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Old 12-17-2009, 09:46 PM   #21
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Just to be a stickler, the claim that uninsured medical costs are the number one cause of bankruptcies is not necessarily logically inconsistent with a 17% incidence. Maybe there were a lot of main causes and none were 17% of the total.

Here's one of those studies reporting a high incidence of bankruptcies due to medical causes. From the abstract: "About half cited medical causes, which indicates that 1.9–2.2 million Americans (filers plus dependents) experienced medical bankruptcy

Looking at this study, I agree that it does a poor job of making clear exactly what role the lack of medical coverage played in the bankruptcies.

Here is a good study attempting to tease out the various reasons for personal bankruptcies. The most significant factor causing personal bankruptcies is not medical expenses . And, it's not job loss. It is overspending:
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This paper utilizes the population of personal bankruptcy filings in the state of Delaware during 2003 and finds that household expenditures on durable consumptions, such as houses and automobiles, contribute significantly to personal bankruptcy. Adverse medical conditions also lead to personal bankruptcy filings, but other adverse events such as divorce and unemployment have marginal effects. Over-consumption makes
households financially over-stretched and more susceptible to adverse events, which reconcile the strategic filing and adverse event explanations
As one author looking at the above study put it:
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having a serious medical condition makes you 50% more likely to file for bankruptcy, but not because of medical bills; medical bills are only a very small percentage of the overall debt of bankrupts, and are not significantly correlated with higher credit card debt, which one would expect if people were keeping down their medical bills by charging them to Visa. Presumably it's the income effect of disability or caretaking responsibilities.

Job loss may precipitate bankruptcy, but bankrupts don't report being laid off at a significantly higher rate than the control group. The difference is, the control group had savings to cover its financial emergency.
It looks like overconsumption of durable goods is the major cause of bankruptcies.
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Old 12-17-2009, 11:00 PM   #22
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Just to be a stickler, the claim that uninsured medical costs are the number one cause of bankruptcies is not necessarily logically inconsistent with a 17% incidence.
You are correct. I think I mentally read RIT's "#1 cause" as "majority of", which are not always the same thing. I probably made that slip because so many of the headlines from that report said something like 'over half the bankruptcies...'

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Old 12-18-2009, 09:01 AM   #23
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Someone kindly send a link to this thread to Elizabeth Warren. She likes to point to medical issues as the cause of bankruptcies a lot.

And from samclem's link "Presumably it's the income effect of disability or caretaking responsibilities." - This is probably as much cause as the actual bills. Combine living above one's means and having no savings and you are walking a financial tight rope. Then add in illness and loss of income from a job due to caretaking or disability, and that in and of itself would lead to bankruptcy in many cases regardless of medical bills.
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Old 12-18-2009, 10:22 AM   #24
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What’s the definition of bankrupt?

At 12-18-09 04:14:51 PM GMT we were at $12,135,856,734,588.51 according to U.S. National Debt Clock

To me were all ready there.
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Old 12-18-2009, 12:45 PM   #25
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What’s the definition of bankrupt?
I also am confused about that. Maybe when we hold a Treasury Auction, and no one shows up?

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Old 12-18-2009, 12:51 PM   #26
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What’s the definition of bankrupt?
Maybe we start auctioning off hard assets that aren't being used very efficiently. The Capitol, the Whitehouse, etc.
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Old 12-18-2009, 01:08 PM   #27
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What’s the definition of bankrupt?
Good question. Maybe when the federal government's debts exceed all of its assets (land, buildings, property, et cetera)? Until then, the government could theoretically remain solvent by selling off assets to retire debts. Not that it would happen, but that might be one way to define it.
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Old 12-18-2009, 01:12 PM   #28
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Until then, the government could theoretically remain solvent by selling off assets to retire debts. Not that it would happen, but that might be one way to define it.
How do you place an accurate value on Yellowstone or the Grand Canyon?

Priceless...
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Old 12-18-2009, 01:15 PM   #29
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How do you place an accurate value on Yellowstone or the Grand Canyon?

Priceless...
Maybe next time the UN meets in NYC, hold an auction on the courthouse steps outside? Highest bidder?

Who will be snapping up US properties a la Japan circa 1989?
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Old 12-18-2009, 01:22 PM   #30
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Who will be snapping up US properties a la Japan circa 1989?
Whaddya bet the Sultan of Dubai has his eye on White Sands National Monument...
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Old 12-18-2009, 02:03 PM   #31
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My thoughts are that this thread will have posts deleted due to political content and will quickly be porky pigged.
..say it ain't true, REWahoo!
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Old 12-18-2009, 02:30 PM   #32
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Whaddya bet the Sultan of Dubai has his eye on White Sands National Monument...
Speaking of bankrupt governments... Dubai is apparently not doing so well these days.
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Old 12-18-2009, 02:48 PM   #33
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How do you place an accurate value on Yellowstone or the Grand Canyon?

Priceless...
Put it on ebay?

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Old 12-18-2009, 03:27 PM   #34
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Owing money does not make you bankrupt.

Owing money beyond your ability to pay does.

The Federal government has revenues that are above $2.5 trillion. Interest on the debt is currently about $450 billion.

We are reaching dangerous levels, but wise action can still avert disaster.



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Originally Posted by wasgotfire View Post
What’s the definition of bankrupt?

At 12-18-09 04:14:51 PM GMT we were at $12,135,856,734,588.51 according to U.S. National Debt Clock

To me were all ready there.
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Old 12-18-2009, 03:33 PM   #35
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Heck, the US is already bankrupt, there are just arguments over how bad.

The real question, when will the currency be officially devalued? Amero anyone?
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Old 12-18-2009, 03:38 PM   #36
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The real question, when will the currency be officially devalued? Amero anyone?
I'm waiting for the day the US government officially pegs the $ to the Ugandan Shilling (UGX) in order to stabilize the dollar.
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Old 12-18-2009, 04:02 PM   #37
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I'm waiting for the day the US government officially pegs the $ to the Ugandan Shilling (UGX) in order to stabilize the dollar.
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Old 12-18-2009, 04:04 PM   #38
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I'm waiting for the day the US government officially pegs the $ to the Ugandan Shilling (UGX) in order to stabilize the dollar.
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Old 12-18-2009, 04:39 PM   #39
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Bankruptcy is a technical term that I don't think applies to the US. As I have said in previous posts, the US government will not default on its debt. It will print the monies necessary to retire its debts.

The real concern is the value of the $ relative to other currencies or commodities (oil).

You will know in no uncertain terms the jig is up on our profligate spending the day that Congress institutes capital controls. It is the final acknowledgement that the US $ is on its way to being worthless. Stopping the flow of $ into other non-US denominated assets is the final step to try to protect the currency.
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Old 12-18-2009, 04:43 PM   #40
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Bankruptcy is a technical term that I don't think applies to the US. As I have said in previous posts, the US government will not default on its debt. It will print the monies necessary to retire its debts.
Right. As long as there is a printing press cranking out fiat money, bankruptcy isn't the likely outcome -- high inflation would be.

Still, as an aside I question why the president would use a term like this when not all that long ago, he was chiding his opponents for using scare tactics about health care reform. Is it any more likely that we'd go bankrupt than, say, Grandma not getting a hip replacement because she's over 70 and we're rationing care?
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