What Obama’s Thinking

I was stunned when I read this. First some caveats:

• The source is an article that summarizes a sit-down he had with House Speaker John Boehner by Stephen Moore in January 7 edition of The Wall Street Journal. Boehner is a fairly conservative Republican, and Moore is a libertarian. So … this isn’t going to be pro-Obama.
• Personally, I’m negative to neutral on Obama and the Democrats. Mostly this is because the Republicans are … hmmm … go read this thing written by Bret Stephens almost a year ago about why the Republicans were bound to lose this year. In short … the Democrats are in the game, while the Republicans went home in a huff and tried to take their ball with them but couldn’t even get it out of Obama’s hands. So … I’m on the lookout for bad things about Obama.

Having noted all that, I couldn’t believe this point.

What stunned House Speaker John Boehner more than anything else during his prolonged closed-door budget negotiations with Barack Obama was this revelation: "At one point several weeks ago," Mr. Boehner says, "the president said to me, 'We don't have a spending problem.' "

…

The president's insistence that Washington doesn't have a spending problem, Mr. Boehner says, is predicated on the belief that massive federal deficits stem from what Mr. Obama called "a health-care problem." Mr. Boehner says that after he recovered from his astonishment—"They blame all of the fiscal woes on our health-care system"—he replied: "Clearly we have a health-care problem, which is about to get worse with ObamaCare. But, Mr. President, we have a very serious spending problem." He repeated this message so often, he says, that toward the end of the negotiations, the president became irritated and said: "I'm getting tired of hearing you say that." [emphasis added]

If you’re like me, and you have trouble understanding where the Democrats in D.C. are coming from, this is the clue you need.

Think about the implications of this: 1) we’re in this situation because of healthcare costs, and 2) presumably because the Democrats passed the Obamacare bill they wanted we’re all going to live happily ever after.

OMFG: this is benighted (that’s a good word for a college student to learn, here’s the definition).

This position denies that:

• We’ve had a passive increase in the deficit and debt because of the Great Recession of 2007-9, but we’re still not really moving in the right direction with this.
• We’ve had a structural increase in the deficit and current and future debts because of responses to the Great Recession in the “Obama” and Bush stimulus packages.
• That concerns about the size and scope of Federal spending have not been a major issue for over 30 years now.
• That social security isn’t a big problem as well.

While there were certainly some problems with access to healthcare prior to Obamacare, no one should deny that the fundamental problem was with Medicare: how was the government going to sustain providing open-ended medical care to seniors. Everything else was just details.

And the problems with Medicare really boil down to three things:

• Healthcare works.
• Healthcare is a luxury good.
• We lack political will to adjust the age at which Medicare coverage starts.

Think about these:

• If healthcare didn’t work, no one would want it, and we wouldn’t spend so much on it … and the problem would go away.
• The income elasticity of healthcare is well over +1: as people become richer they’ll buy proportionally more of it. Spending on healthcare isn’t a cause of problems; instead it’s a side effect of a society that’s doing well economically. Go ahead: name all the poor countries where healthcare spending is high on the policy priority list.
• If people are living longer, this changes the proportion of Medicare payers to receivers. The only way to make this work is to hit the payers up for more cash, or to raise the age at which you can begin to receive benefits. Right or wrong, democracies consistently choose the former.

In what way did Obamacare (which is essentially the Republican healthcare position of the 90’s, as passed by Republican Mitt Romney in Massachusetts a decade later) address any of these? Is it even reasonable to think that it could or should have?

Let me give you a metaphor for all this. Society and the economy is a football team playing defense. They are lined up in their stances, snorting and ready to go. The Democrats are on offense, and Obama is the quarterback. Except the Democrats just walked on to the field in his pinstripes and baseball caps. Some of them think they won’t get hurt because the referees are on their side. Obama’s got a baseball in his hand and is looking for the pitcher’s mound. The Republicans have gone home because they don’t want to play basketball. And the media is wringing its hands because it would prefer that politics was a more cooperative sport … like rowing.