johnoliverHave you ever watched HBO’s Last Week Tonight? It’s a show where British comedian John Oliver reads a teleprompter explaining to Americans what is wrong with our country. It’s also a show where smug, self-satisfied progressives who miss John Stewart can be entertained while thinking they are watching “smart” content.

In reality, Last Week Tonight is frequently one of the dumbest shows on cable (in the sense that watching it makes you less informed about the world). And yet it is almost inescapable if you have an internet connection. Even if you don’t subscribe to HBO you’ll find clips every Monday morning on left-leaning media sites, or someone who wants to feel self-righteous and pseudo-intelligent will slip it into your social media channels.

A prime example is the most recent episode where Oliver takes on the debt collection industry. A representative headline reporting on the show (from a site that should know better) is “Watch: John Oliver just topped Oprah with one of the largest giveaways ever on TV.”

Oliver didn’t top Oprah nor was he involved in one of the largest giveaways ever on TV. The actual amount of money that Oliver gave away wasn’t that significant — $60,000 — but he was able to fool people who don’t know much about economics into thinking he actually gave away $15 million.

I’m not kidding. There are a lot of people this morning who really think a third-tier cable talk show host gave away $15,000,000.

You can watch the clip here. But I warn you it’s crude, simplistic, misleading, overly long, and filled with Oliver’s attempts at what he considers to be “humor.”

We could spend all day parsing the economic fallacies and Nanny State assumptions in the video. Essentially, Oliver thinks that one of the most regulated industries in America simply suffers from a lack of regulation. He also thinks we should pay our debts “when we can” but if we can’t, well, that’s why rich people exist: so that we can redistribute money from the haves to the have-nots.

But let’s set aside those complaints and focus on the absurd claim that Oliver “gave away” $15 million.

Here’s how it works: Oliver starts a debt collection business (and is shocked and horrified to find that it’s relatively easy to start a business in America). His new company then buys nearly $15 million dollars of medical debt for less than half a penny on the dollar ($60,000). He then donates the debt to a non-profit that “forgives” medical debt (i.e., refuses to seek collections). Then Oliver claims he “gave away $15 million.”

Not quite.

Oliver says he bought “out of statute” medical debt from Texas. According to Texas law, debt collectors cannot sue individuals in an attempt to collect debts that are more than four years past due. So the debt is essentially uncollectible anyway. Yet Oliver falsely claims that is “medical debt they no longer have to pay.” That is not true — the legal obligation to pay the debt remains even if the statue of limitations has expired.

So how much did Oliver actually give away? Probably less than $60,000.

What Oliver bought was a very strict and limited right to attempt collections on a large amount of debt. Essentially, Oliver bought the right to ask people “Will you pay me what is owed?” and if they say “No, I don’t think I will” he has absolutely no legal recourse. None.

That is why the debt Oliver bought is not worth $15 million — because attempts to collect the debt when people still had a legal obligation to do so already failed. So how much is the bad debt worth? It’s worth what Oliver could collect.

If Oliver was able to get the 9,000 people on the bad debt list to send a check for $6.67 he might be able to recoup his $60,000 investment. But the companies that sold the debt doubted they’d even recoup that trivial amount, which is why they sold the debt at the price they did.

Oliver therefore didn’t give away $15 million; he gave away the right to collect about $60,000 in uncollectible debt. If you think this is semantics, ask HBO’s accountants if they’ll be writing off this “$15 million debt” on their tax returns next year.

So what does it matter if Oliver pulls this silly, dishonest stunt? Because it allows him and his viewers to feel better about themselves (“Oliver is so generous, and I’m a good person for supporting him!”) when the reality is that thousands of hospitals and medical businesses are the ones that were hurt when they came up $15 million short of what was owed them.

In 2014, U.S. hospitals provided $42.8 billion in uncompensated care, representing 5.3 percent of annual hospital expenses. You know who paid for that uncompensated care? You did. You paid more in higher insurance premiums, higher deductibles, higher taxes, and higher cost of medical care to compensate for those who couldn’t — and those who merely wouldn’t — pay what they owed.

The salaries for the nurses and hospital janitors didn’t go away just because John Oliver bought some bad debt. The cost of the electricity to run the heart monitoring machines didn’t disappear either. The $15 million represented actual expenses that have already been paid. That means all of the $15 million of bad debt Oliver bought was already absorbed by the hospitals and passed on to you and other health care consumers.

So when you see a smug Brit on TV tell you he gave away $15 million you can correct his ignorance by responding, “No, you didn’t. We did.”

