Is it the War on Obesity or the cookies are now luxury in America? The sugar and the cookies are running inflation higher than the health care industry. Food prices were generally down last year. According to the Consumer Price Index (CPI) for December 2009 the food prices were down half point comparing to the same period in 2008. Unfortunately the deflation is absent when sugar is involved. Cookies were 4.3% more expensive that the year before (compare with 3.4% yearly inflation of the health care). Cakes and cupcakes prices were up 2.7%.
Generally the foods that make you feel guilty if you are trying to fit in your Oscars outfit are getting more and more expensive. Spices, sauces and gravies were up 3.6%. Take that!

Curiously the school lunches cost the parents 2.8% more. Ouch! This doesn’t make much sense unless the schools feed the kids with cookies and gravy which I doubt to be the case.

Sugar and salt can’t beat the cigarettes though. If you have any doubt that the Obama sin-tax hikes were sent down to the consumers have doubt no more. Cigarettes were 30.5% more expensive and the other tobacco products were up 22.1%. Glad I quit smoking. The rest of you who still do – hope it makes you feel better that the tobacco tax-hikes pay for the children health care in America. I wonder if President Obama who admits to be still smoking pays for his cigarettes out of his own pocket or with tax-money. Or maybe there is always somebody around ready to provide the President with a bum for free.

The highest inflation though is run by the gasoline 53.5%. Let’s see! Gasoline 53% – Health Care 3.4%. May be the Big Administration has its priority backwards. May be the Energy Independence should be right there at the top with the jobs.

Education is also becoming more expensive (it is right there with the cookies at 4.7%). College textbooks were up 7.4%. May be it is all that money that we are pouring into the education system or folks are going back to school for the lack of jobs and the colleges take advantage of the wave. It is just speculation. The CPI numbers do not give us the cause of the inflation – just point to it.

Now let’s take the magnifying glass and look closer at the health care inflation.

In 2009 medical care became 3.5% more expensive. Inside the number is the surprise though: while the hospital related services were 7.5% more expensive, the health insurance services became 2.9% cheaper! Really? The evil health insurance? Cheaper? The rates of inflation in 2008 were similar (hospital and related services 5.7% up, health insurance 3.5% down).

In fact since 2005 (when the CPI first started to measure the health insurance input in the index) the hospital services became 30.1% more expensive (December 2005-December 2009), while the health insurance for the same period had only 8.33% inflation. No wonder the health insurance premiums go up. The health costs are out of control.

The fact is so embarrassing that the government bureaucrats had to come up with a new formula to measure the health insurance business in 2010.

President Obama and his friends in Congress picked on the insurance companies as if it is their responsibility to provide health care in America. It is not.

If the food prices run into hyperinflation, will it be the grocery stores responsibility to feed the country? Just because their product is connected with food? Will the government require the grocery stores to give away food despite the fact that it will bankrupt them in such situation?

It is the same with the health insurance companies. They offer a product. People either buy it or not. It is not the companies’ responsibility to give away product in rates that will bankrupt them.

It is the society responsibility to fix the health care in America, despite the hospitals and the insurance providers. The Obama health care bill (the “improved” Senate version) does little to reform the health care. It addresses the cost by raising taxes – which is just throwing more money in the black hole of the broken system.

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