The passage of the health care demonstrates the ways in which economic crises create opportunities to expand the power of government, often in ways that have little connection to any effort to alleviate the crisis itself. Back in the fall of 2008, I expressed my fear that the combination of an economic crisis, political ignorance by voters, and unified Democratic control of the federal government would lead to a vast expansion of government if Obama were elected. White House Chief of Staff Rahm Emanuel famously said that the Democrats shouldn’t let “a serious crisis go to waste” because a crisis represents “an opportunity to do things you could not do before.”
I. Once Again, a Crisis Facilitates the Growth of Government.
Obama and the Democrats began to realize my expectations by passing a gargantuan “stimulus” bill and pushing a massive expansion of government control over health care, as well as promoting other major increases in the size and scope of government. But recent Republican political victories, especially Scott Brown’s win in Massachusetts, led many people to think that the health care bill would fail and the expansion of government might come to a halt. I had to admit that I had underestimated the political constraints inhibiting the administration. But I still thought that Democrats might be able to pass the bill by getting the House to adopt the proposal previously passed by the Senate – which has indeed happened.
The health care bill will now take its place with numerous Depression and wartime policies that expanded government in ways that would never have been possible absent the crisis, but which had no real connection to alleviating it. Absent the economic crisis, the Democrats would not have won such a sweeping victory in 2008, nor would Obama have had such an enormous reservoir of initial popularity to invest in pushing the health care bill through. As it turned out, the Democrats will have needed almost every bit of their huge crisis-created congressional majority in order to make up for defections in their own ranks.
II. Crisis-Enabled Measures that Make the Crisis Worse.
Whatever its other merits, the heath care bill does little if anything to alleviate the economic crisis that made its passage possible. Indeed, it may well end up exacerbating the crisis because it includes an employer mandate requiring any employers with more than 50 employees to either provide health insurance that meets various federal requirements or pay a $2000 fee per employee, if any of their employees receive federal health care subsidies. You don’t have to be a labor economist to predict that this increases the costs of hiring workers, and therefore is likely to increase unemployment or at least inhibit its reduction, as may already have happened under Massachusetts’ similar plan.
This too is not a new pattern. Many government-expanding policies enacted during the Depression and other past crises also exacerbated their effects. For example, the National Recovery Act – the centerpiece of the initial New Deal – significantly increased unemployment and raised prices for consumers. Later New Deal policies exacerbated unemployment in similar ways. The Agricultural Adjustment Act, famously upheld by the Supreme Court in Wickard v. Filburn, was a scheme intended to raise food prices at a time when many poor families were already having trouble making ends meet or suffering from malnutrition.
In most of these cases, political ignorance likely contributed to the passage of massive expansions of government that could actually make the crisis worse. Voters have incentives to be rationally ignorant about policy issues, and often don’t realize that proposals advanced in a time of crisis may actually exacerbate it or benefit narrow interest groups at the expense of the general public. Unlike much of the New Deal legislation, the health care bill has become quite unpopular. But public opposition would likely have been much stronger if more people realized that it was likely to increase unemployment, at least in the short run.
III. Will the Health Care Bill Become Permanently Entrenched?
The health care bill is also similar to previous historical examples of crisis-enabled legislation in so far as it will be extremely difficult to reverse. Sixty-five years after the Great Depression, we still have the kinds of perverse agricultural cartels created by the AAA, as well as numerous other dysfunctional policies first sold to the public as efforts to alleviate the Depression.
By creating a wide range of new entitlements and interest group payoffs, the health care bill is also likely to become entrenched over time, and even increase in scope. For example, the mandate requiring individuals to purchase insurance will create a ratchet for further expansions of government, as various interest groups lobby to increase the range of conditions against which people are required to buy insurance. Even if the Republicans retake control of Congress in the fall, they are unlikely to be able to repeal the bill in the face of Democratic opposition and a veto by President Obama. By the time a Republican president might be elected in 2012 or 2016, the new entitlements created by the bill will be sufficiently entrenched that they will be even more difficult to repeal or even limit – just as it has become extraordinarily difficult to constrain Medicare and Social Security.
Ultimately, the political lesson of the health care bill is that the combination of crisis and single-party control of the White House and Congress leads to massive government growth even in a situation where the proposal in question faces public skepticism and unified opposition by the minority party. I don’t claim that this by itself proves that the bill is a bad policy. But it does teach an important lesson about the dynamics of government in times of crisis.
UPDATE: The original version of this post went up just a few minutes before the bill passed. I have changed the language to reflect the fact that the House has now actually voted for the Senate bill.
Anonsters says:
You conveniently left out the part about how the previous government unified under the Republicans was widely perceived to be the root of the various crises besetting the government.
That, to me, means that there will naturally be a larger margin of appreciation for the new single-party-dominated government.
March 21, 2010, 10:41 pmDilan Esper says:
Professor, THE WHOLE WORLD was in depression in the 1930′s when the NIRA was enacted for a bit over a year before getting struck down. And yet you continue to delude yourself into thinking that the NIRA had something to do with the length of a global depression.
Amazing how ideology allows us to lie to ourselves.
March 21, 2010, 10:47 pmRicardo says:
Prof. Somin, regarding your implication that fiscal stimulus was somehow unjustified, have you looked at any of the empirical evidence on this? Brad DeLong has a nice roundup of the evidence here. Do you have a rebuttal to any of this empirical evidence?
March 21, 2010, 10:54 pmDougInSanDiego says:
There exist few people outside the Republican Central Committee who would want to claim that the last administration – at least during the period when the GOP also controlled Congress – was an abomination to fiscal responsibility. That’s ironic given the education of the President and the host of experienced business people he surrounded himself with. Perhaps you are more correct than you intended when you mentioned “single-party-dominated government” in that there may be, in essence, but one party active in the country.
That notwithstanding, it is disingenuous to lay blame for the calamity on the doorstep of the GOP. War spending – the one element that may be more the responsibility of the GOP than the Dems – is a very minor element. Certainly a significant amount of war-related spending occurred, though that is puny compared to faux stimulus packages and the like. Moreover, wartime spending tends to stimulate real industrial output – perhaps in a sector you despise, but in a real sector nonetheless. Subsequent huge spending programs have not had any similar benefit to the economy, having stimulated only campaign contributors and want ads for yet more government employees – neither of which benefits the economy in any significant way.
Certainly the real estate bubble and collapse – very similar in nature to the tech bubble and collapse of the 1990s – was the beneficiary of miscues and outright corruption more of the Dems than the GOP. The one caveat to that is the part played by the investment banks – but, keep in mind that this group of players is the purest form of capitalists in existence and is uniquely apolitical. Witness the perverse effort by Goldman Sachs in founding the carbon trading exchanges despite clear evidence the world is not necessarily doomed, carbon reductions may be irrelevant to the future, and rampant graft may be the driving force behind the entire ‘movement.’
March 21, 2010, 10:57 pmGV says:
I don’t understand how you can claim the health care bill is only possible because of the economic crisis. Health care reform has been popular for years, and Obama made it an important part of his election campaign. Indeed, as many have noted, when the public is told what the public option actually is, they are for it. (See, e.g., here.) If anything, the economic crisis has precluded the type of reform Obama otherwise would have preferred — i.e., a health plan with a public option — because the Republicans have been able to argue that we can’t afford the public option right now.
Of course, as you note, most voters are ignorant about politics, nearly all of the details about our health care system, and the pros and cons of reform. But all of that is a different question.
