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The Europeanization Of America

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 [1] of the Hagel nomination: the American people prefer Medicare to guns. Excerpts:

Advocates for children, education and the poor don’t even try to defend their programs by lobbying for cutbacks in Medicare. They know that given the choice, voters and politicians care more about middle-class seniors than about poor children.

So far, defense budgets have not been squeezed by the Medicare vice. But that is about to change. Oswald Spengler didn’t get much right, but he was certainly correct when he told European leaders that they could either be global military powers or pay for their welfare states, but they couldn’t do both.

More:

Chuck Hagel has been nominated to supervise the beginning of this generation-long process of defense cutbacks. If a Democratic president is going to slash defense, he probably wants a Republican at the Pentagon to give him political cover, and he probably wants a decorated war hero to boot.

All the charges about Hagel’s views on Israel or Iran are secondary. The real question is, how will he begin this long cutting process? How will he balance modernizing the military and paying current personnel? How will he recalibrate American defense strategy with, say, 455,000 fewer service members?

How, in short, will Hagel supervise the beginning of America’s military decline? If members of Congress don’t want America to decline militarily, well, they have no one to blame but the voters and themselves.

Again, to be clear, I don’t think a reduction in the US global military footprint is necessary a “decline” in the sense we usually think of such a thing, as opposed to a retreat to more rational and defensible borders, so to speak. Was the drawdown in defense spending after the Cold War a “decline” — or a prudent use of our resources, relative to the threats America faced? The US is currently responsible for 40 percent of the world’s entire military expenditures [2] — that’s five times what China spends, and 10 times what Russia spends. Do we have any other adversaries? According to the CFR’s numbers from 2011 [3], if the US slashed defense spending by about 50 percent overnight, we would be back to 2000 numbers. Those were the days in which everyone gassed on about how America was a “hyperpower.” Was that really Carter-era, post-Vietnam rot?

change_me

Brad Plumer has a pretty impressive collection of charts [4] showing how massive the US defense budget is. Clearly we have a lot of room to cut. One of the most surprising charts is the one showing poll results indicating that the American public broadly supports defense cuts, even much deeper cuts than either party proposes. Which makes David Brooks’s point.

But just so you keep things in perspective, there’s a chart showing that annual Social Security payments are about equal to the defense budget of the only global superpower, the one that spent as much on defense as the next 13 nations combined. And the budget for Medicare and other government-subsidized health care programs? The same.

Austerity’s a bitch.

 

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42 Comments To "The Europeanization Of America"

#1 Comment By Thomas Andrews On January 8, 2013 @ 8:28 am

Keynes was right.
Austerity has been demonstrated to make things worse when in a recession.

I wish a modern American conservative would explain to me when facts ceased to matter.

We must grow our way out of the recession. This is not achieved through austerity.

Then again, might there be a reason no other advanced country (and most second-tier) has the costs for good medical care we have in the US. If you really wanted to end the expense, you’d stop fighting single-payer. You’d permit Medicare to bargain with pharmaceutical manufacturers. Please tell me how it’s ‘capitalistic’ to prevent price competition?

#2 Comment By reflectionephemeral On January 8, 2013 @ 8:28 am

You’re quite right about the childish choice of the word “decline” to cut our war spending. Danielle Pletka of AEI used the same emotional, context-free rhetoric in an NPR interview this morning.

As to Medicare spending, we could use some Europeanization. [5]:

In 2007, the total spending for health care accounted for 16% of the country’s GDP, the highest share among the OECD and almost double the OECD average
On a per capita basis also the U.S. spent the highest with a total of $7,290 which is two-and-half times the OECD average
The public share of health care expenditure in the USA (45%) is less than any other OECD country
35% of total health care expenditures is done by private health insurance which is the highest In OCED

I can’t read Brooks on foreign policy without thinking of this Adam Smith line, from The Wealth of Nations: “In great empires the people who live in the capital, and in the provinces remote from the scene of action, feel, many of them, scarce any inconveniency from the war; but enjoy, at their ease, the amusement of reading in the newspapers the exploits of their own fleets and armies. To them this amusement compensates the small difference between the taxes which they pay on account of the war, and those which they had been accustomed to pay in time of peace. They are commonly dissatisfied with the return of peace, which puts an end to their amusement, and to a thousand visionary hopes of conquest and national glory from a longer continuance of the war.”

‘Course, when Brooks had his party in charge, he didn’t even have to pay that small difference in taxes. And “a thousand visionary hopes of conquest and national glory” has a nice ring to it. Maybe it could go atop the Weekly Standard‘s masthead.

#3 Comment By Seaoctopus On January 8, 2013 @ 9:08 am

Many folks don’t realize that the defense is not limited to the DoD but is intertwined through other agencies and departments. A massive wealth transfer…

#4 Comment By tennvols87 On January 8, 2013 @ 9:17 am

Stats are totally misleading not only do we have a welfare state much of our armed services budget is a welfare/ pension service. Also China lies about how much it spends anyways and effectively uses its network of spies to outsource its R&D costs to America. What this has clarified is that paleocons put Washington’s farewell address ahead of the Constitution or they’d fight this more. Butter before guns is the ultimate betrayal of Constitutional provisions. Are their any positive examples of superpowers gutting their military strength. It seems like a site as big on EC as this might look into that.

#5 Comment By Connie On January 8, 2013 @ 9:22 am

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

I find that a very prudent use.

#6 Comment By CatherineNY On January 8, 2013 @ 9:35 am

Rod, you’ve been advocating cutting Medicare in several posts lately, but I don’t think I’ve seen your proposals for an alternative to universal social insurance to provide health care for the elderly. I apologize if I have missed a post on this subject. What is your preferred alternative to our current system?

#7 Comment By Sam M On January 8, 2013 @ 9:43 am

The problem with this, politically, is that it’s not just a matter of buying fewer fighter jets. You need a lot fewer people to staff a much smaller military. But the military is, at least in part, a gargantuan jobs program. Look at the issue of base closures. The most anti-empire Congressman just KNOWS he needs that Special Forces training base in his district, and the biggest budget hawk is CERTAIN that the quartermaster division headquartered in his district is essential to a military of any size.

Scaling back the military is very likely to cost money in the short to medium term.

#8 Comment By Sam M On January 8, 2013 @ 9:45 am

PS:

“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.”

Just curious: What do you think counts as prudent domestic spending? You mention poor kids. Do you think we suffer from a lack of money spent on them?

#9 Comment By Tyro On January 8, 2013 @ 9:46 am

Keep in mind that we are also trying to slow the growth of Medicare so that is does not consume a larger and larger chunk of GDP.

In any case, associating a smaller military budget with “decline” is related to how many men buy a suit 2 sizes too big– they think that “bigger” means “more masculine”, when it fact they would just look a lot better if they wore clothes that were the correct size, regardless of whether a size 38 sounds less “manly” than a 42.

The question of whether we are in decline or not has more to do with the strength of our economy and the quality of our public infrastructure and services, of which the military is only a part.

#10 Comment By Dan Davis On January 8, 2013 @ 9:59 am

So paying the doctor bills of old people isn’t prudent?

#11 Comment By Gerard On January 8, 2013 @ 10:00 am

Military recruitment is at record numbers. Enlisted military can join a program that will pay them as officers and their way through 4 years at any college if they agree to stay on for 4 years as an officer after graduating. Defense contractor engineers in Virginia and Massachusetts make $250,000/year. TSA Air Marshals make $150,000/year for sitting in first class playing brickbat on their blackberries or walking around airports with a roller luggage bag. U.S. military officers make $130,000/year and half their time is spent as students at the War College or Harvard’s JFK school (w/ their housing and living expenses paid on top of their generous salary). Defending America from Islamofascists who hate us for our freedom pays really well.

