I’ll leave the depth of this argument to my next exchange with Robin Hanson. I’ll try to side step the political landmine by responding to some of my fellow economists. According to CNBC, the National Association of Business Economists:
The majority of economists surveyed by the National Association for Business Economics believe that the federal deficit should be reduced only or primarily through spending cuts.
The survey out Monday found that 56 percent of the NABE members surveyed felt that way, while 37 percent said they favor equal parts spending cuts and tax increases. The remaining 7 percent believe it should be done only or mostly through tax increases.
As for how to reduce the deficit, nearly 40 percent said the best way would be to contain Medicare and Medicaid costs. Nearly a quarter recommended overhauling the tax system and simplifying tax rates and exemptions. About 15 percent said the government should enact tough spending caps and cut discretionary spending.
Which is all well and good and we can have a deep conversation about about radical entitlement reform. Though I am skeptical about large scale real-world change, on the blackboard I am sympathetic to arguments that the entire Industrial Planning system surround medical care should be abandoned.
That means in part getting rid of Medicare, Medicaid, health care tax deductions. But, of course more importantly, it means getting rid of the FDA. It means legalizing the production and distribution of all drugs.
It means undoing medical and pharmaceutical licensing. Undoing any qualifications whatsoever for practicing medicine or surgery. Removing any implied responsibility to provide the highest quality service. Removing any implied responsibility to “first do no harm” and generally allowing the medical industry to become a free market.
If you want to buy it and someone wants to sell it, then Godspeed.
Now somehow I think this plan is unlikely to become law anytime soon. However, the same can be said for a plan that dramatically cuts the actual benefits that retirees receive. And, ultimately thats the issue. The reason medical care in the US is expensive is because people use a lot of medical care. If you want it to be cheaper people have to use less.
Good luck with that.
No one has ever done before. People have however successfully raised taxes. I am betting that tax increases are how this gets done.