to 1965 is not easily available. What we can more confidently predict is the limit young working people can afford for the sole purpose of paying off the Medicare debts of the earlier generation. If there are other proposals for paying off this foreign debt, they have not been widely voiced. And the debt is still rapidly growing.
Escrow the Single Premium A young subscriber would have to set aside an average of $850 per year (from age 25 to 64) to achieve $247,000 on his 65th birthday, assuming a 5% compound investment income and relatively little sickness. This might seem like an adequate average, but occasional individuals with chronic illnesses would easily exceed it in health expenditures. Assuming a 10% return, he would have to contribute $550 yearly. It is not easy to estimate the size and frequency of expensive occurrences in the future, so someone must be designated to watch this balance and institute mid-course adjustments. As an example, simple heart transplants costing $200,000 are already being discussed. To some unknown extent, the cap on out-of-pocket expenses would have to be adjusted to pass these cost over-runs indirectly through the Catastrophic insurance. Insurance does greatly facilitate sharing of outlier expenses, but usually requires a time lag whenever new ones appear.
It does not require much political experience to know taxpayers greatly resent paying debts that benefitted earlier generations. They complain, but complaining does not pay off the debts of the past. To double required deposits in order to pay off past debts, as well as using forgiveness of payroll deductions and premiums, would require an additional $120,000 per year escrow, for each year's debt accumulation. At present, roughly $ 5300 per beneficiary, per year, is being borrowed, and there are roughly twice as many current beneficiaries as people in the tax-paying group, but for only 18 years, as compared with 40 years as a prospective beneficiary. So that comes to liquidating roughly $1300 a year of debt to balance the two populations or $2600 a year to gain a year. That's for whatever the debt happens to be, which surely someone can calculate. To accomplish it, one would have to project an average of ??% income return. That's definitely the outer limit of what is possible, and it probably over-reaches a little. Therefore, to be safe, one would have to assume some other sources of income, a change in the demographic patterns, or an adjustment with the creditor. Assuming inflation will increase expenses equally with inflation seems a possibility. And it also seems about as likely that medical expenses will go down, as that they go up. You would have to be pretty lucky for all these factors to fall in line over an 80-year lifetime.
Medicare: Optional, Mandatory, or Third Rail? It is this calculation, however rough, which has made me change my mind. It was my original supposition that multi-year premium investment would only apply up to age 65, and that would be followed by Medicare. In other words, it should only be implemented as a less expensive substitute for the Affordable Care Act. It seemed to me the average politician would be very reluctant to agitate retirees by proposing a plan to eliminate Medicare. They would feel threatened, the opposing party would fan the flames of their fears, and the result would be a high likelihood of undermining the whole idea for any age group, for many years. Better to take the safer route of avoiding Medicare, and confining the proposal to working people, where its economics are overwhelmingly favorable.
But when the calculations show how close this proposal under optimistic projections would come to failure, and when nothing remotely close to it has been proposed by anyone, the opportunity runs the risk of passing us by. So, I changed my mind. The moment of opportunity is too fleeting, and the consequences of missing it entirely are too close, to worry about the political disadvantages of doing the right thing. The transition to a pre-funded lifetime system will take a long time to get mature, and the political obstacle course preceding it is a daunting one. However, there is another way of saying all this, which is perhaps more persuasive that Medicare must be changed. It begins to look as though the unfunded and accumulated debts of Medicare are such a drag on our system of government, that very little can be accomplished by anyone, until this central problem is addressed. In that sense, our problem is not the uninsured or the illegal immigrants, or an expensive insurance system. Our problem has become Medicare underfunding, and our second problem is that everyone loves Medicare.
