Chicago Columnist Illinois Review · Political Strategist Analyst · Expert Advisor Institute for Truth in Accounting

SEIFFE:  What Hit Us Last Night?

November 8, 2009

By Ralf Seiffe

You have to hand it to Nancy Pelosi, the first female Tyrant of the House, for squeaking the health care bill through by just five votes. The news media was agog this morning, telling its diminishing audience that “health care reform” had passed, noting in every story that a single, misguided Republican had voted to support the Speaker. Now, with this sweeping bipartisan support, the legislation heads over to the senate. Expect another blue dog-type swindle there, and this so-called health care reform to become law by February. But, in reading it and by news reports, why exactly do we get from health care “reform”?

What, indeed? Americans do not think it’s the most important issue facing the nation, according to the exit polls in last week’s elections. The people want jobs yet Commisar Pelosi’s troops felt empowered to appropriates one of six dollars in the economy. The externalities this will add to micro-economic, job-creating decisions are evident even to knuckle-dragging, reflexive Democrats in New Jersey.
It won’t save money. 

The record of government’s ability to estimate or run large social programs is both clear and almost universally unsuccessful. The USPS, Medicare, and Social Security are all built on financially unsustainable models and have amassed a $72 trillion dollar unfunded liability for our children. Need more proof? In 1965, the cost of Medicare was estimated to have an annual cost of about $12 billion in 1990. The actual cost was more than $110 billion. It now costs more than $400 billion. If the CBO estimates are twice as accurate, as they were in 1965, the $1.2 trillion cost estimate for Pelosi Care will have an annual variance of five times the forecast. 

What’s more, the forecast is an accounting fraud. One flaw in congressional budgeting rules is that forecasts only cover ten years. Recognizing this, the bill’s cost estimates are based on collecting ten years’ of revenues, starting now, but only five years of benefits, starting in 2013. Even General Motors would be profitable if they got ten years of sales but only had to make five years’ worth of cars. Said another way, the Speaker is counting her revenues twice.

It’s errant theft from our children. One enduring image of this speaker’s regime was on her first day, on the House podium surrounded by her grandchildren. Those children—and yours—are the victims of “health care” because we will have to borrow the money to pay for it. The duty to repay will fall on our children coming in the form of much lower living standards in a diminished America. The will serve at the pleasure of our foreign creditors. 

It will lead to rationing just as Medicare now proportionally denies more care than does private industry. It’s clear why—when one entity has a monopoly, it cannot grow faster than the market, by definition. Since it cannot get larger by competing with others by offering better service at lower prices, its incentives are perverted. Typically, monopolies raise prices and lower service levels. In the case of “health care reform” we are already seeing the outlines of huge new taxes and penalties—including jail for insurance scofflaws. As for lower service levels—simply compare what’s available in the U.S. versus Canada. Friends in Michigan tell me the only hope to keep Detroit from disappearing altogether are Canadians coming for hip replacements and chemotherapy.

It will stop the advance of life expectancy. In the last 150 years, medical technology, especially that created by Americans, has roughly doubled life expectancy. This occurred not because we “controlled costs” but because we invested and spent more on medicine. One hallmark of a successful, wealthy society is the ability to fund increasing amounts into complex and expensive life extension techniques. Once the government takes on healthcare, expect bureaucrats to conclude that research simply increases the options—and the costs –of keeping old people alive. One-man death panelist Robert Reich, the intellectual and former Democrat cabinet minister, will quickly see a double benefit in killing research to bolster his already expressed odious arguments on “pulling the plugs”..

It doesn’t fit the times. Nationally socialized health care is an artifact of 1930’s, command and control thinking. Democrats—and their “bipartisan majority”—have been working on this political fool’s gold since Harry Truman followed through on FDR’s “second bill of rights”. But it’s an idea that meshes with an industrial, hierarchical society that vanished from America in the 1970’s and ‘80’s. In every successful business—and that includes the practice of medicine—product and treatment choices expand over time. Ossified politicians that offer fewer choices do not understand this basic fact of nature and for this reason, nationalized health care will fail.

In addition, the Democrats decided that one of their most important concepts, “a woman’s right to choose”, could be threatened in order to pass this 2,000+ page monstrosity. This is a certainly a temporary condition as future congresses will reverse that decision as we move to a single payer system. Given the importance of this kind of “Choice” to Democrats, and its inculcation in their political frame of reference, the ban on federally-funded abortions—even temporarily--is an extraordinarily telling indicator of how important imposition of national health is for Democrats. 

So, what hit us last night? The prima facie shortcomings of the bill tell us that it’s not about improving health care. The new taxes and uncertainties will kill off any hopes of job creation and fix blame on the majority. The Townhall misgiving that developed in August haven’t evaporated and threaten the Blue Dogs and a big part of the Speaker’s majority. Despite letting these so-called conservatives vote “no”, she knows the voters will see through that fiction. The bottom line is that in 2010 voters will reprise New Jersey nationwide and the health care bill only makes the Democrats’ position more difficult.

The Speaker doesn’t seem to care. Nothing could be further from the truth but what could be worth this passel of trouble? For the professionals like Nancy Pelosi, risking their political power indicates that they believe it’s a worthwhile gamble; the only thing that could be is more power… massively more. 

Ralf Seiffe advises business start-ups and product launches from Chicago, Illinois, and is a political analyst and columnist for the Illinois Review. Mr. Seiffe is also an Expert Advisor with The Institute for Truth in Accounting.

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