March 21, 2010, 10:59 pmOrin Kerr says:
Ilya,
I’m not sure the health care bill counts as something “crisis enabled.” Health care reform has been a Democratic party priority for a long time. It was a big priority for the last Democratic President, Bill Clinton, but he was too weak to enact it. It then became a big priority for the present Democratic President, Barack Obama, who just barely was able to pass it after a long period of trying even though he enjoys a Democratic majority in the House and Senate. As far as I can tell, the case for the legislation was made on the ground that it would be a good thing, not that it would alleviate a specific crisis. In light of all of this, I tend to think the real driving force behind the legislation is the 2008 election, not any perceived or real “crisis.”
March 21, 2010, 11:01 pmAnonsters says:
Orin Kerr ridiculously suggests that elections have consequences.
Pshaw, I saw.
Puh. Shaw.
March 21, 2010, 11:03 pmBill Quick says:
Ilya, I don’t believe any significant entitlements take effect until after 2012. Just the taxes to pay for them.
That might make repeal – and an Obama defeat – significantly easier. I’m already assuming a GOP takeover of the House this fall, and a viable chance at the Senate, as well.
March 21, 2010, 11:03 pmMahan Atma says:
What, like the morons screaming about “death panels”?
Hard to imagine a more politically-ignorant belief, isn’t it?
March 21, 2010, 11:04 pmGV says:
Doug wrote, “That notwithstanding, it is disingenuous to lay blame for the calamity on the doorstep of the GOP. War spending — the one element that may be more the responsibility of the GOP than the Dems — is a very minor element.” At least according to one estimate, war costs are approaching one trillion dollars. Perhaps that’s a bit high — I don’t know — but it’s not “disingenuous” to claim that our war spending has dramatically hurt the economy. And while I understand you want to fight against the idea that the Republican party is solely to blame for the poor shape of the economy, isn’t it a bit much to claim nearly every economic woe we are currently facing is the democrats fault? At the end of the day, President Bush controlled the budget for eight years.
March 21, 2010, 11:05 pmBill Quick says:
I think it’s quite obvious that elections have consequences. In this case, I suspect that the consequences of the 2008 election will, in the long run, be dreadful for the Democrat party.
March 21, 2010, 11:06 pmAnonsters says:
Well, that’s the beauty of America.
We’ll find out, won’t we?
March 21, 2010, 11:09 pmMahan Atma says:
What’s going to happen when all those people find out grandma isn’t going to be taken away by death panels, and Obama hasn’t become the next Hitler?
It may just be possible that the Republicans have overplayed their hand on this one you know…
March 21, 2010, 11:10 pmOperationCounterstrike says:
I would argue that health care has become one of these areas like national defense, where the heavy hand of government is necessary because the market simply is not suited to handle the problem.
Sick people do not, in fact, have freedom to choose whether or not to get medical care. So the most basic reqirement for the free market to work in this area is unmet.
This was not a temporary crisis like the near-collapse of 2008; this was an intrinsic problem reaching crisis levels from which it could not be expected to recede.
March 21, 2010, 11:12 pmBoss says:
The state hypes a crisis and creates a worse one. The crisis of 2008 has very little to do with the policies of 2009 and 2010, but these policies have a great deal to do with the bigger crises to come. The crisis of 2008 was, in itself, not big. The response to it, on the other hand, will be as big a crisis as we were told the first crisis, counterfactually, could have been. The real crises to come will live up to the hype with which the first crisis was sold. And its salesmen will continue to say that they help us, and that they keep us safe. They will not say that the state egged on the excesses that inflated the bubble to start with.
March 21, 2010, 11:19 pmKen Arromdee says:
What’s the war cost compared to the cost of a peacetime military (per year, not total compared to per year?) And what’s that compared to the entire budget?
March 21, 2010, 11:21 pmDr. Weevil says:
“Sick people do not, in fact, have freedom to choose whether or not to get medical care. So the most basic reqirement for the free market to work in this area is unmet.”
March 21, 2010, 11:22 pmThis argument is ridiculous. Healthy people (and sick ones) do not, in fact, have freedom to choose whether or not to consume solid and liquid nourishment. Ignoring one’s nutritional needs leads to a quicker and more certain death than ignoring the vast majority of medical problems. Yet somehow our free market system of competitive private food and drink suppliers works tolerably well. I find it difficult to imagine any system of government cafeterias and food warehouses working one-tenth so well.
Frank Drackman says:
Prohibition was overturned…
March 21, 2010, 11:24 pmcan you say 28th Ammendment??
Mahan Atma says:
They don’t have an antitrust exemption. And their product is a helluva lot less expensive. Also, the govt subsidizes them. And anybody in danger of starving can get food stamps.
You want me to go on?
March 21, 2010, 11:34 pmATM says:
Except we didn’t have unified control of the government by Republicans for 8 years. The four middle years, which were the best years, had unified control. The first two years, the Democrats gained control of the Senate because of Jeffords, and the last two years they controlled both houses. So the Democrats have controlled the House for almost 4 years of the last 10 years, and the Senate for almost 6 years.
March 21, 2010, 11:35 pmAnonsters says:
And it tastes great and is less filling.
March 21, 2010, 11:36 pmRicardo says:
Sure, the issue is risk management. Everyday when you wake up in the morning you have a pretty certain idea of what your food expenditure will be that day. Even if you miscalculate, you won’t be that far off. By comparison, you never have a guarantee on any given day that you won’t face a $10,000+ medical bill after being hit by a car or having your appendix removed. A fairly large chunk of medical expenses in the U.S. are attributable not to routine care but to a relatively small number of chronic cases and acute emergencies.
That’s why we have insurance. But the insurance market does not work properly when many people opt out as that creates adverse selection and raises the price of insurance. Additionally, since we kick people off their parents’ health coverage at age 25, someone with a pre-existing condition at that age who cannot get employer-sponsored health coverage automatically becomes a charity case. No private insurer is going to cover him or her.
March 21, 2010, 11:49 pmOrenWithAnE says:
Doesn’t look very viable to me.
March 21, 2010, 11:53 pmChris I says:
What a laughably ignorant post. Professor Somin embarrasses himself with this nonsense.
March 22, 2010, 12:00 amAlex says:
You did read the Congressional Budget Office report, right? Just checking, because it says that the bills will reduce deficit over the next ten years.
March 22, 2010, 12:01 amOperationCounterstrike says:
Dr. Weevil, the food market is not VERY free. From production to final sale to the customer it is very heavily regulated by government.
March 22, 2010, 12:02 amOperationCounterstrike says:
Also, because of the specialization required to deliver health care, the market in health care is intrinsically oligopolistic.
It’s wrong to call this a government takeover of health care–it’s an expansion of already-existing government presence IN health care. FDA is a government agency, remember? And it decides which drugs docs are allowed to prescribe.
March 22, 2010, 12:06 amG. May says:
Re: Anonsters –
You’re conveniently leaving out several facts in your little trolling effort here.
Let me see if I can offer up something equally devoid of careful consideration – the economic collapse didn’t occur until after the Democrats took control of congress. There, see how easy that was? It really doesn’t take much to spew out that sort of partisan nonsense now does it?
[sarc]
Shoot, let’s keep going! Yeah, the Democrats were all over financial reform when they took over weren’t they? I mean, I’m sure it was all over the media how they recognized the impending doom and were busy crafting legislation into the wee hours of the morning only to have the evil George “Lameduck” Bushitler stomp their hope and change into the ground right after he recovered the One Ring. I’m sure I must have just missed that bit of reporting when I got up to go to the restroom or something.
Yes, I can see it now: Barney Frank and Chris Dodd leading the charge up the regulatory hill armed with all their ethical wherewithal to assault those eeeevil Rethuglican policies. No, I’m sure I dreamed that little bit about Rahm Emmanuel’s days-long stint as one of those eeeevil fatcat (thanks President Obama for using the term) investment bankers who pulled in $16 million not long before the fatcat lawyers comprising the political class deemed it chic to lecture us serfs about spending habits.
People were so disenchanted with Republicans that deep blue Massachussetts elected one. Democrats are so well-perceived that they’ve done outright awesome in recent elections haven’t they? Our media-anointed President is still enjoying his lofty poll numbers in all his Democratic glory isn’t he?
[/sarc]
Most people aren’t so blindly partisan as you. Only partisans have a strong favorable view of their team. Most people don’t really have a favorable view of either party quite frankly, and they’re quite justified in that opinion.
March 22, 2010, 12:08 amDesiderius says:
We now have two conservative parties, fighting among themselves over which parts of our glorious past to conserve, forgetting that which engendered the glory in the first place. The Old Deal rides again.
Short-term political victories will not cure such ills. It will only be when progressives come to recognize how inimical to true progress the concentration of power in state monopolies (even such power ostensibly democratically controlled) has ever been and continues to be that new glories will be possible. Let’s not kid ourselves. The most likely result of this vote will be an accentuation of the crisis, with Euro-style nationalization riding to the rescue within the decade.
This result is not liberal in any sense of the word.
Attempts to avoid that result involving the exertion of cultural dominance by recruiting allies among the less liberal may actually impede that recognition from happening, as tribal instincts distract progressives from the self-examination of their doctrines that is already overdue. However “out-of-touch” our progressive leaders, and throughout our institutions our leaders are overwhelmingly progressive; in the end, examining alternatives to fighting City Hall seems prudent.
March 22, 2010, 12:09 amDougInSanDiego says:
Now THAT is funny.
Wait – are you being SERIOUS?????????
You actually BELIEVE that????????????????????????????????
March 22, 2010, 12:12 amMIke P Wagner says:
Prognosticating the future is notoriously difficult. But I suspect that – for better or for worse – the passage of the “reform” bill will be a powerful tool for the Dems in the fall. The most effective tools the Republicans had in galvanizing their base were all chimera – death squads, socialism, “Grandma’s not shovel ready!” etc.
The Republicans could not argue fiscal prudence, given their recent history. And it’s not clear that anyone would have listened.
That means that this fall, the Dems will have some very popular provisions (pre-existing conditions, cancellation) to play against the Republicans who can only scream “Socialism!” – to people who love Medicare.
Note that I am not for or against the legislation, but I do think it’s the more or less inevitable consequence of the Reagan era unfunded COBRA mandate that public hospitals provide care without regard for a patients right to pay.
March 22, 2010, 12:14 amDougInSanDiego says:
G. May
That actually WAS pretty funny!
March 22, 2010, 12:14 amAndrew J. Lazarus says:
I just love when conservatives post without a shred of fact behind their claims. For example, let’s check in on the cost of the Iraq and Afghanistan wars!
I found it remarkable from the get-go that we continued irresponsible tax cuts while going to war, and, mirable dictu, the conservatives who had financed the entire war on credit without the slightest interest in its effect on the deficit rediscovered balanced budgets as soon as Democratic-preferred programs could be constrained.
But why stop at the Iraq War? How about Medicare D? You’ll remember, the Republicans who raised so many procedural objections this week kept the vote rolls open an extra three hours so that enough defectors could be threatened or bribed to change their votes. Leave the process aside, though: what’s the effect of Medicare D on the budget compared to Obamacare? Let’s check with conservative Bruce Bartlett writing in “Forbes“.
I suppose Medicare D at least had the “benefit” of letting Big Pharma and Big Insurance gorge at the Federal trough, which one suspects is the new meaning of Free Market: big business gets taxpayer money for free.
It may be that Obamacare is bad policy, although it is truly hard to imagine anything worse than the mess we have now, with insurance costs crippling both American entrepreneurship and American families, but please don’t give us this nonsense about how expensive it is. Compared to pet GOP projects, it is, frankly, a bargain.
March 22, 2010, 12:17 amAnonsters says:
Was it? I didn’t bother to read anything he wrote after “trolling effort,” because had he bothered to read the second paragraph, he would’ve seen I was making a somewhat serious point.
After all, I said “was widely perceived to be,” not “was.” Evidence of said perception? The election returns in 2006 and 2008. Duh.
But the kneejerk reaction is telling, nonetheless.
March 22, 2010, 12:20 amDougInSanDiego says:
GV
So lets say the war cost IS a trillion dollars (spread over, what — 8 years?
Now compare that to the current level of spending.
As I said – trivial.
Let’s also remember that war spending involves large material and equipment purchases. THAT, GV, is a REAL stimulus. Sending $700 Billion to crony buddies under the guise of a “Stimulus Bill” does NOT stimulate the economy.
March 22, 2010, 12:21 amDougInSanDiego says:
Yes, it was.
See what happens when you cover your ears and shout, “La la la la la – I CAN’T HEAR YOU!”
March 22, 2010, 12:23 amG. May says:
Because the CBO hasn’t been gamed at all now has it? When the NYT stops carrying your water for you as a Democrat, you’ve got problems.
March 22, 2010, 12:23 amrpt says:
Doug, I have to commend you; that is a devastating rejoinder. Of course you have not read the CBO Report, have you?
March 22, 2010, 12:25 amorca says:
In fact Gallup has him back up at 50% today…same place he’s been for the past 8 months.
March 22, 2010, 12:25 amAnonsters says:
No, because, um, I don’t read with my ears…
March 22, 2010, 12:26 amrpt says:
All of the “crisis opportunity” commentary is just an attempt to be the anti-Naomi Klein. There is no historical basis for such analysis from this direction, as Prof. Kerr points out.
March 22, 2010, 12:28 amRicardo says:
That’s because that is the wrong comparison. Not a single penny of wartime spending was financed by an increase in tax revenue — most of the cost of the war simply goes towards increasing the national debt. Now are you really going to claim that $1 trillion (or even $500 billion) of debt is “trivial”?
Because the Pentagon never, ever wastes money. But at least you embrace the idea of fiscal stimulus on principle. So how do you think the $700 billion should be spent differently?
March 22, 2010, 12:30 amAndrew J. Lazarus says:
Except neither Obama nor anyone else is suggesting an annual near-trillion in stimulus, so your comparison is illogical. But then, what can one expect from someone who thinks any company that wants to sell a laptop in New York has to incorporate in New York (see other thread)! Moreover, the Obama stimulus, for better or worse, also entailed construction projects and other programs with multiplier effect. Given how much of the money sent to Iraq was merely stolen, I suggest you be a little more careful about ridiculing how government money is spent.
March 22, 2010, 12:33 amG. May says:
Shocking that the Savior Himself has had to fight his way up to 50%.
March 22, 2010, 12:35 amorca says:
Good enough to keep him in office another seven years.
March 22, 2010, 12:40 amG. May says:
Why be careful ridiculing the government? It’s not like the government has been very careful with the stimulus money.
March 22, 2010, 12:41 amJavert says:
Medicare payments to both doctors and hospitals will be but dramatically, as will approved medical procedures and drugs. More hospitals will become insolvent; more doctors will refuse to take medicare patients, and will quit. Wait times in doctor’s offices and at hospitals will increase. The sick will find it increasingly difficult to find quality care in a timely fashion. Some will die, needlessly. Companies will not be able to hire as many employees because of this legislation’s tax. Some of those unemployed — who the “humanitarians” seem to care so much about — will be unable to afford drugs and doctor visits. Some will be sicker longer; others will die, needlessly. Because of the statist controls in this bill, insurance companies will have less capital to cover medical costs, and will be forced — because of this legislation — to reduce approved procedures. Other Americans will be forced to buy insurance that will provide health care that will treat them worse than a family dog.
