PrintNovember 21, 2009
Healthcare disaster looms
This Congress is beneath contempt. What they are poised to pass today -- yes I know this is just a procedural vote, but everything turns on it -- is an abomination. Since Lincoln and Landrieu have been bought off it is now sure to pass. Landrieu's vote will cost the taxpayers $100 million. I wonder what we paid Lincoln to betray us? This bill will not merely ruin our healthcare system; it will impose economy-crushing taxes, pushing our already tottering economy ever closer to the abyss.
No surprise there. Candidate Obama said that since we are only 4 percent of the world population, we couldn't go on consuming 25 percent of the world's resources. It's not fair. In his worldview we should only be consuming, what, 4 percent? In his mind we are confiscating resources and need to give them back.
How stupid can a person be? It is not a zero sum game! We don't consume 25 percent of the world's resources; we trade 25 percent of the world's resources, (if that figure is even correct. I suspect it is high. But some on the left claim 40, 50, even 75 percent - they are delusional.) In any event, the world should be glad we are here, for we are the world's consumer market. We support the world economy. Without that support the world will plunge into a depression that will make 1933 look like a walk in the park! A good, brief explanation of why that is, here.
As it is, taxes proposed to pay for this bill will be onerous, but at $849 billion over ten years, the bill radically underestimates cost. The Senate Budget Committee estimated the true cost at $2.5 trillion. But even this is a vast underestimate because they implicitly assume the legislation will remain unchanged. This will not happen. It has never, ever happened! After the bill passes, Congress will add all kinds of bells and whistles, and will add more "fixes" as the problems created by the new programs begin to manifest themselves. So think of the Senate Budget Committee's $2.5 trillion 10 year cost as a bare bones, no further changes, minimum.
Medicare provides a good example. From a modest $16 billion spending in its first year, Medicare increased 231% over the next nine years, an average annual program growth of 12.72%. This is after correcting for inflation! I do not believe this new bill even factors in inflation over the 10-year period. If you look at Medicare from its first year to the tenth w/o correcting for inflation, it grew 434% or 18.24% per year! These data are derived from program outlay figures provided by the White House Office of Management and Budget - unassailable.
Here is another way to look at it. Medicare and Medicaid together cost $656 billion in 2008, the last year for which actual data are available. The total number of people enrolled in these two programs is about 88 million people -- yes that's right folks we are paying medical bills for approximately thirty percent of the population already! This comes out to about $7,500 per enrollee per year.
This bill is going to generously allow us to pay for 47 million more. Forget about denying illegals, they will be covered in this legislation. Don't believe a word about "cost savings." It is not going to happen, even if they do start euthanizing granny. Medicare and Medicaid currently squeeze everything they can out of the medical profession and their cost cutting measures are already creating supply shortages. So consider $7,500 a reasonable estimate of per capita cost. Assuming this same average cost for all these new folks gets us an annual price tag of about $350 billion, ($7,500 x 47 million) or a ten year cost of $3.5 trillion.
Now, Congress has never in the history of major legislation, ever left it alone once passed. It will explode just like Medicare and Medicaid have throughout their entire existence - and Congress gave us the exact same phony promises back when these programs were first proposed. So take the $3.5 trillion and multiply it by a factor of 3, i.e. $10 trillion, or an average annual cost of $1 trillion, and you are probably closer to a realistic minimum cost figure.
This bill is a five-alarm fire that will consume our nation if it passes.
Businessman and Examiner.com columnist Jim Simpson is a former White House staff economist and budget analyst. You may read more of his articles on his blog, Truth and Consequences.
