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Yes, Medicare Is a Problem

By Philip Klein on 5.14.09 @ 4:01PM

Robert Reich opines:

Social Security is a tiny problem. Medicare is a terrible one, but the problem is not really Medicare; it's quickly rising health-care costs.

I see this via Tyler Cowen, who correctly responds that, "if Medicare were less generous, much less would be spent on health care."

A good demonstration of that point is to check out a pair of studies by MIT economist Amy Finkelstein, who found that in the first five years of Medicare's implementation, U.S. hospital spending soared 37 percent without a "discernible impact on elderly mortality." Medicare did reduce the out of pocket medical expenses of the elderly, but the result has been a massive burden on the younger generation that is threatening to bankrupt our country.

As it pertains to the current health care debate, there's an argument to be had about what government's role is in providing health care to Americans, but if we're going to have that debate, it would be nice if the other side were honest about the costs of what they're proposing. Simply put, providing subsidized health care to everybody will not lower spending, it will drastically increase spending unless the government rations care, which the other side isn't willing to admit either.

I was chatting with a friend of mine about the entitlement crisis the other day, and he compared Obama to Nero, fiddling while Rome burns. But personally, I think we'd be better of with Nero -- Obama isn't fiddling, he's dousing everything with kerosene.

View all comments (4) | Leave a comment

JP| 5.14.09 @ 4:51PM

No one wants to talk costs anymore - it is too depressing. We have nearly reached the end of the road from a financial point of view. Yes, Obama and co. can ram about anything they wish through Congress. I presume the attendent financial crisis (a plunging dollar, inflation, and another round of equity sell-offs) will give Obama another crisis in which he will impose draconian tax hikes, more nationalizations of industry, and who knows what else. Obama doesn't even know.

What is interesting (as well as heartening) is the smell of panic slowly emerging from Obama's administration. The leaked memo conerning the EPA and potential economic fall-out concerning carbon taxes; an impasse in the Senate concerning Cap and Trade; and an OMB paper admitting that 46 cents of every dollar the goverment is spending is borrowed. I might even imagine that a few Democrats are looking at the upcoming calendar with fear and not exitement.

The President is demanding radical changes in energy policy and health care. These are 2 areas where the effects would be immediatly felt by taxpayers, and House Democrats would bear the brunt of voters anger. The majority of the Democrats gains in the House between 2006-2008 came in red districts. Pelosi could very easily find herself a minority leader once again.

I can easily see a fight brewing over the healthcare debate, and that debate will pit Dems against Obama. The GOP needs to be patient. All they need to do is get the details of Obamacare out to the voters. Like Hillary in 1993-94, healthcare could be Obama's greatest weakness.

Becky| 5.14.09 @ 5:22PM

I think I am coming to grips with the reality that come hell or high water, the party that won is determined to run us into the ground, or at least the natural economic position of man-poverty.

Now I'd like to know what life is like in a bankrupt country, and I think we are becoming bankrupt on all fronts, moral, intellectual, financial and legal.

Red Phillips| 5.15.09 @ 9:10AM

"As it pertains to the current health care debate, there's an argument to be had about what government's role is in providing health care to Americans"

From a constitutional standpoint, no there isn't. Absolutely nothing in the Constitution authorizes Federal involvement in health care. When the other side can show me the Article and section then we will talk.