When do serious people become very frightened of what’s coming down the pike in the near future? When do they panic? Can this Ponzi economy keep on going as we take care of more and more people? At what point do you apologize to your kids for bringing them into the world?

#12 Comment By collin On January 8, 2013 @ 10:10 am

It seemed to work well in the 1990’s under Bill Clinton so why would it not work now. I know the dotcom bubble was over the top but there was a great companies growing at the time. Had Bush not spent all his political capital on Iraq, he might have been successful on Social Security.

I always thought the best line Ron Paul should have used is Big Military leads to Big Government. If we spend all the money on invading other countries, why can’t we take care of our elderly.

#13 Comment By Coldstream On January 8, 2013 @ 10:30 am

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.

Whether we buy guns or pay doctor’s bills of old people, either way we’ll be borrowing money to pay for things we can’t afford, unless you really think that we’ll cut military spending and not turn around and spend that money somewhere else. The end result is the same. The whole damn thing collapses.

#14 Comment By TWylite On January 8, 2013 @ 10:31 am

Our Pentagon budget is welfare for the poor suffering Regional Procurement Compliance Divsion Supervisor pulling in low 6 figures at Raytheon or Northrop Grumman or wherever, able to afford only a midsize extended cab diesel pickup truck after tuition payments for private schoo for his kids. So why do you hate America? My questions are as loaded as my guns, because happiness is a warm, loaded gun. Wayne LaPierre is right, the answer to guns in school is to put more guns in school. And war is peace. To quote Laugh-In or whoever they stole it from, an America at war with someone else, is at peace with itself.

#15 Comment By Opinion Pole On January 8, 2013 @ 10:32 am

I expect Medicare will only get more popular. The continuing financial crisis has decimated a generation, sometimes several generations, of savings. Jobs are harder to find and keep. Real estate equity is gone, businesses are going under. The older have little chance to rebuild, the younger have reduced prospects, and almost everyone is feeling a lot less secure.

#16 Comment By Derek Leaberry On January 8, 2013 @ 10:54 am

All you have to do is to come to northern Virginia, home of hundreds of defense contractors, to understand how mammoth the “defense” budget is. In northern Virginia, the defense contractors along with the rest of the gigantic government apparatus has created wall-to-wall sprawl that would make George Washington puke. Naturally, northern Virginia constantly whines about traffic gridlock caused by mindless growth and there is a constant drumbeat for more spending on roads. By the time the roads to alleviate northern Virginia’s traffic woes are finished, sprawl has defeated the purposes of the new roads. It is a dreadful cycle and government spending, including “defense” spending, is the villain.

Northern Virginia is the lynchpin of the modern Democratic Party in Virginia. Northern Virginia demands higher taxes statewide and furnishes the votes for the statewide election victories of Mark Warner, Tim Kaine and Barack Obama. If by cutting defense Northern Virginia’s influence can be curtailed, so be it and conservatives should be happy.

#17 Comment By Charles Cosimano On January 8, 2013 @ 11:27 am

Two predicitions. Medicare is going to grow, not shrink. Politicians who oppose that will have to get honest work.

#18 Comment By tennvols87 On January 8, 2013 @ 11:31 am

Something tells me a lot of the people whining about Defense Department largese were the same people who caterwauled about Scott Walker. Funny that. But to pretend that defense department costs will be concentrated in reducing bloated salaries is characteristically myopic for this crew. What is going to get cut is fighter squadrons and carrier groups. International travel and shipping is going to get a lot more interesting.

#19 Comment By Noah172 On January 8, 2013 @ 11:37 am

The Europeanization Of America

America becomes less European demographically, more European politically? 😉

All this talk of defense cutbacks is just returning the US to its pre-1945 norms. The Founding Fathers were wary that large standing armies would create a temptation to overseas adventurism and despotism at home. Until 1945, America’s peacetime professional military was tiny and lightly funded. For example, at the beginning of the Civil War, the Army (the professional army, not state militias) was 17,000 strong out of a total population of 31 million, or one soldier for every 1800-odd civilians (can’t find an exact figure for the Navy, but that was even smaller). Today the ratio of active-duty service members to civilians is about 1 to 200.

