To clarify: all of the major categories of government spending have been increasing relative to inflation. But essentially all of the increase in spending relative to economic growth, and the potential tax base, has come from entitlement programs, and about half of that has come from health care entitlements specifically.
The growth in health care expenditures, for better or worse, is not just a government problem: private spending on health care is increasing at broadly the same rates and is eating up a larger and larger share of economic activity. It’s an immensely complicated problem, but the arithmetic is simple: if we can’t slow the rate of growth in health care expenditures, we’ll either have to raise taxes, cut other government spending or continue to run huge deficits. Or we could hope to grow our way out of the problem, but health care expenditures may be impeding private-sector growth as well.
This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
The stimulus is running out, millions lose health insurance in 12 days as COBRA subsidies start to run out, unemployment benefits also start running out, all while the unemployment rate is rising. Foreclosures are up. At the same time out-of-money states are laying off hundreds of thousands of employees, beginning with teachers. (But hey, who needs teachers?) They are deferring infrastructure maintenance like roadwork and water/sewer systems and other public investments that employ people while creating the conditions that enable to economy to grow.
In fact, the stimulus is not only running out, but these state layoffs and other factors mean that government is now a net drag on the economy. The hope was that the stimulus would be enough to hold off the effects of the downturn and provide enough of a boost to get the “economic engine” running again. But for various reasons much of the stimulus was cut back or wasted on ineffective tax cuts, so as it runs out there are signs that the economy could sink back down. This chart shows government contribution to GDP growth, now negative due to state and local governments laying off employees and reducing infrastructure investment.
With all of this going on the DC “conventional wisdom” is that the economy has turned the corner, and no more help is needed. Wall Street and big corporations are making money again so it is time to move on and let regular people fend for themselves. The public wants jobs and a government that works for them, the DC insiders want government to stop spending on We, the People and focus on big corporations. Compare this DC “conventional wisdom” with the current jobs situation. While the economy has finally stopped losing jobs, it is not yet creating enough jobs even to keep up with new workers entering the labor force. Never mind putting unemployed people back to work. Following is a chart of job losses during recessions. This chart shows just how bad this recession is compared to previous recessions, and how we are nowhere near normal.
This “Wall Street and corporations are OK so our jobs here is done” sentiment combines with the right-wing drumbeat that anything government (We, the People) does is bad, (which translates to all decisions should be made by the biggest corporations) and the related drumbeat that any government spending on We, the People is a very bad thing after President Bush left us with a $1.4 trillion deficit. Congress, what’s the holdup?
There are efforts in the Congress to try to do something to help the situation for regular people. For example, the War Supplemental (this is in a war bill because bills for bailing out Wall Street, and for anything to do with military MUST PASS and do so within 72 hours) contains $23 billion to help keep states from laying off 300,000 teachers. It is meeting opposition as “another bailout.” That’s right, the very people who bailed out Wall Street are now blocking a bill helping teachers, calling it a “bailout!”
Then there is the Local Jobs for America Act. This act puts $75 billion into direct government hiring at the state and local level, creating or saving an estimated one million jobs. According to EPI, the $39 billion comes straight back from taxes and reduced unemployment payments!
Unemployment is about 10%. Millions are unemployed and are about to lose COBRA subsidies and unemployment benefits. States are laying off hundreds of thousands. Investment in maintaining and modernizing infrastructure is nil. DC elites think everything is fine. The disconnect between people inside and outside the DC bubble is growing almost as fast as the concentration of wealth at the top.
President Obama has talked about a bold, large scale vision for a new direction for the country. But Congress and the President are getting trapped in austerity budget thinking that won’t allow them to go in direction of stimulus and helping regular people. If there is to be no money because of an austerity budget then American competitiveness, the economy and the mood of the public can only get worse. Do the DC elites actually believe the public is going to reward this with votes? Sign up here for the CAF daily summary.
Here is something that the Democrats in DC need to understand: the “base” has not forgotten about health care with a public option. They have not dropped it. They have not run from it. Pass health care with a strong public option, or a LOT of people are not going to show up at the polls in November.
I am not advocating this, I am afraid of this. Out there in “the real world” people are not tuned into the finer points of the legislative process. ALL they know is that the Congress spent the year on health care, and nothing has been done. And the polls still show that the public option is what the pubic wants. None of this has changed, even if Washington is tired of it.
Meanwhile, if you are watching the CPAC convention of crazy conservatives this week you are seeing the people who are going to be in office if people are not given good reasons to show up and vote.
The Republican agenda is Tax Cuts, Torture and Triggering a depression. We really don’t want that. Democrats, get your act together and pass that health care! The country need to you get this done.
