The Therapy Sessions
Saturday, January 14, 2006
Neglecting my blog
I have been blogging at Bring It On, a very liberal team blog. I'm not really a conservative, but I AM MOST DEFINITELY not a liberal - so I fit in just fine.
But I do get some great comments there:
Most everyone needs healthcare at some point or another. If you are dumb enough to think that you are somehow the exception to that rule, then the likelyhood of you hurting yourself doing something stupid is even greater.
My respose: Everyone needs food and shelter too. Do we organize a massive state-controlled program to see that everyone gets a 4000 sq. foot McMansion and vouchers for three meals a day at their favorite restaurants?
No, we don’t do that because it would be silly. Millions of people would quit their jobs to live on the dole. I’d love such program if it could work. But it wouldn’t. Yes, there are programs like food stamps and section eight housing. But most people can do better than that.
My point is this: if you want to offer people drug coverage, for example, it can’t be the same drug coverage that rich people get. That sounds horrible, but it is true.
There currently 45 milllion people in the US who lack health insurance. Let’s say we decide to pay for all their drugs! Yippee! Sure, Medicare costs $500 billion a year and it is still going bankrupt, the budget deficit is $400 billion, the baby boomers have just started collecting Social Security, and every middle class family is struggling to make ends meet (at least according to our media), but we are the richest country in the world. All those diabetes drugs, statins, beta blockers, proton pump inhibitors, asthma pills will cost…I don’t know …hell, $100 billion. No problem.
But whatever bill you think you’ll pay will grow. And it will grow very fast. People who now struggle to pay for their drug insurance will stop. Why? Because the government is giving them a better deal. No insurance company premium can match the government’s – which would paid by other people. Those anonymous taxpayers. Companies that offer their employees drug coverage would stop doing it. Why? Because they are greedy bastards. Well yeah, but they are logical, greedy bastards: why would they pay out something in benefits that the government is giving away for free?
And pretty soon, you reach a point where going further and further into debt is no longer an option. This is hard for Americans to take, but the world won’t keep lending you money forever. When it looks like you are going to have trouble paying off your debt, your bond ratings go down, and it becomes more expensive to service your debt. (Ask California: it’s bonds are approaching junk status.)
So we will have to raise taxes. You can raise them on the rich, but the rich find the loopholes. Jackasses like former vice presidential candidate John Edwards make $300 million a year and only pay 12% of their income in taxes. (of course, we could just hit the rich at a flat 30% rate and eliminate their deductions, but I imagine “flat tax” is a dirty word in these parts. It shouldn’t be).
But you will find that there aren’t enough rich people, and you will also find that the more you tax them, the less they invest, and the less the economy grows. As the economy slows, you have more people out of work - and most of the people losing their jobs tend to be poorer to begin with - more people applying for government aid.
Soon you have to raise taxes on that “struggling” middle class.
National Health Care - taken in the context of ALL government obligations - would be a disaster. We already face disaster, but it would make it much worse.
But why can’t it work here? They do it in Europe!
Yes, they do it in Europe. And through the process I just described (which is already quite advanced on the continent), we could look just like them. Europe’s high tax economies have been stagnant for a decade (gee, I wonder how that happened?) and they have double digit unemployment (we haven’t seen that since the Great Depression). And the picture is even worse for young people for whom the unemployment rate is more like 1 in 5. Europe is dying (literally, it will soon come to a point we won’t see until 2030: for every old person on a pension, there will only be two workers).
Following Europe is suicidal.
Our competition – like it or not – will come from low wage, low benefit countries. You can stamp up and down and wish really hard that it wasn’t the case. GM and UAW are learning it now. GM was once “too big to fail,” and it made some really big promises. Promises that it can’t possibly keep today. Trying to keep those promises is preventing it from competiting in the marketplace (in economics, competing in the marketpalce goes under a highly technical term: economists call it surviving).
I get the feeling many of you feel the same way about the US government. Our government has already made too many promises.
Making more will only hasten our demise.
Instead of talking about offering more government benefits, we should be talking about means testing the ones we already give out.
For example, do rich senior citizens really need Medicare or Social Security?