Rod Dreher, on our spending priorities:
I support the Chuck Hagel nomination for Defense Secretary, in large part because I think we should have a smaller military footprint around the world, and invest that money at home. But I’m not confident that that money will be used prudently at home. Instead, it will go to pay the doctor bills of old people; there won’t be much for anything else. This is not, of course, a good thing, but it is better than borrowing money we don’t have to pay for things we can’t afford, until the whole damn thing collapses. I appreciate David Brooks pointing out the real meaning of the Hagel nomination: the American people prefer Medicare to guns.
The title of his post is “the Europeanization of America,” suggesting that we are going the way of Europe in preferring health-care spending to defense spending.
Compared to my group of eight developed Western European nations, we spend about 3 times as much on defense, measured as percent of GDP (which is probably the right measure). And yes, that’s still a much smaller number than either we or they spend on health care. But we also spend 60% more than these Western European nations do on health care – and, because we’re talking about much bigger base numbers, our “excess” spending on health care (the difference, as a percentage of GDP, between our spending and the average spending across my comparison group) is twice our “excess” spending on defense.
Between defense and health care, our “excess” spending over these European comparison countries is almost 10% of GDP. That’s an enormous amount of money.
I’m not sure what my comparison nations are spending 10% of their GDP on that we aren’t. Education isn’t it; we spend about the same as a bunch of comparable European countries. Ditto for total spending on R&D. Interestingly, we spend a lot less than the EU average on agricultural producer supports, at least as a percentage of gross receipts. Perhaps that’s the difference: we subsidize health-care providers and weapons-manufacturers, they subsidize cheese- and sausage-makers.
Getting down to European levels of health-care spending is a very tall order. Shrinking is always harder than growing more slowly. In health care, it means either finding large opportunities to increase productivity, and therefore reduce employment, in health care (perhaps through the application of information technology, though that seems to be a promise that rarely if ever gets delivered), and/or a grinding restructuring of the whole sector to reduce high-cost services (which, inevitably, will also mean a reduction in some kinds of care), and/or reducing the revenue of the various levels of service providers (doctors, hospitals, insurers). Any and all of these will mean taking on very powerful constituencies. Because we’re starting from a much higher cost base, we shouldn’t assume that adopting European models for our health-care system will make it easy for us to achieve European spending levels.
Regardless, though, if our budgets were to become “Europeanized,” we’d be spending a lot less on health care for old people as well as much less on defense.