The United States of Insurance Inc.
A recent Wall Street Journal column showed that Social Security, Medicare, Medicaid and all other federal entitlements consumed 9 percent of GDP in 2000. They will consume 18 percent of GDP in 2048. According to the World Bank, the combined public and private sectors already spend 18 of GDP on health care alone.
Our federal tax revenues historically total 18 percent of GDP yearly. You do the math. When entitlements alone consume 18 percent, how high will taxes have to go to pay for the entitlements and the things government really should do? Defense. Courts. National parks. Foreign relations.
Our federal government really has become an insurance operation that happens to run an army.
The current battle in Congress over health care is focused on the wrong question. Congress fights over who will pay to sustain our health care system. The real issue is that the system is unsustainably expensive. Policies accumulated over decades have produced an inefficient system that costs too much. The real challenge is eliminating inefficiencies in the health care system so costs can fall dramatically. If that happened, it wouldn’t be so hard to figure out who will pay for it.
Happy Independence Day.
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