Obamacare yet another flop
As the health care reform debate roars on, Uncle Sam resembles a restless college senior who is flunking economics, finance and management. Despite a report card full of Fs, he suddenly announces: "I want to go to medical school!"...
As the health care reform debate roars on, Uncle Sam resembles a restless college senior who is flunking economics, finance and management. Despite a report card full of Fs, he suddenly announces: "I want to go to medical school!"
Similarly, President Barack Obama stood before a joint session of Congress Wednesday night and re-embraced a government option for health insurance. As he explained, "sometimes government has to step in to help deliver" on the promise that "hard work and responsibility should be rewarded by some measure of security and fair play."
Alas, too often when Washington steps in, failing grades follow:
- Medicare, the Great Society's shining jewel, is a battered gem. Its hospitals program already bleeds ruby-red ink. "Medicare Part A again will spend more in benefits than it receives in revenues" this fiscal year, observes Heritage Foundation analyst Bob Moffitt. Its trust fund is an accounting fiction, but even that fantasy disappears in eight years, with depletion in 2017. Even worse, Heritage's Brian Riedl calculates, between 2009 and 2083, Medicare's budget will zoom from 3.1 percent to 14.8 percent of Gross Domestic Product. Its unfunded liabilities (promises backed by campaign balloons instead of cash) equal $36.3 trillion.
- Social Security, the New Deal's cornerstone, is as cutting edge as a 78 RPM record. In 2016, barely six years away, it will begin paying more in pension checks than it collects in payroll taxes. Congress then will be unable to use Social Security's surplus like a ShamWow to absorb red ink. Social Security's unfunded obligations equal $17.5 trillion -- again not financed by anything but congressional speeches.
- Fannie Mae and Freddie Mac: These two government options in the home mortgage arena are widely considered the twin jet engines that flew the economy into a hillside. These were supposed to be money making, quasi-private companies, with no federal involvement beyond an implicit guarantee that government would cover its losses. Emboldened by this cozy federal safety net, these enterprises embarked upon financial acrobatics they otherwise might have avoided. Rather than generate profits between 2009 and 2019, the Congressional Budget Office estimates, Fannie and Freddie will cost taxpayers $389 billion.
- The Hope for Homeowners program began last Oct. 1. Congress gave it a hefty $300 billion to help some 400,000 homeowners avoid foreclosure. According to an Aug. 10 Newsday editorial, "It has produced exactly one refinanced loan." One down, 399,999 to go.
- "UPS and FedEx are doing just fine, right?" Obama asked in August. "It's the Post Office that's always having problems." Yes, indeed. Its two-year fiscal deficit approaches $8 billion. It has pried some 60,000 mailboxes off of America's streets, the Lexington Institute reports. It also is weighing the cancellation of Saturday services. Even as e-mail, digitally attached documents, and online banking decrease demand for first-class snail mail, the Post Office keeps hiking the cost of stamps. What sort of business actually raises prices while customers walk away?
- The Internal Revenue Code is like John Donne's poetry: It means something different to everyone. Perhaps flummoxed by its 67,000 pages, even IRS advisors offer conflicting answers to identical questions. But today's U.S. Tax Code will be a triumph of window-like clarity compared to the U.S. Health Code that Obamacare would trigger. Just wait until every medical lobby -- from the American Stethoscope Council to the National Tongue Depressor League -- hikes up Capitol Hill to demand exemptions, loopholes and subsidies.
- Although Washington already owns 54 percent of the square mileage west of the Rockies, it obsessively purchases new acreage. More than on private property, land-use restrictions on federal soil often prevent thinning of foliage. Flames frequently follow. "Most western wildfires burn federal land," William Welch wrote in Sept. 9's USA Today. To date this year, 123,554 private acres burned in California versus 271,000 federal acres.
Rather than inaugurate a frivolous, bottomless government option for healthcare, Washington should launch a "private option" for nearly every federal activity outside the Pentagon.
-- Murdock is a columnist with Scripps Howard News Service and a media fellow with the Hoover Institution on War, Revolution and Peace at Stanford University. E-mail him at deroy.Murdock@gmail.com .