Debt and Medical Services

February 24, 2008
If you had accumulated so much debt that your total income for the rest of your life would be insufficient to pay it off, one would think that not only were you imprudent, but that your whole life had been built upon morally questionable premises. Yet that is the situation with regard to the Federal Government and Medicare. According to a column in the Wall Street Journal (February 23-24, A9) by John C. Goodman, " Medicare's unfunded liability is $74 trillion-five times that of Social Security. According to the Congressional Budget Office, health-care spending is on a course that could crowd out all other government programs." The silence of the presidential condidates on this problem is deafening. Obama and Clinton are simply concerned to acquire more debt with their proposals for universal coverage. Neither of them are interested in emphasizing that Medicaid covers the poor and Medicare the elderly so that the most of the uninsured would be capable of purchasing an inexpensive catastrophe policy if that was high enough on their list of priorities. The more the government undertakes to support medical services for the general population, the greater is the budget deficit, the greater the burden on future generations, the greater the temptation to generate inflation (a great way to pay debts), and the worse the general financial condition of the United States. (Because of the irresponsibility on the part of the political class over the last generation, one should no more cry for the US than for Argentina). What is to be done? Perhaps with an extreme problem, one should aim for a radical solution. The government should get out of the health care business entirely; it has no more reason to be involved in it than in the automobile or clothing business. Return all the money collected in taxes to support various medical programs to the taxpayers. Arrange for inexpensive catastrophe insurance to be available for purchase by everyone; and then let everyone pay for their non-catastrophic expenses. The costs of medical care should go way down since individuals will themselves have to control their demand for medical services. Private philanthropy will flow to help those who are really too poor to pay for routine care even if their priorities were in that direction. But do not expect any of the candicates to adopt this or any other rational approach. They are too busy right now telling the public all the benefits they will receive by electing them.
clandesm@aol.com