In an op-ed at the Wall Street Journal critical of the Democratic presidential aspirants in particular and the Democratic Party in general, staunch Democrat Alan Blinder points out three “economic truths” that Democrats “can’t handle”:
- Truth No. 1: You can improve and expand health-insurance coverage without going to a Medicare for All plan that bans private insurance.
- Truth No. 2: You can make great strides toward mitigating climate change without embracing the Green New Deal.
- Truth No. 3: International trade is good for the country, even when the U.S. has a large trade deficit.
In response to Dr. Blinder I would like to suggest some mathematical truths that he, apparently, can’t handle.
First, the reason, beyond the neatness of the slogan, for M4A and the abolition of private insurance is that its advocates can’t make their numbers add up without it. The only way they can envision lowering health care spending while increasing coverage is by legislating a single price for medical services—the Medicare reimbursement rate. Any other alternative within the power of the federal government would result in a substantial net increase in federal taxes. Since I don’t believe that the Congress will hold the line on reimbursement rates I am distrustful of Medicare for All.
More importantly increasing GDP or aggregate income is not necessarily “good for the country”. A simple example will prove that for you. Imagine that you increased the income of the Walton family by $1 trillion while holding all other incomes in the country constant. That would increase aggregate income and average income but I think it would manifestly not be good for the country. In the early Aughts the U. S. economy lost more than 2 million manufacturing jobs in very short order, while most job growth was in low-end service sector jobs. I would submit that was not good for the country. Loss of the manufacturing jobs might have been inevitable but losing them that quickly wasn’t.
As for his second point, I think that any carbon tax will inevitably be finessed as has been the case in Europe but that isn’t a mathematical truth, it’s a political one.