Ryan's Follies: Health Care Reform, Bankruptcy, and Tipping Points

Still more Ryan's follies from his answer [1] to the President's 2011 SOTU.

On the Affordable Care Act (ACA)

”Then the President and his party made matters even worse, by creating a new open-ended health care entitlement.

“What we already know about the President’s health care law is this: Costs are going up, premiums are rising, and millions of people will lose the coverage they currently have. Job creation is being stifled by all of its taxes, penalties, mandates and fees.”

Well, Congressman Ryan's right about most of this. The ACA doesn't contain direct measures to prevent insurance companies from raising premiums, but relies on exchanges that won't be fully operative until 2014, by which time insurance companies will have raised rates far higher than they were when the ACA was passed in 2010. On the other hand, Paul Ryan and the Republicans wouldn't support any cost-cutting measure that would be effective anyway, such as, for example, prohibiting increases in premium costs greater than the rate of inflation in the rest of the economy, because the Republicans and Ryan himself, along with many Democrats are bought and paid for by the health insurance companies and big Pharma.

Ryan's claim that job creation is being stifled by the ACA bill, is currently unsupported by evidence. And his claim about job creation is pure theory, especially since most of the bill isn't operational yet and its impact can't be assessed. One thing's certain, however, and that is that there's no way that either the ACA, or alternatives based on the free competition and confidence fairy theories Ryan favors will produce the 2.5 million new jobs predicted by the California Nurses Association study [2] if the Democrats had rid themselves of the filibuster in January of 2009 and passed Medicare for All, rather than collaborate with the Republicans and the Blue Dogs to cut the heart out of health care reform.

On the ACA and bankruptcy:

”Businesses and unions from around the country are asking the Obama Administration for waivers from the mandates. Washington should not be in the business of picking winners and losers. The President mentioned the need for regulatory reform to ease the burden on American businesses. We agree – and we think his health care law would be a great place to start.

“Health care spending is driving the explosive growth of our debt. And the President’s law is accelerating our country toward bankruptcy.”

Health care spending is driving the explosive growth of debt, both public and private, but as we saw in my first Ryan's Follies post, the public debt accompanying health care deficit spending is reducing debt in the private sector and also increasing demand. Unfortunately, the explosive growth of private debt from health care costs visited upon individuals is causing great suffering in the form of bankruptcies and foreclosures. In addition, these costs result in deaths when people can no longer afford co-pays and decide to forgo treatment they need before illnesses or injuries cause serious damage.

I don't believe that Ryan is right that “the President's Law” is accelerating the Government towards bankruptcy, because it has no risk of “bankruptcy,” unless Congressman Ryan and his colleagues decide to force insolvency by not using their constitutional authority to appropriate Government spending or to raise the debt limit. The “explosive growth” of the public debt is, for reasons stated in my first Ryan's Follies post, [3] of little or no concern. However, I do believe that the growth of private sector debt due to health care costs is a major issue, as is the portion of the US GDP spent on the health care sector, which is way out of line with other industrial nations, and which at the same time produces much worse outcomes for too many Americans whether they have insurance “coverage,” or not.

Of course, the Congressman is not concerned about these real problems, but only about his imagined “problem” of the Government becoming insolvent due to excessive spending. That is, one of the reasons, why, I suppose, he opposes Medicare for All. If he and his Republicans were to join with Democrats to pass that, it would relieve both the increasing private sector debt problem, and also reduce the GDP proportion of health care spending by perhaps one-third. But, I guess we should just expect this kind of public service out of someone who proposes to return the United States to 19th century economic rules and behavior.

Congressman Ryan, criticizes the waiver process, by saying that Washington should not be in the business of picking winners and losers. But, this is one of the most hypocritical remarks in the history of politics coming from Congressman Ryan, since he has gone out of his way to see to it that lack of regulation would ensure that the health insurance companies, big Pharma, the FIRE sector, and businesses in his and other Congressional Districts that wanted to move jobs to other nations would be big winners while American workers and people needing Medical insurance would be big losers. The Congressman has always picked winners and losers.

Unfortunately, for America, however, he has never picked them in the public interest; but only to benefit his own political career. And this has meant, when it comes to jobs, that he has picked foreign winners and American losers while always wrapping himself in the flag.

And back to public debt:

”Our debt is out of control. What was a fiscal challenge is now a fiscal crisis.

"We cannot deny it; instead we must, as Americans, confront it responsibly.

“If we act soon, and if we act responsibly, people in and near retirement will be protected.”

As shown in my first Follies post, the national debt isn't out of control at all. But Ryan is right to think that we have a fiscal crisis that we have to confront responsibly. That crisis is that the Government including Congress, the Federal Reserve, and the Executive Branch isn't using activist fiscal policy to achieve the public purpose, even though there is no solvency risk and little inflation risk in the United States doing so. The United States has so many problems right now that letting these problems go unsolved, by kicking them down the road is the real meaning of fiscal irresponsibility.

When it comes to fiscal irresponsibility no one is better described by that term than Paul Ryan. Of course, he has a lot of company in Peter G. Peterson, the Koch brothers, and all the advocates of balanced budget amendments, Republicans and Democrats who think it's responsible to manage the US Government's spending as though it were a household or still on the gold standard. These people, who have, apparently been joined by Barack Obama, will destroy the economic foundations of the United States, and create a nation where everyday life is “nasty, brutish, and short,” and the sick “die quickly.”

And, of course, “tipping points” into dependency:

”Our nation is approaching a tipping point.

“We are at a moment, where if government’s growth is left unchecked and unchallenged, America’s best century will be considered our past century. This is a future in which we will transform our social safety net into a hammock, which lulls able-bodied people into lives of complacency and dependency.”

Anyone who has experienced unemployment, or living on Social Security alone, or Medicare, not supplemented by other medical insurance, knows that the social safety net is no hammock, and that it is not nearly as generous as social safety nets in other modern industrial nations. Our social safety net is the most stingy and mean of all these, and also the one most immersed in false economies that undercut demand and prevent the social safety net from doing its job of making recessions less punishing for poor people, people out of work, the sick, and most of the 99%.

Congressman Ryan makes Mr. Potter, the banker in “It's a Wonderful Life,” look like a generous man, for he means to drain America of real wealth so he can serve the job exporters he loves so well better. If he has his way, the social safety net will become a bed of nails. If we simply leave it where it is, there's no danger of hammocks anytime soon. And even if we were to extend it by passing enhanced Medicare for All, and say, doubling Social Security payments in recognition of the fact that the financial sector of the economy has, by now, nearly destroyed both the savings, and the pension legs of the proverbial three-legged retirement stool for a very large percentage of the middle class, there is no way that even that would tip us all over into “hammocks.”

A strong, generous, social safety net is not a social invention that will make people dependent. Instead, it is an invention to make them more free. FDR wisely said that “necessitous men are not free men.” What angers me so much about Romney, Ryan, the Koch Brothers, Peter G. Peterson, and all who follow him, is that they want to make most of us “necessitous” while they lack for nothing!

(Cross-posted from Correntewire.com [4].)