2011-02-11 / Columnists

The Rockaway Irregular

Can We Still Believe?
Commentary by Stuart W. Mirsky

As President Obama tilts right in a much anticipated effort to reposition himself after the November election (in which his side took what he described as a “shellacking”), his efforts are made all the more difficult by his own history. Halfway through his current term, from his signature issue of health care reform to increased government regulation to spending, spending and still more spending, the president has defined himself as a man of the left. He was booster-in-chief for all the Democratic efforts to legislate new entitlements and higher government spending, with the perennial promise that new and higher taxes on the wealthy would eventually pay for what Americans would ultimately come to depend on. Until the Bush tax cuts can finally be done away with, however, we’ll just keep raising the debt limit and increase spending – funding it all by still more borrowing from foreign investors, as the Federal Reserve obligingly weakens the dollar to help pay it all off (never mind inflation which a weak dollar brings).

The left famously favors government solutions for everything — at any cost – and the man in the White House has hardly, if ever, stood apart from this viewpoint. Poverty? Pass some laws. Uneven distribution of incomes and assets? Government taxation and entitlement programs will “spread the wealth around.” Climate issues? Laws again – while taxing and regulating the offenders into submission.

Never mind what that does to economic activity, or that faltering economic activity fosters job losses and reduced salaries. You can always pass another law, can’t you?

What about the president’s biggest issue, health care? It was expensive and getting more so when the Democrats finally got lopsided control of both houses of Congress and the White House in 2008. The already state-regulated insurance industry provided coverage unevenly through a hodgepodge system differentiated by state and region and reflecting the different demographics and costs of doing business.

The old system was clunking along imperfectly when the Democrats rammed through their “reform” to homogenize it by increasing health care related fees on employers and providers, mandating coverage to extend to an estimated 30 million previously uncovered, and by upping taxes to pay for it all. The new law also grants the federal government the power to tell citizens they must buy a service, like it or not, on pain of an IRS imposed fine (already being adjudicated for its constitutionality in the courts).

The officially named Patient Care and Affordability Act of 2010, euphemistically called “Obamacare” for simplicity’s sake and in honor of the president who carried the flag for it, adds millions of new people to the roles who had previously opted out of the system, either because they couldn’t afford insurance or because they just preferred not to buy it. Those who can’t afford medical insurance can still get free medical care, of course, at hospital emergency rooms. But the uninsured under the old system lacked inexpensive access to preventive care or routine visits to a physician prior to Obamacare. Of course many went to doctors anyway, paying their own way. But the high costs were (and are) an impediment.

Years ago it wasn’t un-common to pay for your own doctor’s visits but, as medical insurance be-came more ubiquitous, most of us got used to relying on insurance, losing the cost consciousness that comes with paying as you go.

Nowadays an insurance co-pay can run about what a doctor’s visit used to cost in its entirety, although inflation has eroded the face value of our money so we don’t feel it as much. Paying monthly premiums feels more like a fixed cost, too, one that isn’t directly associated with individual doctor visits (although awareness of the monthly premium might prompt some to make more doctor’s visits to get their money’s worth!)

Today’s higher medical costs are thus a function of increased usage by those with insurance, as well as the erosion of the dollar’s value over the years. It also reflects the disconnect between patient and payer. When something feels like it’s free (or very cheap), we tend to use it more liberally. The litigiousness of our society also plays its part in driving costs up because medical malpractice lawsuits increase doctors’ malpractice insurance costs, further impacting the fees they charge. But the big problem with our old insurance system lay in its patchwork nature because of the gaps and unevenness in available coverage. These things, combined with the very laudable desire to ensure every American equal access to basic medical care, led the administration and the Democrats in the last Congress to pass a “reform” bill that tripled national spending going forward while imposing onerous regulatory and fee burdens on medical providers and employers.

Recently Congressman Anthony Weiner argued in this paper that repeal of Obamacare would be “frightening.” Flagging some of the bill’s “popular reforms,” he made the case that these would be lost. The ability to carry our children on our family coverage until they reach 26, for instance, could go. (But why did the last Congress stop at 26 instead of 27 or 31 or even 45?) Or what about mandated coverage of pre-existing conditions? On Weiner’s view, loss of the more than 2000 page law (and the many thousands more pages of anticipated regulations in the fine print) ensure loss of even such relatively simple “popular” reforms. bamacare, the Congressman also reminded us, fills the “donut hole” which former President Bush’s Medicare drug entitlement (granting seniors a drug benefit not previously available) had created.

What if that were lost, too? Citing the Congressional Budget Office, Weiner went on to argue that Obamacare would actually save Americans $1.3 trillion over twenty years. Eliminating it, he claimed, would therefore increase our growing national debt.

On his view, adding 30 million more people via government funded discounts is actually cost reduction.

Spending more really means spending less!

The election this past November reflected this country’s growing concern with the implications of runaway government spending for our future. Sure we can all agree that it would be great to live in a world where everyone could get everything he or she needed with someone else picking up the tab. But the Democrats’ solution, which relies on higher taxation and shouldering increasingly burdensome debt levels, isn’t cost free, as people like Congressman Weiner would have us believe. It’s just harder to connect the dots.

High taxes choke off economic activity (we saw it firsthand in the seventies) while high debt weakens us in relation to other nations.

And, both are inevitable outcomes when a society cannot rein in its desire for “free” stuff.

A country whose debt is unsustainable cannot speak with authority on the world stage or pay for its critical defense needs – or its future growth. If our economy isn’t growing in a world where others are, then it’s shrinking.

As President Obama seeks to reposition himself for the upcoming presidential race in 2012, he needs to do more than talk the talk of moderation and fiscal conservatism which so many American voters now seem ready to hear. It’s time to take another look at what our runaway entitlement society has already done to this nation – and what it will certainly do going forward, if the errors of the last Congress aren’t fixed now.

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