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POLICY/INTERNATIONAL: Obvious, but public and private taxes still cost money

Via Ezra, Krugman, and  Bradford Plumer there are some interesting numbers showing that the private welfare state (i.e. pensions, health benefits, etc provided by corporations) in the US added to the public welfare state which exists here but is more extensive in Europe, is roughly the same size as its counterparts in Europe. Krugman’s point, which I’ve reflected many times, is that if you let the corporate welfare system fall apart (i.e. replace GM as largest employer with Wal-Mart) then you are going to have a collapse in the coverage of welfare which will be to the wide detriment of society, particularly to the middle-classes. The fall in employer-based health insurance is the most obvious example of this collapse, and it will continue to get worse until there’s a political solution some years down the road. (Although in Joe Paduda’s view the time-table for this solution is moving up).

What I’ve been saying for years is that whether you call them “premiums” or “taxes”, society (i.e. people) still needs to pay for the underlying expenses, and when your underlying expenses are up to two times greater than those of other countries, you will have to pay more for them. So, there is a cost for having health care at 15% of GDP, and we are going to have to pay it somehow. And that’s one reason why other countries make serious efforts to contain those costs, with all the unpleasant consequences that may entail, as I discussed yesterday.

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Tom LeithRon GreinerMatthew Holtgadfly Recent comment authors
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gadfly
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gadfly

//your comment may not have been all that “balanced” it Kaiser was the subject//
My comment was very short – I just asked him if Kaiser was a client. 🙂

Tom Leith
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Tom Leith

> I just saw a commercial for Assurant insurance that > enjoined people to, “Stop paying for other people’s > benefits!” So, they know the mindset of the average American. Until people begin to see insurance as a way to finance risk, this will be the marketing pitch. Of course, almost everybody undervalues risk. > private welfare state (i.e. pensions, > health benefits, etc provided by corporations) This is the nub of the disagreement, isn’t it? I don’t see pensions, health benefits, etc. provided by corporations as welfare — I see them as compensation. The problem of what to with… Read more »

Ron Greiner
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Gadfly,
Those are good commercials. I like the 3 kites coming together at the end to form the logo.
They don’t say HSA. They are quiet as church mice.

Matthew Holt
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Matthew Holt

I doubt it. Joe seems to work mostly for workers comp people. But then again, your comment may not have been all that “balanced” it Kaiser was the subject, Gadfly! If it was his Kaiser v Revolution Health piece, then I agree with him (but I won’t censor your comments if it’s less than 10 lines and on the subject!)

gadfly
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gadfly

Does Joe Paduda get consulting work from Kaiser? I asked him on his blog after something that particularly looked like an infomercial, but he screened the comment.

gadfly
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gadfly

I just saw a commercial for Assurant insurance that enjoined people to, “Stop paying for other people’s benefits!” (i.e., just pay for what you need for yourself right now – and don’t think on what you might need help with in the future…). People will find the message of self-serving greed a lot more appealing than talk of public/national problems, pooling resources and such.