Economics 101

Yahoo News reports,

In the health care debate, Democrats and their allies have gone after insurance companies as rapacious profiteers making, according to Pelosi, "immoral" and "obscene" returns while "the bodies pile up."

Ledgers tell a different reality. Health insurance profit margins typically run about 6 percent, give or take a point or two. That's anemic compared with other forms of insurance and a broad array of industries, even some beleaguered ones.

Profits barely exceeded 2 percent of revenues in the latest annual measure. This partly explains why the credit ratings of some of the largest insurers were downgraded to negative from stable heading into this year, as investors were warned of a stagnant if not shrinking market for private plans.

So people, this is your simple economics lesson for the day. There is a vast difference between profit margin and profits(gross profits). Democrats always try to turn you against companies, namely, oil and insurance companies, based on gross profits. That means nothing.

Gross profit Margin = Revenue-Cost of Sales/Revenue

Gross profit = Net sales – Cost of goods sold.

The latest statistics show profit margins are 2%! Do you think drug dealers on the corner of a Brooklyn neighborhood would operate on a 2% profit margin? Hell no. They wouldn't waste their time. Sure, insurance companies make insane gross profits, but costs of goods and services are very high. Neal Boortz spoke a bit about this today on his show, so I must give credit where it's due. His point was that Democrats, in order to get Health Care reform passed, or any agenda for that matter, must turn you against the issue. They do this by lying. Nancy Pelosi, which happens to be among the richest members of Congress, has a listed net worth in 2007 estimated at nearly 48 million. Is this a person wth room to speak about immoral and insane profits? Does that make sense to anyone that's logical or not lost in the stubborness of their ideologies? Being educated on these issues is a must. You have to imform yourself so you can decipher through the rhetoric. Liberals tell you oil companies have record profits. Yes, that's true. Record profits, but not record margins. What the liberals don't tell you is that the government makes more money through taxes on oil than the oil companies themselves make. Insurance companies make huge profits? Yes, they do, but what they don't tell you is that bureaucracy and Government stands in the way of insurance companies truly competing on the free market. Why wouldn't the Government allow competition over state lines for better rates and better health care plans? There's no reason other than it would mean losing control. As I've said a thousand times, this is nothing but a political play to gain control of the health care of millions of potential voters. People, they have no interest in providing you better health care. They simply want your vote and that's all that's at play here. If you don't understand this, once again, you're stupid and you're not listening because I've told you this at least three times, if not more. Even if politics don't interest you. Even if think you're a democrat. Inform yourselves. Don't vote for a party because your friends or family do. Wake up and make some decisions for yourselves. If you have no interest in doing better, getting a better job, getting off welfare, quitting your drug habit, providing for your children, just don't vote, please. I'm begging you. It would make the people who actually contribute a hell of a lot happier.