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.

This is pretty interesting. Paul Belien, a Belgian conservative is complaining about governments in Europe cutting spending on health care, with the results that more expensive technologies are withheld from the elderly (like his 90 year old uncle).  He thinks the answer is to move towards building reserves for the future, and he’s probably is in the individual HSA crowd (although theoretically these could be pooled reserves). But that’s not the interesting thing.

The interesting thing is that he understands the equation. If we spend more on health care, we spend less on other things, and that there’s a choice between these positions. Given that, he has what he considers to be a solutions. Here’s his conclusion.

At the root of these decisions is the understandable desire of governments to control health-care costs. But rationing is clearly not the answer. What many governments in Western Europe have overlooked is that there is nothing wrong with a society devoting more of its resources to health care. This even appears to be an indication of prosperity. The higher and the more developed a society becomes, the more its citizens are willing to spend on keeping healthy. Modern technology makes everything cheaper except the highest quality of medical care, which is constantly improving. To try to limit access to this technology in the name of “cost-control” is irresponsible.

Meanwhile, the larger and more fundamental problem of how to finance the health-care systems is not adressed. Instead of funding the provisions of today’s sick with taxes from today’s healthy and young, people should be building up reserves for their own future liabilities. What Europe needs is to replace its pay-as-you-go systems by privatized and capitalized health-care systems. This, however, would imply that the governments relinquish control over the system, which is the very last thing they are willing to do.

Now I disagree with him about who should ultimately control health care, because I think it’s more of a public good than he does, but at least we are starting on the same page—one that I went over at length in my “Health care = Communism + Frappuchinos” article, which is well worth another read. The issue is that some care is basic and some care is a luxury good bought on the margins. You’ll note that he never says directly that people should be forced to pay for all their own health care with no cross-subsidiaztion. Of course that is where the US has been heading, and why our poor and unisured are literally dying (albeit not) in the streets.

Would it that we could have this rational argument with most conservatives (and even several liberals) in this country. Instead we get the Cato guys missing the point by trying to get us to worry about the almost incidental spending on the healthy, and Ron being Ron. No one wants to talk about whether or not we should be paying for the more expensive stuff for the 90 year old uncle, and that’s the real debate.