#20 Comment By jacobus On January 8, 2013 @ 12:01 pm

If only we had cut our military so much in the 1990s that it made invading Iraq seem impossible…

We, as a country, need LIMITS!!!

#21 Comment By Franklin Evans On January 8, 2013 @ 12:06 pm

Inspired by the Manning corollary to Godwin’s Law, I give you the Evans Federal Budget Discussion Killer: Any discussion about federal taxes and expenditures will die a quick death soon after the first mention of “socialized programs”. 😉

My bogeyman is the profit motive. There just are some things in our society that immediately suffer from the push for profits: medical care, public education, national defense, national infrastructures (primarily around transportation), just to name the ones prominent in my rather tired brain.

The reason Europeans get qualitatively equal medical care for a fraction of what we spend is that the difference goes to investors and corporate executive salaries. The arithmetic looks rather simple to me.

So, the question I perennially ask my fellow citizens is this: Do you want quality, or do you want profits?

#22 Comment By JonF On January 8, 2013 @ 12:30 pm

Rod, why do you think healthcare is a “bad” thing? To be sure, I think we ought spend less money per patient than we do– but not by cutting anyone off, but by insisting that the healthcare industry start doing more with less– i.e., get productive as every other industry on the planet (except education, the other big money waster) has been forced to do.
However I can think of much worse things to do with money than helping the sick. I would rather God pass judgement on us for that than for a myriad other possible things.
Also, I detect a hint– a bare one, and maybe I am reading more into it than is there– of dislike for the elderly. Why? Some of them are unlikeable as individuals of course (though that applies to everyone, even the youngest kids), but collectively we owe them our world– which, hand-wringing aside, could be much, much worse than it is.

#23 Comment By Rod Dreher On January 8, 2013 @ 12:54 pm

Rod, you’ve been advocating cutting Medicare in several posts lately, but I don’t think I’ve seen your proposals for an alternative to universal social insurance to provide health care for the elderly. I apologize if I have missed a post on this subject. What is your preferred alternative to our current system?

Catherine, I don’t have strongly defined or well-informed views on Medicare, but taking the 30,000-foot view, it seems to me that we absolutely have to do something to rein in costs, or they’ll break us. We can’t keep going on the current trajectory.

Jon: However I can think of much worse things to do with money than helping the sick. I would rather God pass judgement on us for that than for a myriad other possible things.
Also, I detect a hint– a bare one, and maybe I am reading more into it than is there– of dislike for the elderly. Why?

Dislike for the elderly? Good grief, no. My parents are elderly. God willing, I too will be elderly one day. I was raised in a culture that reveres the elderly, and I maintained that orientation despite living in Fort Lauderdale for three years, in a place that was disproportionately populated by elderly people who could be complete jackasses in public, and who behaved as if their advanced age gave them license to be less than respectful of others. Maybe it was a cultural thing.

Anyway, I agree with you that providing health care for the sick and the elderly is, or should be, a top priority of ours. What troubles me is that health care costs have been going up so much, and will continue to do so, that they’re going to eat up money that we ought to be spending more equitably — and that includes investments in things like infrastructure, which probably won’t benefit the elderly here today, but will benefit their grandchildren. Taken too far, Medicare spending will end up like eating the seed corn that the children and grandchildren will need to support themselves. There may be no greater need in our society than to pay for health care for the old, but to consider it an unlimited need is to distort our proper priorities. Children don’t have the vote, and unfortunately younger adults don’t vote. But they exist.

#24 Comment By Mary Russell On January 8, 2013 @ 1:11 pm

“You mention poor kids. Do you think we suffer from a lack of money spent on them?”

