The Administration's flawed health care argument threatens their fiscal policy strategy

The Administration's flawed health care argument threatens their fiscal policy strategy

The President’s fiscal policy is based upon a flawed health care premise, and the flaws are becoming apparent to a wider audience. The Administration’s fiscal strategy is to increase short-term spending (and not just on health care) and more than offset those spending increases through long-term reductions in federal health care spending. In theory this strategy could work, but by ducking painful policy choices on health care reform that would actually reduce long-term health care spending, the President and his team have placed their health care and fiscal policy strategies in jeopardy.

Flaw 1: The arithmetic is nearly impossible. These bills start by increasing federal health spending 10-15% by creating a new entitlement. That digs a huge hole before beginning to address the existing fiscal problem.

Flaw 2: As it becomes increasingly more difficult to pass health care reform legislation, the Administration is lowering the bar to say such legislation must not increase the long-term deficit (rather than must reduce it). But to make their fiscal policy case, the Administration needs to be able to demonstrate that health care reform will reduce long-term deficits.

Flaw 3: The Administration has not recommended policies that would actually reduce long-term federal health spending. When experts (like CBO) point this out, the Administration misrepresents the analysis and repeats their claims of long-term savings. As CBO has dismantled this argument, it has placed health care legislation in jeopardy. In addition, the lynchpin of the President’s fiscal policy case is buckling.

Flaw 4: The Administration says the long-term savings will exist, but the savings are too nebulous to be precisely scored. What, then, do they plan to display in next year’s President’s budget if they are successful? At some point someone would have to attribute specific long-term budgetary effects to an enacted health care reform bill. You can’t just hand-wave past this problem forever. It will catch up to you.

Challenge 1: I challenge the Administration to publish their own estimate of long-term budgetary savings from any of their long-term proposals. (They can’t because their professional estimators agree with CBO.) Let’s watch how NEC Director Dr. Larry Summers struggled with these flaws yesterday on NBC’s Meet the Press with host David Gregory.

SUMMERS: That’s why the president has made health care a central issue in long-term deficit reduction. It’s going to be the largest part of the federal, the federal budget.  So we’re going right at the deficit, but we’re going at the issue that’s measured in the hundreds of billions of dollars, federal dollars, which is federal health care spending. And that’s the big fight the President’s committed to. GREGORY: The difficulty of deadlines being missed and more public opposition to health care leads to the question of whether or not the president is losing the economic argument, that is the argument that health care is essential as an economic fix. SUMMERS: It is essential as an economic fix. It’s essential because of how much of the federal budget health care represents. It’s essential because it’s so important for the competitiveness of American businesses. You know, for some of the automobile companies, the health insurance companies are actually their largest supplier. And it’s essential to slow the growth of health costs if American families are going to see rising wages that rise ahead of inflation. So it is essential.

Flaw 5: CBO says the House bill would increase the budget deficit over the next ten years. They’re $239 B short.

Flaw 6: CBO says the House bill will result in bigger and ever-increasing deficits in the long run. This is because the bill starts with a huge spending increase, and then offsets fast-growing health spending increases with slow-growing tax increases

Flaw 7: While health cost growth is a huge and growing federal budget problem today, it’s actually not the largest source of growth for the next 15-20 years. Demographics and aging of the population is. To address this one needs to change the demographic parameters of Medicare, Medicaid, and Social Security. By ignoring demographics, the Administration can punt on Social Security reform (which Speaker Pelosi definitely does not want to do.) But even if health reform legislation achieved the President’s stated goals, the benefits would build very slowly over time. We would still have to address the medium-term demographic cost driver.

