Bill Roper's Journal

I'd be all for letting the market correct itself, and let the chips fall where they may, except that we don't have much of a social safety net in this country. What free health care there is is patchy and hard to find. Medicare has been the whipping boy for entitlement programs so that it becomes hard to find providers that accept it any more, and living on just a social security check is not much of a living.

So what happens when the hard market correction wipes out the retirement savings of a lot of people, including my parents (ages 79 and 81)? I predict a huge load on the underfunded part of the health care system followed by a bonanza in the funeral home industry. I can't predict the size of that impulse, though.

It's all well and good when you are young and in demand and (think you) can support yourself through the wilderness by your wits and abilities. However, there are lots of people whose version of "hurts a lot" includes dying fairly promptly, and lots of those people (and the larger network of people close enough to them to factor their fates into their actions) can vote. Naturally, the profiteers waiting in the wings (that are surely there) are selling fear, uncertainty and doubt in large "economy-size" doses.

What we need is a somewhat softer correction. The question is, how soft?

This is one such proposal. There is a lot to like in this analysis, but I think 90% is too high, since the uncertainty in the recorded value will surely surely be bigger than 10%. 25% of face value might be a starting point for the recorded value, but I suspect it's too low to restore liquidity. What I'd like to see is credible simulations. However, there is neither time nor adequate credibility for that.

This sure is going to be one for the history books.