The briefer, and more eloquent version, for all this is: death panels.
March 22, 2010, 12:41 amG. May says:
Riiiight. Enjoy the rest of your evening.
March 22, 2010, 12:43 amrpt says:
What does this mean? Is it some kind of tea party racial slur code? No Christian would use such language.
March 22, 2010, 12:44 amrpt says:
As you must have enjoyed yours.
March 22, 2010, 12:45 amrpt says:
Are you moving to Canada? Don’t you remember that all of this happened after Medicare passed?
March 22, 2010, 12:47 amorca says:
If my grin gets any bigger I may have to seek medical attention…
March 22, 2010, 12:48 amG. May says:
I don’t think you’re that obtuse and I’m sure no Christian would use such language. I’m sure your assumptions about me would be far more self-gratifying if you just went ahead and called me a teabagger.
My evening was mediocre, thanks for your clearly genuine concern. Enjoy the rest of yours too.
March 22, 2010, 12:51 amrpt says:
And your doctor visit will be covered!
March 22, 2010, 12:52 amG. May says:
Well played indeed.
Now, I’m really out of here.
March 22, 2010, 12:53 amRicardo says:
So I take it that you are in favor of increasing taxes to cover the cost of Medicare? Or do you not realize just how quickly Medicare expenses are projected to increase over the next 30 years? The CEA estimated that by 2040, Medicare and Medicaid combined would make up 15% of GDP. Without cost control, the U.S. will have Swedish-style tax rates by 2040.
March 22, 2010, 12:58 amgeokstr says:
I daresay, neither have you. And as a CPA with 35 years of accounting and financial reporting experience with major corporations, I’ll also say I understand a lot more than you about how the D’s played with the bill to make the CBO numbers look much more favorable than they really are. Not that it would make any difference to you if you did know more, because the ends justify the means for leftists, honesty, integrity, honor, ethics and morals be damned. If a corporation were to try anything like this, their officers and directors would be in prison already.
There was so much trickery, double-counting, revenue/tax front-loading, rosy scenarios, and other dishonesty in the bill in order to get that CBO score, but given that it is the legacy of this particularly dishonest president, that’s not really surprising.
And even with the rosy conclusion that it will reduce the deficit, it still has an additional cost of $940 billion that the economy can ill afford. And that does not even include the hundreds of billions in additional medicaid costs off-loaded onto the states at a time when they’re just as bankrupt as the federal government.
Leftists really do think you can strangle a few more eggs out of the golden goose if they just squeeze its neck a lot harder, don’t they?
Did you even bother to read the NYT link provided to you by G. May at 12.23? No, of course not, silly of me to even ask. And they’re not the only ones – there have been a raft of analyses showing how much slimy accounting was put in this bill.
Here’s a beaut of a quote from it:
But dishonesty and the left are conjoined at the hip.
March 22, 2010, 1:05 amSG says:
And your doctor visit will be covered!
Yup, it will be covered the same way it always was, if you purchased coverage. Except now you don’t have a choice in the matter.
I still want to know, as I asked in another thread, where did the notion come from that if we all pass the bill for our personal health consumption to the person to our left, the total cost will go down. Hasn’t anyone with a (D) after their name ever gone out to dinner with a group? When you agree ahead of time to split the check evenly, everyone orders appetizers and nice bottles of wine. When you agree to pay for what you ordered, all of a sudden some people are OK with glasses of water.
Health insurance reform has been handled far more dishonestly than anything leading up the Iraq War. I hope never to hear any progressive/liberal/leftist/Democrat ever mention that again although given the level of integrity that has been demonstrated, I don’t expect it.
March 22, 2010, 1:05 amChristopher Cooke says:
the one point on which I agree with Prof. Somin is that this piece of legislation will not be overturned. Like Medicare, and Social Security before that, this new program will prove to be popular and not be repealed. I think this is why the Republicans were fighting so hard to defeat the bill. They knew this was their only chance.
March 22, 2010, 1:13 amrpt says:
Please provide the details. You have reminded me how much fun it was to depose the know-it-all guys from E&Y and Seidman.
March 22, 2010, 1:13 amCato The Elder says:
Does anyone ever notice how the only people mentioning “Glenn Beck” and “death panels!”, repeatedly in fact, are liberals and leftists? Sarah Palin’s Facebook post was 8 months ago, at least, and scarcely any Republican here has defended the purported “misinformation” or used it rhetorically. Yet the endless haranguing continues. Doesn’t the culture of victimization just become mentally exhausting after a while?
On the legislation: it will fail in its efforts, as the Democrats have refused to learn from Massachusetts’ example. Annual premium growth rates will spike and small businesses will be forced out of business by mandates they can’t afford, as they have in Mass. Thus I ask, keeping in the vein of the past 8 years, shouldn’t we Republicans hold up this bill as the Democrats’ own AUMF? If the utterly predictable comes true, aren’t they in fact guilty of the same recklessness they accused the Bush Administration of, the same Pollyanna attitude to the evidence? I think so. The sad thing is, even if the future shows beyond all doubt that the bill is a failure, I have a feeling it will have created so many dependents and structural frictions they will still have managed to force us to prematurely double down.
March 22, 2010, 1:14 amorca says:
Where was the Joan of Arc of the Republican party while this vote was taking place, BTW?
March 22, 2010, 1:23 amRicardo says:
1. When health insurance is voluntary, many healthy people opt out. Despite arguments to the contrary, this actually creates inefficiency since there are some healthy people who would like to manage risk who find health insurance is simply too expensive to be worth it. Others find they are denied coverage by overly-cautious insurance companies for specious reasons. These are the typical signs you are dealing with a market where there is imperfect information. See the classic Akerlof paper “The Market for Lemons” for the mathematical version of the argument. Kenneth Arrow also had some early work criticizing the market for health insurance.
2. Insurance companies have bargaining power that they can use to control costs. When you go the hospital and you have insurance, your insurance company is typically able to shave about 40% off the bill compared to what you would pay without insurance. This is simply overcharging and insurance companies are better at fighting it than individuals are.
3. We already pay about $40 billion every year to go toward the cost of caring for the uninsured. Again, having these individuals’ health costs covered by companies as in 2) will lower the cost of caring for the uninsured and shift it out of the government’s area of responsibility. Conservatives ought to be happy with this particular result.
March 22, 2010, 1:23 amAndrew J. Lazarus says:
I think you are overlooking SG’s assumption that in a perfect world as determined by his calculations, we would allow these people to suffer and die.
March 22, 2010, 1:30 amBecky says:
If you approach the health care system as a complex system, sort of like differential equations, even a slight change can effect the trajectory of the actual plan in practice.
I do not believe that the Mass. system is working to plan, and not in the good way. It is running short of money, cuts are being made to hospitals and drs, people have seen their premiums rise and access curtailed.
Our set of equations does not operate in a vacuum. Concurrently, public pensions are woefully underfunded.
In order to resolve health care, public pensions, state financial stresses, in addition to the impending SS, Medicare crisis, we have to have a very robust economy, something neither side is predicting that I know of.
Warren Buffet thought this should be scrapped because of the legislation’s inablility to address costs.
