Friday, March 19, 2010

There is no going back

Do quote Megan McArdle a lot? It's because I usually injure my neck nodding to everything she writes:

But there is one thing of which I am nearly perfectly certain: If we pass this thing, no American politician, left or right, is going to cut any of these programs, or raise the broad-based taxes necessary to pay for them, without any compensating goodies to offer the public . . . until the crisis is almost upon us. I can think of no situation, other than impending crisis, in which such a thing has been done--and usually, as with Social Security, they have done just little enough to kick the problem down the road. The idea that you pass a program of dubious sustainability because you can always make it sustainable later, seems borderline insane. I can't think of a single major entitlement that has become more sustainable over time. Why is this one supposed to be different?
This country's inability to address runaway entitlement spending has left us with nearly $108 trillion in unfunded liabilities. These are promises the government cannot possibly meet but there is no political will to tell Americans they can't have their ice cream. Now we're about to dramatically expand the role of government at the very moment in time when we should be shrinking it.

It's mortifying.


another Eric Lindholm said...

But this is exactly the same ploy that the Repubs use with all of their tax cuts. They're huge deficit generators, sold on the promise of improved revenues at some mythical time down the road.

Most Americans want their government to provide them everything, but they don't want to have to pay for it. Each side capitalizes on one or the other of these irreconcilable desires. The Reps let the public "keep their money" while letting costs soar through "essentials" like oil wars, yet still leaving the U.S.'s own have-nots in the dust; the Dems shower us with goodies but don't have the balls to raise the funds for them.

The crisis isn't that, this time, we have a Dem-controlled government finding yet another way to balloon the deficit. It's that the public is too short-sighted to demand that either party be honest about how much all of their stuff costs.

Eric said...

Eric, you know I have too much respect for you to dissent. Most of what you say is exactly spot on.

But let me make a distinction: the tax cuts, for all their budgetary problems, involve allowing Americans to keep more of their money to spend as they see fit. (Side note: see Milton Friedman's "Ways to spend money"). The health care legislation involves a huge expansion of government at the expense of individual freedom.

There is virtually no chance that HCR won't expand and extend to a government takeover of health care despite what Washington may protest. Massachusetts was the canary in the coalmine, but they plunged forward anyway.

America, IMO, used to be a place where, hey, if you want to smoke and eat at McDonalds then more power to ya. Now everybody is going to be paying for the smokers and fat-asses. The inevitable result is a NATION OF SCOLDS.

A shame.

another Eric Lindholm said...

I don't think we're that far apart. But it's not just the smokers and fat-asses that health care reform will help. Let me resort, if I may, to the tried-and-true technique of personal anecdote.

A student of mine is trying to play the game right by going to college, even though it's hell for him to afford. He has rented an apartment two cities away and rides his bike 45 minutes each way, so as not to waste money on a car. (Public transportation is useless in the Los Angeles suburbs.) So, long story short, a driver cut him off, he was seriously injured, he'll survive, but his bills top $300K. His own health insurance maxed out at $100K, then dropped him. Maybe he'll collect through a personal injury lawsuit, maybe not. And no insurer will touch him now, because he looks like one big walking pre-existing condition.

Now I suppose we can find a flaw in his strategy somewhere: opting for a private college instead of a public one, maybe riding his bike too fast, who knows. But basically, this is exactly the kind of path we want American dream-pursuers to take. It's a shame that our system isn't better able to support him, for him and for us. It's in everyone's best interests for us to be able to accommodate people like him.

And I think that's the critical issue, even for the smokers and fat-asses. Can't they contribute to society anyway? Granted, they'll be burdens on the health-care system, but many of them can still hold down jobs, be part of a recovering economy, etc. They can be net assets rather than net liabilities. Are we better off with a nation of hard-working fat-asses, or with one of old-money do-nothings who spend their days playing golf, drinking cognac, and lamenting the estate tax?

Eric said...

Let me throw this out briefly because I really need to go to bed, since I live on the East Coast.

That student's story is compelling but is it really the business of the government to determine who is "worthy" to receive extra help? Would you be so sympathetic if he was riding his bike to a Hitler Youth rally? Also, is there any limit to the taxpayer's burden to this student?

His case is tragic, for sure, but there's tragedy everywhere in the health care system. Demands are infinite but resources are finite. Paying a quarter-million for this person's health care means a quarter-million NOT paid for chemotherary for two dozen patients.

I'm not saying it's right or wrong, I'm just saying that I don't think the government is capable to make the determination.

Brian said...

Anyone who complains about tax cuts must not be paying taxes to begin with. It's my money, and not the government's. Government spending is a huge deficit generator, not taxes. In fact, history has shown tax cutting brings more revenue. Go sell that crap elsewhere.

Bram said...

Please look up the Laffer Curve. We are already past the peak. I know people quitting and / or retiring before the tax hikes next year.

There is no more tax revenue to be had. High rates will cause drops in revenue - like has already happened in MA.

Anonymous said...

Trickle down economics really really works, Vol. 7,000?

Going Galt, Vol. 650?

THIS looks like a job for the....

Bram said...

More like the Great Depression Part 2.

Anonymous said...

The Dust Bowl's back, too, and it's blowing through a lot of Republican heads.