Under the bed of welfare

Posted: Sep 04, 2000 12:00 AM
Have you ever died? No, you will say; but that doesn't excuse your indifference to the cost of dying, most notably, funeral expenses. These are significant, even unbearable, episodes in economic life. They are, for one thing, all but unavoidable, because even cremation is hardly free. Add to the mechanical costs of embalming the purchase of a coffin, the cost of interment, the poignant factor, and you get some idea of the cost.

You think there is a heavy markup in drug prices? Check the out-of-pocket costs of tending to a corpse, from the moment one becomes that, to the recital of the final prayer over the grave, compared to the bill presented to the bereaved. What is the argument against a Federal Interment Relief Act?

We tread our way softly, quietly, to the root positions in the current national political question about drugs and who is to pay for them. To say the government is to pay for them is the easiest way to say: "Somebody else is going to pay for them." But right away, economic sleuthing slows you down. One percent of American taxpayers pay 33 percent of income taxes, and 25 percent pay 82 percent of the taxes.

Yes, but does that mean that an extra $25 billion or so of spending per year will be borne by the good old 25 percent who are now paying the 82 percent?

The answer is no, unless one assumes that tax rates will increase on the middle class. But Al Gore isn't asking for that; neither is George W. Bush. Therefore, a $25 billion medical subvention is going to be financed by anticipated surpluses, which translates into a decision not to return those surpluses to the taxpayers. And if the surpluses didn't materialize, then what?

Round and round we go. The cost of prescription drugs is rising at about 12 percent per year; the overall cost of health care, about 5 percent. By the hard rules of mathematics, these rates have suffocating implications. Twelve percent compounded over 12 years comes to 390 percent. Add to this progression the subversive effect of drugs: They prolong life! The more you take, the longer you live, the more drugs you need.

So who is going to pay for it all?

Even wealthy societies have limits. If every American, before dying, had a heart bypass, you would run out of doctors and nurses and hospitals, just to begin with. Something has to give, and the big question is: Will this happen in the presidential political scene?

Imagine a debate:

Moderator: We intend to ask the candidates, What do you intend to do about prescription drugs? The rules of engagement are -- you are not allowed to say that the "government" will pay for them because, of course, the government has no resources. Vice President Gore, we will begin with you.

Gore: The American people are endowed by our Founding Fathers with life, liberty, and the right to pursue happiness. There is no way in which happiness can be pursued if you can't afford the basic medium of happiness, which is health. I talked the other day to a woman in East Hartford, Conn. She is a 65-year-old retired clerical worker who has no insurance coverage for drugs. Her monthly drug bill for her diabetic ailment is $506. Her monthly Social Security check is $496. Somebody has to pick up her medical expenses.

Moderator: Governor Bush, who is that somebody?

Bush: Well, the best way to put that is: the lady's neighbor.

Moderator: How will the neighbor pay?

Bush: Got to be through taxation; there's no other way.

Gore: I wouldn't put it quite that way.

Bush: No, you wouldn't, because your scam is to make it sound as though the diabetes pills are going to materialize, just like that, for your lady in East Hartford, at no palpable cost to anybody, let alone her next-door neighbor, who, when you put the problem to her in this particular way, is less eager to vote for "free drugs" -- less eager to vote for you -- than she was before.

Moderator: Are you saying, Governor Bush, that you're against helping the diabetic lady in East Hartford?

Bush: I'm in favor of encouraging any relief plans for the specially needy designed and financed by the states with reference to the community's own priorities and resources. There's a family tradition, where I come from, against voodoo approaches to national problems. You do too much voodoo, you pop off, and who is expected to pay for that expense? Uncle Sam?