In healthcare, it’s not so much the poor kids (who have Medicaid, and therefore have Cadillac insurance) but middle and lower middle class kids.
For instance: in my state, autism therapy for children is an out of pocket expense. I’m not talking about the crazy stuff like chelation therapy. I’m talking about speech and play therapy, ABA-all of which is now evidence based. Private insurers may or may not cover this stuff. So if the family is not on Medicaid, or they have insurance but it doesn’t cover developmental problems (quite a few insurers don’t), then the family is stuck paying $70/hour for speech, occupational therapy, PT. Needless to say, many families can’t do this – and forego early intervention for kids who would benefit greatly and over the long term with their academic outlook if they got speech therapy early on.

Yet we are now paying for absolutely free colonoscopies for well to do elderly, free mammograms on women in their 80s (long past the age the test is evidence based). We are paying for an obscene amount of unnecessary tests and procedures in the ICU for the elderly person that everyone knows has only one finger above the grave.

[Note from Rod: Dr. Russell, I’m so glad you wrote this. When my oldest son received his Asperger’s diagnosis and sensory processing disorder diagnosis at age six, we put him into a physical therapy regimen that proved to be very, very helpful. It was also expensive, but we were fortunate enough to be able to pay for it. We saw dramatic differences in his behavior within a relatively short period of time. Years later, when his little sister was young, and started showing evidence of sensory processing disorder, we by then had the experience to know what we were dealing with, and put her into physical therapy at an early age (three), knowing by then that early intervention is key. Consequently, she hasn’t had nearly the problems that her oldest brother did. I think about parents of the poor and working class who couldn’t have afforded the therapy that made such a huge difference in our kids’ lives. And I think about research showing that most Medicare costs are accrued for the quite elderly, in the final years of their lives. This is unjust. — RD]

#25 Comment By Rob in CT On January 8, 2013 @ 1:28 pm

Agreed that healthcare costs must be reigned in. Medicare for all. Granted, that’s a significant change, and there are many entrenched interests who oppose it. Which is why it didn’t happen.

We’re going to have to cut the military budget *and* benefits expenditures. They make up most of the budget. There’s really no sane way to avoid military cuts.

Now, as someone who thinks Keynes was basically right, I recognize that sharp military cuts will be harmful. It has to be phased in slowly, along with any other austerity measures. The last thing we want to do is trigger a double-dip recession. Any cost savings from the cuts will be wiped out (via drop in revenue + increases in automatic stabilizer expenditures).

#26 Comment By reflectionephemeral On January 8, 2013 @ 1:37 pm

I don’t have strongly defined or well-informed views on Medicare, but taking the 30,000-foot view, it seems to me that we absolutely have to do something to rein in costs, or they’ll break us. We can’t keep going on the current trajectory.

That’s why all fiscal conservatives supported the Affordable Care Act. Fiscal conservatism has of course long been dead in the Republican party. [6]:

The Affordable Care Act’s central hope is that Medicare can lead the health-care system to pay for value, cut down on overtreatment, and cut out treatments that simply don’t work. The law develops Accountable Care Organizations, in which Medicare pays one provider to coordinate all of your care successfully, rather than paying many doctors and providers to add to your care no matter the cost or outcome, as is the current practice. It also begins experimenting with bundled payments, in which Medicare pays one lump-sum for all care related to the successful treatment of a condition rather than paying for every piece of care separately. To help these reforms succeed, and to help all doctors make more cost-effective treatment decisions, the law accelerates research on which drugs and treatments are most effective, and creates and funds the Patient-Centered Outcomes Research Institute to disseminate the data.
If those initiatives work, they head over to the Independent Payment Advisory Board (IPAB), which can implement cost-controlling reforms across Medicare without congressional approval — an effort to make continuous reform the default for Medicare, even if Congress is gridlocked or focused on other matters. And if they don’t work, then it’s up to the Center for Medicare and Medicaid Innovation, a funded body that will be continually testing payment and practice reforms, to keep searching and experimenting, and when it hits on successful ideas, handing them to the IPAB to implement throughout the system.
The law also goes after bad and wasted care: It cuts payments to hospitals with high rates of re-admission, as that tends to signal care isn’t being delivered well, or isn’t being follow up on effectively. It cuts payments to hospitals for care related to infections caught in the hospitals. It develops new plans to help Medicare base its purchasing decisions on value, and new programs to help Medicaid move patients with chronic illnesses into systems that rely on the sort of maintenance-based care that’s been shown to successfully lower costs and improve outcomes.

