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Inevitable Decline?
Great Britain turned back its welfare state, and we can turn back ours.


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Mona Charen

Throughout the past year of debate on health-care reform, the conservative fear and the liberal hope have been the same: that passage of a huge new entitlement program would prove irreversible. “No one now dares touch Social Security or Medicare,” the Democrats crow, “and it will be the same with Obamacare.” Once the hammock has been strung, they reason, a lazy and comfortable electorate will bestir itself only to defend its place at the trough (forgive a mixed metaphor). At election time, a “kept” electorate will obediently choose the party of entitlements.

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Conservatives have imagined the same result, though with bitter apprehension rather than fond anticipation. Further haunting conservative imaginations have been two concomitant fears — 1) that a nation with nationalized health care will become resistant to all arguments for smaller government; and 2) that health entitlements will so raid the treasury that a global military posture will become unsustainable.

As has been noted in this space before, the fate of Catastrophic Health Insurance in the late 1980s proves that entitlements do not always achieve immortality. Sixteen months after passage, the bill was repealed. Furious senior citizens were outraged at the premiums, which ranged from $58 per year for those earning $25,000 or less, to $800 per year for those in the highest income brackets.

Cynics might say that the fate of the Catastrophic law only reinforces the case that people like giveaways; ask them to chip in for a benefit like long-term care, and they’ll rock the car of Ways and Means committee chairman Dan Rostenkowski, forcing him to run for cover literally and figuratively. Maybe. But another way to look at it is that many older people had already taken the step of purchasing private long-term-care insurance and were now being hit twice. And the costs of the program had not been clearly spelled out at the time of passage, leaving the nasty surprise for later.

Obamacare’s costs have also been misrepresented by the Democrats. Only by stripping the $208 billion “doc fix” from the legislation could they claim that the bill would not increase the deficit. But the doc fix will happen, and health spending, even taking the rest of the bill’s ridiculously rosy assumptions as true, will exceed $1.1 trillion. By the Cato Institute’s reckoning, the actual ten-year cost will exceed $3 trillion.

Some of these costs will be borne immediately. Couples earning more than $250,000 will pay an additional Medicare tax and a 3.8 percent tax on investment income; patrons of tanning salons will pay a 10 percent sales tax; makers of medical devices such as defibrillators and insulin pumps will pay a 2.3 percent new tax; and large employers, such as Caterpillar and John Deere, will have to pay taxes on the federal subsidies they receive so that they can provide retiree benefits.



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