Apparently America’s chief accountant, David Walker, is now a movie star. From the NY Times:
The movie, “I.O.U.S.A.,” debuting Aug. 21, is an 87-minute alarum on what it calls the tsunami of debt bearing down on the United States’ future, caused by the rising national deficit, the trade imbalance and the pending costs of baby boomers cashing in on entitlements.
Early reviewers have dubbed the film “An Inconvenient Truth” for the economy… .
“I.O.U.S.A.” offers up as its action hero David M. Walker, former head of the Government Accountability Office. With movie-star looks that scream “accountant” rather than “Terminator,” Walker has been the Cassandra — or Chicken Little — of America’s growing deficit for some time. …
“You probably know that the national deficit is $9.6 trillion and rising. What you don’t know is how bad things really are. If you include all the unfunded entitlement obligations — Social Security, Medicare, Medicaid and so forth — we are actually in a $53 trillion hole, Walker says.”
Action Accountant vs. Debt Tsunami. Actually, I think the premise has promise. Think Paul Revere. But maybe that’s just the accountant in me speaking.
Unfortunately, as I’ve written before, those like Walker who focus on cutting “entitlements” and federal spending as a solution to the problem are barking up the wrong tsunami. The problem isn’t entitlement programs; the problem is healthcare costs. That’s how they come up with a “$53 trillion hole”, by projecting trends in healthcare costs into the indefinite future.
Healthcare costs are a tsunami no matter who pays them, but if, as Walker says, the federal budget deficit is the problem, I have a simple solution: have the government get completely out of the healthcare business and have employers and individuals cover all the costs. Presto, problem solved!
Unfortunately that would simply move health care finance into the private sector; Instead of taxes and debt service eating up a huge portion of our income, health insurance premiums and out-of-pocket costs would be eating up a huge portion of our income. It would rearrange the deck chairs on the Tsunami, so to speak.
But, to paraphrase Walker,it’s really worse than you think. It turns out that healthcare financed by the private sector is even more costly than healthcare financed by the government. So, pushing more people into the private healthcare system (cutting back Medicare and Medicaid) would likely increase the problem.
I realize this is counter intuitive to free market believers, but the facts speak for themselves. Not only is our own public sector more efficient than the private when it comes to healthcare, if we look at other countries that adopted universal healthcare decades ago, we find them spending 3-8% less of their income on healthcare with similar or even better results.
The unavoidable (and apparently inconvenient) truth is this: we have the most private healthcare system in the world; it is also the most expensive. It’s hard to imagine how privatizing it even more would decrease costs, yet that’s the solution implied by those who want to cut government spending on healthcare and push even more people into the private sector.