New School Politics

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The consensus early in the ‘08 campaign seems to be that, while a very seductive politician, Sen. Barak Obama (D-IL) appears to lack substance and quite simply no one really knows what he would do as president if elected. 

Thursday, the young senator made his first self-identification and it was a revealing one.  

The Associated Press reports: 

WASHINGTON (AP) — Every American should have health care coverage within six years, Democratic Sen. Barack Obama said Thursday as he set an ambitious goal soon after jumping into the 2008 presidential race.  

“The time has come for universal health care in

America,” Obama said at a conference of Families USA, a health care advocacy group.  

“I am absolutely determined that by the end of the first term of the next president, we should have universal health care in this country,” the

Illinois senator said.  

Obama was previewing what is shaping up to be a theme of the 2008 Democratic primary. One of his rivals, 2004 vice presidential nominee John Edwards, also said as he announced his candidacy last month that he will offer a proposal for universal health care.  

Obama said while plans are offered in every campaign season with “much fanfare and promise,” they collapse under the weight of

Washington politics, leaving citizens to struggle with the skyrocketing costs.  

He said it’s wrong that 46 million in this country are uninsured when the country spends more than any one else on health care. He said Americans pay $15 billion in taxes to help care for the uninsured.  

“We can’t afford another disappointing charade in 2008, 2009 and Obama said. “It’s not only tiresome, it’s wrong.”  

Obama’s call was an echo of a speech he made last April when he said Democrats “need to cling to the core values that make us Democrats, the belief in universal health care, the belief in universal education, and then we should be agnostic in terms of how to achieve those values.”

I’ve said it before, there is no such thing as magic. And despite how much politicians may lead you to believe it, the government cannot simply create “cheap affordable healthcare” by decree. There will be a cost of any program that a President Obama or Edwards may propose; and the cost will be outrageous and will simultaneously destroy all incentive and ability to innovate and provide quality healthcare to customers. 

It’s ironic that Obama and Edwards are now proposing universal healthcare considering who they’re chasing in the primary. Over ten years ago Mrs. Clinton was at the center of a proposal to socialize American medicine, maybe they should ask her how that turned out.

Popularity: 27% [?]

Yesterday the President threw himself into the national debate on healthcare by offering his own initiative on the issue. He essentially offers two changes: one, being a shift of responsibility from the federal to state governments and, two, a shift in the tax burden from private to employee based health insurance.

Free Market News reports:

President Bush is putting together a proposal to tax workers for health insurance payments paid by their employers, according to the Associated Press and Reuters. The Bush administration is hoping that the plan will encourage individuals to buy their own insurance. Under the proposal, health insurance benefits would be considered taxable income subject to a standard deduction of $7,500 for individuals and $15,000 for families. In addition, individuals would be able to deduct their health insurance premium costs if they pay for it themselves. The tax proposal will likely help the 46 million Americans who are uninsured by giving them an incentive to buy private health care.

What I can agree on with the President on is that employee-based healthcare is overemphasized. For very long politicians have been attempting to connect health coverage with employment. This emphasis, however, seems irrational to me. There is no reason for connecting healthcare and employment just like there is no reason for connecting internet service and employment. We have division of labor for a reason–it is more efficient. Needlessly hampering employers with healthcare costs will only inflate the price of labor and reduce the demand for employment.

But although lowering taxes on individual insurance and no longer placing as great an emphasis on employer provided care are good steps it cannot avoid the fact that Bush’s plan still encompasses taxing those who have health care to pay for those who do not. Politicians have led the public to think that, while there are different methods of going about it, the only options we have involve government.

But there is an alternative that has not been presented, and that is deregulating the healthcare system in favor of freedom. What exists in the issue of health care is that people seem to view it as different, even sacred, compared to everything else–people don’t demand universal home ownership or cell phone coverage, but many do medical insurance. The fact remains that health coverage exists within an economic reality like any other commodity–it must obey by economic laws like supply and demand.  By taxing people with coverage to pay for those who do not, you raise the price of insurance and ultimately punish the purchase of healthcare. By using one man’s money to buy another’s health coverage for others, there is no limit on how much money can be wasted. And by ensuring that there will automatically be demand for healthcare government destroys incentive for innovation and production of quality healthcare.

Nearly everyone in politics agrees that healthcare is in an unacceptable state but they still fail to recognize why it is at that point. For over seventy years we have been trying what Bush, Kennedy, Schwarzenegger, et al. are still proposing today–government sponsored coverage–and all the while no one acknowledged the free market alternative. Until and unless we reintroduce freedom to an industry long devoid of it we ask for its destruction. Only by removing the burden of regulation and the costliness of taxation and by restoring the incentive to buy and sell will the health of healthcare be ensured.

Popularity: 28% [?]

Governor Arnold Schwarzenegger’s new plan to universalize health care in the state of California is ominous news, especially for an industry already beleaguered by the most severe restrictions of the government. The horrid state of healthcare and the progression towards state controlled coverage in California is a stark reminder of the novel Atlas Shrugged, by Ayn Rand. First, for those of you who have not read Atlas Shrugged, I recommend that you read it more strongly than any other piece of advice I could give. The book is about an America in which the government is escalating its roll in the economy as well as its infringement upon individual rights. In response to the country’s turn towards statism, the “men of the mind”, the industrialists, stop producing. The following is an excerpt from a doctor explaining why he went on strike in response to the socialization of health care:

Popularity: 21% [?]