Wednesday, March 24, 2010

On Unicorns and Mammograms

On spending, politicians tend to be like shopaholic wives coming home from the mall: the rationale for absurd and damaging expenditures is couched in the language of fiscal discipline. On the retail level, it comes out as, "Yes, these jeans cost $250, but they're normally $400!" On the national level, it's "Sure it cost a trillion dollars but it will save or create 4 million jobs" and "Well, it costs at least a trillion dollars, but insurance premiums will go down an average of $2500!" A rose by any other name would still smell as sweet; a flaming bag of dog dung by any other name will still stink.

The recently-passed health regulation bill is of the same comedic but painful logic. We are led to believe that we must spend money to save money, a line of thinking we should be so lucky to try out on our own creditors. Leaving aside the countless damaging provisions enumerated in the bill, including putting more of our well-being in the hands of the people who run Amtrak and the post office, one question needs to be asked: is the bill cynical enough to work?

The plans for "funding" the bill are what should draw the most raised eyebrows. First are the raising of various taxes on "the rich" and people with lavish insurance plans. Second are the cuts to Medicare, meaning "the elimination of $100B of waste and fraud" and slashing reimbursements to doctors. Third is the coercion of individuals and companies to purchase government-approved insurance policies.

To analyze each of these means of funding which will allegedly reduce our national deficit/expand coverage/reduce private insurance premiums, let's use a test called "What's More Likely?" originally used by Scott Adams in The Dilbert Principle.

What's more likely...that the unions and the better-off will humbly accept being taxed, grateful to contribute to the health care of others? Or that they will pressure members of Congress to create carve-outs for them and find new ways to hide their money?

What's more likely...that the government too stupid to avoid being swindled for trillions over the years will suddenly become a competent, well-audited machine? Or will the new watershed of cash enrich the people behind "Viagra for dead chicks" so much that they will name their yachts after Barney Frank?

What's more likely...that the Congress which every year lacks the courage to reduce Medicare reimbursement rates will do so dramatically in an election year? Or that Senators will begin to pretend to not speak English when pressed about the issue?

What's more likely...that companies and individuals will continue to shell out tens of thousands on insurance policies that they don't have to have? Or will they pay the relatively small fine and spend the rest of the money on flat screens and Snuggies?

Where the most cynicism is needed in this bill is the assumption that people and companies will obey the mandate over paying the fine. President Obama promises a reduction in premiums due to increased number of customers paying in. But how would rates not go up taking on riskier patients? The CBO, which has proven to be cheerily optimistic in its calculations over the decades, have stated that even with ObamaCare that family premiums will go up 13% by 2016, which obviously isn't the same as being reduced by $2500 annually. Clearly, this bill isn't sufficiently cynical to account for the realities of the market and individuals responding to the new conditions it creates.

Or is the opposite true - that the bill is ultra-cynical and counting on these issues to severely damage the insurance industry, sending premiums through the roof? We'll call this the Limbaugh Corollary; Rush Limbaugh asserts that ObamaCare is one of many mechanisms used by the Democrat Party to destroy the economy and American way of life so they can implement socialism. While the Limbaugh Corollary is pure conjecture, the consistent actions of the president and congressional leadership skew very much in favor of government intervention and control. The theory is unreasonable, but we don't have much evidence that leading Democrats are at all reasonable.

The health regulation bill is a disappointment to liberals who want single-payer or at least a public option, an outrage to conservatives, and an abomination to a majority of Americans. Simple, common sense analysis of this intrusive and excessive volume of legislation reveals it to be destructive, freedom-limiting, invasive, ineffective, wildly expensive, and a discredit to all who support it.

For a great critical analysis of the bill, check out this article from Jon Kraushar of Fox News: