BHO and the starry-eyed folks who support the House bill evidently believe they can tax and borrow to provide the so-called "public option" for health care. They forget that health care must be produced by real people using real resources. It really isn't about the money.
The deficits projected for the next decade and beyond are unprecedented. According to an assessment released in March by the Congressional Budget Office (CBO), the president's budget implies that deficits will average 5.2% of GDP over the next decade and will be 5.5% of GDP in 2019. Without the president's proposals, the budget office forecasts a 2019 deficit of only 2% of GDP.
The CBO's deficit projections are based on the optimistic assumptions that the economy will grow at a healthy 3% pace with no recessions during the next decade; that there will be no new spending programs after this year's budget; and that the rising national debt will increase the rate of interest on government bonds by less than 1%. More realistic assumptions would imply a 2019 deficit of more than 8% of GDP and a government debt of more than 100% of GDP.
Higher taxes to finance Obamacare will definitely mean diverting scarce resources into health care and away from whatever else private citizens would have used their income to buy. Increased federal debt will mean diverting scarce resources into health care and away from whatever plant and equipment businesses would have put in place instead.
The economic maxim, "there ain't no such thing as a free lunch," remains true quite regardless of BHO's dissembling pronouncements. One grows weary of all the arguments that run in terms of money and financing. Think of the diversion of real resources that must take place to produce more health care. That's the real stuff.
Do we want to produce more health care each year? Maybe we do, but public opinion is making it evident that we do not want to be coerced into it. The real issue isn't whether more health care is a good thing. The real issue is whether BHO and his supporters get to force all of the rest of us to do their bidding.
I know readers of this blog may be tired of the repeated reference, but once again, I urge you to read Milton Friedman's article about health care reform here.
Voluntary exchange for health care, which is the foundation of all successful economies, has two attributes to recommend it. First, it works; second, it's moral. Coercion of the many by the few is neither moral nor will it work.