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Tuesday, April 12, 2011

Alice in Wonderland 'Insoluble'?


So, does the pundit commentariat know enough (including me?) to find all the false assumptions in the 'insoluble' assertion of Andrew Sullivan (which is quite different than Kling's "Iron Trilemma")?

I used to be persuaded that "we" couldn't afford the best care for little Johnny. What if we had to do that for everyone? It'd be unsustainable.

Then Democrats had a healthcare debate among themselves and I changed my mind. (Republicans had a fit-to-be-tied, instead.)

Turns out that lifetime caps are not the big part of underwriting health risks as you'd think, even with today's advancements. (What amounts to something are "heroic" medical efforts at end-of-life).

How about "we have to ration, we just do"? How does one address that?

Well, you rework the insurance market, so that you 'compromise' on that by kicking the can down the road, until such time as we have the national wealth (hopefully) that it isn't a bother.

How? Create a private market for catastrophic health coverage. If "Ryan" wants to give vouchers to the poor to fund such coverage, then do it when they are young and the amounts can grow, in escrow, until they are needed in old age.

Last, you need the power of indexing of tax rates. Until the Republicans (and their Libertarian boosters) understand that taxes can and must go up sometimes, it doesn't matter what you say about any long-term (or short-term) fiscal challenge, they are ill equipped to handling it.

That disability is closer to the definition of "insoluble" in American politics.

So much so that Andrew's entire casting of the problem as one of rationing is mistaken. About 1/3 of the long-term fiscal problem is with simple aging of the population and another 1/3 with the high pace of health cost inflation. The wealthiest in America simply do not want to face the music that they can and should pay for that "bubble", in higher taxes over the next 20 years.

It's a question about who pays, not a "systemic design" question. Unless, of course, you think health cost inflation is structural. Who believes that?