Monday, March 22, 2010

Thoughts on the passage of health care reform

Freedom is inversely proportional to the size of government. Last night, our government suddenly grew in size to control almost one-fifth of the national economy. We will surely notice the loss of freedom as soon as the “benefits” of this new law go into effect in 2013. First, we will see fewer choices in our health care options and higher taxes. Later, our children will see a large loss of economic freedom as taxes are raised even further to pay for this “free” health care and Big Government makes even more of our personal choices for us.

We can see what is likely to happen in the next few years by looking at government run health care that already exists in this country. In Massachusetts, RomneyCare has caused health insurance costs to increase at a higher rate than the rest of the country [1]. Increased demand for health care with no corresponding increase in supply is causing shortages in the form of long wait times to see a doctor. Nationally, many doctors refuse to see Medicare patients because of the price controls and bureaucracy associated with the program [2]. In the future, many doctors will likely leave the profession rather than submit to restrictive regulations.

Insurance companies will be forced to cover patients with pre-existing conditions but without charging these sick people more. This means that rates will rise for everyone to pay for those who elect not to buy insurance until they are sick. Eventually many insurance companies will decide that the new rules are unprofitable and may withdraw from the marketplace entirely.

This will lead to an additional health care crisis. Depending on the party in power, further government “fixes” will be needed, which may consist of the longed-for “public option” – fully nationalized health care – of the Democrats.

Ayn Rand described this process her novel Atlas Shrugged. The government enacts regulation to fix perceived flaws in the free market. The government fix causes more problems, which require further government fixes since the marketplace is failing. Eventually, the government totally controls the market.

As both Speaker Pelosi [3] and President Obama [4] pointed out, none of us will know exactly what is in this monstrous law until it is in force. That alone should be sufficient reason to throw from congress each and every Democrat who voted for the bill, but there are plenty of other reasons as well.

The passage of the law directly contravened the will of the people. A recent poll [5] showed that 54% of Americans opposed the plan, while only 41% favored it. Moreover, only 26% strongly favored it, while 45% strongly opposed it. This is not democracy in action. Conversely, ramming the plan through will do more to erode the confidence of the people in government, especially when their worst fears are confirmed and things get worse.

This health care plan will also bust the budget in spite of claims that it will save money [8]. Analysts put the cost of Obama’s health care reform at over $1 trillion dollar, boosting the already record-breaking deficit to its highest point since WWII. Back then, we had a plan to reduce the deficit: win the war. Today, the deficits will keep rising until the government can either no longer, raise taxes or print more money. The true cost of health care reform will be measured in lost jobs, or jobs never created, as higher taxes and new regulations strangle the economic recovery.

Furthermore, the hyper-partisanship of Obama’s first year will likely become the norm. The health care battle is not over; in fact, it is just beginning. The next step, after a massive Democratic loss this November, will be to start the battle to either repeal or reform the reform. Obama is almost certain to veto any attempt to repeal his signature legislation. While Republican gains are not likely to be enough to override an Obama veto, they may win enough seats to at least make positive changes. Off the top of my head, I cannot think of any entitlement that has ever been repealed.

The battle will also move to the courts and the states over the next few years. There will certainly be lawsuits filed over the constitutionality of the government forcing people to buy insurance. I am not optimistic about this avenue since a large number of judges have questionable views about what the constitution actually says. After all, 4/9 of the justices on the Supreme Court don’t believe that “the right of the people to keep and bear arms shall not be infringed” actually means that the right of the people to keep and bear arms shall not be infringed.

At least thirty states have proposed or passed legislation that will allow their citizens to opt out of federal health insurance mandates [6]. Georgia’s senate passed a proposed opt-out constitutional amendment last week, and it should go to the house this week [7]. There is some question about the effectiveness of such measures since federal law typically trumps state laws. However, the tenth amendment to the constitution says “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” This issue will probably have to be settled by the courts as well. Even if the courts decide in favor of the states, opt-out laws will not be able to mitigate all of the damage of the federal regulations.

The first step on the road to recovery will be to remove as many Democrats who voted for the bill from office. With a few exceptions, Democrats have controlled congress since the days of FDR. The country now has a federal budget bloated with entitlements and restricted freedoms to show for it. To begin correcting this problem, we must throw the spenders out of congress, and then hold the Republicans who replace them accountable.


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