In the near term, for another fifteen or so years, projected increased federal health care spending comes predominantly from the aging of the population. But over the long haul, as the CBO explained a few years back, “[t]he bulk of that projected increase in health care spending [on Medicare and Medicaid] reflects higher costs per beneficiary rather than an increase in the number of beneficiaries associated with an aging population.”

All rational discussion of entitlement reform comes from the Democratic Party these days. (Not from “the left”, necessarily; the ACA itself comes from the pre-irrational Heritage Foundation).

#27 Comment By Lindsey On January 8, 2013 @ 2:29 pm

While I’m uncomfortable with our military spending, I also have to admit to being concerned about cutting spending. I live in a rural area, and the local military base is one of the very few places in the area that allows people to maintain a middle class lifestyle. I’m not talking about being “able to afford only a midsize extended cab diesel pickup truck after tuition payments for private school for his kids,” as one person put it. I’m talking about a comfortable existence that allows college educated young people to come back and live near their families, perhaps purchase an average sort of house, and put their children through college (with help from financial aid programs). The base also employs a large number of local people in blue collar jobs, and of course all of these positions provide insurance and retirement benefits that many would not be able to afford on their own, or obtain through other employers. I’m concerned that spending cuts would likely mean that the local base will close, which would mean a massive loss of jobs. But then again, all cuts hurt somebody, somewhere.

#28 Comment By Fran Macadam On January 8, 2013 @ 2:41 pm

“Affordable” the health care iis not. Relying entirely upon private insurance crony capitalists, adjuncts to banks and Wall Street speculation firms, it merely makes a vast transfer of remaining sub-1% wealth to these entities mandated. Once again already this year as the fiscal belt is tightened on the rest of us, insurance companies are socking the public with more annual 30% increases. At the same time, fiscal cliff measures gutted meaningful subsidy and alternatives.
Evidently, we had an election in which the public voted, but a government joined in bipartisan purchase by crony capitalism.

#29 Comment By Fran Macadam On January 8, 2013 @ 2:44 pm

“Affordable” the health care act is not. Relying entirely upon private insurance crony capitalists, adjuncts to banks and Wall Street speculation firms, it merely makes a vast transfer of remaining sub-1% wealth to these entities mandated. Once again already this year as the fiscal noose is tightened on the rest of us, insurance companies are socking the public with more annual up to 30% increases. At the same time, fiscal cliff measures gutted meaningful subsidies and alternatives.
Evidently, we had an election in which the public voted, but get a government joined in bipartisan purchase by crony capitalism.

#30 Comment By Tyro On January 8, 2013 @ 3:18 pm

I’m talking about a comfortable existence that allows college educated young people to come back and live near their families, perhaps purchase an average sort of house, and put their children through college

Being pretty familiar with the military industrial complex myself, it really is designed in such a way as to make sure that talented engineers can stay in their home region if they so choose by getting employment at a nearby military base or laboratory. I don’t think we really NEED a National Lab in Idaho, but the idea is that if you got a EE degree from Idaho State, you shouldn’t have to move all the way to Boston or California to make a living.

#31 Comment By Derek Leaberry On January 8, 2013 @ 3:40 pm

The advances of medicine over the last forty-five years, which have improved the lives of tens of millions, have become financially unsustainable in two ways. First, at great expense, we can prolong life so that almost every Medicare recipient will extract much more from Medicare than they ever put in. Second, because modern medicine has done an outstanding job at prolonging life, almost every Social Security recipient will extract much more from that fund than they ever put in. It is an unpleasant dilemma which will not be resolved nicely.

