,Rawles linked to this article about Greece. Pay close attention to this paragraph:
So pharmacist buys [drug] for $50. Sells [drug] to patients for $20. Government gets the bill for the difference of $30 (plus, presumably, some profit for the pharmacist.) When government has no money, pharmacist is on the hook for the $30. Choice is then to either sell the drug to the patient at the price the government was being charged ($50 + profit) or stop buying drugs when patients can’t pay for them. This is a perfect example of what I meant a few posts back about why austerity measures are hated by these countries populace. Faced with the ‘real’ cost of their medication, Greeks cannot afford them. Without the government subsidizing the cost of the drugs, the pharmacist won’t buy them because they’re not going to buy what they cannot sell. The result, very predictably, is that there are now drug shortages looming.
Any business or industry, in Greece or anywhere else, that relies on ‘easy’ government money to make things function is skating on thin ice these days. As things progress I think we’re going to see more situations like this in more countries where government has artificially been keeping prices low through subsidies and can no longer afford to do so…pissing off the population who, having come to rely on those products and services at low prices, will be outraged at having to pay ‘their fair share’. Political fallout, naturally, will be severe.
I suppose it might be a good idea to analyze and examine our own systems and see where such weaknesses are so we can have workarounds ready for when/if this sort of belt-tightening comes a-knocking at our national door.
I know the defense contractors around my area (Northern Viginia) are running scared right now. I think they know the boom years of the last decade are over.
I am using the news abroad as a springboard with those who have been reticent to prepare. Esp these females with kids who are so blase’ about the whole thing.
I hope to get them to at least hit up the Mormon Food Storage location for some purchases…you MUST have food. You can cope with a lot of privation but not that…
Too, we cleaned the garage this wknd – more room and definitely a better way to know what we have. And, of course, the ability now to back vehicles in for loading. THAT was critical.
In the US, most farms receive subsidies, especially the very large corporate farms. Dairy and dirt farms get the most subsidies.
If I follow the logic correctly, it sounds like there are no actual drug shortages, only people who can’t afford the real cost of the drugs. If fewer people can afford them, there should be a surplus (at least at the manufacturer or distributor), but maybe not at the pharmacy. I suppose production cut backs would be the logical response to falling sales.
Agreed: Anything with government subsidy is going to have the supply-demand curve turned upside down when that subsidy stops. Even if we are not buying subsidized goods, if a large enough group using WIC, Food stamps, welfare, etc. go away, there may be a temporary glut followed by shortages from supply cut-backs.
I should add, goods that are not profitable to produce without the subsidy will disappear completely.
This is European logic. Think of it as the state owned health insurance company having run out of money and not being able to uphold their part of the contract due to heavy speculation in the credit marked.
Hey, that kind of sounds familiar…
Just wanted to send this your way, figured it was a good proxy to what you said….
http://www.wired.com/wiredenterprise/2012/06/microsoft_greece/