Flaw 8: Dr. Summers is right that we need to slow health cost growth if American families are going to see rising wages that rise ahead of inflation. That is why rising health costs do not harm the competitiveness of American businesses. They hurt the workers at those businesses. In addition, the health insurance mandates now trumpeted by the President and Speaker would raise premiums costs for most Americans. Let’s return to Mr. Gregory and Dr. Summers:

GREGORY: That’s a very important point, and yet the CBO, the Congressional Budget Office, has looked at this, a nonpartisan actor in this debate, and has said there is a shortfall in paying for it even over the first decade, and that shortfall grows in subsequent decades. As you look at these health care plans, do there have to be fundamental changes if you’re going to avoid adding to the deficit down the line? SUMMERS: CBO said that about one of the bills that’s passed, one of the committees. This is why the discussions are continuing. No bill is going to move forward that is not over the first 10 years scored by the CBO as budget neutral. But the President’s — in addition to insisting on budget neutrality, which we didn’t use to do, the President’s doing another important thing. It’s what we’ve called a belt-and-suspenders approach. There’s some things — how we pay drug companies, for example — where you can do the accounting very accurately and you can see what happens to the deficit. There are other things, encouraging — encouraging preventive care, taking the whole reimbursement system out of politics — where it’s much more difficult to do the exact calculation. And so the CBO doesn’t give us any credit for them even though most people would say that, over time, they’re likely to have some benefit. And so we’re doing both sets of things. And so I think we’ve got a lot of basis for being optimistic that, whatever the CBO says, it’s going to end up better. But we’re being very conservative. That’s why it’s belt-and-suspenders. We’re not taking any account of that second set of changes, the preventive care and all of that. This is the most fiscally responsible approach to introducing a major structural change in the economy that’s ever been pursued. If you look at what happened with Medicare; if you look at what happened with prescription drugs; if you look at what happened when food stamps was introduced, there has never been this degree of careful scrutiny of long-run — long-run cost impacts. And it’s right because the center of this has to be containing health care costs, otherwise it’s not going to work for most families.

Flaw 9: CBO did not say that it’s difficult to calculate how much the President’s “IMAC” Medicare commission would save. CBO said, “enacting the proposal, as drafted, would yield savings of $2 billion over the 2010-2019 period — in CBO’s judgment, the probability is high that no savings would be realized –Looking beyond the 10-year budget window, CBO expects that this proposal would generate larger but still modest savings on the same probabilistic basis.”

Challenge 2: I challenge the Administration to produce three experts who would say that the specific IMAC legislative language offered by the Administration would produce significant long-term budget savings.

Flaw 10: While the Administration asserts that providing more information by itself would significantly slow the growth of health spending, most (all?) health experts say you also have to change incentives. Here’s CBO:

Other approaches — such as the wider adoption of health information technology or greater use of preventive medical care — could improve people’s health but would probably generate either modest reductions in the overall costs of health care or increases in such spending within a 10-year budgetary time frame. Significantly reducing the level or slowing the growth of health care spending would require substantial changes in those incentives.

The Administration’s health care reform and fiscal policy strategies are based on flawed premises. When neutral and non-partisan referees like CBO point out these flaws, both strategies collapse. The damage to the President’s health care reform effort is evident. I think the damage to his fiscal policy strategy will soon become apparent as well.

(photo credit: Collapsed by Martin Cathrae)

15 responses

  1. Pingback: PunditKix

  2. Well put Keith.

    As someone outside of the D.C. and politics spheres, it is scary to hear how the Obama administration is distorting and omitting facts presented to them by the CBO. From your analysis over the past few months, it appears that the Administration has set a policy goal, near universal health insurance, without first considering the economic path that could lead them there.

    If you have time in one of your future posts, it would be very interesting to see how your health care reform plan (v.2) could address the problems / issues mentioned by a) the White House and b) the House. My intuition is that your plan could address 75%+ of these issues specifically surrounding a) the heath insurance burden on businesses (aka. a personal tax deduction), b) increasing the number and diversity of health insurance opportunities (by allowing health insurance companies to compete across state lines), and c) by redefining the cost curve issue as a demographic one in the short term and a technological one in the long term.