#32 Comment By Pete S On January 8, 2013 @ 4:07 pm

I think we need to look at improvements in a couple of areas. First, as Derek Leaberry says we have made great advances in the last few decades which do prolong lives at great expense. Perhaps some of the research and resources which made these advances possible should go to better preventive care and education early in life so that people reach Medicare age in better condition? Maybe we could take away some of the subsidies for high fructose corn syrup to fund this as well.
Relatedly, we need to stop referring to regulations aimed at improving the environment or workplace safety as “red tape”. These are just more instances of getting lower costs (and prices) now at the cost of creating health problems which will be paid for by future generations.
I am not recommending a bigger nanny state, I am just saying that we need to consider future consequences of current decisions.

#33 Comment By Zzzzz On January 8, 2013 @ 4:10 pm

We spend the bulk of healthcare spending at the beginning of life (eg neonatal units, children with serious defects, etc) and at the end of life, on doing everything we can to preserve the lives of dying people. It is unjust, but the issue is an ethical one. If you state that it is a waste of resources to pay for the care for a child born with serious medical deformities, who will spend his or her short life at a cost of a million dollars with multiple surguries before dying by age 5, people will howl that it is immoral. The same applies to denying an 80 year old an 1/2 million dollar operation to install a medical device that will allow them to live less than a year. We can’t get these costs under control because people won’t accept that requires difficult moral choices.

#34 Comment By Travis On January 8, 2013 @ 4:17 pm

The question is not “Is spending bad?” The question is “What spending provides the greatest return to our nation?”

I defy anyone to argue that the trillions of dollars spent on F-22 fighters, drones firing missiles into tent camps and ground troops occupying Afghanistan has returned more value to the American people than the trillions of dollars spent on providing a health care safety net to poor and elderly Americans.

#35 Comment By Lord Karth On January 8, 2013 @ 4:58 pm

Travis writes: “I defy anyone to argue that the trillions of dollars spent on F-22 fighters, drones firing missiles into tent camps and ground troops occupying Afghanistan has returned more value to the American people than the trillions of dollars spent on providing a health care safety net to poor and elderly Americans.”

F-22 fighters, drones and all the rest of what makes up national defense keeps nasty outsiders with bad breath and weird ideas about killing Americans, stealing their stuff and/or enslaving us at bay. There’s a reason why “provid[ing] for the common defense” was the first specific function of government mentioned in the Preamble to the Constitution.

Your servant,

Lord Karth

#36 Comment By Franklin Evans On January 8, 2013 @ 5:15 pm

In response to Derek’s points, and with due respect from not knowing his level of knowledge of such things…

As a former insurance professional and pension actuary, I assert that the concerns over Medicare and Social Security are quite overblown.

Medicare: This is an insurance program with a “fixed premium”, that being a poor analogy for the Medicare portion of the FICA withholdings. Basic actuarial mathematics has your answer: adjust the amount of premiums being collected based on changes to the experience of the covered pool.

Flipside: Medicare is a political football under the control of Congress, and while I’m sure they solicit advice from actuaries, they are not required to follow it.

Social Security: This is a pension program. Any statement that starts with “…and they will get out of it more than they put into it…” is totally ridiculous. Revenues continue to increase with every annual increase in the compensation ceiling up to which the OASDI portion of FICA is calculated. Past adjustments have included increasing the normal retirement age based on year and month of birth (mine is around 67) at which the “full” benefit is calculated. At no point in its history has Social Security needed draconian adjustments, being more closely advised by pension actuaries than the vast majority of private pension plans.

Flipside: As another political football, Obama’s recent “vacation” by reducing the employee portion of OASDI withholding is not the first political action in conflict with the basic design of the program. Social Security is a dedicated-funding program, not some bogusly-argued “entitlement”.

