Obama’s draft healthcare initiative is out. The President’s essentially looks for a minimum of $325 billion in new taxes. We know it will be more, lots more, because a) the taxes they are proposing will not raise revenues at the rates the government estimates; b) health care costs are going to increase faster than the government estimates; and c) Congress will find ways to spend money even faster than the Administration’s proposals.
A) Tax revenues – as noted elsewhere, revenues are coming in at a slower rate than projected, mostly due to the recession. This stands in stark contrast to Obama’s projected year end economic growth estimate of 3.5% (Does anybody – anybody – believe this number? I don’t think that even Obama’s Mom would buy this one) . The specific tax items mentioned – increasing the death tax, gift tax, and taxing charitable deductions – will not raise the money projected, due to the fact that the class warfare aspects of the administration – note the fleecing of the holders of Chrysler’s debt to fund a political payoff to the UAW – will lead capital to flee to more friendly markets overseas. Likewise, expect continued growth in the loophole industry for the death tax and gift taxes. Interesting to note that Mr. Community Activist is willing to gut charities as well, in order to funnel everything through politically supportive groups like ACORN.
B) Cost Control - The only long term way to reduce health care costs is to either increase the supply, or restrict production. Most of the administration’s proposals will eventually fall into the line of increased regulations and price controls, rather than taking steps to provide more care. As we adopt a series of soviet style 5 year plans, eventually we’ll be in a place where some bureaucrat decides that some treatments just won’t be given. Since a large chunk of medical expense is related to catastrophic care in the last year of life, or related to accidents, you might as well plan to put granny out on that ice floe right now. Secondly, while medical advances will continue to be made, don’t look for expensive new treatment options to be made available to the masses, because that costs money.
There’s just not enough savings in computerizing medical records or eliminating waste, fraud, abuse, etc. to make free care available for everyone.
C) Congress – I’m sure that there are some “savings” estimates built into the Obama plan. I’m also sure that Congress will override most of them. Don’t think that John Murtha, Charlie Rangel, Barney Frank, and Chris Dodd are going to stand idly by and let their clients suffer.
One suspects that there will be plenty of high quality care available for the Friends of Obama. That’s the nature of political control of health care. The politicians get the care, you get the tax bill.