Tea Party-Two Party

Guilder’s Guide to Greatness: Part 2

February 24, 2010

Continued from Part 1


Neither coercively-enforced Medicare nor Medicaid would be necessary if we removed many of the stifling administrative regulations from the health industry that separate the doctor from the patient and drive up costs. Florin assumes that if the omnipotent government got out of the health business, that pestilence would immediately sweep the land. However, if we removed many of the bureaucratic roadblocks that hamper the creation of low-cost, private health clinics and charitable organizations such as religious hospitals, we could fill the vacuum of Medicare and Medicaid without the fiscal time bomb that is strapped to our budget now. Many criticize the inefficient bureaucracy of HMOs, or Health Maintenance Organizations, for the distance they create between doctor and patient. I completely agree with these critics. However, most don’t realize that it is our friend Uncle Sam that subsidized these inefficient behemoths to give them market dominance through the 1973 HMO Act. I wish more people could see that the proposed “solutions”—increased Medicare, Medicaid, and the proposed Obamacare overhaul—have the same root causes of the healthcare mess we are in now. Try looking at it another way: out of our entire health system, plastic surgery is the sector with the cheapest costs. Why? Because plastic surgery is the least regulated area of the health industry. Conversely, plastic surgeons are one of the few groups of doctors who haven’t seen the large salary reductions of the rest of the industry in the past decade.

In addition to these solutions, the health insurance industry, another widely criticized area of our health care system and justification of Medicare and Medicaid, could be easily and quickly improved in the following freedom-boosting ways:

  • Allow the purchasing of insurance across state lines—widely advocated by fiscal conservatives, the Democratic Congress refuses to include it in the healthcare over hall. Allowing real free market competition in the insurance markets will reduce many of the flaws of our current government-subsidized and restricted system.
  • Like in every other insurance industry, medical insurance should only need to be used when something bad happens to you, like breaking your leg or being diagnosed with cancer, not in order to come in for routine checkups. Medical clinics that allow cash payments rather than insurance tend to have lower overall costs. Ron Paul mentions one such clinic in Tennessee that I can bring up in comments.
  • Establish tax-free medical savings accounts, much like the 401k system, which can be used to save up for unforeseen medical expenses as well as routine costs.

Ice Ice Baby: Budget Freeze Part 2

February 21, 2010
1 Comment

Check out Part 1 for an introduction and Guilder’s argument.

FLORIN: Guilder argues that those big programs shouldn’t exist anyway, but since they do, it would be impossible to reform the system to compensate if they disappeared. Despite inefficiency, they do provide incredibly important services that can’t be cut. Imagine the furor that would arise if Medicare was ended. Obama’s plan will affect too many essential programs on a scale sure to affect the economy. If you look at what he’s cutting, it’s pretty terrifying: education for the disadvantaged down 32%, lots of welfare programs out anyway from 10% to a massive 50%, and the public health and social emergencies fund is down 81%. Defense, however, is another story. Even though it is technically considered discretionary spending, it isn’t being touched by the freeze. Yes, there’s a war going on, but there are definitely aspects of the defense budget that could be cut without affecting strategy. What’s happening is that the budget freeze is affecting the wrong things.

John Maynard Keynes was a massively influential economist who basically suggested the theory that it’s good to stimulate the economy through quick and major government action. Yeah, it’s OK, I don’t really understand Keynes either. However, Nobel Prize winner Paul Krugman definitely does: as a dear disciple of Keynes, he writes that the freeze is going to hurt the economy, not help it. Not only are jobs going to go out the window, the freeze is “bad long-run fiscal policy, shifting attention away from the essential need to reform health care and focusing on small change instead.”

The government holds a social contract with the people: in exchange for essential services like healthcare, Social Security, and protection, citizens pay taxes and obey just laws. Obviously, Guilder disagrees with the need for these programs and dearly desires a cut in them, but consider a world without such protection. Life expectancy? That’s out the window. This fundamental disagreement isn’t what our debate is about, however—we’re focusing on the differences between our opinions of the budget freeze. In general, it’s not really pleased anyone. Guilder talks about a mounting deficit and how it will harm the government, but how does cutting jobs and preventing any end to unemployment help? How is taking away necessary programs, especially for the disadvantaged, going to be beneficial? Look at it from the point of the average citizen, not a theorist up in an ivory tower, and you’ll see how the budget freeze is coming at exactly the wrong time.

CONCLUSION: It’s clear that we disagree a lot, but that’s not really a new concept. We do (finally!) agree on the fact that the budget freeze appears to be completely the wrong idea, but aside from slashing defense spending, there’s a clear ideological difference. See Guilder’s follow up post for his solutions to the budget freeze. Make up your own minds, and agree with, confront, laud, comfort, yell at, and give gold stars to us in the comments!

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Two schools of thought. One intellectual barfight. Contact us at teapartytwoparty[at]gmail[dot]com.