March 19, 2005

Demmokratz Math

From Kos:

    GM will spend $7 Billion on health care cost for its 1.1 million workers, retirees, and families. That's insane, and a cost that would be better borne by the federal government.

    Pass universal health care, and that's a $7 billion improvement on GM's bottom line. And not just GM, just about all businesses would be unshackled from those hideous expenses. Profits would rise. The market would rise. And the people would rejoice.
I like the idea that somehow $7 billion can just be deducted from the economy or that $7 billion can be printed out of thin air. If GM, just one large employer, has health care costs of $7 billion then wouldn't US national health care be at LEAST a few hundred billion dollars a year - and quite possibly over a trillion dollars per annum?

Where is that money going to come from? You guessed it! Taxes. Most likely a reinstatement of higher income taxes, capital gains taxes and corporate income taxes - all of which affect small businesses and large businesses, all of which affect the employees and owners and executives of all sized businesses.

It's not like the government just has a huge well of money from which all spending derives. The US economy pays the bill, whether it pays it privately or through taxes. The global economy takes up the slack to essentially underwrite US debt when we over have excess. But somebody pays for it.

This is symptomatic of the way many Democrats (and a number of Republicans) see the government budget: like a big free ride that can pay for anything if only we're willing. It does not work that way. It's just that the US economy is so huge that we can undertake enormous projects without immediately disastrous effects.

That money comes from somewhere, and as always money in an economy comes from and by way of people. Companies may write the checks but that money was taken from customers and would've ultimately gone to employees or charities. Taxation comes from people, no matter who writes the check.

The whole Democratic effort to steal balanced budgets as an issue always struck me as entirely false. If this kind of thinking is truly symptomatic of Democrats then it's obvious they'll have trouble sticking to it. The left base of the Dems doesn't want to maintain the sort of fiscal discipline it requires to keep balanced budgets - they think balanced budgets is an argument for more taxes, not restrained spending.

You cannot just get a trillion dollars out of thin air. You cannot just tax an extra half trillion dollars out of the economy. You cannot expect the add layers of bureaucracy to the already bureaucratic-heavy health industry and then force hospitals to be at the mercy of the budget process and expect to get better health service. Sure, you'd get everybody covered but the system as a whole would be worthless.

It's pointless. Just give tax cuts for health expenditures by lifting the Archer MSA cap. Poor people and old people already have guaranteed eligibility for government insurance. It's the non-poor, under-65 crowd that's ineligible, and they don't need a handout - just a little respite from a funds-hungry government maw.

If this is how most Democrats see government budgeting, as unlimited, meaningless numbers to be written and not funds to be allocated efficiently, then it's no wonder they're going to suck at wooing the capitalist-investor class to their side.


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