BE CAREFUL WHAT YOU WISH FOR…

3/19/10

My 3/17/10 comment on the politics of the health insurance bill seems to have generated a great deal of thoughtful give and take on the topic. Two of my more insightful and engaged readers and friends contacted me with observations and nuanced differences on the bill. One addressed, among other things, the timing of the bill’s provisions, specifically that the bill’s costs, in the form of taxes, will kick in before its ostensible benefits, generating a pool of money waiting to be spent, always a dangerous thing when dealing with most humans but especially with politicians. At any rate, the guys who wrote me on these matters are two of the smartest guys I know, and I have reproduced my replies below because they expand on the points I made on 3/17 (and happy and blessed St. Joseph’s Day to all of you!):


3/18/10

You're absolutely right; the "benefits" aren't mandated to start kicking in for 3 years, which is why I said "(I would say the “immediate” impact, but it’s going to take a few years before the features of the bill fully take effect.)" This could be the bill's undoing, but probably not; not many people will be paying taxes directly according to the bill; high benefit plans will be taxed, as will drug companies and health care products companies. The "benefits" in the form of access to health insurance will kick in before the pernicious effects of the new or increased taxes will be felt. The politicians are too clever to let the costs fully sink in before the "benefits" kick in. At any rate, the way the Republicans are vilifying this bill, as long as the world doesn't end upon the bill's passage, it might turn out to be a plus for the Dems. Not a prediction, just something to think about while all the commentators (or at least those of the stripe you and I and most conservatives would listen to) seem to be saying this is a sure political loser.

I hadn't thought about the "burning a hole in the pocket" angle...very insightful of you! Perhaps the pols will "lend" to the general fund the money accumulating before the program fully kicks in, as they do with the current Social Security surplus and then spend it as they please on "urgent" needs that somehow didn't exist until the pols realized there was a pile of unspent money lying around. The outcome, as you point out, won't be a good one. But the typical pol probably figures "What the hell; that's down the line. We'll cross that bridge, with other people's money, when we come to it."



3/19/10

Don't misunderstand me; I'm not for the health insurance bill, largely because it does nothing to sever the tie between employment and health insurance, which I think should be one of the primary goals of any true reform of the health insurance system. I've written a lot on this subject in the blog.

My point in the latest post was not to comment on the economic, ideological, or financial merits of the bill, but, rather, to comment on the politics of the bill. The GOPers who are so sure that this is a big political loser might find out differently when the bill is passed and implemented. People seem to talk a good game about how they despise big government and all that, but, when a program helps them, all of the sudden that becomes a “worthy” program and a “proper role for government.” This bill is going to help a lot of people directly, especially those who, like me (and you, I think), buy their own health insurance. And the costs, both direct and indirect, for the individual or for the economy, won’t be felt, for most people, until after even the already delayed benefits kick in. Thus, this might not be as big a loser for the Dems, politically, as some people seem to think. Heck, the way the GOP has vilified this bill, it will work out as a political plus for the Dems if the world doesn’t end Sunday after the vote.

My point on “GOP loyalists” was that they might argue, in response to my discourse on long run costs and short term benefits, that, even if I’m right, the Republicans are thinking of the long term while the Dems are just concerned about the short term. But that simply isn’t true; rare indeed is the pol, Republican or Democrat, who thinks beyond the next election. There is the tendency on the part of partisans to label Dems bad and GOP good, or vice-versa. As someone more familiar with my thinking than are most people, you know my attitude is Dems bad GOP bad. They are all barnacles on the ship of state.