The "simplified" goal is therefore for everyone to accumulate $80,000 in savings by the 65th birthday, remembering that savings get a lot harder when earned income stops and definitely remembering that people approaching retirement are not likely to part readily with $80,000. With the current law, you would have to start maximum annual depositing in an HSA of $3300 by your 52nd birthday, to reach $80,000 by age 65, and you would still need 10% internal compounding to make it. With a 5% return, you would have to start at age 48. But notice how easily $200 a year would also get you there, starting at age 25 (see below) but it immediately gets questionable to assume $700 a year deposit for a 25 yr-old receiving 5% returns. We are definitely reaching a point where the ideas proposed in this book will no longer bail us out of our Medicare debt. Because -- the most optimistic of these projections are achieved by assuming there will be no contributions at all from people aged 25-65, for their own healthcare, babies, contraceptives and whatever. Many frugal people might skin by with looser rules; But the universal goals of the past are just that, the goals of the past. If we are going to cover lifetime health costs instead of just Medicare, many more will need $80,000 to do it and have something left to share with the less fortunate. But to repeat, that still compares very favorably with the $325,000 which is often cited as a lifetime cost. Unfortunately, that just isn't enough, the Chinese will have to wait for repayment. This book was not written to propose a change in Medicare, but in writing it I do not see how we get out of our healthcare mess without addressing Medicare. If politicians can be persuaded of that, at least we will no longer need to invent reasons for urgency.
Starting with the Medicare example. Notice that forty years of maximum contributions would amount to far more than the necessary $40-80,000 by age 65. We haven't forgotten that the individual is at risk for other illnesses in the meantime, so in effect what we need is an individual escrow fund for lifetime funding intended (at first) only to replace Medicare coverage. (We are examining lifetime coverage, piece by piece, trying to accommodate an extended transition period.) Depending on a lot of factors, that goal could cost as little as $100 a year deposited for forty years at high-interest rates, or as much as the full $1000 per year with low rates. It all depends on what income you receive on the deposits in the interval. In a moment, we will show that 10% return is not impossible, but it is also true that a contribution of $1000 per year would not seem tragic, compared with the present cost of health insurance (now averaging over $6000 a year). I have unrelated doubts about the current $325,000 estimate of average lifetime health costs, but that is what is commonly stated. For the moment, consider these numbers as providing a ballpark worksheet for multi-year funding, using an example familiar to everyone, but not necessarily easy to understand after one quick reading.
The Cost of Pre-funding Medicare. Rates of 10% compound income return would reduce the required contribution to $100 per year from age 25 to 65, but if the income were only 2% would require $700 contributed per year, and at 5% would require $300 per year. Remember, we are here only talking of funding Medicare, as a tangible national example, Obviously, a higher return would provide affordability to many more people than lesser returns. Let's take the issues separately, but don't take these preliminary numbers too literally. They are mainly intended to alert the reader to the enormous power of compound interest. Let's go forward with some equally amazing investment discoveries which are more recent, and vindicated less by logic than empirical results.
109 Volumes
Philadephia: America's Capital, 1774-1800 The Continental Congress met in Philadelphia from 1774 to 1788. Next, the new republic had its capital here from 1790 to 1800. Thoroughly Quaker Philadelphia was in the center of the founding twenty-five years when, and where, the enduring political institutions of America emerged.
Philadelphia: Decline and Fall (1900-2060) The world's richest industrial city in 1900, was defeated and dejected by 1950. Why? Digby Baltzell blamed it on the Quakers. Others blame the Erie Canal, and Andrew Jackson, or maybe Martin van Buren. Some say the city-county consolidation of 1858. Others blame the unions. We rather favor the decline of family business and the rise of the modern corporation in its place.
Originally the "lower counties" of Pennsylvania, and thus one of three Quaker colonies founded by William Penn, Delaware has developed its own set of traditions and history.
Start in Philadelphia, take two days to tour around Delaware Bay. Down the New Jersey side to Cape May, ferry over to Lewes, tour up to Dover and New Castle, visit Winterthur, Longwood Gardens, Brandywine Battlefield and art museum, then back to Philadelphia. Try it!
Millions of eye patients have been asked to read the passage from Franklin's autobiography, "I walked up Market Street, etc." which is commonly printed on eye-test cards. Here's your chance to do it.
In 1751, the Pennsylvania Hospital at 8th and Spruce was 'way out in the country. Now it is in the center of a city, but the area still remains dominated by medical institutions.
Grievances provoking the American Revolutionary War left many Philadelphians unprovoked. Loyalists often fled to Canada, especially Kingston, Ontario. Decades later the flow of dissidents reversed, Canadian anti-royalists taking refuge south of the border.
