No, not because of the Iraq war but because of healthcare. The CBO writes:
Under current law, rising costs for health care and the aging of the population will cause federal spending on Medicare, Medicaid, and Social Security to rise substantially as a share of the economy….In response to your letter of May 15, 2008, the Congressional Budget Office (CBO) has prepared the attached analysis of the potential economic effects of…using higher income tax rates alone to finance the increases in spending….
With no economic feedbacks taken into account and under an assumption that raising marginal tax rates was the only mechanism used to balance the budget, tax rates would have to more than double. The tax rate for the lowest tax bracket would have to be increased from 10 percent to 25 percent; the tax rate on incomes in the current 25 percent bracket would have to be increased to 63 percent; and the tax rate of the highest bracket would have to be raised from 35 percent to 88 percent. The top corporate income tax rate would also increase from 35 percent to 88 percent.
Such tax rates would significantly reduce economic activity and would create serious problems with tax avoidance and tax evasion.
This is the projected tax hike with current healthcare spending. Remember this the next time a Democrat running for office promises to expand healthcare.
Update: Kling has more.
And - since HP brings up the Iraq War - we would do well to remember that the Democratic candidate is promising to reduce our presence, and therefore the tax burden, of said war.
In addition, it seems appropriate to note that the current high cost of government-assisted healthcare has skyrocketed recently due to the extremely expensive Medicaire package passed by our Republican President and his Republican Congress.
Just sayin’.
True - but, it should be also noted, that the total cost of the Iraq war, from the beginning to the end, would only pay for one year of the coming costs of healthcare.
Oh and one more point, it is only the Democratic presidential nominees that are proposing to increase government healthcare. McCain proposes no such thing.
I agree that none of the plans on the table work well–Obama’s is really a non-starter. That said, there’s something odd about the fact that much smaller economies manage somehow to provide pretty good health coverage to their citizens. I get the feeling that American health care if far overprized. One could fly to France, pay a fraction of the full uninsured doctor’s fee, and probably pay for your ticket if you live on the East Coast. (You’d probably aslo get better healthcare and get an appointment faster.) But I agree that the Democrats have no fix. The US healthcare system, if is every to work, needs to be completely dismantled and rebuilt.
Hmmm… Can you please quantify? As I understand it the Iraq War has already cost over a trillion dollars (some say three trillion). And there’s no telling when it will end. How exactly did you come to this conclusion?
Karlo,
Those countries have ‘cheaper’ health insurance, in large part, because of the United States expensive health insurance. Just to give one example, because the United States does not have price controls on drugs, more drugs are invented…and of course those countries reek the benefits of it without paying much of the costs. You move the United States healthcare stystem in their direction and you kill the goose that lays the golden egg.
Second, France, Britains, and Canadas healthcare system is not really all that great. They have longer waiting lines, lower quality, and many times the government simply refuses to perform certain operations. Hardly something I’d want to move towards.
LaurenceB,
From this. Even assuming GDP will stay what it is now, healthcare would roughly cost 1.5 trillion - per year. In other words, from a fiscal conservative point of view, the one time Iraq war seems like small potatoes against the always growing, year after year, healthcare systems Democrats want to expand.
HP,
The U.S. government spends 1.5 trillion a year on healthcare costs? Where does that figure come from?
From the document you linked to, on Page 5, Table 1, it seems pretty clear that all public healthcare spending is 847.3 billion/year (in 2005, the last year for which data is available).
That’s only a bit higher than the yearly cost of the Iraq War (off-the-cuff estimating between 400-700 billion). If we assume that both healthcare and warfare continue to appreciate, than these costs seem roughly comparable, with healthcare edging out the Iraq War (but not total Defense spending, of course).
I will add that up until now I’ve been trying hard (and hereby failing) to resist the urge to point out that the Republican candidate seems fairly comfortable with the prospect of dramatically expanding war costs (to include Iran). If this is our choice: Escalating health care costs vs. (slightly less extravagant) Escalating war costs; sign me up for the Democrat.
No, it doesnt currently spend 1.5 trillion, but its fast approaching that.
Thats the difference: healthcare cost grows, almost exponentially each year, while the cost of the Iraq war stays relatively the same (maybe even gets cheaper with each passing year). If you look at the graph at the link I provided, you will see that even with only current healthcare promises the government makes today, healthcare will grow to cost 1, 2, even 3 trillion per year. You show me any estimate even remotely comparable to that regarding the Iraq war.
And still, even with this in our future, Democrats continue to campaign on expanding government healthcare.
Actually speaking err typing; the democrats have made the Middle East far way more dangerous than the republicans could EVER HAVE MADE IT.
They made the case for nuclear energy with in the region, and now the countries of turkey,syria,saudi arabia,jordon,egypt as well as other countries with in the middle east are actively seeking nuclear power, and one of them is actively looking into uranium enrichment before they EVEN have anything being built “minus IRAN”.
There is an old saying here in washington d.c.
” Who needs enemies? When you have the democrats”.
Ahh… So, you’re comparing current war spending to projected future healthcare spending, and discovering that the second is much larger.
I could say something snarky here I guess, but I won’t.