I spent 14 years in the pension administration service industry. These are complex concepts. However, the basics really aren’t that difficult to understand, and it’s that understanding which makes it easy for me to reject the scare tactics being used. How do you know a politician is lying about Medicare or Social Security? Because he or she omits “as they are constructed now, without any adjustments” to “It’s going to go bankrupt in X years!” Only an idiot would let them ride as they are, and we’ve had decades of smart people watching over them.

#37 Comment By Duncan in London On January 8, 2013 @ 5:51 pm

This point has been made above but cannot be made often enough. This is a crazy-sounding debate from outside the States. And I know I’m late commenting…..

Americans spend MORE on health than Europeans. Right Now. To become more European is to spend LESS for basically similar outcomes – to become more efficient. You have an insanely inefficient healthcare system which is ruining America.

Europe has many economic problems right now. NONE of them are caused by lavish spending on healthcare. It’s really important you understand this.

The problems are the entirely self-created one of the poorly-implemented single currency, and Europe’s low birth rate (leading to a long term problem of who is going to pay the debt that exists). And then there’s lack of flexibility in many labour markets, Greece’s criminal politicians etc etc.

BUT the costs of the European healthcare systems are cheaper than, as good as, and growing slower than, their American equivalents. And THAT’S the thing you don’t want to import from Europe?

You can have Guns AND Perfectly Good European Butter. You really can.

Or ONLY really, really stupid wasteful expensive American Butter. And you’re choosing the latter. And complaining about it. And debating it like it’s not insane. What is wrong with you people? Take a look at this chart:

[7]

You’ll find a defence budget in there. You’re Welcome.

#38 Comment By Duncan in London On January 8, 2013 @ 6:53 pm

Wow just read the Brooks piece:

Europeans, who are ahead of us in confronting that decision, have chosen welfare over global power. European nations can no longer perform many elemental tasks of moving troops and fighting…

….heavily implying that they are being forced to do this by their exploding healthcare costs, no? How misleading your whole debate is!

You think Brad Plumer has great charts? Look at this:
[8] v [9]

Tell me who is wasting money here? (Remember US and European healthcare outcomes are basically the same)

#39 Comment By Peter On January 8, 2013 @ 9:34 pm

Duncan in London – Graphs are the best. It is interesting that the US spends more public money on health than the UK. I was aware it was more as an absolute value but I didn’t know it was more as a percentage of GDP.

#40 Comment By Joseph D’Hippolito On January 9, 2013 @ 3:03 am

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.

Rod, there’s a vast difference between excessive care for terminal patients and “paying the doctor bills of old people.” We are rapidly becoming a society in which the elderly and chronically ill are viewed less as human and more as inconvenient, especially financially.

If Obamacare remains in place, the United States will embrace euthanasia within 10, 15 years for the “common good.” I’m not kidding.

I strongly suggest you and everybody else read about what Britain’s National Health Service has wrought. It’s the future in this country — and it’s far from pretty:

[10]

#41 Comment By JonF On January 9, 2013 @ 6:17 am

Lord Karth,

Do you really think we could not defend this country at much less expense? Come on, we did so for generations after the US was founded, and in a more dangerous world than we have now (that is, there were more aggressive nations hell-bent on imperial adventures in that world– nowadays that’s us). I don’t think anyone is advising unilateral total disarmament. Our huge military isn’t about defending the US at all. It’s about imposing our will everywhere and anywhere we choose.

#42 Comment By Siarlys Jenkins On January 9, 2013 @ 10:18 pm

I don’t have strongly defined or well-informed views on Medicare, but taking the 30,000-foot view, it seems to me that we absolutely have to do something to rein in costs, or they’ll break us. We can’t keep going on the current trajectory.

We can’t shift to any other trajectory without a realistic plan for what the new trajectory is going to be, why, what it will cost to change course, and what we will have when the transformation is over.

Nobody can talk with integrity about balancing the budget, cutting the deficit, or paying down our current load of debt, without being quite specific about what we are going to stop spending money on, what new sources of revenue we are going to tap, and how the numbers add up.