Friday, November 21, 2008

Killing Conservatism?

This is frightening.

The reason Democrats want universal health care is because, like Social Security before it, it will shift an entire generation to the Left. Worse, once implemented, it will be nearly impossible to eliminate, and change will become a third rail.

Republicans would face the same problem with healthcare that they currently do with Social Security, persuading people to trade one in the hand (the current system) for two in the bush (a reformed system). And we see how well that has worked out. Combine Obamacare with plans to take away the tax-advantaged status of 401(k) plans and IRAs and you would end up with government responsible for both healthcare and retirement. The big-government constituency would grow and deepen. And remember that fewer and fewer people are paying the incomes taxes that would help pay for increased government services. That breakage of the linkage between taxes and government "benefits" creates toxic incentives for more of both — and an economy more shackled than ever by taxes, debt, and regulation.

People like the idea of something for nothing. And the fact that more and more of the tax burden is being shouldered by a smaller and smaller fraction of the population makes it more attractive to the moocher class. Sadly, these same people will be shocked and perplexed when knee replacements, heart surgery, cancer drugs and MRIs become unavailable to them because the cost is too high. But rationing is the only way socialized medicine controls costs. Sure, it's not too bad for children; but if you are 63 years old and want a hip replacement, you won't get it.
John McCain's healthcare plan was perhaps the most provocative policy proposal of the entire 2008 campaign. Too bad he could neither fully explain how it worked nor persuasively argue why it was better than Barack Obama's plan. Also too bad since his plan would have smartly reduced healthcare costs by getting companies out of the healthcare benefits business and empowering individuals to buy insurance on their own. This would have helped fix what economist Arnold Kling calls the insurance vs. insulation problem: "Insulation relieves the patient of the stress of making decisions about treatment. The patient also does not have to worry about shopping around for the best price. The problem with insulation is that it is not a sustainable form of healthcare finance."

Republicans need to do all they can to block Obamacare. It is not only terrible from the patient's point of view, but a disaster for the GOP.