“Socialist governments traditionally do make a financial mess. They always run out of other people’s money,” Margaret Thatcher, 2/5/1976, This Week with Llew Gardner. (Image courtesy of The Margaret Thatcher Foundation (www.margaretthatcher.org/).
The place where governments truly wreck themselves upon the shoals of financial ruin is when they take it upon themselves to manage the lives of their citizenry. They take money from the producers, and shunt it over to the non-producers resulting in a shrinking of the former group and a growing of the latter. Socialized medicine is probably the best example of this.
Medicare and medicaid costs have grown dramatically along with our aging population, our advancing technology and with, as Dr. J. has said in the past, the unrealistic expectations of a populace who have been told OVER and OVER and OVER that health care is a right and thus they should not expect to be on the hook for it.
It goes without saying that we are rapidly approaching a tipping point. Medicare-as-we-know-it is going bankrupt. Within the current system, we will have have some combination of medicare reducing the services it offers (government-run-rationing) and raising taxes (government-run-compulsory-giving). The problem is, however, the government is running out of your money to work with. The Wall Street Journal had a column a while back saying that if the government raised taxes to 100% on the top 1%, it wouldn’t cover the deficit, let alone the debt. Furthermore, readers are familiar with the Laffer Curve by now, so they should not need to be reminded that if taxes are too high revenues will drop.
This gets us to today’s prescription from the Dr. J.
Michael F. Cannon, penned a lovely article in the National Review (7/4/11 issue) that was abbreviated and posted over at NRO. He talks about the waste, fraud and abuse in the Medicare/Medicaid and how it makes things worse for the doctors who are legitimately trying to take care of patients in the system because their reimbursement is lower due to the cost of graft. He makes the point that the government is incapable of being a true watchdog with over a billion claims to a million doctors for 50 million patients (paraphrasing here).
Now, what St. Paul proposes is to put the money back into the hands of the Medicare patients in the form of vouchers. Patients will then make rational economic decisions for the portion of their insurance that they will be on the hook for, rather than ask for the moon and the stars on someone elses dime. One of the reasons for waste, as Dr. J. said yesterday, is that patients want ‘everything’ because ‘it’s a right,’ even if they don’t know what ‘everything’ is or if ‘everything’ will actually help them or not.
Ryan’s plan will break medicaid into 50 smaller chunks where each state manages a finite budget of what it can afford and what it is given by the feds rather than the current ‘spend more to get more’ which results in the current wasteful system to help our poor. Each state should better manage the needs of it’s poor than the federal government with a one size fits all rationale.
Mr. Cannon’s article is one more example of why government run healthcare is bad for the economy, and therefore bad for you.