Fernando,
On your list, you forgot Israel. Weird mistake, since they’re the only country in the mideast with nuclear weapons.
Do you think that war spending, adjusted for inflation, could double, triple, even quadruple in the future? It seems to me that no matter how you view the war, its most expensive years are behind us. I could even accept a continuation of current spending…but a doubling? Well healthcare is clearly going to do that. Nobody denies this.
So on this point alone, from purely a fiscal conservative POV, the Democrats seem more scary than the Republican nominee.
Who knows? How much would a war with Iran cost? War costs go up when wars get started - neither of us can predict if a new war will start in the next four (or eight) years, but we do know which candidate is more likely to start one.
Remember - ten years ago people were talking about a “Peace Dividend” and the budget was balanced - in part, due to military spending cuts. At that time, what would a “projected future war spending” graph have looked like?
The fact that the CBO can’t predict war spending, certainly does not mean that we will not be spending huge amounts of taxpayer money on wars in the future.
And, all other things being even, isn’t it preferable to spend a dollar on health care, rather than warfare?
True. But were still not comparing apples to apples here. Healthcare costs (within a certain margin) is a certainty…war costs are not. If we go to war with Iran the costs may approach healthcare costs, if we stay in Iraq for many years the costs may approach healthcare costs, etc…my point here is that Democrats are proposing to further expand a program that we already know costs too much…while McCain, at best, is only a likelihood to increase the cost of war, and even then, wars costs tend to be much shorter lived than government programs (for example, LBJ’s medicare, where the bulk of the healthcare costs come from, is still with us today while most people cant even give you an estimate of how much LBJ’s vietnam war cost us).
As for war vs healthcare…that depends. For example, given high opportunity costs, do you think it would have been better for the US to have invested more in WWII or healthcare for its citizens between 1938 and 1945? Its not an easy answer - both, health and security, seem pretty fundamental to me. Of course this assumes security is at issue in the war being fought, and whether the government program is really addressing the health of its citizenry…two very debatable points on their own.
All well argued, HP. It’s a tough call.
HP,
I certainly agree with you that healthcare funding will cost us more than the entire Iraq Invasion from 2003 to today. I think the real issue here is that the purpose of health care is keep Americans in good health; what is the purpose of the war in Iraq? The purpose keeps changing, and the only thing the Bush Administration is certain of about Iraq is that we simply cannot withdraw and admit defeat.
If your answer is that the war is being waged to improve the lives of the Iraqis, I would have to respond by asking why so many billions of American tax dollars have to be spent on Iraqis? Doesn’t this country donate enough money to the international community?
As for the reason for the high prices of health care, one only has to look towards the 600+ lobbyists of the pharmaceutical industry that currently permeate in Capitol Hill. The Food and Drug Administration ushers in regulations that keep federal agencies like Veterans Affairs and Medicare from negotiating lower prices when they buy prescription drugs in bulk. Basically, the government forces itself to buy drugs at whatever price the drug companies charge.
Furthermore, people on government medical insurance can only get prescriptions for drugs that are FDA approved. There have been numerous FDA recalls over the last few years for medications like Vioxx, Avandia and Meridia which has some deadly side effects unknown by the FDA such as an increase in heart failure. This makes me believe that the only thing a drug manufacturer needs to acquire FDA approval is a big fat bribe to the Congress members whose committees oversee the FDA. Therefore, only manufacturers who are FDA approved will have exclusive access to millions of Americans who are enrolled in state-run health insurance plans. This eliminates their competition who would’ve tried to sell medications for less.
Insurance also makes things expensive, as hospitals and clinics spend a lot of money just to hire people to process the mountain of insurance paperwork. Insurance also tells patients which doctors they can and cannot be seen by, what prescription medications they can obtain and what procedures are and aren’t covered by insurance. And since Medicaid/Medicare patients don’t have to pay for the doctor visits, procedures, surgeries and hospital stays, hospitals charge whatever they want and the government pays the bill. Some health care professionals and patients even engage in health insurance fraud which robs the state of millions and billions more are spent to investigate shady Medicaid claims and try to catch the frauds. I guess the hospitals figure if the state is willing to pay whatever doctors charge, why not go the extra mile and charge the state for services that were never rendered to patients?
John Stossel of 20/20 offered a great analogy: What if the government provided food for poor families the way they do with health care? We’d have grocery insurance, and families wouldn’t care how much their groceries spent or even know how much they were. That’s why I believe state-sponsored health insurance should be abolished and replaced with a simpler system identical to that of food stamps: recipients receive a
set amount of funds on their Medicaid/Medicare cards based on how many people are in their household and what, if any, medical conditions exist that would warrant increased visits, medication or special medical care. Then doctors and drug manufacturers would actually compete for patients’ business and set prices lower the way supermarkets who accept food stamps do today.
After that, the fucking FDA should be completely dismantled. That would also decrease government spending.
I agree with much of what you say. In fact, thats pretty much my philosophy on all fundamental human needs: the poor should be subsidized by the government in the most direct way possible and everybody else should pay for it themselves. This is why I agree with medicaid in principle but find medicare problematic.