I think that Robert Samuelson is a bit too harsh in his criticism of the Obama Administration:
We cannot build a productive economy on the foundations of health care and “green” energy. These programs would create burdens for many, benefits for some. Indeed, their weaknesses may feed on each other, as higher health spending requires more taxes that are satisfied by stiffer terms for cap-and-trade. We clearly need changes in these areas: ways to check wasteful health spending and promote efficient energy use. I have long advocated a gasoline tax on national security grounds. But Obama’s vision for economic renewal is mostly a self-serving mirage.
In the column proper he draws a link between the two capstones of the Administration’s economic plans, energy policy, i.e. “cap and trade”, and healthcare reform:
Consider global warming. The centerpiece of Obama’s agenda is a “cap-and-trade” program. This would be, in effect, a tax on fossil fuels (oil, coal, natural gas). The idea is to raise their prices so that households and businesses use less or switch to costlier “alternative” energy sources such as solar. In general, we would spend more on energy and get less of it.
The story for health care is similar, though the cause is different. We spend more and more for it (now 21 percent of personal consumption, says Brookings economist Gary Burtless) and get, it seems, less and less gain in improved health. This is largely the result of costly new technologies and the unintended consequence of open-ended insurance reimbursement that encourages unneeded tests, procedures and visits to doctors. Expanding health insurance might aggravate the problem. Many of today’s uninsured get health care for free or don’t need much because they’re young (40 percent are between 18 and 34).
Together, health care and energy constitute about a quarter of the U.S. economy. If their costs increase, they will crowd out other spending. The president’s policies might, as he says, create high-paying “green” or medical jobs. But if so, they will destroy old jobs elsewhere. Think about it. If you spend more for gasoline or electricity — or for health insurance premiums — then you spend less on other things, from meals out to home repair. Jobs in those sectors suffer.
You need only look at a graph of the projected federal government deficits to see why the Obama Administration’s concerned about healthcare:
Not the deficit in 2009. We all know that’s a result of the stimulus plan and bailing out the financial sector. Look at the deficits starting around 2015. Those are the ones we need to worry about and they’re overwhelmingly due to rising healthcare costs.
I don’t attribute the Obama Administration’s interest in “cap and trade” and universal coverage to being “self-serving” but rather to the fallacy of an appeal to consequences. Wouldn’t it be wonderful if those approaches would solve the problems they’re addressing? Consequently, they must be true.
Contrariwise, I think that the only genuine solution to the problems in our healthcare system is a dramatic change in the way that healthcare services are delivered. We need to increase the supply of healthcare.
And as far as energy policy goes I’ve favored a carbon tax for decades. Cap and trade here in the United States will have the same outcomes it’s produced in Europe: not much in the way of reduction of emissions but plenty of opportunities for lobbying and government finagling.
