If the Wall Street Geniuses Created a National Health Insurance System

A sadly realistic take on how to finance a national health insurance program:

1. Set up a large, well capitalized hedge fund. About $5B should do it.

2. The prospectus of the fund should note its purpose is to “Seek
out profit opportunities via arbitraging inefficiencies in the markets
and health care system of the United States.”  Include standard
“Socially Conscious” fund language in clauses such as Do well by doing good.

3. Launch the fund — and promptly max out your leverage. Today’s
environment makes it difficult to go 50 to 1, but getting 10 or 20 to 1
should not be much problem.

4. Use the money to write Credit Default Swaps with a notational
value of $3 trillion dollars. The premia on these CDS should be about
10-15% or so.

5. Rollover the cash premiums — about $350 billion dollars worth —
into a national fund. Use it to buy health care insurance for all US

6. Declare that due to current credit conditions, your unfortunately
must announce to your counter-parties that you will be defaulting on
these CDS. Note that significant amounts of this paper are held by JP
Morgan and Citi. Another trillion is held by China and Japan, with
Sovereign Wealth Funds owning the rest.

7. Send out a press release announcing “systemic risk.” Tell the
Treasury Secretary and the Federal Reserve Chief that your imminent
collapse will wreak global havoc. Apply for bailout.

The author then says just repeat the process to pay for things like global warming, school vouchers, missile defense, etc.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s