Wednesday, November 12, 2008

The Cost of Living

In news that would have been a lot more meaningful before the election, an independent study of President-elect Obama’s healthcare plan finds that it will provide coverage for 2/3 of currently uninsured Americans at a cost of $75 billion--or about one tenth of the bailout. The government will recover about $25 billion of that because it won’t have to cover the hospital costs of those newly insured people anymore.

So that’s a $50 billion bill to the taxpayer in exchange for health insurance for 31 million people.

Of course, it’s an annual cost, not a one-time deal. With healthcare costs rising much faster than inflation or wages, the burden will become increasingly large every year.

I’m all for the Obama plan, but I think it’s important to take an honest look at the numbers. If anyone thinks we can pay for it with the money we’ll save by withdrawing from Iraq, remember that we paid for Iraq with borrowed money--which was stupid--and it’d be stupid to pay for this with borrowed money as well.

In the long term, we can pay for healthcare reforms with the money we currently pay on interest on the national debt, but we’ve got to eliminate the deficit first and start paying down the debt before that money gets freed up. In the meantime, the money must come from somewhere.

No one said Obama’s job was easy.

No comments: