Tuesday, December 23, 2008

Universal Health Care Biggest Tax Cut and Stimulus For Nation

CBS printed this article from the Nation, written by Jacob Hacker, that is truly the best explanation yet as to why health care reform should be on top of the list of changes by the Obama administration to kick start the economy in the long term.

Medicine Is The Best Stimulus

As we move deeper into the recession, most economists are urging President-elect Obama to spend big money right away in order to stimulate and prop up the economy. The sticking point for a lot of people, however, is the long-term budget picture, especially given that Obama is planning to keep most of his predecessor's tax cuts. How are we going to drop huge sums of money on job creation and fiscal stimulus right now without continuing to suffer through yawning budget deficits years down the road? In fact, we have a magic bullet for short-term spending and long-term saving--health care reform.

During the campaign, skeptics complained that a health care overhaul would involve a lot of upfront costs and that the saving would only come later. But that's exactly what we need right now. Health care involves major spending in the near future, but, more than other initiatives, it will put a brake on federal outlays in the far future. All this argues for temporarily throwing fiscal caution to the wind when it comes to health care reform.
The idea of spiking the deficit now may seem frightening, but it's a lot better than the alternative--and it could actually make it easier to bring universal health care to America.

When talk turns to economic stimulus, health care usually gets short shrift. Perhaps that's because we are so used to thinking of health care as something we should spend less on; or perhaps it's because we assume that health care spending goes straight into doctors' pockets and hospitals' budgets. Yet, when done right, the biggest effect of broadening and upgrading coverage is to immediately help struggling families. The typical items on the stimulus menu--infrastructure spending, general aid to the states, benefits for the jobless, investments in new forms of energy--have a lot going for them. But they shouldn't blind us to the fact that government health spending is also an extraordinarily effective way to boost the economy.

After all, health care isn't a luxury good, like a flat-screen television--something you can put off when money is tight. People do economize on health care when times are tough, but only so much and with serious risks, both physical and financial. The better way to think about health care is like an upfront deduction from family income. If you make that deduction smaller, families have more to spend on other things, improving their own situation and the economy in general.

Read the rest here.....

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