I said it the other day, and I feel the need to repeat it: the public does not yet understand that the government is about to order people to buy health insurance, with their own money. Yes, the government is about to order people to cough up hundreds of dollars a month each.
When the Republicans start using their toxic message-machine magic on this, and the public starts to understand that they are being ordered by the government to cough up a huge amount of money every month, Democrats had better have good hiding places, because things are going to get really bad out there.
This is the kind of policy that results when “centrist” Democrats give in to to the demands of Republicans and big corporations and the top 1% of the wealthy. Instead of just taxing the wealthy and corporations at reasonable rates and using the money to provide We, the People with health care — thereby vastly improving the economy for … the wealthy and big corporations — they instead come up with a scheme to order regular people to pay for health insurance because they don’t already have it because they can’t afford it.
Now it is December and the current health care reform bill orders everyone to buy very expensive insurance from the big corporations, with no public option and no Medicare buy-in. Even if you are in the income range where you receive subsidies you have to pay “only” 9 or 10% of your income, at a time when people are runnng up credit cards just to get by as it is. That is with the subsidies. Above that level you pay more.
The public hasn’t really tuned into this yet, but if this passes and Republicans start working their toxic magic (with of course little or no organized effort by Dems to counter their lies and sell it to the public) I expect this will be as unppular as Bush’s bailout of the big financial firms, which the Republicans have largely engineered the public into thinking was Obama’s, just as they did with the Bush deficits.
So I think that when all these factors come into play for the next election, passing this will turn out to be suicide for the Democrats who hold office. They don’t see that because at this point are in a mindset that the public wants them to just get it over with and pass anything. But this is bad beyond just the next election.
Let me say this about that.
People are discussing Health Care Mandates. The idea is that you require everyone to purchase health insurance. There – problem solved, you have Universal Health Care.
Health care doesn’t work unless everyone has insurance. Otherwise you are only insuring the sick, which is expensive. And the sick who aren’t uninsured aren’t insured so what is the point?
Hillary and Edwards are for it, Obama says he is against it. Which means, of course, his plan can’t work.
The reason this is discussed as an option at all is that everyone is afraid of the big insurance companies. The feel that if they don’t offer a plan that keeps the big insurance companies in the deal those companies will campaign against them,like they did against Bill Clinton after Hillary offered her plan in the early 90′s. So they come up with plans that depend on pumping money to private insurance companies.
Of course, the big insurance companies are going to work to undermine a Democratic President no matter what, but the candidates have to pretend this won’t happen… otherwise they would have to offer the dreaded Medicare-For-All plan that every other country in the world has, and works, and covers everyone, and costs so much less…
Mandates require us to give large amounts of our money to corporations. Cool! My wife and I currently pay about $1200 a month for health care for two people. Imagine thinking you can get elected by offering a plan that requires everyone to give $1200 a month to corporations!
This all shows that the candidates are far more afraid of offending the big corporations than of offending the People.
The AFL-CIO, AFSCME, SEIU, MoveOn.org, Americans United for Change, USAction, and True Majority are going to spend millions of dollars running an ad against targeted Republicans urging them to override President Bush’s veto of SCHIP, the child health coverage bill. The ad says the candidates are targeted because they support “Billions of Dollars for Iraq War, But Veto for Children’s Health Care”
My problem with the ad is that it does not teach a larger lesson. This is “a teachable moment.” People are upset that President Bush is vetoing this bill, but they do not understand the deeper ideological principals behind what is happening to them. This is an opportunity to teach people that conservatives believe in a you-are-on-your-own, dog-eat-dog philosophy and progressives believe we are all in this together for each other.
The ad says “George Bush and his backers would rather send half a trillion to Iraq than spend a fraction of that here to keep our kids healthy.” Even by changing “and his backers” to “and the conservatives” they could have let people know that it isn’t just Bush and it isn’t about particular politicians, it’s the conservative ideology that is hurting them. This issue is about differences in philosophy between conservatives and progressives.
But instead of teaching the public a lesson about what is happening to us all, this coalition will spend millions running this ad against individual politicians, and in the end the money will literally just go up in the air(waves) and nothing will remain behind.
A letter-to-the-editor titled, “Single-payer plan is the way to go” in the San Jose Mercury News this morning reminded me to keep this drumbeat going. PLEASE stop saying “single-payer” and start saying “Medicare For All.”
NO ONE KNOWS WHAT “SINGLE-PAYER” MEANS!!! I was talking to someone last week who thought “single-payer” means you have to pay all your medical bills by yourself with no help. That’s what it sounds like it means, and no one understands what it means otherwise, so why would anyone think it is a good thing? But everyone understands what Medicare is, and loves it, so why not just say “Medicare For All?” Sheesh!
