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Health Care Reform: It Can't Happen Soon Enough
09/12/09
Barack Obama's sustained leadership of health care reform is not the product of some dazzling liberal utopian vision. In stark contrast, he is working to save U.S. and global economic prosperity. In my lifetime, things can get very ugly. Let me explain how.
First, consider the soaring costs of health care delivery, caused by our current systems, as shown in Figure 1.
Figure 1: Projected U.S. health care spending, as a percentage of GDP
(Figure adapted from the Congressional Budget Office)
One thing is clear from this graph: we can't afford to make it come true. Our expanding obligations to receive proper care is one of the several unsustainable paths that young people have inherited. Consider also the rising costs of Social Security; this program is expected to stop working as soon as 2017. Combined, the costs of health care and Social Security are fueling the problem of our lifetime: the ballooning U.S. budget deficit (Figure 2).
Figure 2: Projected budget deficit of the United States
(Figure courtesy of the Washington Post)
So what do we do about these problems?
We start by supporting policies that will last for our whole lives -- not just a decade. We understand how essential health care reform really is, if not only for ethical reasons, then also because of economic necessity. And we urge the public to support the Obama administration's imminent reform of Social Security, soon after health care legislation has been passed. Both of these life-support systems must still work, when we need them most. But we can't expect that unless there are major changes to it.
Of course, we must prudently respect the efficiency of free market solutions. But we can't risk a free market failure, and that is where this is heading.
In short, if we ignore necessary reforms, then we can expect tomorrow to be awfully less prosperous than today. If we wait, we can expect to pay more on yesterday's debt, and have less for what we need today. But Americans do not need to settle with such expectations, because we can act now, and steer our nation far and away from its predicted train wreck.
5 comments
However, let's not insert judgment on free markets and their risk of "failure." The train wreck that America is headed towards was not a result of a free market collapse. The rapid economic decline post-2006 (aka post 02-06 housing bubble) was not from the greedy decisions of mortgage companies. When government dabbles in bank regulation through artificial support of their loans (re: GSE Freddie Mac, Fannie Mae), they effectively INSURE the risky behavior of bank lending. Where a market free of government intervention would compel banks to assess their actions with greater care, now we need more government regulation to fix what it caused in the first place.
The health care situation is just a subsidiary problem and result of the pseudo-capitalist system in place.
Thank you for the sharp critique. You make several strong points, so please welcome a few relevant assertions:
Societies without government regulation can become monopolistic, ecotoxic, and harmful to constituencies -- to start with. Of course, the same could be said, e.g., of a fascist nation. But history has shown (consider the Great Depression) that market-driven systems can be driven to the ground. I assert that our "pseudo-capitalist" system stabilizes and secures our future from such cataclysmic game-changers.
Yes, a Fed-backed insurance program might encourage the decadent culture that created the crisis. But facing crumbling markets, policy makers did what they thought would work. There are still major systemic risks in the ever-pumping financial industry. So, we must dilute these risks. Then, we can endure the failure of a bank -- rather than be destroyed by it.
You raise valid concerns: thank you for expanding my insight and stimulating thought.
Your critique exposes why I think pending legislation will have fixes for the status quo, but will not be sufficient for the secular future. Indeed, the key to cost containment is to prevent the exorbitant fees being pumped from spontaneous trauma treatment. This requires more than an insurance program -- government or private -- it requires healthy living with gradual care.
You are correct to assert that the government program simply dilutes the burden to more people, rather than focusing on the cause of the burden. But keep in mind that this dilution already exists, only more subtly and with greater socioeconomic costs, because major victims without insurance require bankruptcy bail-outs.
I think it is essential that we move the debate to this question: what can government, or private initiatives, do to extensively prevent, rather than insure?
Useful answers to this question will take into consideration the efficiency of free-market solutions, and the respect of individual preferences.
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