March 22, 2010, 1:30 amDougInSanDiego says:
Correct. I prefer to use just a little teensy bit of common sense about such things, and do not see the “deficit neutral” or “no new taxes” claims to be consistant with that.
Just a minor concern or 2:
Just HOW will the federal government suddenly be able to work more efficiently and so save $500 million?
Just HOW will the system incorporate a million, or 10 million, or 30 million … additional insurees without any extra cost?
Just HOW will one of histories largest brand new bureaucracies be paid for without increasing the cost of medical care?
Just HOW will a bureaucrat in Washington DC – even if paid 100% higher than an equally trained individual in private industry, and even if given the sweetheart of retirement plans, be capable of making decisions favorable to me about my health care – decisions better than those made by an insurance company bureaucrat?
Just a few lingering doubts, you might say.
March 22, 2010, 1:33 amDougInSanDiego says:
Buddy of mine ~~~~~~~~~~~~~
If these Chicago Mafia Thugs had simply gone after THAT problem, and proposed a bill costing $40 Billion – instead of the TRILLIONS this monstrosity will end up costing – heck, I’d have been a supporter even IF they didn’t improve any of the other ‘rising cost’ problems (just as the Mother Of All Bills does not improve any).
March 22, 2010, 1:43 amSG says:
1. [...] Despite arguments to the contrary, this actually creates inefficiency since there are some healthy people who would like to manage risk who find health insurance is simply too expensive to be worth it.
Yes, and if the mandate were for catastrophic care, you’d have a point. But it’s not – it’s for comprehensive care. And for the record, I would support a universal, public catastrophic coverage, with catastrophic defined on a sliding scale.
2. [...]When you go the hospital and you have insurance, your insurance company is typically able to shave about 40% off the bill compared to what you would pay without insurance. This is simply overcharging and insurance companies are better at fighting it than individuals are.
Yes/no/maybe. Ever negotiated with cash? I have and it works. You can often get Medicare pricing
That said, one reform I would have suported would be transparency in billing.
3. We already pay about $40 billion every year to go toward the cost of caring for the uninsured. Again, having these individuals’ health costs covered by companies as in 2) will lower the cost of caring for the uninsured and shift it out of the government’s area of responsibility. Conservatives ought to be happy with this particular result.
Again, if this bill were about catastrophic coverage, your point would be valid. But it’s not, it’s about comprehensive coverage. We’re mandating that people pre-pay for day-to-day medical coverage. I think that’s directly analogous to agreeing to split the dinner check ahead of time.
And to the extent that people haven’t purchased coverage because they can’t afford it, subsidized coverage doesn’t reduce the public cost of the uninsured, it just moves it upfront. Along with incentivizing people to consume more (raising the cost for everyone given that nothing has been done to increase the supply – we’ve only up’ed the demand and thereby increased the cost.
March 22, 2010, 1:43 amSG says:
I think you are overlooking SG’s assumption that in a perfect world as determined by his calculations, we would allow these people to suffer and die.
No, just you.
March 22, 2010, 1:44 amRicardo says:
Your question was framed generally and I answered it that way. It seems we don’t disagree on this point. I haven’t seen any detailed analysis of the final version of the bill and just what counts as a qualifying health insurance program. From what I can very roughly gather, the Secretary of HHS would be empowered to determine what health insurance plan qualifies. Do you have a particular source that confirms it will mandate “comprehensive” care?
Never needed to. This assumes you have the cash to begin with, though. The anecdotes I have read generally indicate your negotiating power falls when you do not have the cash to pay up front. Instead, negotiation tends to take the form of agreeing to a payment plan stretched out over 10 or 15 years rather than a reduction in the principal.
It is a basic fact that insurance companies have much more leverage over health care providers than individuals do. There was even an aborted attempt by doctors to unionize several years ago to counter the power that insurance companies have in determining their fees.
I’ll await more information on the explicit nature of the individual mandate and its maximum deductible requirements. In any case, as I said, your questions were generally phrased about how universal insurance could decrease overall costs and I gave you three reasons for thinking that it might — you don’t appear to disagree with the logic or the goal of universal catastrophic coverage.
You are right that sharing routine medical expenses would tend to push up overall spending on those routine medical expenses. But the problem here is that routine expenses are a small portion of overall medical spending. Fixating on this while ignoring the much larger problem of the ballooning cost of acute and chronic care doesn’t make much sense if your real concern is overall cost. Your complaint (assuming the bill does in fact mandate genuine comprehensive care, unlike the Massachusetts mandate) is that the bill isn’t perfect, not that it may not be an important step in reducing health-related expenses.
March 22, 2010, 2:36 amRicardo says:
Doug, $40 billion over 10 years is $400 billion. Since this bill does things besides subsidize health insurance for the uninsured (like plug the “doughnut hole” in Medicare Part D) of course the spending side of the bill will be higher than $400 billion.
I’m waiting for your detailed critique of the stimulus package and what the government should have spent the money on instead, though.
March 22, 2010, 2:45 amAmerican Psikhushka says:
Dilan Esper-
Professor, THE WHOLE WORLD was in depression in the 1930’s when the NIRA was enacted for a bit over a year before getting struck down. And yet you continue to delude yourself into thinking that the NIRA had something to do with the length of a global depression.
The world was a lot more insular at the time. Besides, even a fair number of mainstream economists agree that FDR’s initiatives prolonged the Great Depression.
Still waiting for your explanation on how Hayek was wrong about the connection between heavy central planning and totalitarianism. Note that some conservatives are claiming that the new health initiatives will require 16,000 more IRS agents to enforce. I’m not taking that estimate at face value, but thousands and thousands of new agents is certainly an expansion of the law enforcement and surveillance establishment, is it not?
March 22, 2010, 5:16 amNick says:
Obama said that it would alleviate a specific crisis. He said it, for example, on October 3.
“When I took office eight months ago, our nation was in the midst of an economic crisis unlike any we’d seen in generations.”
Enter our hero, the Politician, stage left.
“While I was confident that our economy would recover, we know that employment is often the last thing to come back after a recession. Our task is to do everything we possibly can to accelerate that process.”
And where was he going with this?
“This is something I hear about from entrepreneurs I meet – people who’ve got a good idea, and the expertise and determination to build it into a thriving business. But many can’t take that leap because they can’t afford to lose the health insurance they have at their current job.”
They’re entrepreneurs, but they don’t work for themselves? Doesn’t matter. The point is what’s next.
“Rising health care costs are undermining our businesses, exploding our deficits, and costing our nation more jobs with each passing month.”
So he made the link. He made the case.
As Pelosi did, too. “It’s about jobs. In its life, it will create 4 million jobs, 400,000 jobs, almost immediately.” Not just the IRS, I assume she had meant.
March 22, 2010, 6:02 amLenny says:
I for one will be very entertained if the price of group policies shoot up to the point where the $2,000 per employee penalty for non-coverage of employees is less than the cost of continuing the policy. I will get a good laugh as people start losing their health insurance and face the daunting task of paying for it on their own or paying the individual mandate penalty.
I work for the state government; my insurance is provided by state law. I work for a tax authority…my job will probably soon involve going after those people. I will be heartless; I will laugh when people tell me they can’t afford the insurance and can’t afford the penalty. I am from the government and I know what is best for you.
March 22, 2010, 6:13 amA. Zarkov says:
Obama wants to grant amnesty to from 11-20 million illegal aliens. Has the cost of covering these people been factored into the CBO analysis? I’ll bet not. Once those illegal aliens become legal residents they can sponsor their relatives– the chain migration effect. Something like 60% of Mexico wants to migrate to what they consider the northern part of their country, but we consider the South West. How can the US possibly afford to cover the hordes that will descend on this country to get free medical care? Even the Republicans for the most part don’t want to discuss this aspect of immigration. The fools think the Mexicans are going to come in and vote Republican. The stupid party.
