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Larry Kudlow: Our President’s ‘Public’ Health Plan Will Bankrupt Nation
Does anybody really believe that adding 50 million people to the public health-care rolls will not cost the government more money? About $1.5 trillion to $2 trillion more? At least.
So let’s be serious when evaluating President Obama’s goal of universal health care, and the idea that it’s a cost-cutter. Can’t happen. Won’t happen. Costs are going to explode.
Think of it: Can anyone name a federal program that ever cut costs for anything? Let’s not forget that the existing Medicare system is roughly $80 trillion in the hole.
And does anybody believe Obama’s new “public” health-insurance plan isn’t really a bridge to single-payer government-run health care? And does anyone think this plan won’t produce a government gatekeeper that will allocate health services and control prices and therefore crowd-out the private-insurance doctor-hospital system?
Federal boards are going to decide what’s good for you and me. And what’s not good for you and me. These boards will drive a wedge between doctors and patients.
The president, in his New York Times Magazine interview with David Leonhardt, said his elderly mother should not (in theory) have had a hip-replacement operation. Yes, Obama would have fought for that operation for his mother’s sake. But a federal board of so-called experts would have told the rest of us, “No way.”
And then there’s the charade of all those private health providers visiting the White House and promising $2 trillion in savings. Utter nonsense.
And even if you put aside the demerits of a government-run health system, Obama’s health-care “funding” plans are completely falling apart. Not only will Obama’s health program cost at least twice as much as his $650 billion estimate, but his original plan to fund the program by auctioning off carbon-emissions warrants (through the misbegotten cap-and-trade system) has fallen through. In an attempt to buy off hundreds of energy, industrial and other companies, the White House is now going to give away those carbon-cap-emissions trading warrants. So all those revenues are out the window. Fictitious.
Anyway, the cap-and-tax system won’t pass Congress. The science is wrong. The economics are root-canal austerity –– Malthusian limits to growth. And there are too many oil and coal senators who will vote against it.
All of this is why the national-health-care debate is so outrageous. At some point we have to get serious about solving Medicare by limiting middle-class benefits and funding the program properly. There is no other way out. We can grow our way out of the Social Security deficit if we pursue pro-growth policies that maintain low tax and inflation rates. Prospects for that don’t look any too good right now, though it could be done. But government health care is nothing but a massive, unfunded, middle-class entitlement problem. (The poor are already in Medicaid.)
Sen. Max Baucus, D-Mont., proposes to solve health care by limiting employer tax breaks. He’s on to something, but he’s only got half the story. All the tax breaks for health care should go to individuals and small businesses. Let them shop around for the best health deal wherever they can find it with essentially pre-tax dollars.
Additionally, insurance companies should be permitted to sell their products across state lines. And popular health savings accounts –– which combine investor retirements with proper insurance by removing the smothering red tape –– should be promoted. This approach of consumer choice and market competition will strengthen our private health-care system.
So private enterprise can coexist with public health care and not be crowded out by the heavy-handed overreach of government. But the Obama Democrats are determined to force through a state-run system that will bankrupt the country.
I’m not somebody who obsesses about the national debt or deficit. But I have to admit, today’s spending-and-borrowing is blowing my mind. As a share of gross domestic product, we’re looking at double-digit deficits as far as the eye can see. Over the next 10 years, the Congressional Budget Office predicts federal debt in the hands of the public will absorb 80 percent of GDP. And that doesn’t include the real cost of state-run health care. Other than the temporary financial conditions surrounding World War II, we’ve never seen anything like this.
The president’s grandiose government-takeover-and-control strategies are going to make things worse and worse –– that is, unless members of that tiny band known as the Republican Party can stand on their hind legs and just say no. The Republicans must come up with some pro-competition, private-enterprise alternatives for health, energy, education, taxes and trade that will meet the yearning of voter-taxpayers for a return to private-enterprise American prosperity and opportunity.
Free-market competition will lower costs in health care just as it has every place else. It also will grow the economy. The GOP must return to this basic conservative principle and reject Obama’s massive government assault.
