I write this as I read the latest on the evaporating hope of a public option, the progressive option of last resort. I am like most who had realized in late summer that the single payer movement was hopelessly outspent, out-manuevered, out-lobbied. The reform intent of the entire year, squandered. Reform itself has dissipated in thin air. Only a strong lesson emerges; for single payer to be realized, the movement must be better organized next time.
However, will there be a next time? I have long term questions. I reviewed the interviews of former Australian Prime Minister, Paul Keating, over the holiday. I have compiled these interviews here. I am gravely concerned. In the Common Dreams article, it states:
The number of uninsured capable of gaining insurance will be somewhere around 24 million. With private plans as the alternative, estimates are that more than $450 billion in tax-payer money will be transferred to private insurers in order to allow the uninsured to gain coverage. However, that coverage will be something akin to the lowest form of car insurance - you get by before the eyes of the state, but get into an accident and you will find yourself facing massive debt. Estimates are that the low-coverage plans would only cover 60% of costs. Even worse news comes for the more than 20 million people who will likely remain uninsured. They will now also have to forfeit 2% of their annual income because of it. A nightmarish scenario indeed - uninsured and penalized!
This coupled with Keating's prediction is a recipe for an economic disaster. If Keating predicts the American recovery to shape up in six to seven years, coupled with the health bill mandated buy-ins, and the projection of when the law takes effect, even with subsidies -- this will harm the economy long term.
In the rush to push any bill short of a thoughtful, and well-planned out approach to single payer; the health bill has the potential to delay an economic recovery and exacerbate the crisis we already are in. Keating, if his analysis is correct, predicts the U.S. may default on its debt. The holders of our debt, mainly China, will have to settle for only 40% of what is owed them. The U.S. Treasury credit rating will likely be downgraded.
Moodys recently raised their concern. "By the end of a two year period, the U.S. debt ratios will be higher and moving the country's metrics to the lower end of the pack...this triple rating isn't assured forever." said Steven Hess, sovereign credit analyst at Moody's. Moodys has outlined that US debt for 2008 stands at 41% of GDP which, they feel, is cause for concen. Even more concerning is the expectation of the percentage to rise to 62.4% by 2010.
Two realities will collide in the realm of the Keating scenario that spell trouble.
1. Our senators tell us this bill is deficit neutral. Moody's takes issue with the Treasury's ability to raise at least 1 trillion domestically to meet this nation's obligations. There is a shortfall and the already squeezed consumer likely will not be a revenue source. The combined large projected deficit and the squeeze on the consumer who is already juggling any and all combinations of a home mortgage, credit card debt, student loans/college tuition and add health care costs to the mix.
2. The Senate is not looking at the hidden cost to the individual who will buy into these basically worthless mandated plans. Who pays? Who pays when the consumer is on the hook for a high deductible and out-of-pocket expenses the plans do not cover? The consumer? If that happens, we can assume this will hit the disposable income of the individual. When one factors into these two economic realities, this feels like we are actually planning a recession.
This one issue is very alarming to me personally. I live in Max Baucus's state. Montana has perhaps the lowest in per capita, disposable income than any state in the nation. As it is now, we cannot even afford to send our kids to college. Our state's most premier public university, the University of Montana, is labeled a failure factory because of the economic conditions. Only 40% of all enrollees actually graduate, far below the national average. The proof of the tasting is in the pudding, our senator has opted for the caviar. It is appalling to me that he has pushed this dangerous legislation as far as he has with no concern for his constituents. It is hard to look forward to a future of hot dogs. This is what this bill delivers Montana.
The progressive left had hoped single payer would be the foundational building block for what this economic crisis demands...the second New Deal, with strong elements of the War on Poverty. Instead, we got a Congress that are kidding themselves, and a president that refuses to lead.
What are the future political costs if we continue to slog our way through never-ending recession? We know the mismanagement of the other party got us here, but we must also look at the deregulation of the Clinton years. These are the same people who have commandeered the change train. The Team of Rubinites. At what cost, does our Democratic Congress and the Team of Rubinites in the White House, really need and want the campaign cash of the health insurance special interest? Future recession, lost elections, the opportunity costs of a lost hope of reform...another generation as a minority party? I guess these are the questions we must ask ourselves.
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