    There are some issues that I think your health care reform plan v.2 and health insurance cost analysis do not currently resolve. One, what is your point of view on the claim that we need to ensure that all Americans have health insurance? The Democrats seem to be claiming that we need to get close to 100% coverage. Two, I think your health care reform plan v.2 could use a preamble that outlines a) your premises and b) your goals. Specifically, I think that we need to clarify what the purpose of health insurance. My understanding, based on some courses I took in college, is that health insurance is meant to cover large, unpredictable medical expenses that a “normal person” could not reasonably cover. This includes surgeries, broken legs, critical diagnostics, etc. (It would be great to know how costs break down by type. It would also be great to re-iterate the 80-20 rule, how 20% of the population account for 80% of medical costs.) Currently, many insurances also cover routine check-ups. I would like to know your view on this. Do you see routine check-ups as a form of preventative medicine that pays dividends through fewer high cost procedures later in life? Another Pandora’s box you should address is “Pre-Existing Conditions”. How will your plan address populations that have serious medical pre-conditions that make it cost-prohibitive to purchase health insurance? To address this issue do you believe in mandating that everyone have basic medical insurance, aka. insurance that covers only extremely costly diseases and procedures?

    I think a succinct preamble would let your plan be more easily discussed by politicians and in people’s goals? At the end of the day, what are we looking for from a medical perspective?

    Finally, do you know what, if anything, the Republicans are doing in terms of health reform. It is very discouraging to see the Democrats hustling around to pass this mega-health bill and all the Republicans are doing is attempting to stop them. Why don’t the Republicans put forth a reasonable bill that could reduce health care costs, decrease American’s dependence on business for health care, and increase health insurance options without involving the government.

    I personally think that this would change the debate. Instead of Americans thinking its $1,000,000,000,000 or nothing, we need to show them that we can address the fundamental issues by “undoing government regulation”, aka. leveling the playing field for medical insurance deductions and cross-state health insurance competition.

  3. Mr Hennessey,

    I believe the costs for Medicare’s Prescription Drug plan have all come in under budgeted projections and that there is a high level of user satisfaction with the program. I know the plan cost approximately $350 billion over ten years but was the cost curve lowered over the long run?

  4. Here you go Alex. This is the Republican bill introduced on May 20.

    You can read the entire bill via the links at the bottom of the page.
    You haven’t heard about it bcs the MSM want to drive the narrative that the Repubs are just obstructionists. Surprised?

    My rule of thumb is that everything I read in the MSM either omits key details, is completely wrong, or simply biased until proven otherwise. If you ask a physcian about some medical news article, they often say the article is lacking (per above). Likewise with a real estate broker, and so on. The general news articles are written by generalist-journalists — ie, they may write well but have no in depth knowledge about which they write. As a result , they either let their ignorance shine through or their bias. I think that is the reality.

  5. Alex C,

    Mr. Hennessey wrote

    “I believe our Nation’s long-term fiscal problems, and the problems resulting from the growth of per capita health care spending, are higher priorities to solve than reducing the number of uninsured Americans now. I would rather solve America’s health care cost problems of the future than expand government now. This is my value choice. I expect and accept that others will disagree.”

    This is instructive because when having a discussion about any political topic or policy proposal one needs to understand a person’s underlying philosophical framework which produces their respective values. I can respect Mr. Hennessey’s erudition and rigorous logic, but if I hold dissimilar values/philosophies I still won’t arrive at the same conclusion on any particular policy decision.

    I believe that every human being has value based on human solidarity and similarity of needs (I support a robust interpretation of UDHR article 25), and therefore I believe that a $239 billion dollar budget gap should be overcome to ensure that each person has some form of health care regardless of pre-existing conditions or whatever other contributing factor. So, for example, instead of funding multi-trillion dollar overseas adventures/oppression, which is escalating in different theaters through the choices of the current administration, that money would’ve been/would be put to better use by covering the assumed $239 billion budget gap.

