Tuesday, January 23, 2007

Cwechblug State of the Union Response

First, excellent Democratic rebuttal by Sen. Webb. There were a few things in the State of the Union that struck me as interesting, bad ideas, or idiotic. First, I was surprised at how little substance there was in this State of the Union. Very few coherent policy objectives, and a lot of fluffy nice sounding rhetoric. The few things that he did propose left me perplexed however. Why did Bush propose the National Guard?
A second task we can take on together is to design and establish a volunteer Civilian Reserve Corps. Such a corps would function much like our military reserve. It would ease the burden on the Armed Forces by allowing us to hire civilians with critical skills to serve on missions abroad when America needs them. And it would give people across America who do not wear the uniform a chance to serve in the defining struggle of our time.

If anyone can tell the difference between what he proposes in this section of the speech and the National Guard, please tell me, because I am still perplexed about why Bush proposed the National Guard tonight.

Moving on to Health Care. This is quite possibly one of the worst ideas I've ever heard. The following is what Bush proposed tonight in regards to health care.
For Americans who now purchase health insurance on their own, my proposal would mean a substantial tax savings — $4,500 for a family of four making $60,000 a year. And for the millions of other Americans who have no health insurance at all, this deduction would help put a basic private health insurance plan within their reach. Changing the tax code is a vital and necessary step to making health care affordable for more Americans.

My second proposal is to help the States that are coming up with innovative ways to cover the uninsured. States that make basic private health insurance available to all their citizens should receive Federal funds to help them provide this coverage to the poor and the sick. I have asked the Secretary of Health and Human Services to work with Congress to take existing Federal funds and use them to create “Affordable Choices” grants. These grants would give our Nation’s Governors more money and more flexibility to get private health insurance to those most in need.

There's been much debate about the problems with Wyden's plan, namely that it doesnt do enough to contain costs. But this is truly rediculous. If you make health care costs tax deductable and do nothing else, you merely give insurance companies the ability to charge any amount of money at public expense. Rather than contain costs as we need to do, insurance premiums would drive straight through the roof. Because once everyone has the ability to deduct health care costs from their taxes, insurance companies will have a huge market available to them for which there is no demand curve. There is nothing to contain costs of insurance. People by health care at price 1, deducting their entire premium from their income taxes, insurance companies raise prices because they can make more money, cost 2 is now far higher than cost one. Consumer purchases health care at cost 2 and deducts it from their taxes. It is a giant Federal gift to insurance companies that seems limitless. I'm also wondering about people who have so little income that they dont pay anything in taxes. Are they going to recieve money back from the government to cover their health care costs. This may be universal, but its a monumentally bad idea.

The proposal to give a Federal grant to encourage States to "find innovative ways to provide private health insurance to their citizens." This is really a way to prevent States from going single-payer on their own and stop the movement at the State level where it is beginning to take shape. This is not encouraging States to come up with innovative new policies, it is limiting them to a narrow set of policy options that are more likely to fail than single-payer. The specification of private insurance here is important.

Finally, Bush once more proposed health savings accounts, which have the fundamental flaw of assuming that health care is a normal consumer item. If I want a banana, I know that a banana is what I need and I can shop at a place in which I can get a good price for a banana. Health care isnt like this at all. If I need an MRI, the only way I know that I need an MRI is that the doctor who is going to make money through the process told me I need an MRI. I cant make the rational consumer choice that I dont really need an MRI, if I choose not to get one I run considerable personal health risks. The money in a health savings account would be limited, so if I develope a major health problem I might run out of money in the account and end up paying out of pocket. Not to mention the question of what one does if they dont have any money to put in the health savings account to begin with. So that's three bad ideas in health care by my count.

Bush also engaged in a little bit of Ron Saxton style rhetoric, claiming that we're going to keep medicare healthy, expand the war in Iraq, cut taxes, create a new National Guard (huh?), and balance the budget. A friend of mine commented "We're raiding Canada," and as near as I can tell that's the only way to do it. We're not going to cut programs, we're going to cut taxes, and balance the budget. It all sounds nice but cant be taken seriously, I guess Saxton's magic "inefficiences" have returned.

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