…Under a single-payer system, the government has sole control over health care coverage, so it controls how and when money can be allocated to health care expenses. With this system, government bureaucrats will be charged with saving money for the government – not patients’ lives. The current health care system is in need of reform, but a single-payer system is not the cure for universal access to proper coverage. We need to seek alternative solutions, such as free-market competition, and not assume government-run care is in our best interest.
This is an example of the thinking that sets in after years of anti-government propaganda.
So how does this letter read if you think of government as citizens banding together to take care of each other and get things done?
…Under a single-payer system, the people have control over their health care coverage, so they control how and when money can be allocated to health care expenses to best benefit the public. Compare this to the current system, in which corporate accountant bureaucrats are charged with saving money for the company – not patients’ lives. … We need to corporate-run health care, and should not assume publicly-run care is in the public’s best interest.
The public wants health care. Democrats are trying to bring health care coverage to more people. Republicans understand this will cause more people to appreciate the value of government, so they are trying to block efforts to bring health care coverage to more children. Also, government health care is much more efficient than corporate insurance programs. Which means cronies don’t make big profits.
This is what Republicans in government means to your lives. White House moves to limit health coverage for children,
The Bush administration, continuing its fight to stop states from expanding the popular Children’s Health Insurance Program, has adopted new standards that would make it much more difficult for California, New York and other states to extend coverage to children in middle-income families.
… After learning of the new policy, some state officials said Monday that it could cripple their efforts to cover more children and would impose standards that could not be met.
Michael Moore’s movie ‘Sicko’ documenting America’s health insurance crisis is likely to incite strong grassroots demand for a “single-payer” Medicare-For-All type of solution. So the Washington consultants/appeasers are at it again.
From the article, ‘Sicko’ leaves top Democrats ill at ease
Stoking the passions of rank-and-file Democrats for a government takeover of the healthcare system amounts to political folly, respond some liberal veterans of Washington’s healthcare battles.
“To presume that the private sector is going to sit idly by to see the destruction of private coverage I think is a misreading of reality,” … “I think the presidential candidates understand that if healthcare reform is going to have a chance of success, it will require bipartisanship and a balance of public and private coverage.”
Conventional Wisdom thinking is that you have to include private insurance companies in any plan, or they’ll put so much money and effort into opposing your plan – and you – that nothing can pass. In the 90′s the Clinton administration offered a comprehensive health care plan that involved private insurers instead of a “Medicare-For-All”-style national health plan, hoping to ward off industry opposition. … And of course the private insurance companies did oppose the Clinton plan anyway, putting so much money into opposing it that it never even came up for a vote.
.. So here is some news for Democrats who are offering health care plans that offer tribute to private insurance companies: They are going to oppose your plan.
The logic seems to be that if we appease them, they will compromise. This ignores the reality – they want it all.
“Medicare For All” is simple to understand and implement. On this subject Ezra Klein wrote,
That’s why Medicare-for-All is such a great banner. Medicare happens to be a very good, though deeply underfunded program. It keeps costs down better than the private sector, it enjoys sky-high satisfaction ratings from those on it, its administrative costs are dirt cheap, and so forth. … It’s just normal health care that the government pays for. Simple as that.
Better yet, Republicans can’t demonize the idea because it already exists and everybody’s parents and grandparents use it.
And if companies complain about all the jobs that will be lost – what they are saying is that the private sector is less efficient than a government solution. Medicare’s overhead is a fraction of the insurance companies.
It is time. It’s simple. Let’s expand Medicare to cover everyone.
There is a move to require companies to pay for sick days. Conservatives say this is “Socialism.”
If basic human rights is “Socialism” then I guess I’m a Socialist! How about you?
In Europe people get several weeks paid vacation each year – by law. They get generous pensions and fully-paid health care for everyone.
What sorts of things should we, the people, require of the companies we, through the laws we pass, allow to operate? Who is our economy FOR? Discuss.
In California two of the several propositions are to tax oil companies to fund research into alternative energy and to tax cigarettes to pay for health care.
So the tobacco and oil companies have paid for a flier that has been mailed to registered Democrats telling them that the Democratic Party opposes those propositions. AP Wire | Democrats angry over flier suggesting they oppose oil tax measure.
Leading Democrats joined supporters of Proposition 87, an initiative seeking to fund alternative fuel research by taxing instate oil production, to publicly distance the party from the flier, which was mailed to 4.2 million households.
The so-called Voter Information Guide for Democrats endorses Democratic candidates running for statewide offices. But it also urges voters to defeat the oil tax measure and another initiative seeking to boost taxes on cigarettes to fund health programs. Both initiatives are supported by the California Democratic Party.
I’ll bet that things like this are happening all across the country. It is time to put corporate executives in jail for things like this. And it is time to get corporations OUT of our politics.