Council of Economic Advisers brings out the socialist scarecrow

By Binyamin Appelbaum and Jim Tankersley
The New York Times, October 23, 2018

Karl Marx. Vladimir Lenin. Mao Zedong. Elizabeth Warren?

The White House Council of Economic Advisers on Tuesday published a 72-page report criticizing what it described as the socialist ideas of leading Democratic Party politicians, and seeking to link President Trump’s political rivals with figures reviled by most Americans.

The document departs from the council’s long tradition of delivering sober, albeit partisan, studies on current questions confronting economic policymakers, such as the value of tax cuts or the effects of increased corporate concentration. Instead, the report seeks to tar Democrats by linking them with the failed economic policies of communist governments in China, the Soviet Union and other countries.

The word “socialism” appears 144 times — on average, twice a page.

In case the point was lost on anyone, the message was driven home by a follow-up release from the White House press office with the headline “Congressional Democrats Want to Take Money From Hardworking Americans to Fund Failed Socialist Policies.”

“There are proposals on the table, like the ‘Medicare for All’ proposal, that are very consistent with the design of socialism,” Kevin Hassett, the chairman of the council, told reporters during a conference call to discuss the report on Tuesday.

https://www.nytimes.com…

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The Opportunity Costs of Socialism

The Council of Economic Advisers, October 2018

From the Introduction

The Nordic and European versions of socialized medicine have been viewed as so desirable by modern U.S. socialists that they have proposed nationalizing payments for healthcare — which makes up more than a sixth of the U.S. economy — through the recent “Medicare for All” proposal. This proposal would create a monopoly government health insurer to provide healthcare for “free” (i.e., without cost sharing) and to centrally set all prices paid to suppliers such as doctors and hospitals. We find that if this policy were financed out of current Federal spending without borrowing or tax increases, then more than half the entire existing Federal budget would need to be cut. If it were financed through higher taxes, GDP would fall by 9 percent, or about $7,000 per person in 2022. Evidence on the productivity and effectiveness of single-payer systems suggests that “Medicare for All” would reduce longevity and health, particularly among the elderly, even though it would only slightly increase the fraction of the population with health insurance.

(For details on Medicare for All, use the link to access the section, “Socialized Medicine: The Case of Medicare for All,” pages 39-53.)

Report – The Opportunity Costs of Socialism:
https://www.whitehouse.gov…

Council of Economic Advisors – Staff:
https://www.whitehouse.gov…

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Comment:

By Don McCanne, M.D.

No authorship is claimed for this document other than that it is a product of President Trump’s Council of Economic Advisers (CEA). It does seem to represent the conservative ideology of some of the prominent members and staff of the CEA. Specifically, it attacks as socialism the Medicare for All proposal that has become quite popular. It seems to be timed to suppress the vote for the candidates in the forthcoming midterm election who support the Medicare for All concept.

You should be prepared to hear from some of our conservative or libertarian politicians the highly biased rhetoric contained in this document.

They claim that the taxes required to finance Medicare for All would cause the GDP to drop by 9 percent. But under the PNHP model of an improved Medicare for All, the total spending would be about the same as it is now, and the volume of services also would be about the same since any additional care required for unmet needs would displace care that is of little benefit, simply because of the capacity limits of the system. The claim that diverting resources to health care suppresses the economy is without merit since health care is a robust sector of our economy. There should be no negative impact on the GDP.

They label Medicare for all as a monopoly when most economists consider it to be a monopsony – serving as a buying agent benefiting patients.

The report also claims that there is an opportunity cost (inability to use funds elsewhere) of paying the taxes required to fund Medicare for All. But the collective amount that we will be paying in taxes is no more than we are already paying in public and private funds, so there is no additional opportunity cost. If there were no taxpayer funded program and we instead were paying directly for health care, there would still be the same opportunity cost of not being able to spend those funds elsewhere.

In the full report, they make some preposterous statements designed to dismiss the benefit of recovering the hundreds of billions of dollars in our current administrative waste. By denying that, they are also, in effect, denying that we would be receiving greater value in our health care spending since that waste would be redirected to beneficial health care services.

Probably the most outrageous claim of all is that they say that Medicare for All would reduce longevity and health, particularly among the elderly. But our seniors would be receiving more and better services under a more efficient financing system. How could they claim that that would impair health and shorten life?

How many times do we have to say it? Can’t we just do away with the divisive politics and get down to the policy issues that would benefit all of us – like affordable health care for everyone? It’s really very simple, not to mention that it would place us on the moral high ground.

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