    Personally, I support a complete dismantling of the for-profit health care system (the President’s bill, I’m assuming, won’t meet that standard due to political infeasibility) , either by outlawing for-profit health insurance companies, similar to the system in Switzerland, or by implementing a universal single-payer health care system, like Canada’s or the U.K. However, as long as universal coverage is assured, I’m open to different delivery mechanisms.

  6. @PMA – Glad you mentioned Switzerland. Switzerland has a mandated insurance requirment. Everyone must have + they have 99.5% compliance. We have only 83% compliance with our auto insurance which is also mandated. Different culture=different result.

    All Swiss insurance is PRIVATE and purchased by individuals. The poor are subsidized to the extent the premiums exceed 10% of their income.

    The Swiss spend nearly 12% of GDP on health care while we are a bit over 15%.

    The Swiss do NOT get their health insurance from their employers but must buy it themselves – thereby, opting for higher deductibles + ultimately payment over 31% out of pocket. Overall, the Swiss govt pays for about 25% of the country’s healthcare bill; the US is NOW payment about 45%.

    And bcs the govt mandates a basic benefits package that all insurers must offer, it is becoming more vulnerable to special interest groups. Sound familair?

    There is a lot of good in the Swiss system but I suspect you may not like it as much now that you know some of the details. Personally, I like the overall mandate that every resident must have insurance. I like that it is purchased privately (not by employers). And I would do away with all the specific medical mandates bcs that becomes a politcial football which ultimately leads to very bad results. I would also allow (as Keith suggests) that individuals be able to purchase insurance accoss state lines (to open up more choices + more competition).

    Remember: Good intentions does not necessarily make for good policy.

  7. @PMA – FANTASTIC comment. Thank you for contributing to the debate here. While we come at the problem from different perspectives and end up at different places, I value highly that we can have a civil disagreement, when so many others around the country are shouting at each other.

    I respect your viewpoint, as well as the well-intentioned and positive contribution you are making to a passionate and civil debate. Thank you.


  8. @PMA and others,

    To make rational choices in fiscal policy, any public policy, or for that matter just about any decision, we need to distinguish between (1) alternative sets of trade-offs associated with each of our options, and (2) which set of trade-offs (and thus which option) we consider best, based on our values and priorities. All too often the two get conflated and confused, or insufficient attention and effort at objectivity (or in some cases, honesty) is applied to one’s determination of #1. And it doesn’t help that many experts on whom we rely to refine our sense of #1 are spinning to support their own policy preferences (based on their personal values and priorities) while ostensibly offering us help with #1.

    Certainly PMA, Keith, and each of us can have different values and priorites and different policy preferences on that basis, and that (i.e., #2) should also be a subject of discussion of a philosophical nature, but often people claiming a difference of opinion based on #2 (supposedly different values and priorities) are actually basing their preferences on false assumptions, oversights, and other forms of flawed analysis regarding #1 (what the trade-offs actually are if we go with Option A vs. Option B or C, etc.). And of course, decision-making — that #1 and #2 combination and sequence — is a “junk in, junk out” process. If one is failing to address trade-offs with sufficient accuracy and thoroughness, whatever choice results is reached irrationally…and thus immorally if the choice involves substantial potential harm. So PMA saying “I want universal healthcare because I value every human being” begs the question:
    “ok PMA, and what are the trade-offs — the incremental harms to some people — that you anticipate and consider acceptable trade-offs for the benefit of some people receiving health insurance (and thus better healthcare and better health and quality of life)?”

    And it is not responsible for one, without a reasonable degree of research and effort at objective analysis, make/accept the convenient assumption that there is no trade-off — that what one is advocating is a win-win all around, all gain and no pain, as in the assertion that if we just forego foreign policies that are harmful to us (and others) in themselves, we can have all the good stuff one is advocating essentially at no cost, or the assumption that if we just ensure that everyone has health insurance, the effect of that expansion of coverage will be lower federal spending on healthcare, not more.

    Greg Mankiw on his blog today contrasted this post by Keith with a post by Paul Krugman, and Greg remarked, “A large part of the policy debate boils down to this: Are you more worried about the problem of the uninsured or about the long-term fiscal imbalance?” The problem with characterizing the choice in that way is that it pits a tangible benefit (and one with very legitimate emotional impact) vs. an abstraction. What may be insufficiently apparent (or insufficiently visceral) from this abstraction (the long-term fiscal imbalance) is that if one chooses policies that worsen the long-term fiscal imbalance and make it more difficult economically and politically to reduce it to sustainable or “healthy” levels, he is at least implicitly (whether fully aware of it or not) choosing to impose even greater sacrifices on many people down the road in order to expand health insurance coverage.

    Obviously those eventual sacrifices can take any of a variety of forms and can hit different segments in different ways to different degrees based on how we distribute the pain, but I think it’s safe to say that a very large portion of the American population — I’d say a substantial majority — will have to make significant sacrifices (and would even if we don’t expand coverage, but even more so with expansion of coverage). Taxes on most people will have to be higher even without expansion of coverage, and more so with it, and that means less economic growth, jobs, and per capita income, and a lower portion of after-tax income. Projected spending will have to be substantially cut even without expansion of coverage, and even more so with it, and spending cuts will probably be very broad based across the budget, cutting Defense in ways that reduce our economic and physical security, and cutting Social Security, Medicare and Medicaid in ways that harm beneficiaries of those programs (or would-be beneficiaries no longer eligible), along with various other cuts in non-Defense discretionary spending. Higher federal debt will mean higher interest rates, which will reduce economic growth, too. And there’s always the possibility of some degree of monetization of the debt, which will bring higher inflation and associated disruption of the economy and diminishing of the value of people’s savings. And I’m probably leaving a few things out in terms of major sacrifices we already face and that will be made that much more severe by expansion of coverage — even if it is “offset” over a 10 year period (because the incremental spending will grow faster than will the offsets) or even if it were (which it won’t be) offset over the long term (because spending cuts and tax increases used to “offset” spending on expansion of coverage are no longer available for deficit reduction, leaving us with more painful sacrifices to reduce deficits).

    If someone has looked into and thought through all of the above (the trade-offs) to a reasonable degree (and made a reasonable effort at objective consideration/analysis) and then concludes, based on his values, that it’s reasonably safe to assume that whatever those sacrifices are likely to be, they are preferable to 30 or 40 million Americans lacking health insurance, I would respect that preference both because it was arrived at rationally and responsibly and because I respect (and generally share) the (humanitarian) values being applied. But this paragraph started with a big “if” that doesn’t seem to apply to a great many vocal advocates of universal coverage whom I’ve encountered in the blogosphere and heard/read in the media. I guess that’s one difference between righteous and self-righteous, and between actual morality and feel-good faux morality masking a self-satisfying, irresponsible and thus immoral approach to important public policy issues. (And I don’t mean to imply that folks on the right are any better in their consideration of issues generally and choices of positions on options. There’s plenty of fairly thoughtless application of ideology and ideologically-convenient assumptions on both sides.)

  9. Evinx and kbh,

    Thank you both for your comments.

    Although the Swiss system is imperfect, there are certain features of the system that are attractive. Not sure how much of this is propagandized, but it’s from the Swiss Federal Office of Public Health website.

    “Health insurance

    Social health insurance gives everyone living in Switzerland access to adequate health care in the event of sickness, and accident if they are not covered by accident insurance.
    Social health insurance is operated by a number of insurers. Only those which meet the conditions set out in Swiss legislation, and which are not profit-making, are authorized to handle social health insurance. They must apply the legal provisions in an identical manner and separate from other insurance (for example, complementary insurance according to by private insurance law). If an insurer becomes insolvent, the cost of its statutory benefits are taken over by a joint body funded by contributions made by the insurers on the basis of their social health insurance premiums.