March 22, 2010, 6:13 amsashal says:
nah, just a couple of fringe historical revisionists, which the modern radicalized extremist party -GOP gladly embraced.
March 22, 2010, 6:41 amSuper majority of mainstream economist know how FDR policies helped to get out of Great Depression and it was only one setback (1937?1938?), when he decided to listen to people like yourself and cut on stimulus, which has been corrected soon after….
sashal says:
Then we will go a to a single payer, the best system the modern world invented….
March 22, 2010, 6:48 amJust like Dutch, Germans etc……
Ideological rigidity about mythical dangers of socialism lurking in the improved health care coverage for the majority is not helping in the competitive modern world where the business competition from other countries is not stifled with huge medical costs for their employees
lenny says:
Single payer will be even more fun. People no longer have hope in government like they had in the 30s or faith like they had in the 60s. Single payer will be like the VA system, one that my veteran friends try so hard to stay out of.
Many of you are gloating over your political victory. This will be bad for the country and will cause much suffering. I will laugh at all the crying, even though I will be suffering too. I will laugh at the irony of it all.
March 22, 2010, 8:23 amDYSPEPSIA GENERATION » Blog Archive » Crisis, the Health Care Bill, and the Growth of Government says:
[...] Ilya Somin at the Volokh Conspiracy traces how we lose our freedom through a defective political process. [...]
March 22, 2010, 8:24 amInstapundit » Blog Archive » ILYA SOMIN: Crisis, The Health Care Bill, And The Growth Of Government. “Ultimately, the political… says:
[...] SOMIN: Crisis, The Health Care Bill, And The Growth Of Government. “Ultimately, the political lesson of the health care bill is that the combination of crisis [...]
March 22, 2010, 8:37 amA.W. says:
Gotta say i disagree. There was no crisis in health care. it was as manufactured as the “crisis” in global warming.
What this is, is an ideological belief that if they shift america to the european model, then democrats will control this place forever. nothing more complicated than that. And they are willing to turn this into a suicide mission to accomplish that.
March 22, 2010, 9:32 amDougInSanDiego says:
1. Perhaps you missed the part about the Mother-Of-All-Bills NOT covering a 10-year period?
2. Perhaps you missed the part about LIMITING the spending – i.e., NOT “plugging loopholes” simply because more spending can do so?
3. A ‘detailed analysis’ of the stimulus spending is easy: crony bucks to cronies of the Chicago mafia.
March 22, 2010, 9:37 amFury says:
We shall see. The polls – multiple polls – suggest that there is a majority of opposition to this health care bill.
Of course, the real measure will be what happens to people’s health care. Are there longer or shorter wait times to get in to see your doctor? Does you health insurance cost more or less than before? Those are the measures that people – voters – will use to assess health reform. If those measures are better than now, Dems will get all the credit. If they are worse than before, Dems will get all the blame.
March 22, 2010, 9:39 amAndrew J. Lazarus says:
If you didn’t work for the government (!) you might notice people are losing their insurance already.
March 22, 2010, 10:30 ammattski says:
Not gloating—not at all. The bill is imperfect, there will be justified criticism. And justified praise. But it’s a step in the right direction.
March 22, 2010, 10:40 amNRWO says:
Ilya: Wouldn’t your statement that, “this increases the costs of hiring workers, and therefore is likely to increases unemployment” be limited to businesses “with more than 50 employees”?
Based on your statement, it seems that burden will fall on larger (> 50 employees) rather than smaller businesses (<= 50 employees).
It hard to sort out the implications of the legislation, but a simple burden analysis would suggest that smaller businesses would have a competitive advantage (and this could, for example, provide additional investment in, and spur additional hiring by, such businesses).
March 22, 2010, 11:02 amsashal says:
Typical hyperbole from a diminishing GOP. The same kind of crap we heard about Social Security, Medicare and the Clinton Deficit Reduction plan. All of their hyperbole never came to pass b/c none of it was true. Reason #1 why the GOP is out of power today and the reason they’ll stay that way. Thank goodness.
March 22, 2010, 11:14 amJoe says:
You’re right, i can’t think of any highly specialized businesses. And since everything government touches grows and has nothing but sunny skies ahead (medicare, medicaid, social security); I think we should be much more liberal with allowing government to step in and making our lives so much easier.
March 22, 2010, 11:22 amMike P Wagner says:
It will be interesting to watch. While the overall bill itself was unpopular before it was passed, several of the provisions are – the pre-conditions aspect, and the cancellation protection. The costs won’t show up until long after the upcoming election.
I think that I recall that the popular provisions take effect immediately – if that’s in fact the case, then it looks like it’s engineered to help the Dems in the fall.
I expect the Dems to pound the popular provisions very hard this fall and to use the CBO report for cover on the deficit issues , and I suspect that it will be a successful strategy.
I consider it likely that the fall will have the Democrats running during an improving economy, the war effort in Iraq much wound down, and a Heath Care reform bill whose rewards come before the election, and whose costs come after the election (way after). I hope that I don’t need to say that the 1st two don’t have much to do with economic policy, but I think the Dems will benefit.
But you are correct that the truth table for a prediction lies in the future.
March 22, 2010, 11:22 amJoe says:
You’re right, i can’t think of any highly specialized businesses not owned by the government that witness to the value of a competitive, free market. And since everything government touches turns to gold and grows ad infinitum(medicare, medicaid, social security); I think we should be much more liberal with allowing government to step in and make our lives so much easier.
March 22, 2010, 11:24 amSDN says:
ATM, remind me again when the Republicans had a filibuster proof majority. Between the Copperheads and the RINOs, real measures such as tort reform never had a chance.
March 22, 2010, 11:42 amCalderon says:
But I thought the point was that the “crisis” drove the 2008 election. Because of the “financial crisis,” the Democratic party got abnormally large majorities in both houses of Congress, and it may have aided them in getting the presidency as well. With these large but temporary majorities, they were able to enact policies they would not otherwise have been to. In short, the 2008 election and the “crisis” were connected rather than separate.
March 22, 2010, 1:52 pmmooglar says:
I believe, as do many political observers, that the financial crisis and ensuing recession (along with a brilliant PR campaign, albeit filled with lies, by the GOP) far from helping the healthcare bill actually almost killed it. People without jobs care more about the economy getting back on its feet than about healthcare. I’ve heard many opine that Obama made a huge tactical error by focusing on healthcare during his first year when he should have been focused on the economy.
Also, there’s a great deal of evidence that the lack of interest in healthcare reform by those struggling in this economy would have killed the healthcare bill had Aetna and other insurance companies in California not decided to make those enormous rate hikes recently. The bill appeared quite dead before that happened.
So, I find it difficult to see how the financial crisis and recession helped the Obama administration in its pursuit of healthcare reform. I believe some of the commenters above, who noted that the healthcare bill doesn’t really do anything to help the economy right now, are exactly right. And that’s why the healthcare bill was hurt, not helped by the recession. Crises can be used as excuses to get things done that couldn’t be done otherwise, but I think there has to be some connection to what you do and the crisis you are using as an excuse. That’s why the Bush administration had to try so hard to convince the American people that Saddam was going to give a nuke to Bin Laden, because without a connection between the crisis (9/11) and what Bush wanted to do (invade Iraq), the country wouldn’t support it.
