The government will then give up that strategy and turn to what the Reagan administration called "revenue enhancement": higher taxes on the "rich." When that fails, because there aren't enough rich to soak, the politicians will soak the middle class. When that fails, they will turn to more borrowing. The Fed will print more money, and we'll have more inflation. Everyone will be poorer.
The Times story adds: "They are committed to rewarding high-quality care, by paying for the value, rather than the volume, of [Medicare] services."
Value to whom? When someone buys a service in the market, that indicates he values it more than what he gives up for it. But when the taxpayers subsidize the buyer, the link between benefit and cost is broken. Market discipline disappears.
Listening to the health-care debate, I hear Republicans and Democrats saying it's wrong to deny anyone anything. That head-in-the-sand attitude is why Medicare has a $36-trillion unfunded liability. It's not sustainable -- and they know it.
They've given us a system that now can be saved only if bureaucrats limit coverage by second-guessing retirees' decisions. Government will decide which Medicare services have value and which do not. Retirees may have a different opinion.
One may be willing to give up the last year of life if he's in pain and has little hope for recovery. Another may want to fight to the end. But when taxpayers pay, the state will make one choice for all retirees.
Now, to reduce the financial burden of the medical system, Obama proposes a plan that inevitably will extend the second-guessing to the rest of us. So much for his promise not to interfere with our medical decisions.
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