    The role of the insurers is not restricted to reimbursing the cost of services provided to insured persons. They also work together with the cantons to encourage health promotion. Insurers and cantons operate a joint body whose aim is to promote, co-ordinate and evaluate steps aimed at promoting good health and preventing illness.”

    This is from the wikipedia site, and perhaps the information is incorrect:

    “Health insurance covers the costs of medical treatment and hospitalisation of the insured. However, the insured person pays part of the cost of treatment. This is done:

    * by means of an annual excess (or deductible, called the franchise), which ranges from CHF 300 to a maximum of CHF 2,500 as chosen by the insured person (premiums are adjusted accordingly);
    * and by a charge of 10% of the costs over and above the excess. This is known as the retention, and is up to a maximum of 700CHF per year (excluding medication).”

    So if I’m correct the maximum out of pocket annual costs a person would incur would be CHF 3200, which is roughly $3000, if a person has health insurance with the highest deductible. The wikipedia site didn’t explain how the Swiss system handles those who cannot pay the CHF 3200, such as the unemployed.

    Although this a free-market heresy, how would socializing health insurance reduce per capita health costs in the U.S., if at all? Maybe someone here with a superior grasp of economics could help clue me in.

  10. PMA,

    I noticed (ahem) that once again you avoided my points and questions (as elsewhere). Please respond, at least in general terms, to the following:

    (1) What types and degrees of sacrifices do you think Americans (and others, for that matter) are already going to have to eventually make to adequately reduce our long-term fiscal imbalance? Who will get hurt in what ways and how much? (I’ve already laid out in general terms my answer, so if you wish, you can comment on where and to what extent you agree/disagree.)

    (2) How much greater and more severe will sacrifices have to be due to the incremental spending associated with providing universal coverage? Again, who will get hurt more, in what ways, and how much?

    (3) Why do you think that causing the sacrifices in #2 are more moral and better than having people uninsured who would be covered under universal coverage?

    Again, unless you consider and address these fundamental questions, your moral choice is neither rational nor moral, and engaging in unrealistic or inadequately assessed, convenient wishful thinking regarding assumptions to view your favored policy as a win-win, “all gain, no pain” proposition is immoral, and constitutes nothing more than feel-good, self-righteous posturing. I’m not saying that that is necessarily what you are doing, but I’ve seen indications of it from your comments and from my attempts to engage you here and elsewhere. I’d be glad to engage in a rational, thoughtful discussion on this matter if you’re willing to do so.

  11. I believe that running deficits is immoral. I also believe civil societies have a duty to allocate resources in as responsible a manner as possible, particularly when those resources are limited and extracted through coercion. I also believe that if a society or community has the technological prowess to prevent deaths, then it is a categorical imperative that that society do so, and within a hierarchy of duties that that duty super-cedes all other duties. Randian objectivists, utilitarians, American libertarians, and many conservatives would disagree with this value choice and its many logically or emotionally assumed consequences, and I respect that disagreement.

  12. PMA,

    RE: I believe that running deficits is immoral.

    Do you really mean to make such a sweeping statement?? Are you against deficit-producing, somewhat automatically-triggered, counter-cyclical stabilizers. Do you think there is no validity or desirability of any degree of Keyensian fiscal policy to smooth out cycles, and instead believe we should follow a Hoover-like approach of always balancing budgets even when we are in (or anticipate) a recession or depression? Or do you really mean that running up a very large debt-to-GDP ratio over a long period of time through persistent, large, structural deficits is immoral because it sticks subsequent generations with a large part of the bill for current consumption?

    Re: like President Hoover I also believe civil societies have a duty to allocate resources in as responsible a manner as possible, particularly when those resources are limited and extracted through coercion.

