05 October 2013 ~ 0 Comentarios

Obamacare and the debt

by Carlos Alberto Montaner


(FIRMAS PRESS) The Republicans are wrong. Obamacare has absolutely nothing to do with the sweet European socialism. It is a limited version of the Swiss model of health care, rabidly conservative and very much in accord with a basic principle of classic liberalism: People must be responsible for their lives. Each mast must bear the weight of its own sail.

The Swiss have one of the best health care systems in the world. It is efficient, swift and of a very high professional level. All the people living in the country, even the illegals, from birth to death, must hold a health insurance contract with one of 93 private companies that offer them and compete in price and quality.

 The federal government regulates the issuance of those policies, known as “sickness funds,” and the cantons manage them. If someone cannot pay for the insurance, the canton will cover the cost.

The Swiss health care system is not cheap. It consumes approximately 12 percent of the GNP, somewhat higher than the median for the OCDE [Organization for Economic Cooperation and Development] countries. But in the United States, the slice of GNP is 18 percent, and medicines there are the most expensive in the world.

Besides, until the advent of Obamacare, the United States presented that incredibly shameful situation of people who were denied medical insurance because they had some chronic illness or were charged an exorbitant amount for the premium. That is unworthy of the world’s leading economy and the necessary social solidarity.

In any case, Obamacare much resembles the Swiss model but is more limited. For example, the fact that undocumented immigrants cannot acquire this insurance coverage is a clear wrong.

That implies that, when they get sick and seek help in public hospitals, something that’s absolutely justifiable, their expenses are paid for by the whole of society. By harassing and acting against the undocumented immigrants, U.S. legislators end up harassing and afflicting the legitimate citizens and residents.

That’s something very similar to what happens when undocumented immigrants are denied access to citizenship or are needlessly hampered in their efforts to gain it. All serious studies demonstrate that people with full citizenship create more wealth and savings than those who suffer the uncertainty of a precarious and limited residence. To be “tough” with undocumented immigrants is the fastest way to lose an eye while trying to blind an opponent.

The Democrats also are wrong. It is foolish for the Obama administration to continue to mire the country in debt. The national debt is up to some $17 trillion. Every day, that debt increases by $1.8 billion. It already exceeds the GNP, which is $16 trillion.

I invite the reader to access the US Government Debt website so he can see the picture of public finance in movement. If he doesn’t become scared or depressed, it’s because he suffers a pathological indifference to horror or has been subjected secretly to a radical lobotomy.

Today, the interest rates are the lowest in history. Despite that, out of each tax dollar paid to the federal government, 25 cents go to the holders of public debt. If the interest rate rose to 5 percent (the historical median), half of the taxes would go into paying interests.

Because that situation is unthinkable, given the commitments to Social Security, Medicare and Defense – the budget’s three hungry lions – the government would have to hike taxes and the entire productive apparatus would suffer a reduction in its capacity to create wealth.

But the politicians are neither mad nor more irresponsible than cooks or car salesmen. As Spanish legislator Miguel Angel Cortés likes to say, they are “ferocious and hungry animals who feed on votes.” And these peculiar creatures respond to the short-term interests of their voters.

The Keynesian nonsense that “in the long run we are all dead” is no consolation at all. If this madness is not brought to a halt, we’ll all be ruined. Something that resembles death.

Leave a Reply