Wednesday, October 7, 2009

Unsustainable Resource Allocation

Yesterday I wrote that our elderly are getting 2-4 times the money out of social services as they put in, as hard working taxpayers and their children are deprived of valuable services that would strengthen our country now and for the future. This recent MSNBC interview with crazy Betsy McCaughey gives the CBO citation and shows how the approximately 3:1 ratio was found.

There are two valid drivers for how we allocate money. The more deontological driver is to spend money to give people what they deserve. Benefits to soldiers, for example, or temporary unemployment benefits, or funds to support poor children. People who have a raw deal through no fault of their own, or who made sacrifices for the rest of us, deserve care. The more utilitarian driver is spend money on whatever will net the greatest good. What sets us up to have the best future? Military benefits are driven by this, also, as they are often calculated incentives to attract needed recruits so that we can even have a military. Public works projects that improve our infrastructure so we can continue trade and growth. Investing in research. Paying such vast amounts of money on social services to the elderly is more than they deserve and is not an investment in the future. At least McCaughey wants to raise the Medicare age to 70, even if she opposes making the system more efficient.

The major invalid driver of money allocation is greed. Special interests want their money. Politicians want votes and campaign contributions. Politicians make allocations (corn subsidies, no-bid contracts, F-22s, bridges to nowhere, etc...) that will get them votes and contributions, even though it hurts most people. Old people vote. Old people vote more often than young people. Politicians make policies that benefit old people at everyone else's (and the country's overall) expense. We are in a death spiral of increasing social security and Medicare expenses because politicians pacify the elderly now for votes instead of looking at the big picture and our country's needs for the future.

The interview also helpfully shows that a public option, or the public marketplace option that Obama talked about, would greatly reduce health care costs by eliminating the widespread occurance of localized insurance monopolies. I have two real choices for insurance provision in my area, and that is not competition that benefits consumers. When did Republicans start hating competition? Was it when insurance lobbyists handed them goodies, or are they just stubbornly trying to shoot down at any cost everything Obama tries to do?

Also, tort reform, which I've strongly advocated, seems to be a very low priority as far as cost controls go. It's still a good idea, and the special interest most opposed is the lawyers who take half the money, but it can go on the back burner.

No comments:

Post a Comment