Economic Shalom: A Reformed Primer

Economic Shalom: A Reformed Primer

This Reformed Christian primer on work and faith champions the glory of God in all of life’s endeavors by tracing four key themes of economics in Christian confession and commitment and examining markers for human flourishing in the real world of economics, commerce, and markets. With scholarly passion and pastoral wisdom, tempered by the insight of economists, John Bolt presents a winsome case for how God uses the market economy to meet human needs.

  • K Rojas

    You seem extremely biased. Your arguments are full with emotion which is not a good way to prevent yourself. Do you have a solution or do you only have critiques? Stop tagging people to boost your advertising ratings to come to your blog. Extremely Shady.

  • Jamie Kimble

    Sheesh. Someone woke up on the wrong side of the bed.

    • Joe Carter

      Unfortunately, it happens every Monday when I wake up to find that people are talking about the latest lame nonsense from Oliver’s show. And it happens every. single. Monday. Ugh.

  • justforlaugs 2013

    Someone hates of the show……. you know is TV right? Get your own Tv Show. Plus you know that amount was paid regardless by the government right? or the insurance company paid it and the people owe the difference to the insurance company…Nevertheless Janitors, doctors, etc till get paid their salaries regardless. Plus medical bills are overly priced and you know that.

  • Mindforms

    “…left-leaning media sites…” As opposed to your right wing fundamentalist schlock?

  • Chris Backe

    The only thing ‘third-tier’ around here is the assumption that folks watching HBO are somehow not as good as those watching Kimmel, Fallon, etc. Recall HBO is an add-on for many subscribers, meaning you have to consciously turn it on instead of network hosts blathering about whichever movie / TV star is hot right now.

    The segment showed how trivial it was to start a business with the capacity to royally screw over a great many people in a very short amount of time. Making something like that so easy, without requiring a license or some form of control, is terrifying.

    To be sure, I wish he had purchased debt that *could* be collected on – that would be the type of debt that could be forgiven and really make a difference. The jab about the accounting is unfair, though – they’re not expecting $15 million in revenue, and a one-time expense like this doesn’t necessarily get a revenue tied to it.

  • Vernon Burgess

    You are a little shit. It takes a lot of mental fortitude to gather correct information and make huge impact for people. To take debt before collectors can and forgive it saved americans 15 millions dollars to conniving litle other shits taking advantage of people who could never pay off a debts due to sickness. Medical dept should never have existed. We all should have no medical bills and all expenses paid by taxes. Why, no one should suffer.

  • tune-in for baseball

    You need a review in Econ as well. The debt was “retired” or written off. This industry has nothing to do with costing the hospitals money. Any collected dollars was not going to the Hospitals but in the collector’s pocket.

    This is basically a “loansharking” operation that does not “loan” money but “buys I.O.U.’s” that are still active or expired. Then any “arm twisting” money collected goes into the pocket of a morally bankrupt outfit.

    Your statement,”In 2012, U.S. hospitals provided $45.9 billion in uncompensated care, representing 6.1 percent of annual hospital expenses” is a joke. Is that total what insurance companies pay or what average USA citizens pay? All uncompensated care is the fault of the “for-profit” scam called Insurance companies. They decide who gets compensated medical care and who doesn’t. And the Hospitals are in bed with them too. Until Obamacare forced the insurance industry to cover everybody, they could cherry pick who was covered and who got left out in the cold. Why don’t you show the dollar amount for uncompensated care post Obamacare?

    The “charge” for any medical service, equipment, band aid,etc. can be 4-5 different numbers depending upon who pays. The exact same band aid at hospital XYZ will have 4-5 different price tags!!! The highest number is charged to any poor soul who needs medical help with no insurance. The other price tags are colluded between the insurance companies and hospitals. No other industry or retail operation is allowed to charge customers different rates for the exact same thing.

    You want to help hospitals get paid. Medicare For All will pay the bills,have less than 9% overhead,and hundreds of millions of $$$,(if not billions) will go to pay for care and not to the insurance company middleman that has nothing to do with actual medical care.

    And No, our out of pocket costs will not go up. Money not paid to insurance companies will be transferred to pay for the medical expenses.

  • Ahmed Zaher

    tldr; John Oliver forgiving unpaid debt is meaningless because those dang poor and dead people where not able to pay thier medical bills, which raised taxes, medical bills, and insurance premiums. So Oliver really gave the money back to the hospitals after they already made you pay for those gosh darn dead and poor people.

    Lol dumb libural, giving away money that we already “payed” off.

    PS- please buy my christian book about how ancapenomics ( as created by our true lord and savior Rothbard, jesus was a leftist cuck XD).