— Larry Kudlow is the founder and CEO of Kudlow & Co. LLC, an economic research and consulting firm in New York City, and host of CNBC’s Kudlow & Company. Click here for more information, or click here to contact him.
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» on 05.15.09 @ 06:13 AM
“Free market competition” is exactly what has caused the health care costs in this country to skyrocket. 47 million Americans are uninsured, while another 50 million+ people are under-insured. And now, with the economy in a mess, hundreds of thousands of people are losing their jobs and their health insurance coverage along with them! Tying health care coverage to employment is failing small business owners and their employees badly! With “for profit” insurance companies calling the shots and their CEOs and stockholders getting rich, sick people are dying because they have NO access to health care.
With a Universal Single Payer Health Care system, EVERYONE will be able to see a doctor when it is necessary to save or prolong their lives AND the cost will be significantly less for everyone. Unregulated Capitalism has shown itself to be a profit-driven and unethical venture. Republicans, the “Party of No”, will disagree with anything that is good for the masses of Americans who are suffering and dying in this country due to our lack of a National Health Care Plan that covers every person AND will cost much, much less than what we have now: “OUR NATIONAL HEALTH CARE PLAN / DON’T GET SICK”
Mr. Larry Kudlow, a CEO I might add, you are WRONG.
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» on 05.15.09 @ 07:20 AM
Right on. Next tackle the joke called computerized medical records improving health care which is also one of Obama’s priorities. Have you seen a patient’s medical recordlately? Every page of a chart from the paper system is now turned into 100 pages of useless check off boxes with the useful information such as a chronological charting of blood pressures and laboratory data in fine print and very difficult to find amoung the volumes of pages.
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» on 05.15.09 @ 10:06 AM
Thank you Hamiltons for being exactly right on. I could not have said it better myself. You would think that big business would welcome the idea of not having the responsibility of providing healthcare to their employees. This is one of the reasons why GM,Chrysler and Ford are having trouble competing with foreign manufactorers.
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» on 05.15.09 @ 10:42 AM
Spoken bravely, as only a Wall Street plutocrat with a Platinum medical plan (paid for
by others) could articulate it.
Does Kudlow think the cost of lost GNP/GDP from having one out of every five people with no health coverage, or minimal coverage, is “good” economic planning?
Does he think that America can not do what most of our European and Asian economic competitors have already done - create national health plans that mostly work, and mostly cover ... everyone?
Does Kudlow believe that the “economic disaster” and “looming bankruptcy” from
some kind of universal health care will be worse than the world-wide economic
disaster Mr. Kudlow’s greedy colleagues, and their enablers in the Bush-Cheney
administration left us all, as their main legacy (besides water-boarding)?
I’d like to see Mr. Kudlow leave all his IDs at home, then see how it feels to get
very sick, suddenly, in Osage, Oklahoma, with no proof of his Platinum insurance
policy.
Maybe then, he’d recognize that the remorseless price-gouging by Big Pharma has
gone on long enough, and he’s see Obama’s modest initial efforts as having some
merit.
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» on 05.15.09 @ 11:28 AM
Let’s face facts. Our country is already bankrupt. Nothing can survive the financial defeat of millions of Americans, especially when the federal government squanders trillions of tax dollars “helping” mega-corporations and well-heeled institutions who have made a series of fatal financial decisions.
Personally, I cannot comprehend how our country is going to recover from the current economic disaster. A government whose financial well-being is predicated upon income derived from taxing Americans who are already in financial jeopardy will eventually fail.
As someone who has been uninsured and unable to afford any type of healthcare for 15 years, I would welcome a universal healthcare system. I agree that tying healthcare coverage to employment is failing. But letting our federal government develop a universal single payer healthcare system will also fail.
I feel that U.S. healthcare is such a mess, it will take decades to facilitate a system that works for us all. In the meantime, people are dying. My younger brother, born with spina bifida, was a Medicaid patient. He died because his doctor assured me that “absence” seizures weren’t life threatening. So, it’s not just profit-driven insurance companies who make decisions that cost people their lives. Americans suffer and die because of inadequate professionals as well.
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