The Economics of Healthcare Reform

It’s getting so I hate to turn on the television, unless I’m watching something I have TIVO’d, and can zip through the commercials. On live TV, there is an ad that runs every few minutes declaring that healthcare reform will add to the national deficit and raise taxes. The ad ends by darkly warning that “America cannot afford” to reform healthcare.

Complex issues are never accurately addressed by slogans and bumper stickers, of course, but those of us who have actually been following the various proposals and arguments cannot help but be offended by the intellectual dishonesty of this particular 30-second spot. There are a number of proposals still on the table, for one thing, that would have different results. None of them currently would do any of the things this ad claims, for another. The Congressional Budget Office says that the version in the U.S. House would REDUCE the deficit by some 100 billion dollars over the next ten years.

Since I grit my teeth every time this particular bit of propaganda airs, I was gratified to see release of the following open letter from several of the nation’s most eminent economists.

Successful health care reform is vital to the nation’s fiscal and economic future. The legislation the House will vote on in the coming days will guarantee security of coverage, limit the costs of care, create incentives for improved quality of care, and set us on the path towards sustainable economic growth. In short, the House health reform legislation takes the steps necessary to promote our economic health.

Specifically, the bill:

  • Reduces the deficit by over $100 billion in the first 10 years, and continues to reduce the deficit in subsequent years, as judged by the Congressional Budget Office.
  • Takes initial steps to “bend the cost curve,” and thus might lead to even larger cost savings than official estimates suggest.
  • Covers nearly all American citizens and legal residents.

We urge House passage of the legislation, which provides a historic opportunity to realize the long-delayed goal of significant health care reform.

Signed,

Dr. Henry J. Aaron, The Brookings Institution
Dr. Mike Chernew, Harvard University Medical School
Dr. David Cutler, Harvard University
Dr. Judy Feder, Georgetown University, Center for American Progress Action Fund
Dr. Dana Goldman, University of Southern California
Dr. Jonathan Gruber, Massachusetts Institute of Technology
Dr. Len Nichols, The New America Foundation

The More Things Change….

In 1964, Richard Hofstader wrote The Paranoid Style in American Politics. As I was re-reading his survey of American political history, this caught my eye:

“The anti-Masonic movement was a product not merely of natural enthusiasm but also of the vicissitudes of party politics. It was joined and used by a great many men who did not fully share its original anti-Masonic feelings. It attracted the support of several reputable statesmen who had only mild sympathy with its fundamental bias, but who as politicians could not afford to ignore it. Still, it was a folk movement of considerable power, and the rural enthusiasts who provided its real impetus believed in it wholeheartedly.”

Just substitute “tea bag” for “anti-masonic” and you have an apt description of our time.

Couldn’t Have Said It As Well

I have been meaning to post on this very issue, but Doug Masson has said precisely what I intended to say, and better, so I’m just going to say “amen.”

I will only add that a similar argument is made when the subject is poverty, and policies to address the structural elements in the economy that make it difficult for families to move into the middle class. There are strong echoes of Calvinism in the dismissive belief that, if someone is poor, it must be due to laziness, lack of drive, or other moral defect. As Calvin taught, if God loved you–if you were among the “saved”–then you wouldn’t be poor.

True Believer Syndrome

To me, one of the most frustrating aspects of contemporary public debate is something I call the “true believer” syndrome. The true believer can be on the political right or left; the distinguishing characteristic is a smug certainty that he or she is in possession of Truth (note capital T), and only the most unenlightened, hypocritical or downright evil person could possibly disagree.

On the right, true believers tend to be either biblical literalists or free-market fundamentalists. On the left, a disproportionate number are self-proclaimed (self-satisfied) environmentalists. What makes the environmentalists particularly annoying—at least to me—is that I generally agree with their basic message. It’s the aura of superior virtue that is off-putting.

 I thought about this the other day, during a meeting of IUPUI’s “Common Theme” committee. The campus Common Theme program began a couple of years ago; much like the “One Book, One Community” project adopted by many cities, the Common Theme takes one book annually as its centerpiece. A year-long discussion of the themes raised by that book will include speakers, panel discussions, student projects and other programs. It’s an effort to encourage a more thoughtful and informed discussion of an important issue—and it is well worth doing.

This year, the Common Theme book is Bill McKibben’s Deep Economy: The Wealth of Communities and the Durable Future. McKibben is evidently a rock star of sorts in the environmental movement, and he will be on campus November 9th to kick off the year’s programming. I read the book, and found much of its argument—although certainly not all of it—persuasive.  

I also found it annoying, thanks to the book’s moralistic tone.

A cover blurb from the Boston Globe might best convey what I mean: “A hopeful manifesto…an inspiring book that shows us not only the way we need to live, but also the way we should want to.”  And indeed, throughout the book, there is the implicit message that if you are somehow so benighted as to disagree with one or more of McKibben’s prescriptions for a virtuous life, should you somehow, inexplicably fail to agree that this is the way you should want to live, you are to be scorned or at least pitied.

This is particularly irksome because—while there is much of value in the book—some of those prescriptions are just plain dumb. Others aren’t going to happen. (Small towns in America are not going to begin issuing their own currency. If you want to know what that has to do with sustainability, or saving the environment, you’ll have to read the book.)

 Ideally, those of us participating in the Common Theme discussions will use these opportunities to separate the wheat from the chaff, to focus on the very real environmental challenges we face, to understand connections we hadn’t recognized, and to figure out how to make the changes that will inevitably be required. And ideally, we can participate in those discussions without being treated to the sort of elitism and moral snobbery that too often characterize these discussions.

 Ideally, True Believers would stop being their own worst enemies.

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The Ethics of Private Police

In my historic neighborhood, we are having a vigorous debate about the wisdom/propriety of paying monthly “dues” to hire off-duty police officers to conduct extra patrols. The concern is that the Indianapolis police force is stretched thin, and despite Mayor Ballard’s emphasis on public safety, not much has changed, and certainly not for the better.

I understand the problem; it’s real, and not improving. Like my neighbors, I want to feel that my person and property are being adequately protected. But I have a real problem with “rent-a-cop” proposals of this sort.

Public safety is one of the very few things that virtually all Americans believe should be provided by government. Practically speaking, private policing creates the classic “free rider” problem–if I pay a private security guy to patrol my street, my neighbor who refuses to pay his fair share for this service will benefit anyway. Ethically, the question goes to the heart of why we have collective mechanisms like government in the first place: why should citizens who can afford to pay extra get adequate basic services while our poorer neighbors don’t?

 If I thought that hiring private security for the Old Northside would prompt the city to deploy added police in underserved poor neighborhoods–where social dysfunction and economic distress increases the incidence of violent crime–I might reconsider my opposition, but anyone who understands the way these things work knows how unlikely that is. It’s more likely that the Mayor would breathe a sigh of relief and REDUCE the public police force proportionately. My neighborhood would benefit at the expense of poorer areas.

What’s worse, we’d be echoing the message that seems to resonate with all those “tea bagger” folks: that we don’t need no stinkin’ government. If for some reason you can’t fend for yourself,  it’s probably because you are undeserving. In any case, that’s your problem.