July 12, 2011
David Brooks is such a moderate guy. He doesn’t have the hubris of people who think that we can control risk, boost growth and employment, or never raise taxes. He just thinks that we have to reduce Social Security and Medicare.
And Speaker Boehner and President Obama apparently agree with him. They were reportedly prepared to raise the age of eligibility for Medicare from age 65 to age 67. Unfortunately, the people who think that we can never raise taxes and the people who support Medicare and Social Security obstructed this deal. David Brooks thinks this is a real tragedy.
Of course people who have the hubris to know arithmetic were probably less upset about not seeing this deal go through. It is extremely expensive for people in their 60s to get health care insurance.
Many struggle through their early and mid-60s, just hanging on until they reach age 65 and have the government pick up most of their health care costs through Medicare. Insurance for someone in their 60s with any moderately serious medical condition can easily be $20,000 or $30,000 a year.
People who have the hubris to know arithmetic also know that the real problem is the broken health care system in the United States. If the United States had the same per person health care costs as any other wealthy country, then we would be facing huge budget surpluses, not deficits.
If policy was not controlled by protectionists like David Brooks, then we would just allow seniors to buy into other countries’ health care systems and allow them to split the savings with the government. This would be a huge win-win for all involved except the U.S. health care industry. Because of its power, this sort of trade is never debated publicly and people like Brooks are scared to even mention it.
People who have the hubris to know arithmetic would also point out to Brooks that the “huge” stimulus did not fail because they knew from the onset that it was nowhere near large enough. The annual stimulus was around $300 billion in each of 2009 and 2010. The loss in annual demand from the collapse of the housing bubble was around $1.4 trillion. Followers of arithmetic know that $1.4 trillion is considerably larger than $300 billion, therefore they did not expect the stimulus to be anywhere near sufficient to boost the economy back to full employment.
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