Fact Check: The Truth About Socialized Medicine [UPDATED 4/14]

The COVID-19 pandemic is, among other things, an historical opportunity to compare healthcare systems around the world.    Though it's still too early to draw any final conclusions, a couple of patterns have already emerged.
 
The graph below plots the top 40 COVID-19 countries based on their Heritage Economic Freedom ranking and their case fatality rates (CFRs) as of April 14th, 2020.  (China, Russia, and Pakistan have been left out due to unreliable data.)

You'll notice that most countries in the first two quadrants of economic freedom are tightly grouped in the bottom left corner of the graph.  Economic freedom correlates with low CFRs.  But there are also countries with very high CFRs in the free group.  In all cases, these outlier countries have the highest degrees of one-size-fits-all nationalized free healthcare, aka socialized medicine.

It seems the more nationalized and rigidly socialized a healthcare system is, the more deadly it is.  (Sorry Democrats, Progressives, and Socialists.) Meanwhile, economically free countries with strong private healthcare components are performing the best in this pandemic.  The U.S., Germany, Switzerland, Norway, Israel, and others with blended private and public healthcare systems have consistently lower CFRs than their fully socialized counterparts.

(raw data below)

Caveats:  1. It is very early in the pandemic.  2. Each country is on a different part of the pandemic timeline.  3. Data is sketchy at this point.  4. Each country has a unique demographic mix.  5. Some countries are doing well AND have nationalized healthcare.

To be clear, every country, including the U.S., has some degree of government guaranteed healthcare. Some countries have the one-size-fits-all universal free systems, some are totally nationalized w/ a fee, some have nationalized insurance, or single-payer, some are blended public and private systems (i.e. The U.S.), and there's everything in between.

One of the big differences between nationalized countries is how they do it.  For example, total nationalization vs insurance nationalization makes a big difference.  Take Canada and UK:  In the UK, everything is nationalized - all health workers work for the national system and the facilities are owned by the system.  In Canada, the healthcare workers etc. are not nationalized, but the insurance system is single-payer. Canada has a low CFR so far, and UK is quite high.  Neither has a fraction of the ventilators or ICU beds per capita as the U.S.

     (Data sources:  Worldometers and Heritage)

AOC Reacts to COVID-19

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Fact Check: Socialism Kills!

It's way too early to close the book on this, but there's already a strong correlation between economic freedom and COVID death rates.  Free markets save lives, and an unfree market (ie: socialism) kills.

To make this graph, I took the top 100 countries in the Heritage Foundation Index of Economic Freedom and calculated the Case Fatality Rate (CFR) as of 3/26/20 based on raw data from Worldometers.

I only included countries that had both significant COVID cases and could also be considered reasonably reliable data sources.  (China is not in the top 100, and I don't trust their numbers anyway.)

I'll update this periodically, and we'll see if it holds.  Below is the raw data.

(Note: The two outliers in the first quadrant are UK and Netherlands, which both have socialized medicine yet relatively free economies.  Again, it's very early in the progression of this pandemic, and there's a lot of data uncertainty.)

Country	Economic Freedom	Cases	Fatalities	Case Fatality Rate
Singapore	1	683	2	0.29%
Hong Kong	2	453	4	0.88%
Australia	4	2806	13	0.46%
Switzerland	5	11811	191	1.62%
Ireland	6	1564	9	0.58%
United Kingdom	7	11658	578	4.96%
Denmark	8	1877	41	2.18%
Canada	9	3897	37	0.95%
Estonia	10	538	1	0.19%
Iceland	13	802	2	0.25%
Netherlands	14	7431	434	5.84%
Chile	15	1306	4	0.31%
Lithuania	16	299	4	1.34%
United States	17	81864	1173	1.43%
Luxembourg	19	1453	9	0.62%
Finland	20	958	5	0.52%
Sweden	22	2840	71	2.50%
Czech Republic	23	1925	9	0.47%
Malaysia	24	2031	23	1.13%
Korea, South	25	9241	131	1.42%
Israel	26	2693	8	0.30%
Germany	27	43646	262	0.60%
Norway	28	3346	14	0.42%
Austria	29	6847	49	0.72%
Japan	30	1399	47	3.36%
Romania	38	1029	22	2.14%
Thailand	43	1045	4	0.38%
Poland	46	1221	16	1.31%
Belgium	48	6235	220	3.53%
Indonesia	54	893	78	8.73%
Portugal	56	3544	60	1.69%
Spain	58	56197	4145	7.38%
France	64	29155	1696	5.82%
Philippines	70	707	45	6.36%
Turkey	71	3629	75	2.07%
Greece	100	892	26	2.91%

The Coronavirus Economic Crisis - How to Fix It?

I believe we are doing this all wrong.  Not the medical part.  I think the world is getting that right as evidenced by the success of gene mapping, vaccines, hydroxychloroquine/zinc, anti-bodies, anti-virals, etc.  The medical crisis might be a supply chain problem at this point.  Still deadly serious, but there's a light at the end of the tunnel.  However, the economic crisis is an unfolding disaster.  

The current approach is like the Dutch boy with his fingers in the dyke.  Except he's trying to plug a million holes with his fingers.  It's simply not possible and doomed to fail.

The government is talking about trying to bail out every individual industry involved, well, at least the big ones with lots of lobbyists.  Airlines, cruise ships (yeah, there's an essential industry) automobiles, chain restaurants, banks, planes, hotels, etc., will all get generous bailouts in the trillions.  And these industries were the ones who for years have been blowing their money on stock buybacks to enrich their execs.  Why should they get a blank check worth trillions?  They shouldn't.

Nor should they be asked to twist in the wind thanks to a pandemic.  

Meanwhile, massage therapists, wait staff, carpenters, bartenders, yoga instructors, musicians, small businesses, restaurants, bars, and people like YOU are completely out of work and on their own. 

There's another way which would save everyone, and avoid the disaster we are creating.  

Believe it or not, this is NOT a MONEY problem.  It's a TIME problem.  

We don't need BAILOUTS,  we need TIMEOUTS!

Going back to the dyke analogy, what if there was a way to freeze the ocean?   

The idea is similar to the sci -fi concept of suspended animation.  To do that we need to both support life AND suspend time.      

Therefore I propose two remedies:

1. Suspend all time related expenses: debt, taxes, rents, leases, insurance, etc. until this is over.  We simply go into timeout for the shutdown weeks or months and add that time to the end with interest. This would freeze bank loans, the entire bond market, municipal market, mortgages, rents auto leases, loans, insurance, and all taxes, etc.  Nobody would be obliged to pay anything, and nobody would be able to demand anything regarding these obligations.  Bankruptcies, evictions, lawsuits, etc would all be in suspended animation until normalcy returns.  

No company would need a giant bailout under this scenario because no company would have these time related expenses during a time of no revenue.  Any company that could continue operations would do so and would continue paying their debts, taxes, rents, and leases. Those that cannot though, would not go bankrupt simply because of a pandemic.  The federal government would still be there to lend to states and local governments who need it.  

2. To deal with the need to sustain life, everyone who needs money in the U.S. would go on the existing food stamp program (SNAP), which would be increased to encompass other essential expenses like energy, gas, and medications.    

SNAP is an existing program. It wouldn't require much modification to scale up for the entire population.  (Alternatively, checks could be sent to everyone, but what could possibly go wrong with that?)  

The timeout bill would be much shorter than the bailout monstrosity and way cheaper.  The only money spent would be for citizens to sustain life and governments as loans.  No money would need to go to businesses and corporations. 

Let's freeze this ocean of economic woe until this nightmare clears up.  When it's over, we can thaw the economy and bring it back to life.    

[Update: Unfortunately, the government will never do this.  Why?  First, freezing the economy would be a huge statistical hit to GDP and the unemployment numbers.  Pumping trillions into a bailout will flow directly to GDP and paying employees who can't work will moderate unemployment numbers. Politicians can't allow the bad optics of crashing GDP and rising employment numbers.  That would spook the markets, God forbid.  Second, Democrats see this as an opportunity to blackmail Trump to sign their agenda.  Both sides want a 2000 page bill that no one will ever read except the lobbyists who write it.  That's why we will spend trillions of dollars we don't have and flood the market with the monetary equivalent of Fentanyl.  Sad!]  

DIY Virus Mask

(If video doesn't play, click on the YouTube button.  Links are not working well these days. )

The government says you don't need a mask unless you're sick.  Translation: YOU NEED A MASK, and everyone you know and love needs one too!   Why?  Because there is significant asymptomatic spread and minimal compliance by the symptomatic.  

Here's how you can make many very good masks for about $1 plus labor. 

See graph below.  What more do you need to know?  

When this is all over, the no-mask policy promoted by the U.S. CDC will be rightly seen as deadly and criminal.   Heads must roll.  

Coronavirus and Leverage

Forget for a moment the potential death toll.  And forget for a moment the financial damage from plummeting stocks.  The coronavirus could make the 2008 mortgage crisis look like child's play.

The last time there was a real pandemic was 1918.  Spanish flu killed up to 5% of the world's population.  Obviously a huge human tragedy.  (On the bright side, 95% of the world survived!) But there are big differences between 1918 and 102 years later.  High speed travel is ubiquitous, medicine has improved greatly, aaaand LEVERAGE IS EVERYWHERE (ie: borrowed money).

Unlike the early 1900s, everything today is bought on time, and the coronavirus does not care about your payment schedule.  

Banks, businesses, bonds, houses, cars, hospitals, you name it.  Everything today depends on a matrix of time sensitive payments happening at precise intervals. If time slows down, or takes a temporary pause, those payments will not happen and the deck of ownership around the world will be  completely re-shuffled.

If you are a leveraged company and depend on China for some part of your product, you cannot sell product TODAY.  If you cannot sell product, you cannot pay your debts. If your debts are collateralized by assets, someone else will soon own those assets. 

If you hold a mortgage and your job depends on business as usual, guess what?  Business as usual is going to take a temporary pause.  Can your mortgage payments?    

There will be bank runs, defaults, bankruptcies, and financial chaos beyond anything the world has seen before.  

Just another fun aspect to the unfolding pandemic.  

Godspeed.