Cato the Elder wrote:
I can’t vouch for your experience and why or how you might think that’s the case. But I heard self-described Republicans and “conservatives” talking about death panels and the lot all day yesterday in the call-in on CSPAN while Congress was in session. I think you are (perhaps unintentionally) being disingenuous here.
The point of all that rhetoric about “death panels” and the like was to get average people (“politically ignorant,” as Somin would say) people to believe it. Glenn Beck and Sarah Palin and Grassley all knew there weren’t going to be death panels. They just wanted to get that meme out into the public consciousness to erode support for healthcare reform. Once people in diners and at their kid’s baseball games are all talking about “death panels,” there’s no longer any need for Glenn Beck et al to talk about them.
It’s just like how, after the Bush administration convinced 60% or whatever of the American people that Saddam had something to do with 9/11, they suddenly became reasonable again and stopped saying that. Because they didn’t have to anymore. It was out there. So, then you get to have your cake and eat it too: you’ve already gotten people to believe you, yet you can pretend that it isn’t your fault because you aren’t talking about it anymore. And because you say it isn’t true occasionally, to like a press club gathering, in a soft voice, instead of shouting to the rafters the way you did when spreading the initial lie.
So, while Glenn Beck et. al aren’t talking about “death panels” anymore, they, and you, know damned well that people are talking about them and still believe in them. So, when liberals bring them up as an example of how the GOP handled this debate and when liberals try to debunk those claims, and you say, “only liberals are still talking about that,” you are not being truthful, for one thing, and you are also using rhetorical tricks to keep liberals from being able to push back against those lies. Because those lies are still out there and liberals are far from the only ones talking about them.
March 22, 2010, 3:15 pmmooglar says:
There are a bunch of reasons why neither the Democrats nor the Republicans have gotten control over the deficit. If we continue to ignore them and waste our time claiming that “the other side” doesn’t really care about spending and the deficit but “our side” does, there’s really no chance of doing anything about it.
Look at the argument in these very comments up above. One side defending its spending policies, the other using those policies as an excuse for their own, on and on. The fact is that both parties care about fiscal responsibility when they don’t have charge of the purse strings and neither party cares about fiscal responsibility when they do. When Party X is out of power and Party Y is trying to move forward its agenda, of course Party X suddenly thinks we’re spending too much money. Because they don’t want Party Y’s policies in the first place, so why in the hell would they think they were worth paying for? So, suddenly, Party X wants to reduce the deficit and budget, in large part because it would hinder Party Y from implementing its agenda.
But then, suddenly, Party X gets into power. Wow! Do they take their avowed stance on fiscal responsibility seriously and cut the budget and deficit? No, of course not. Because they think their policies are important. And since they are important, they are worth paying for, even if we have to go into debt to do it. After all, it was just Party Y’s policies they didn’t want to pay for, ultimately. Those were definitely not worth the money. But Party X’s policies are, and so they decide (always) that they must get their policies implemented while they are in power and can, and that this overrides the need for fiscal responsibility.
Plus, Party X figures Party Y isn’t going to be fiscally responsible when they get back in control, so the budget’s going to get blown anyway, but only on Party Y’s policies. And, Party X figures that since Party Y spent all that money on dumb stuff when they were in charge, that it makes no sense to become fiscally responsible now, when the pooch is already screwed.
Further, say you become President. Now, whatever your stance on fiscal responsibility before you took office, after you take office there are certain realities at play. For one thing, Presidents are measured in history by what they do, not by what they don’t do. While “reducing the deficit and spending” sounds like doing something, you fear that it is really not doing something, more like, “not spending money,” and nobody is remembered as great just for being frugal. Further, even if you do reduce spending and balance the budget, will you even get credit? Or will Congress? Will there be endless debates about whether you actually did it or not? (See Clinton, Bill). But when you do things, which inevitably means spending money, you will be remembered for them, whether for good or ill, and if you do a lot of things you are more likely to be considered great than if you do little.
Further, only a portion of the people actually understand and care about the deficit. At least who understand and care enough for it to have any sway in whom they support come election time. I’d say it’s less than 50%, maybe something like 10%. So, if you, as President, decide, despite the danger to your legacy in so doing, to reduce spending and the deficit, you are courting a relatively small portion of the electorate. But you won’t get the support of even that portion of the electorate with your budget-busting, because guess what? That 10% (or whatever) have lots of different ideas about what programs are and aren’t important and which ones should be cut. So, no matter how you choose to reduce spending, you are going to alienate portions of the “balanced budget” crowd. There’s no avoiding it. Someone’s ox is getting gored. You are going to lose as many as you gain if you are lucky, so in the end, it’s a wash.
But wait, no it isn’t! Why? Because, when you start cutting the budget, you are going to be pissing off a lot of the people who don’t care about the deficit but do care about the programs you just cut. If you cut defense, then you are “weak on national defense” and you lose people. If you cut, say, Medicare, then seniors and those about to retire will go against you. But no matter what you cut, you’re losing support, and the support you will be losing will likely not be in proportion to the net support you gain from the “balanced budget” crowd, if any. (And I doubt there would be a net gain there, anyway).
Plus, you made a lot of promises to become President, right? And you had a lot of things you wanted to accomplish, right? Are you really going to forgo those things, set them aside, in the name of fiscal responsibility? Hell no! Heck, even if you balance the budget the next guy will just ‘f it up and then he’ll be the one who got to do a lot of stuff and really make his mark instead of you. No, you have goals. The budget problem was there before you got there, after all, and it’ll be there after you’re gone, right? So why should you be the one to fix what so many others have screwed up?
Similar realities, I think, are at play with Representatives and Senators as well. What’s the old joke? They all want to reduce the budget by reducing spending in every district except the one they represent, right?
Until and unless the American people decide that curbing spending and reducing the deficit is our number one priority, more important than any program or any ox that has to be gored to do it, and demand that it be done, it never will. But, as long as the political costs to try to curb spending and reduce the deficit are higher than political cost of doing nothing, or even higher than the costs of increasing spending and the deficit, spending and the deficit will just keep going up. That’s the reality.
If we were serious about reducing spending and the deficit, we wouldn’t be arguing about which party spent more when, nor would we be arguing about why our side’s spending was justified and the other side’s wasn’t. We’d be willing to see stuff we care about reduced or eliminated if need be, rather than insisting on the cuts coming from stuff important to the other side. But we aren’t doing that, so, in truth, how serious can we be?
March 22, 2010, 3:48 pmleo marvin says:
Yes, but the causation is “but for,” not “proximate.” If you’re a lawyer you know what that means. If you’re not, count yourself lucky.
March 22, 2010, 5:46 pmCalderon says:
Yes, but the causation is “but for,” not “proximate.” If you’re a lawyer you know what that means. If you’re not, count yourself lucky.
I am a lawyer, and probably could find the case that discusses exactly where between the want of a nail and loss of a kingdom that proximate causation cuts off.
That said, though I know you’re not being very serious, I’d think we can probably agree that proximate causation doesn’t really apply to discussions of history or politics (or any other circumstance besides one party attempting to impose liability on another). In common parlance, one certainly could argue that the “crisis” caused the large Democratic majority and possibly the Democratic presidency in 2008, which in turn caused health care reform to pass. (One could dispute the claim that the “crisis” caused the Democratic majorities, such as by using polls or projections from before the “crisis” began, but Orin didn’t make that argument)
Ilya is very explicit about this in the second paragraph under heading I, and I was surprised that the normally ultra-meticulous Orin Kerr seemed to miss one of the main points of Ilya’s post.
