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Winners and Losers
by Michael Tennant
by Michael Tennant
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Referring to President Bush's latest socialist scheme, Kate
Baicker, a member of the White House Council of Economic Advisers, said, "There
are always going to be some winners and some losers . . . ."
As if anticipating this comment 58 years ago, Ludwig von Mises
wrote in Human Action: "The statement that one man's boon is the other man's
damage is valid with regard to robbery, war, and booty. The robber's plunder is
the damage of the despoiled victim. But war and commerce are two different
things."
In short, if the president's latest attempt further to socialize
the already heavily socialized health insurance industry, as characterized by
Baicker, really does result in "some winners and some losers," it must be,
according to Mises, either "robbery, war, [or] booty." To one degree or
another, it is all three. It robs some citizens to provide booty for others,
with the tax-eaters making war on the taxpayers.
It is also the final nail in the coffin of anyone's
characterization of Bush as a conservative, for with this proposal Bush is
officially asking for a tax increase on "about 30 million Americans," according
to Baicker. Given that government estimates are usually quite far off the mark
and that the administration is naturally going to try to make the policy appear
to harm as few people as possible, it's probably safe to say that far more than
30 million Americans are going to see a tax hike out of this.
Now the Democrats will argue about the specifics of the plan and
complain that the plan doesn't go far enough toward Castro-style socialized
medicine - never mind this recent example of how well that system works - but
the fact is that they, as well as most of their cohorts on the other side of
the aisle, must be overjoyed that a Republican president who has expended much
effort burnishing his reputation as a tax-cutter is now proposing to end the
decades-old exemption of employer-paid health insurance from income taxation.
Finally they can get their hands on all that money that has eluded their grasp
for all these years!
The administration will counter that, in fact, "more than 100
million Americans" will end up saving money under Bush's plan, but that is a
matter that time can correct. Under Bush's plan families get a tax deduction
for up to $15,000 worth of health insurance premiums (individuals get only
$7,500), with any overage being taxable. The Reuters article linked above notes
that "[a]verage family coverage offered by employers costs about $11,500
annually." Thus, without even changing the tax code again, the feds can ensure
themselves a steady stream of increasing revenue: with health care costs
continuing to climb precipitously, the average will easily reach $15,000 in a
few years. Throw in a few reductions in the deduction and you easily have a tax
increase on most, if not all, Americans in no time flat.
The essence of the plan is more fascistic than out-and-out
socialistic: taxation combined with faux federalism and increased subsidization
and regulation of private insurance companies (to avoid the appearance of
having a single-payer health care system). The IRS will rob taxpayers of their
hard-earned money if they or their employers dare to spend more than the
government's approved amount on annual health insurance premiums. Then the feds
will kindly turn around and supply some of that money - probably very little
once administrative costs are taken out - to the states so that the state
governments can tighten their grip on the health-care industry by "arrang[ing]
for uninsured residents to get coverage," as Reuters describes it, adding that
"states could subsidize health insurance premiums directly, they could
establish high-risk pools for the sickest people, and could help individuals
and small businesses create their own insurance pools."
The whole plan is perverse. Employees with generous employers will
now be penalized, either by paying higher taxes or by having their benefits cut
so as to avoid those taxes, while the ranks of those on the government health
insurance dole in one fashion or another will increase, causing upward pressure
on health care costs. This will, in turn, cause health insurance premiums to
rise, pushing ever more people over the government's arbitrary limit,
increasing the amount of income subject to confiscation by Washington. Then
come further interventions to "fix" that problem, and before you know it, we're
off to Havana General Hospital.
Furthermore, even from a utilitarian standpoint the plan doesn't
make sense. According to the Reuters article, "[t]here are about 47 million
people with no insurance in a country of 300 million. Baicker said Bush's tax
proposal would result in 'upwards of 3 million or more [sic] newly insured
people.'" Meanwhile, taxes are going to increase on at least 30 million people.
Thus, in order to insure an additional 1 percent of the population - and a mere
6 percent of the uninsured, for that matter - the government is going to hike
taxes on 10 percent of the population.
Ah, but there is an escape clause, says the administration. No one
has to pay the higher taxes - to be a "loser," in Baicker's words. Anyone who
just shuts up and does as he's told can avoid them. "Baicker," reports Reuters,
"said about 30 million Americans could face higher taxes under the president's
plan 'if they didn't change their behavior' - meaning giving up an employer's
more generous health plan in favor of a less-costly one." There you have it,
straight from the horse's mouth: it's all about government control of your
behavior. Do as you're told, and no untoward consequences will befall you; do
otherwise, and we're coming for your bank account. Can they make it any plainer
than that?
In the great game of politics, there are always winners and losers
because government does not produce anything. It can only rob Peter to pay
Paul. From a purely political standpoint, then, Baicker was correct in that
assertion.
Meanwhile, unlike the "robbery, war, and booty" of politics, every
day billions of people interact peacefully in the marketplace, with each party
to an exchange coming out a winner because he has exchanged something he valued
less for something he valued more. As Mises put it, again in Human Action, "The
market economy involves peaceful cooperation. It bursts asunder when the
citizens turn into warriors and, instead of exchanging commodities and
services, fight one another." That is, of course, precisely what happens with
government programs, where one group of citizens fights with another to see
which group can steal more from the other.
Instead of increasing the government's role in health care, whether
via Democrats' up-front socialism or Republicans' backdoor variety, it's time
we abandoned the road to serfdom and embraced a genuinely free market for
medicine. Otherwise we'll all end up losers. Just ask Fidel.
January 24, 2007
Michael Tennant [send him mail] is a software developer in
Pittsburgh, Pennsylvania.
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