Posted by
Andrews on Thursday, February 26, 2009 1:25:20 AM
I was reading about Obama's healthcare plan and two parts caught my eye. First, Obama wants to insure the
supposed 46 million uninsured, and there is talk of taxing employee health insurance subsidies as income.
Don't they realize this duo, or even just the first, is chasing a moving target? As they increase free health care, won't the lowest wage earners simply opt out of health plans? Or employers drop them? Thus the burden on the system will rise as government provided health care becomes a reality, any who qualify will cease to pay for employee health plans and instead rely on the government. In addition, if health care contributions are taxed, then it may make even more financial sense to simply opt out of an employer plan and rely on Uncle Sam.
Of course, their estimates of $600 billion or $700 billion to cover half, means that the estimate is about $1 to $1.5 trillion to cover everyone. And we all know about government estimates, just look at the prescription benefit. So that means we are looking at $2-3 trillion per year without the added burden I foresee. And once that is funded, either through new taxes or inflation, the economic drag will surely cause unemployment to rise, adding even more to the rolls of beneficiaries. It seems like a never-ending burden which will balloon the annual deficit to numbers in excess of $3 trillion per year. And that is just not sustainable.
Of course Obama claims he can knock the entire deficit, including all his schemes by "cuts", to $500 billion. That is absurd on the face of it, as any inefficiencies are also someone's income. To remove $500 billion or $1 trillion in "waste" is to remove a trillion dollars of potential lobbyist money. There is no way the government employees union will let a Democrat congress cut that much money. Nor will AARP allow him to institute the means tests or increased premiums he mentions. (Recall how they fought tooth and nail against any premium for catastrophic coverage? And that was just a token amount.) Nor will the other interests which survive on these inefficiencies. Not that I believe he really can find that much waste to cut without ending programs he holds dear, but even if he could, he could not remove them without alienating all of congress, and that would be the death knell of his plan.
Of course, once he spends a trillion or two on supposed stimulus, inflated the money supply to pay for it, and imposes his cap and trade absurdities on the economy, there will be much less money, and many fewer rich people, for him to plunder, so even if all his assumptions were correct, they are based on the faulty premise that the future will be the same or better in terms of economics.
Can someone remind me again why we think this lawyer and community activist has special knowledge that allows him to manage both health care and the economy? Most honest economists
would not try to manage the economy themselves, so what makes a lawyer think he can? Oh, that's right, lawyers are arrogant twits!
POSTSCRIPT
Before any angry lawyer writes in, I am a law school drop out, I once thought I wanted to be a lawyer, so I am not an ignorant buffoon bashing lawyers. I am a well informed buffoon making accurate observations about lawyers, especially those who go into politics.
POSTSCRIPT II
One other question. With the massive new bureaucracy required by even more health care coverage, as well as the massively intrusive cap and trade scheme (at least until all industry flees to Mexico), how is Obama going to cut the costs of government? More likely, costs will rise even faster.
POSTSCRIPT III
There is one noteworthy achievement in Obama's plans. It is the only anticipation of savings more unrealistic than the supposed savings in the FairTax scheme. While the FairTaxers think they can administer a nationwide tax scheme without bureaucrats (or more realistically push it off on the states and then say it costs nothing), Obama actually thinks he can grow government yet spend less.
Hey, maybe he thinks there is some bureaucratic effiiciency of scale! That
IS a novel theory.
UPDATE (02/26/2009): I seem to have made a mistake. Obama is more delusional than I thought. He estimated 46 million people could be covered by $50-$65 billion, or half of them, anyway. Let us think about that number. The total Department of Education budget is $114 billion, yet healthcare will be nationalized for half that? Including all his fighting for every dime with providers? Perhaps it will not cost the trillions I suggested, but it probably will. I wille xplain why in a new post later today.