    You are conflating at least two concepts here, as well as being excessively vague, perhaps intentionally, perhaps not. I mean, who the heck opposes government using tax revenue confiscated from the populace “in as responsible a manner as possible”? Is anyone supportive or indifferent to irresponsible use of such funds? When you say “as responsible a manner as possible”, do you mean (1) in terms of cost-effectiveness (direct benefits or utility derived per dollar of spending), meaning in large part low levels of waste, inefficiency, and ineffectiveness or (2) in terms of #1 plus broader economic effects related to ultimate impact on GDP (or GDP per capita) and standard of living in aggregate of within some constraint related to distribution of income and/or wealth across current and future population segments, which would relate not just to how funds are allocated, but also to how much to tax and how, and how much to spend and on what, and how large deficits and debt should be, or (3) something else?

    Re: I also believe that if a society or community has the technological prowess to prevent deaths, then it is a categorical imperative that that society do so, and within a hierarchy of duties that that duty super-cedes all other duties.

    Again, so extremely vague as to be meaningless and useless, just a vacuous facade of virtue, and completely irrational, by which I mean devoid of any rational perspective. If we apply your rule regarding our “categorical imperative” to prevent deaths, we would probably ban all motor vehicles (except emergency vehicles), because that would prevent a great many deaths. Real life and rational moral analysis and choices involves assessment of trade-offs, not sweeping statements that if something is bad, we must prevent it, period, without any consideration of trade-offs, meaning a reasonable attempt at a holistic view, consideration and weighing of the various benefits, costs and risks to various parties. You are either omitting such reasoning from your comments for some reason or you have a completely irrational approach to morality and related choices and assessments. And remember, lest it somehow escape your attention, resources are finite, and that applies even within the category of “preventing deaths” (by which I assume you mean preventing earlier deaths), as well as between “preventing deaths” to the extent humanly possible and other objectives related to quality of life.

    Re: Randian objectivists, utilitarians, American libertarians, and many conservatives would disagree with this value choice and its many logically or emotionally assumed consequences, and I respect that disagreement.

    If you are going to attribute philosophical views to various ideological/philosophical segments, you really, really should think through and express much more clearly what the heck you are talking about in terms of moral reasoning. I would say that your approach is deontological and criticize it on that basis, but even characterizing it as deontological would be giving your comments too much credit, because your approach, at least as you’ve represented it here, is simply, completely irrational because it doesn’t even seem to reflect reasonably thought-out principles, let alone consideration of trade-offs.

    Basically, after seeing several comments by you here and on that other blog, I really see nothing beyond (ironically) self-righteous, extremely broad statements that, essentially, we should do good things and we should not do bad things, with the implication that doing the good things you advocate would not involve trade-offs causing harms to people along with providing the benefits you seek. If you have thought it through any further than that and actually applied some rational moral or practical reasoning, your comments so far haven’t shown it, despite my repeated requests and guidance. Perhaps at some point they will.

  13. PMA,

    Just for illustration as follow-up to my comment above (and please note that I do mean that this is just an illustration of the concepts I’m trying to convey to you regarding trade-offs and a rational approach to morality), what if an alternative to providing health insurance to thirty or forty million more Americans is to use the same funds instead to prevent a few million deaths every year — including millions of children — in Africa from malaria, hunger and hunger-related diseases? Perhaps you will say that the distinction of American beneficiaries vs. non-American should be a big factor in the moral calculus, and that would of course be debatable, but the point is that, given that all resources are finite (and our financial resources certainly are), alternative uses of that money (alternative ways to spend it and the alternative of saving it directly [by not spending it now] or indirectly [by not running up higher debt]) should be considered in the moral calculus, as opposed to simply, irrationally saying “Hey, if we provide universal coverage, we can ‘prevent deaths’, and ‘preventing deaths’ is a good thing, so providing universal coverage must be the moral thing to do.”

