Saturday, October 19, 2019

No Hiding

     When a politician proposes to “give” you something, he’s lying to you. There are no exceptions. Americans once knew that at a visceral level. They understood that the State cannot “give” unless it first takes -- and the taking must exceed the giving for the “transaction” to occur at all.

     But apparently a lot of Americans have never learned about this teensy little fact of life. The evidence is the willingness of a great many to take vipers like Elizabeth Warren as honest and sincere.

     This morning, Silicon Graybeard has a nicely detailed article on Warren’s ridiculous claim that a “Medicare for all” system – socialized medicine without the admission that it’s socialized – will make Americans’ medical care cheaper in aggregate. However, it won’t appeal to the “I was told there would be no math” crowd, as it uses actual numbers. So for the rest, here’s why a claim such as Warren’s cannot possibly ever be true.

     Medical care – i.e., the goods and services Americans consume for the maintenance and restoration of their health – is provided by people:

  • People make the goods: i.e., the medicines, the devices, and the hospital and clinic buildings.
  • People – nurses, doctors, and their various aides and orderlies – provide the services.
  • People must be paid for those goods and services.

     Let’s avoid numbers and simply call the current aggregate cost of American medical care – the total we who consume it must pay for it at the retail end -- $X.

     Just now, the transactions involved in making those purchases are dyadic: i.e., they occur between two agents, a provider and a purchaser. Sometimes the purchaser makes use of insurance to afford them, but the actual transaction involves only two actors.

     In a “Medicare for all” system, such transitions become triadic: one or more third parties must be appeased for the transaction to occur. Those third parties are the legions of bureaudrones who would administer the system. They too must be paid. Let’s call the aggregate of their salaries $Y. We’re not paying them at the moment, because they’re not there: Washington hasn’t hired them. There are a few who administer the already existing Medicare system, but their number would surely increase were Medicare expanded to cover all medical products and services. As Medicare currently serves about a fifth of the nation, the population of Medicare administrators would probably increase by about 400%.

     That’s a lot of government salaries and benefits packages. So $Y is likely to be a big number. However, the important thing about it is that it will be a positive number. Therefore, there is simply no getting around the fact:

$X + $Y will be greater than $X.

     So the aggregate cost of medical care under a “Medicare for all” scheme would necessarily be greater than in the current moderately-free market for such things.

     But the advocates of socialized medicine will object: “There are ways to control the costs!” And to the analysis of those ways we shall now turn.

     The first notion the socialized-medicine folks will float is the old “waste, fraud, and abuse” gambit. These things, they claim, can be isolated, hunted down, and staked through the heart. Afterward, costs are guaranteed to decrease. (And “we’ll all go to the house of pancakes.”)

     It’s nonsense, of course. It’s a promise politicians always make when they seek to reach into your wallet. The refutation is simple. “Waste, fraud, and abuse” don’t emerge spontaneously out of the primordial ylem. They occur because people commit those acts: producers, consumers, and insurers of medical care. Some percentage of those involved in such transactions will be dishonest, and will endeavor to cheat the system. As the number of persons involved in the system is guaranteed to increase under socialized medicine, the number of dishonest persons would increase as well. (This assumes Washington proves unable to hire from the ranks of the angels, but when has it ever?) Thus “waste, fraud, and abuse” would increase.

     Indeed, the problem might explode. In the current, moderately free system, there are legal consequences should a patient, a provider, or an insurer attempt to cheat and be found out. But were the system to be socialized, a sharply increased fraction of the cheaters would be inside the government, and therefore less accountable to any enforcement agency. Elaborate new systems designed to conceal the cheating from the citizenry would emerge. Supervisors and departmental administrators would be encouraged to look away, perhaps for “a piece of the action.”

     The crusader against “waste, fraud, and abuse” through increased government involvement and control is a con man. “Government,” “honesty,” and “efficiency” have never gone together, and never will.

     The second of the socializers’ gambits is price control: under a socialized system, the State would decree that the prices of medical products and services cannot exceed certain maxima. Those maxima would be determined by the administrators of the system, as Congress is too busy with more important matters. (More important than life and death? Why yes: more important than your life or death, anyway.)

     But price controls guarantee that the products and services being price-controlled will become less available. They always have and they always will. So drugs and medical devices of all sorts would rapidly dwindle. The development of new ones would likely halt in place. And of course, those who aspire to become doctors or nurses would view their career prospects in a completely different light: as de facto government employees who lack the right to set the prices for their own services. The balance of incentives and disincentives to enter the medical field would shift toward the negative. We’d have fewer medical practitioners of every sort.

     Maybe medical care would be cheaper...but would you be able to get it when you need it? Ask any Briton or Canadian.

     Third and last for this tirade, we have the “tax the rich” nostrum, which is the major arrow in Elizabeth Warren’s quiver. (She does carry a bow and a quiver full of arrows, doesn’t she? I mean, as she’s an Indian, and dislikes guns as well...?) This is a frank admission that costs would increase. It merely seeks to excite the cupidity of the voter by offering to shift his burdens onto other, “rich” shoulders.

     We can leave aside the moral aspects of such a proposition. Either they’re obvious or they aren’t. But the practical aspects are important as well. First, just who are these “rich?” Second, what do you imagine they would do when confronted by the massive tax increases to be laid upon them?

     These are questions Miss Warren refuses to answer, as have all socialists throughout history. “The rich” proves to be an expanding category. It creeps steadily toward you and me as the State discovers that it “needs more money.” As for the behavioral changes “the rich” would adopt in the face of sharply increased taxation, discussing those is anathema to anyone on the Left. Leftists hate to ponder incentive effects and their operation in a dynamic system. They prefer a static picture of the world, in which “the rich” simply have to hold still and take whatever reaming they’ve “got coming.”

     If you’re thinking about emigration restrictions and anti-capital-flight legislation, you’re not alone.

     So Elizabeth Warren’s “Medicare for all” claims differ not at all from any other proposition about socializing medicine (or anything else). Either the costs Americans would bear would increase, or the availability of medical care would sink toward the levels that are currently costing lives and lifespans in every nation that’s adopted such a scheme. And you don’t need numbers to demonstrate it.

     Ultimately, the laws of economics will prevail over all political attempts to repeal or modify them. Whenever Smith wants something that he must purchase from Jones, the laws of supply and demand, in particular, will dictate the course of events. The costs – in money, time, pain and suffering, quality of products and services, and quality of life – cannot be lowered by waving a government wand. There’s no hiding them...nor is it possible to hide from them.

1 comment:

Linda Fox said...


No Government program is FREE - what that really means is "no direct cost to the non-taxpaying/low-taxpaying user".