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Balanced Fare: We Report, You Deride

Friday, April 25, 2003

Prof. Krugman - Not Good For Your Health

Prof. Krugman wonders today why we might prefer tax cuts to government sponsored health care. A quick hit:

So why should tax cuts take priority over health care? I know the party line: tax cuts for high earners are the key to economic growth, and a rising tide lifts all boats. But there's not a shred of evidence supporting that claim. More than two decades after the supply-siders launched their tax-cut crusade, ordinary workers have yet to see a rising tide. The median real wage is only 7 percent higher now than it was in 1979, with all of that increase achieved after Bill Clinton raised taxes for the top bracket.

If American families knew what was good for them, then most of them — all but a small, affluent minority — would cheerfully give up their tax cuts in return for a guarantee that health care would be there when needed. And even the affluent might prefer to live in a society where no sick child was left behind.

I find the median wage statistic very interesting. If I were a economist on the short list for a Nobel prize, I might have a few of questions:

The US economy is famous for creating jobs and absorbing third world immigrants, many of whom enter the US labor market at the low end of the wage scale. Pat Buchanan, if I recall, made a crusade of the belief that immigrants take away jobs from Americans and depress wages. Was he simply wrong on the facts, or have we as a society chosen to accept that as a consequence of our immigration policy? Or, viewed differently, wasn't globalization going to depress unskilled wages for US workers anyway, either through immigration or foreign competition, in which the Buchanan argument for excluding immigrants collapses? And is the median wage in a growing job market with many new entrants a fair measure of how individuals may have progressed over the last twenty years?

How have median wages performed in other countries? Europe is a disaster area for creating new jobs and absorbing immigrants, but they have national health! Can instructive comparisons be made between the US and Europe on this point?

Prof. K seems to believe that the choice is bewtween tax cuts and a national health care that "would be there when needed". Has he followed the debate in England over their attempts to reform their national health? I will link to about the first piece I found, and offer this excerpt:

Earlier, a report by former NatWest chief executive Derek Wanless had called for NHS spending to more than double by 2022.

Mr Wanless said spending on the NHS should rise to £184 billion a year from £68 billion a year now.

His report said the health service had been underfunded by £200 billion over the last 30 years. He called for an initial five year period of high growth to catch up, followed by a lower level of sustained investment.

His was the first major review of the future needs of the NHS since it was established in 1948.

...Under his plan, patients would wait no longer than two weeks for an inpatient or outpatient appointment.

This compares with the governments target of a 15 month maximum wait for inpatient treatment, met by the end of last month.

Fifteen months? Health care that is always there, if you should live so long.

So, how unreasonable is the American public when it doubts whether these plans deliver as advertised?

Just wondering.

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