  14. PMA:

    I admire your stated sense of morality – and your acknowledgment of the legitimacy of alternative perspectives. But I would like to offer some clarity to explain how/why I concur with your perspective (and not), and where distortions of meaning detract from the discussion. With a subject that is this dynamic and significant, it is highly desirable to have clarity in terms and meanings:

    1.) I believe that running deficits is immoral.
    Use of credit (deficit spending, borrowing against future production to service current consumption) is not inherently immoral and is in fact quite useful in many instances – buying a home, building a factory, water treatment plant, interstate highway system, etc., for examples. But use of credit becomes immoral when it is not used to enhance future productivity or reduce current/future costs – buying a home offsets current/future rent and savings costs, building a factory provides for future production of wealth, etc. In the case of Federal deficits, there is room for legitimate disagreement as to whether a particular deficit-funded expenditure will provide a “return on investment”, but the fact remains that, at this point, any new expenditure and many pre-existing expenditures are deficit-funded. I’m not necessarily certain that is immoral, but I am convinced it’s unsustainable and inefficient.

    2.) I also believe civil societies have a duty to allocate resources in as responsible a manner as possible, particularly when those resources are limited and extracted through coercion.
    I am in complete agreement. But again, there is room for legitimate disagreement as to what “as responsible a manner as possible” actually entails. For example, I strongly supported public funds (even deficit spending) used in the defense build-up of the 1980′s, while others simply considered it war-mongering. By the same token, I supported a defense wind-down during the 1990′s after the Soviet Union voted itself out of existence. The 1980′s “investment” had a direct “return on investment” in that it resulted in a far lower diversion of national funds to defense requirements in subsequent years. Within the current context of health care and health insurance, I do not believe that a greater diversion of funds to the health care industry will provide any “return on investment”. Consider that, at the peak of the Reagan/Bush-One defense build-up, total defense spending approached, but did not quite reach 6% of GDP – current health care spending is at 16.6% of GDP and rising. I find it hard to believe the U.S. at-large is that sick, that it must divert nearly 20% of total income to health care.

    3.) I also believe that if a society or community has the technological prowess to prevent deaths, then it is a categorical imperative that that society do so, and within a hierarchy of duties that that duty super-cedes all other duties.
    Again, I concur, in principle. There is, however, a set of misleading terms and implications in your statement. First, “preventing deaths” (along with “saving lives”, in other discussions) is horribly misleading – preventing death is an impossibility. At best, medical treatments can postpone death, and/or relieve pain. No more than that. Second, medical treatment is not the only means of postponing death or relieving pain, nor is it even the historically most prominent means of doing so. Given human history of wars, plagues, and poverty, and the contributions those have made to human suffering and premature death, the entire medical community stands a distant “also ran” in its contribution to treating human suffering. Your local water treatment plant, grocery stores, garbage-removal service and even the concept of “mutually assured destruction” do more to keep you and others alive and well than all the doctors and hospitals combined. Third, within the current context of health care/insurance debate, there is a serious flaw in the implication that health insurance is the same thing as health care. Such is decidedly not the case. Health care is medical treatment. Health insurance is protection from financial loss associated with paying for medical treatment. While providing medical treatment to individuals who require it may be a moral imperative for society, protecting them from the associated financial loss is not a moral imperative.

    In all respects, U.S. society has lived up to your (and my) desire to apply its “technical prowess” to alleviate human suffering. But the continued diversion of so much of the national income (GDP) to one single component of the economy, the medical industry, does not hold great promise in terms of continued fulfillment of our desires – technology advance does not only apply to the medical industry. And a dollar spent in the medical industry is a dollar that isn’t spent elsewhere that may provide a far greater return in terms of alleviating human suffering. That is the economic principal of “opportunity cost”. (Forgive me, I teach college level economics, so my biases tend to be couched in economics terms.)

  15. Shayne,

    Apparently PMA is not eager to respond to either of us, so I’ll comment just to say that I would suggest you not “admire” the “morality” of someone who proclaims his sense of morality on some matter while negligently failing to thoughtfully consider trade-offs, or who exhibits an irresponsible (apparent) readiness to just assume that no trade-offs exists. How convenient. I could say we should do everything that could bring benefits and prevent/reduce harm to everyone, but that wouldn’t make me a moral guy. It would make me a self-righteous idiot.


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