August 18, 2009

Probably the real reason health care cannot be reformed

It's only my theory, but then again, the whole blog's only my theory. When did that ever stop me before?

I cannot quite understand Barack Obama's apparent kowtowing to Big Pharma (whose lobbying group is practically named Big Pharma) or to the health insurance industry, or his mystifying inconsistency on whether he will or will not insist on a public option as part of the medical insurance scheme. I simply find it hard to believe that he's that cynical. My guess is that he's actually a Single Payer advocate who, in better times, would support a Medicare-for-All Program, or an expansion of the VA hospital system to cover everyone including non-veterans, or some form of socialized medicine.

But these aren't better times. It is perhaps a measure of the spoiled and self-indulgent nature of the American populace, and its tendency toward fatuous and irresponsible political discourse, that a graph such as that above from the St. Louis Fed is never introduced into the dialogue. The fact of the matter is that unless all of federal expenditures undergo a massive and fundamental restructuring, there really isn't money for anything new, and barely enough to do that which we have always done. That is the point that is never discussed. And while it may be true that over time a basic change in the delivery of health care to the American populace (freeing it at last from the ruinous costs of monthly premiums and high deductibles) would substantially improve the economy and federal finances, the problem right now is that the United States simply cannot undertake any heavy expenditures on a massive new social program. In a way, it's nearly insane to talk as if we can.

I think Barack Obama is aware of this fundamental lunacy. It has trapped his presidency. He came into office with health care reform a cornerstone of his Change Program, and then he got The Word. I think this happens to all Presidents-Elect in recent times. A story is told of an ashen-faced Bill Clinton, who met with the outgoing Treasury Secretary and the Chairman of the Fed before Clinton took the oath in 1993, staggering back to Hillary with the news that the federal government could afford "nothing, not even lunch." Those times were flush compared to these. The three lines of the graph above tell the story in chilling detail. Tax receipts (blue) are falling below $2 trillion; the budget (green), including the massive stimulus and such crazy expense items as "nation building" in Iraq & Afghanistan, has shot above $3.5 trillion; and the resulting deficit (red) is pushing $2 trillion. The lines are interrelated, of course, and are all going in exactly the wrong direction.

And against this backdrop we want to introduce a huge social program? I would find the "progressive" position, such as that promoted by Nancy Pelosi, more credible if she combined her advocacy with a demand that the defense budget be cut in half, effective now, and that all but the most essential overseas bases be closed. And went further and announced that the House would approve absolutely no more "supplementals" for Iraq & Afghanistan, with all the troops stranded there brought home as soon as possible. Yet one never hears that kind of logic and common sense, because such a position is not "centrist" enough, not militaristic enough, for Democrats who are always afraid of being labeled soft on....something. Take your pick of bad guys -- Commies, terrorists, narco-dealers.

We will be fortunate at the rate we're going to avoid a Black Swan event with the dollar's value, or a default on national debt obligations. Ben Bernanke has been given the task of raising money in a situation that requires the combined skills of Bret Maverick and the magician David Copperfield. Although Gentle Ben is daily vilified, his conjuring tricks are about the only thing between us and Going All Iceland.

So Obama is involved in his own Cash for Clunkers program. He can't deliver that 700 series BMW we all thought we were going to get. Instead, it looks more like a 1985 Chevy with scaly paint and a smoking exhaust, but honest (he's saying at these town halls), it's really just the same, it's a car. You'll get used to the vinyl, trust me. And most important, it's kind of what we can afford right now.

So he's asking the private sector to help him out, because the federal government just can't do it. It's that simple. He could simply tell us that, and then introduce the subject of where we DO spend most of our money, but I don't suppose that's going to happen either. Not Audacious and Hopeful enough. Honest, maybe, but you know how honesty sells in this country.

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