Tuesday, December 22, 2009

Tsunami or Happy Ending?

Democrats are touting the notion that their health bill will become popular once people start to experience the goodies. The Politico's Manu Raju writes:

[B]ecause some of the most popular insurance reforms in it will take effect sooner than other parts of the bill, [Democrats] think Republicans will have a hard time getting voters to line up against it...

[Tom Harkin (D-IA) listed a handful of measures that would take effect soon, including a prohibition against denying coverage for children with pre-existing conditions and a provision allowing children to stay on their families’ policies until age 26 — even though most of the benefits don’t take effect until 2014.

He could be right, of course. But at Contentions, Peter Wehner sees a tsunami of voter rejection.

Few Democrats understand the depth and intensity of opposition that exists toward them and their agenda, especially regarding health care. Passage of this bill will only heighten the depth and intensity of the opposition. We’re seeing a political tsunami in the making, and passage of health-care legislation would only add to its size and force.

That's why we have politics and elections. So we can judge who is right on the prognostication front.

It is incontestable that the Democrats are sending us further into the subsidy swamp, and creating huge problems down the road. Says The Wall Street Journal edit page:

WellPoint found that a healthy 25-year-old in Milwaukee buying coverage on the individual market will see his costs rise by 178%. A small business based in Richmond with eight employees in average health will see a 23% increase. Insurance costs for a 40-year-old family with two kids living in Indianapolis will pay 106% more. And on and on.

Apart from political rage, people are going to try to avoid these costs.

Leaving aside the politics, we should understand what is going on here. When politicians start handing out free stuff they raise the costs for everyone else. That means that most people have to take the government program because the alternative is too expensive. So? Let everyone jump into the government program. It may not be great, but it is something, and we all share the cost of public goods.

Well, the problem is that the poor get screwed. Medicaid is already a mess because health providers are so poorly reimbursed that they don't want Medicaid patients. That means lousy care for the poor. We know of course that schools for the poor are lousy. And welfare just destroys the low-income family.

Meanwhile federal government employees get 40 percent more than private sector workers, and state-and-local government employees earn 37 percent more than private sector workers. Every private sector enterprise and its employees have to pay for all this. Since government spends about 40 percent of GDP that means that every business owner and every worker has to pay for that 40 percent every day before they earn a dime for themselves.

That means that it's too expensive to hire the poor and the unskilled, because they are just too expensive when you have to pay for government as well as the worker.

And as the unintended consequences come in, politicians think up a new way to subsidize their supporters.

We know that the liberal welfare state will blow up eventually. If things can't go on forever, they won't.

The only question is whether the American people can defuse the bomb before it goes off. One indication would be if they turn against the Democrats that are pushing "affordable" health care down the nation's throat.

Maybe they will. Maybe they won't. Stay tuned.

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