Insurance

During the Great Depression a number of new laws were introduced, one of which was social security and this turned out to be the most successful and most expensive government program ever. Politically it is a two edged sword. On the positive side it gave the Democratic Party control of congress for 40 plus years and led to the next biggest government program, Medicare. The Democrats learned that they can garner votes by offering these programs. The downside is that politicians saw the people as unable to care for themselves. While this in and of itself is not a problem, allowing people to know that the leadership feels they are incapable of taking care of themselves is dangerous. Now herein lies the dilemma. We must continue to offer programs that care for people but we must keep secret the fact that we feel they cannot get along without us.

This was relatively easy with programs like social security and Medicare since people paid up front for these. In other words they were not welfare. Part of the Great Society, were other programs that were not paid for by the recipients, things like food stamps, WIC, living quarters and health care. These were not called welfare but public assistance but in either case they were programs paid for by government. This was OK for a number of years but soon it became obvious to most that they were in fact welfare. The solution to keep people from thinking the government saw them as incapable of self support was to introduce the idea of victimization. People were entitled to these programs because they were victims of some real or perceived past or present injustice. That solved the problem for a number of years as victimization became quite popular. Since many victims were counted in different categories we soon had more victims than non-victims. For example you could be minority, female and disabled. This seems to satisfy the doubters for some years but once again the people wised up. The next step was to consider certain things as rights which means everyone had a right to health care or perhaps a job or a house or a proper diet. The rights thing is a little difficult to sell so the government has now used the concept of social justice. Is it fair for Bill Gates to have 50 billion dollars while others live below the poverty level? One way the government has to remedy this type of injustice has been around since 1913 and is called income tax. Today the top one percent of taxpayers pay 40% of all income tax, the top five percent pay 60% of all income tax and the bottom 50% pay no income tax. In addition many of the low income people receive tax rebates even though they pay no tax. Is this social justice or should the rich pay more? Who decides what is just? The average family income in the US is $52,000. What if laws were passed so that every family had that amount? Would that qualify as just? Let’s not just consider income, let’s look at assets. The total assets owned by the American people are about 12 trillion. If we gave each family their fair (just) share we would all have $160,000 in the bank along with our $52,000 of income. Have we then achieve social justice? Not many people would suggest such radical changes but perhaps many would like to move gradually in that direction. Once the government provides a benefit it is very difficult to take it back. Germany is trying this now and they have a lot of people upset.

The newest program to be drawn into the government sphere of influence is health insurance. People point out that social security, Medicare and Medicaid are very popular and they certainly are, but what is left out of the equation is the fact that all of these programs are going broke. We are told that over the next 20 years the new health plan will cost less and I have no way of disputing that but looking back at other health programs like Medicare I can see what has happened. I have heard proponents of health care say why not Medicare for everyone. When Medicare was introduced in 1965 the government accounting office project the 1990 cost to be 9 billion but the actual cost adjusted for inflation was 66 billion.

As we look into the future we find we are short of money to pay for social security, Medicare and Medicaid. How much short, introduces us to numbers that we can hardly understand. Those three programs are currently facing unfunded promises of 110 trillion (with t) dollars. That does not take into account that the future cost may be more than what the GAO is predicting as has happen in the past projections.

I have no objection if the people want this new health care plan but let us not be fooled into thinking that it is going to save money. Just forget about all the numbers and ask yourself if we can insure 31 million new people and say it will cost less.