Sunday, October 31, 2010

Where is the money coming from?

The perennial political question once the subject drifts onto budget. US governments, local, state, and federal are in trouble. They are spending a good deal more than they take in via taxes. Voters are getting restless about government debt. The opposition to anything (there is ALWAYS opposition to anything) can say "Well that's a nice idea, but where is the money coming from?"
Hmm. Right now the US spends 19% of GNP on healthcare. All other countries in the world spend half of that, and citizen's health in the first world nations is as good, maybe a bit better than it is in the US. If the US cut its health care expenditures down to the level of the rest of the world, that would free up nearly 10% of GNP for other purposes.
10% of GNP is a whacking great sum. The entire Federal budget is only 24% of GNP. 10% of GNP would cut the federal deficit to zero and leave money left over. If the rest of the world can keep healthcare spending below 10% of GNP why can't we? If we did, it would free up rivers of cash to put to better purposes.
We even know some of the reasons US health care is so expensive. Malpractice suits, high drug prices, lack of competition in the insurance business. None of which was addressed by Obamacare. Much of which is a matter of state law. Malpractice suits go to state courts. Changes in state law could make it harder to win a malpractice suit. Drug prices could be reduced by purchasing drugs overseas or from Canada. Competition could be increased by a state law allowing health insurance companies from every state in the Union to sell policies in New Hampshire.
If we work at it, we can find the money in reduced health care spending.

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