March 22, 2010, 6:31 pmAmerican Psikhushka says:
sashal-
nah, just a couple of fringe historical revisionists, which the modern radicalized extremist party –GOP gladly embraced.
I see. Anyone who disagrees with you is on the “fringe”.(And by implication in the same sentence “radicalized” and “extremist”, nice slipping that in.) Sort of like the academics who disagreed with global warming were “deniers”. And I’m a libertarian independent – not GOP – by the way.
…when he decided to listen to people like yourself and cut on stimulus, which has been corrected soon after….
Oh I am all for stimulus – the only stimulus that truly works longterm – leaving the vast majority of money in the hands of the people that earned it.(Cutting taxes/spending.) Funny, the latest stimulus championed by economists hasn’t done too well.(As predicted by Austrian economists.) But I don’t doubt that when the economy eventually works through malinvestments/etc. and starts to turn around, a turnaround that was actually delayed by more malinvestment caused by “stimulus” efforts (also predicted by Austrians), mainstream economists will claim that it was due to the “stimulus”. Just like they did with the Great Depression.
Through the confusion of correlation/causation Keynesians can always claim that their “stimuli” “causes” recoveries, when in fact it delays them and exaggerates the booms and busts that we have to “recover” from in the first place.
March 22, 2010, 7:12 pmCynthia says:
What many of you are forgetting is that the CBO has seldom been right in their predictions of cost. The estimated cost of medicare is now 9 times more than projections.
March 22, 2010, 7:19 pmIn addition, besides the military, look at the programs/services the government runs: medicare is broke, postoffice is broke, amtrak is broke, social security is broke. What makes anyone think that the government taking over one-sixth of our economy is going to fair any better. The private sector can always do better…UPS…FedX
Also look at the experience of Canada, people come here because they have to wait an inordinate amount of time to see their doctor or more moreover have a vital operation in their country. (That is a death panel)
I agree we need heathcare reform, but not this way. We could surely insure the 15 million currently without care, without impacting all of us. Yes, insurance companies need to take people with pre-existing conditions. But, I don’t want the government to tell me what treatment I can or cannot get, that’s between me and my physician.
American Psikhushka says:
sashal-
Then we will go a to a single payer, the best system the modern world invented….
Not at all.
See these socialized medicine horror stories from the British and Canadian systems. The site is conservative, but all the articles are taken from the mainstream British and Canadian press, not any “radicalized”, “extremist” Americans. (No offense to Canadians or Britons, I just don’t want to copy their medical system.)
There’s a reason why that Canadian politician came to the US for treatment a while back.
Ideological rigidity about mythical dangers of socialism lurking in the improved health care coverage for the majority is not helping in the competitive modern world where the business competition from other countries is not stifled with huge medical costs for their employees
The dangers are far from “mythical”, see above.
And note that in some highly taxed and regulated EU countries unemployment is increased because employers are afraid to hire because it is expensive and nearly impossible to fire bad employees once hired. So they hire off the books or just don’t hire at all. Some utopia. Actually keeping people out of work when there is work to be done. Some competitiveness.
March 22, 2010, 7:32 pmuberVU - social comments says:
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March 22, 2010, 10:54 pmDesiderius says:
Mattski,
“Not gloating—not at all.”
Good god, man, open your eyes. Read what your fellow commenters are posting. What effect do you think it will have?
March 22, 2010, 10:57 pmRicardo says:
By definition, when you force insurance companies to cover people with pre-existing conditions, it “impact[s] all of us.” Somebody has to pay for their care. The best way to minimize that impact on the rest of us who have insurance is to mandate health insurance so that it isn’t only sick people who are signing up.
Well, at the very least, it is between you, your physician and your insurance company. Or do you think the party who actually pays the bills — your insurer — should have no say whatsoever?
The reality is that the health care market is complicated and defies simple solutions. We happen to live in a world where we don’t want to see people suffering and dying because they cannot afford health care. Given that simple goal, we need to figure out the most cost-effective, most efficient and most humane way of delivering that care.
March 22, 2010, 11:44 pmDesiderius says:
“We happen to live in a world where we don’t want to see people suffering and dying because they cannot afford health care. Given that simple goal, we need to figure out the most cost-effective, most efficient and most humane way of delivering that care.”
That would have been universal catastrophic. That’s been blocked by the same people continually lecturing us here on our lack of compassion (among the gentler epithets).
March 22, 2010, 11:50 pmRicardo says:
The bill that was passed mandates “minimal essential coverage” without explicitly defining the term. Of course, you don’t define “catastrophic” coverage either. So can you provide a citation in support of your claim that this bill effectively “blocked” universal catastrophic coverage?
It does seem to mandate more comprehensive coverage for children but I think you will agree that children are a special case, especially given that the payoffs to preventive care in children are so large.
March 23, 2010, 1:46 amDesiderius says:
I see what the government does for children every day as a public school teacher, Ricardo. Forgive me if I’d hope for better.
March 23, 2010, 6:05 amdjf says:
You imply that the purpose of health care reform was primarily intended to alleviate the economic crisis. It wasn’t.
March 23, 2010, 5:54 pmAlex says:
Um, that’s the opinion page. Did you read Harshaw’s other opinion pieces? He’s pretty far right, if you ask me. He staunchly defends Lynne Cheney for attacking the Al Qaida Seven. In the article you cited, he quotes mostly from conservative columnists and politicians, with a couple of gratuitous dems thrown in for good measure. In short, What the #$%* are you talking about? The “New York Times” did not trash the CBO report. Tobin Harshaw did.
March 24, 2010, 12:42 amAlex says:
Here’s a list of quotes in that article, just so you don’t give me crap about claiming that it’s “all conservative”:
First quote: Ezra Klein (liberal). Quoted in order to dismiss him as a liberal lackey.
Second quote: The Economist (“center” right, neoconservative). Quoted in order to trash the CBO
Third quote: Megan McCardle (far right).
Fourth quote: Larry Kudlow of National Review (far right).
Fifth quote: “a more surprising critic,” democratic governor Phil Bredesen (Tennessee democrat, center to center-right).
Sixth quote: Ed Morrissey (far far right)
Seventh quote: Ed Carson, Investors Business Daily (center right to right, neoconservative)
Eigth quote: Peter Suderman of Reason (Megan McCardle’s fiance! Reason is libertarian)
Ninth quote: Philip Klein, American Spectator (right)
Tenth quote: Daniel Foster of The Corner (far right)
Finally, the eleventh quote is from a person who tends to side with the conservatives, equity investor Don Marron, but who also clarifies that the CBO is correct in its assessment, assuming the bill is executed as written:
But, he says:
Regardless of what the truth of the CBO report is, that’s certainly not an op-ed written by a liberal, assuming the Times is actually a liberal paper. Moreover, it’s an op-ed! Op-eds do not reflect the view of the paper. They never have (unless it’s a magazine like The National Review which has nothing but op-eds.
March 24, 2010, 1:01 amAlex says:
Moreover, I was quoting the CBO report in order to dismiss Somin’s hysteria over the “massive” growth of government, not because I think it’s 100% accurate.
March 24, 2010, 1:03 amAlex says:
Here’s a quote from a long list of right-wing hypocrisy moment:
So what is the CBO? Non-partisan when it favors the right and partisan when it favors the left? Stop being idiots.
March 24, 2010, 9:32 amAlex says:
And here’s the link to where that last quote came from, a long list of Republican hypocrisy under Obama: http://tpmcafe.talkingpointsmemo.com/talk/blogs/a/m/americandad/2010/03/an-open-letter-to-conservative.php?ref=mp
March 24, 2010, 9:33 am