I have written before about Health care expenses and that one way to encourage more free market forces in the health care industry would be to eliminate the anti-trust protection afforded to the insurance industry. This was not very well accepted by our own Senator Orrin Hatch - you can read his letter to me below.

Another thought provoking idea is one created by Michael Cannon of the CATO Institute. In his paper, "Large Health Savings Accounts: A Step toward Tax Neutrality for Health Care," Cannon proposes making some changes to HSA's which would encourage more competition and therefore drive prices down to a competitive level. His proposals are as follows:

1. Increase HSA contribution limits dramatically. For illustrative purposes, assume the maximum annual contribution limits would be roughly tripled, from $2,850 to $8,000 for individuals and from $5,500 to $16,000 for families.
2. Remove the requirement that HSA holders be covered by a qualified high-deductible health plan. HSAs would be open to those covered by any type of insurance, as well as the uninsured.
3. Allow HSA holders to purchase health insurance, of any type and from any source, tax-free with HSA funds.

Cannon writes, "Restructuring the exclusion for employer-sponsored health benefits in this way would enable more individuals to obtain health insurance that matches their preferences, would increase efficiency in the health care sector, and could reduce inequities created by the exclusion. These changes also offer a means of limiting the currently unlimited tax exclusion for employer-sponsored health benefits that may be more politically feasible than past proposals. " He concludes: "Large HSAs could serve as a step toward a tax system that offers no preferred treatment to health expenditures, and thereby forces the health care sector to accomplish more with the resources devoted to it."

I personally liked his ideas and recommend that we look closer at them and invite our elected officials to look closer as well. What we need is not more government health care programs or forcing employers to purchase group insurance (which would just perpetuate and deepen the divide between the consumer and the prices) such as those being proposed by certain presidential contenders.

To read his full report, please click on the link below.

http://www.bepress.com/fhep/11/2/3/

Federal Reserve Chairman Ben Bernanke said this past Wednesday that "It now appears likely that real gross domestic product will not grow much, if at all, over the first half of 2008 and could even contract slightly."

I don't want to sound cruel or insensitive to those who will lose their jobs in this downturn (I lost mine last year), but I assert that a "slight" GDP contraction is not that bad (and a much better result than a government planned and ran economy). This is the result of our free market economy that we all benefit by on a daily basis. This is Adam Smith's invisible hand at work - and it works for our good. All the free world has seen an increase in wealth and comfort due to the free market forces. They have caused a loss of jobs in one area but an increase in others. In America for example, our manufacturing jobs are being sent abroad but yet we are still experiencing unheard of unemployment levels. The free market economy may hurt a little as it finds the right balance, but we all are far better off because of it.

Our economy grows when there are buyers for products and when there are too many products for the buyers the economy lags and some jobs get lost. The Federal Reserve reacts by lowering interest rates when inflation is contained; this encourages investment which causes growth and creates jobs until there are too many products on the shelves at which point the economy contracts - and thus it moves - but it always moves up.

We shouldn't be too overly concerned about "slight" GDP contraction. We should always be wise, live good lives, have our own houses in order, live within our means and trust that all will work out. It is my opinion that slight GDP contraction is made to look like the sky is falling because it is an election year and everyone wants to blame everyone else and everyone wants to have a better program for saving the economy than anyone else and look like they are doing more for it than anyone else.

Just because we all can't buy brand new everything this year doesn't mean the world is coming to an end. Let's be real: the free market forces at work will find the right balance and we will all be better off because of it.