As of right now, both President Obama and Senator Baucus have proposed expensive solutions in a a feeble effort to redesign our undeniably cancerous health care system. Both proposals are looking to cost somewhere around $900 billion over the next 10 years. Baucus is confident that his plan would reduce the federal budget deficit by $23 billion. However, the national debt is currently at $11.8 trillion and has risen $3.78 billion a day since September of 2007. In fact, it it currently takes only about 3-4 seconds to add an additional $100,000 to our deficit. If you really want to be nauseated then I suggest you visit the online debt clock (http://www.usdebtclock.org/). There you get a dreadful sense that our economy is in the process of radioactive decay. So, Baucus's plan would cut the deficit by about 6 days worth of bloated government spending. That's a proverbial drop in the bucket if there ever was one. I suspect that Obama's plan will provide similar savings, if you really want to call them that. Well, then what's the solution?
For one, the idea that you can fix the economy by piling on more debt is ludicrous. There's a reason that banks don't like to loan money to folks with a poor credit history and an abysmal income. It's risky for them and thus the interest rates should be high in order to compensate. By artificially lowering interest rates to keep credit flowing against the market's wishes is insanity. It only perpetuates the reckless policy of easy credit that created the housing bubble. Foreclosures are now so astronomically high because people received easy credit when they shouldn't have qualified for a loan in the first place. The original blame should be cast on the Federal Reserve's massive credit expansion efforts. To make matters worse, places like China and Japan hold sizable portions of our debt via US bonds. Right now China alone holds about $800 billion of US debt. This means that our economic stature is ultimately determined by those that hold these US assets. If we devalue the dollar by printing a trillion new greenbacks then China is that much closer to dumping the dollar in search of a sturdier currency. That results in hyperinflation. That means we'll be burning dollars to stay warm in the winter. One needn't look any further than the inflated fiat currency of the Weimar Republic just before Hitler rose to power. Hopefully, you see why adding $900 billion to our debt in 10 years, only to pay it down by $23 billion is laughable. Ideally, the government shouldn't spend a dime instituting programs that they can't truly pay for. But our system still needs to be fixed, right?
Absolutely. Health care is currently defective but it's not due to the supposed free-market failures. It's entirely due to extensive government interference. The list of foolish things is almost without end. To start, guaranteed issue policies are one reason why health care costs are so distorted. These force insurance companies to cover all comers even those with pre-existing conditions. Currently, 42 states allow guaranteed issue health coverage to varying degrees, while 8 states require ALL to be covered regardless of their medical history. To be brutally honest, people with a litany of problems must pay more than the healthy person. The problem is that it's agreeable to those benefitting from the handout, but not to those that are forced to bear the costs and pay higher premiums as a result. You accept enough of the infirm, then the twenty-something is strangled by the rising costs. This is similar to the banking crisis. The folks with loads of debt should be expected to have higher interest payments due to the risk involved. Instead, the mismanagement of funds by the lenders and the borrowers leaves the honest savers with an economic disaster to pick up afterwards. Another reason for pricy healthcare are things called "Community Ratings". These are often used in conjunction with guaranteed issue policies and are responsible for equalizing premiums regardless of one's health. The young pay the same as the old. Obviously, this will lead to cheaper premiums for the elderly and infirm but will dramatically raise premiums for the healthy 21 year old. Theoretically, the premiums could become so high that they could make health care virtually unaffordable for some. Some costly measures are spurred on by advocacy groups. In some of these cases, states with government-mandated coverage might also demand that you pay for alcoholism coverage or drug-addiction coverage. Still, the list continues. State governments demand that citizens only purchase insurance in state. This provides an impediment to market entry by limiting the buyer's choices. Less competition means higher prices due to the law of supply and demand. Another costly variable in this equation is the existence of medical licensing boards like the AMA. The AMA formed in 1847 in an effort to push out the charlatans and impose some standards in medical practice. Undoubtedly, the AMA's efforts were unnecessary but left the lovely unintended consequence of creating a limited supply of doctors. In a free market, the quacks would be held accountable by fraud and negligence laws, but people would still be free to visit whomever they trusted. Today, the AMA is alive and well, but it still creates a scarcity where there needn't be one. Ok, but what about those nasty HMOs that Michael Moore loves to talk about?
The case of HMOs is maybe the most ironic argument used by advocates of nationalized health care. Some people want to believe that today's HMO juggernauts originated in the free market, but in reality they were nothing more than a contrivance by the federal government. With the passing of the Health Maintenance Organization Act of 1973, government grants and loans have since been used to plan, start, or expand HMOs. Also, HMO's achieved monopoly status when it was demanded that all companies with at least 25 employees had to offer federally certified HMO options. The power of our insurance companies was granted NOT because they rightfully ascended the ranks by offering the most affordable and efficient services, but because the federal government waved their wand and made it so.
Finally, people need to accept that suing doctors for malpractice is in most cases absurd. In actuality, most malpractice lawsuits have more to do with "customer dissatisfaction" than irreparable damage being done by the doctor. I wouldn't sue Parks and Recreation if I decided to mountain climb without a harness and was maimed as a result of my poor decision. Yet some people would and they should be lambasted for being vindictive and doing what ultimately amounts to fraud. Another complication is that conditions such as osteoporosis and osteopenia have been deemed "diseases"when in fact they're just the normal side-effects of aging. Yet, old ladies want a pill to fix their bones or costly hormone replacement therapy to falsely maintain a vestige of youth. Even more clamber for such things when they are covered by Medicare. They then become litigious if they develop a deep vein thrombosis or cancer from their dangerous treatment course because they ignored the potential cost of reclaiming their youth with such silly methods. Defensive medicine is a term that's been circulating for a few years and it's also driving up costs. This means that doctors would rather order that expensive CAT scan just to cover their bases than run the risk of getting sued by a vindictive and unhappy patient. As a result, malpractice insurance is becoming more expensive in order to absorb the frivolous lawsuits and so doctors must demand higher premiums.
Costs are unavoidable and therefore healthcare is no different. With our federal government wanting to spend nearly a trillion dollars in 10 years to fix the damage created by it's very self, faith in our bureaucrats must be lost and their debilitating measures repudiated. A free-market option has not existed in well over a century. To return to such halcyon days would require that we dismantle the superfluous legislation that allows price fixing and forces limited competition. It also requires that people have the freedom to act as they see fit without the infantilizing financial aid of the government. Some will fall and will fall hard, but it's ultimately up to them as to whether they learn from their mistakes and learn to save, produce, and become reasonable. Until then, America will be perennially cruising for a bruising and, believe me, we look battered enough as is.
