Posted by: michelle2005 | March 13, 2009

“All Roads Lead to Tax Cuts”…Oh Really?!

The other day, while reading the “National Review Online” I saw an advertisement for a group calling itself “Conservatives for Patients Rights” cleverly abbreviated CPR.  This is the latest conservative effort (ala the famous “Harry and Louise” ads) to scared Americans away from real health care reform.



Those ads were created and paid for by the health insurance industry that had a stake in keeping the status quo.  Whenever you see an ad, telling how to feel about an issue it is best to know who funded the ad.  The old saying follow the money usually goes a long way to help one understand the rest of the story.




Richard Scott former CEO of Columbia/Hospital Corporation of America (Columbia HCA) leads CPR.  Mr. Scott claims to have in “insignificant” financial interest in the health care industry.  Rather he has stated that he primarily concerned with the free market.  An article posted on noted: “Scott shied away from comparing his effort to the famous industry-led “Harry and Louise” ad campaign that helped torpedo universal coverage in the Clinton administration, saying that while they may receive some aid from health care stakeholders, the “goal is to get support from individuals.”  Of course, that was the point of the “Harry and Louise” ads to get support from individuals.  How dumb do these people think that we are?   




Mr. Scott has written an open letter to President Obama, requesting details of the administration’s plan:



You made health care a centerpiece of your campaign and just last week announced a sweeping $634 billion plan to reform our nation’s health care system. While you were very specific about how you would pay for this plan, you offered virtually no details on your plan itself.  One of our basic rights as consumers is to be able to shop and compare. As taxpayers, we should have the ability to not only know the cost of your plan, but the specifics of what we get out of your plan. That is the only way Americans can make an informed decision. As you convene your health care summit at the White House, we call upon you to lay out the details and specifics of your plan for all to see. We are entitled to a healthy debate on how your plan will impact each of us. Many Americans are leery about allowing the government to have a more significant role in making private health care decisions that should only be made by a patient and their doctor.” 



I found this letter quite strange given that on the same website there is a link to sixteen health plans including the Obama Administration’s own site. The Obama Healthcare Plan in provided in a nine page pdf. document.  



One sentence at the end of the brief letter exists to fuel consumer fears.  Mr. Scott wrote” Mr. President, Americans don’t want surprises. And we don’t want national boards or faceless bureaucrats taking away our rights to make our own health decisions in the name of controlling costs.”  It would appear that Mr. Scott never heard of HMO’s or their practice of rejecting patients’ medical claims, in the name of controlling costs.




This week on “Point of View” a news segment of American Family Radio, commentators noted that while Medicare does not restrict patient choice, it is rife with fraud.  The reporters noted there had been $60 billion in fraud and that Medicare had no way to police the rampant fraud.  The news commentators on Point of View told the radio audience that if Medicare fraud could be controlled this would go a long way to controlling health care costs.  This is the “oh that is a big number” scare tactic.  Billions wow, if only they had that money we would have a solution.  Just one problem, the cost to reform healthcare exceeds $600 billion over ten years; $60 billion is less than 1% of that total. It is a lot of money but it will not solve our healthcare problems.      



The “Point of View” guest in the second hour was Richard Scott the man behind Conservatives for Patients’ Rights.  I was unable to get a call in to the show but if I had, I would have liked to ask Mr. Scott about the following piece of information



Your hosts of this show mentioned Medicare fraud.  Did you not as CEO of HCA Mr. Scott preside over the biggest case of Medicare fraud in this country?   How ironic!  I did not hear anything about that Medicare fraud when Mr. Scott’s segment was on the air. 



The CPR website has a link to an article published on the Heritage Foundation website: The Fallacy of Health Care Reform as Economic Stimulus.   The article questions how government investment into healthcare can help lower the costs of healthcare



Five paragraphs into a discussion on the merits of government investment into healthcare and healthcare reform I witnessed a familiar pattern.  Only lower taxes can produce wealth.  How convenient that in a discussion on health care taxes takes center stage.



“Any money the government spends on health care (or anything else) has to come from somewhere–either higher taxes, more borrowing, or inflation–and that means less is available to the economy for private spending. Government spending cannot cause prosperity; it can only reallocate resources from one person or activity to another. Prosperity–economic expansion–can be achieved only by increasing total production, not simply moving it around. For this to occur, entrepreneurial individuals and companies have to find it worthwhile to engage in productive activity and investment. The only way government can induce sustainable economic expansion is to reduce the taxes and regulations that inhibit productive activity.




A favorite canard of conservatives is that government does not produce wealth.  This should surprise economists as the formula for gross domestic product the chief measure of wealth includes government expenditures.



The most common approach to measuring and quantifying GDP is the expenditure method:

GDP = consumption + gross investment + government spending + (exports − imports), or,
GDP = C + I + G + (X − M).



The private sector is unable or unwilling to invest because of the credit market collapse, and decrease consumption.   Consumers have decreased consumption due to fear of pending unemployment and decreased credit available.  Looking at the above equation what area of expenditures is the only avenue to increase GDP and hence wealth?  From a careful examination, one would have to conclude that government spending must step in to support growth. 




The conservative argument that, lower taxes and decreased regulations continues to prevail in Republican Party.  The Heritage Foundation article closes with the same mantra, increased spending by the poor comes off the hard earned money of the American workers.  “Previously uninsured families to spend more on consumer goods, since they would not have to save for unexpected medical expenses. Gruber and Yelowitz find that previously uninsured households that become eligible for Medicaid do indeed spend more. But this does not mean that total consumer spending increases–the money used to fund Medicaid expansion has to come from somewhere; in particular, whoever paid the taxes to fund the expansion had to reduce their own spending. Furthermore, the recessionary effects of taxation mean that the decrease in spending by other taxpayers is greater than the increase in spending by new Medicaid recipients.



The tax rates proposed by the Obama administration are the same level that existed during the Clinton administration.  I do not recall that those at the highest income levels were stressed out about not having enough to spend.  Republicans and conservatives continue to Scare America First with the specter of higher taxes, even when the effects on the average earner would be nominal.  Let us have an honest conversation, we need healthcare reform now, we have waited too long.      


It appears that the RNC has lost their footing!










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