‘Obamacare’ is a bad deal for all

The headline, “Obamacare touted as good deal,” in The Advocate Nov. 27 piqued my interest.

Any reasonable person, aware that the Patient Protection and Affordable Care Act was passed by a collection of jackanapes in the U.S. Senate who did not bother to read the legislation they voted for and have an incredibly long history of fiscal mismanagement, might want to know the justification for this headline.

I found it in The Associated Press author’s first sentence:

“States will receive more than $9 in federal money for every $1 they spend to cover low-income residents under President Barack Obama’s health-care law, according to a nonpartisan analysis released Monday.” No further justification was provided. That’s it: exclusive focus on benefits; no recognition of costs.

If someone came up to you on Third Street or at the Mall of Louisiana and said, “Give me $1 and I will give you more than $9 back,” would you consider that “a good deal” — or would you suspect something fraudulent afoot?

Governments do not create wealth, they merely redistribute it. From time to time, enterprising individuals try to emulate the government in this regard. Bernie Madoff and Robert Allen Stanford readily come to mind.

When the “good deals” go sour, some of the clients suffer and the perpetrators (sometimes) go to jail. Yet when politicians engage in the same behavior, we hail their efforts as “progressive” politics. I find it ironic that we look to government to protect our interests in the first instance and we persistently succumb to its blandishments in the second. Economics teaches there’s no such thing as a free lunch, but a gullible public refuses to believe it.

Every dollar spent by the federal government comes from tax revenue, borrowed funds or the printing press. Each of these avenues imposes costs (and consequences) on some segment of society, which means that one group’s “good” deal is another group’s “bad” deal. We expect politicians to hide the full costs of their policies as much as possible, but do we not deserve better from the Fourth Estate?

Perhaps more journalism schools should include economics in their curricula. If a student in Econ 101 evaluated a “deal” by extolling its benefits and ignoring its costs, he would deservedly receive a failing grade. At least it used to be that way back in my day.

Robert Hebert

economist

Baton Rouge

Comments

1) Comment by billynurse - 05/12/2012

Amen, Mr Hebert. I think VERY few of us realize the magnitude of this 2500 page monstrosity perpetrated on our formerly free country.

2) Comment by InPVille - 05/12/2012

@Scrooge: Cycles of economies going up and down existed before the theory that govt. could control or lessen economic downturns were proposed and efforts to implement the theory initiated. Business cycles have continued to exist even after the attempts to implement the theory. The point is the theory is falsified. A new theory, one that actually works, is needed. The current theory only provides politicians cover where citizens are concerned to give the appearance they are doing something in order to hide their impotence. Also it has left western nations holding huge national debts.

3) Comment by Scrooge - 04/12/2012

But I am no expert, only seeking the truth or at least a best possible justification.

4) Comment by Scrooge - 04/12/2012

Besides, if "Governments do not create wealth, they merely redistribute it.", why would it be necessary to give tax breaks to businesses, especially those with perceived or at least propagandist potential? Isn't the point to create wealth? Government and business are two separate entities, an overabundance of either demonstrably creates abuse.

5) Comment by Scrooge - 04/12/2012

Triple, Alright admittedly I responded to the sensationalist headline but just as there are "no atheists in foxholes" the ideologically afflicted might not be so fanatical had their families had been affected by a serious, potentially fatal disease that would have resulted in the ultimate consequence had not the insurance coverage been in effect as I have unfortunately experienced. Money and ideology lose their luster when faced with death. Just to be clear, this is an intensely emotional issue for me. Sorry to be reactionary, but the "give me liberty from insurance coverage or give me death" ignorati may regret what they wished for. However, the "Governments do not create wealth, they merely redistribute it." statement belies the results of government investment say for example the evolution of ARPAnet to the modern internet since the creation of wealth by government investment in the ARPAnet is incalculable. Governments should invest in potentialities private investment cannot or will not afford, but the abuse of that statement is rife with shameful examples. Louisiana today is one.

6) Comment by Triple - 03/12/2012

Come on Scrooge, Mr. Hebert made no judgement on health care for the citizenry, no suggestion of keeping pre-ACA health care status-quo.  His observation concerning the press is valid, no drill down on the details by the AP, only sensationalism of what a "good deal" for the states.  His opinion suggests the press is not providing a service to the citizens, but a disservice by  providing one side of a complex issue.  The Advocate missed the mark with the assigned title, ironically reinforcing his premise. The letter addresses the press not ACA and you know that, why make a comment so far off target?

7) Comment by Scrooge - 03/12/2012

Great Mr. Hebert, , lets return to the good old days. Just don't get an expensive malady that insurance companies deem uninsurable. Noble that you are willing to suffer and die while going bankrupt for the common economic good?

8) Comment by Chucky - 03/12/2012

Sorry i have a cold and do not feel well. Most poster's have more than one source for news and are well-informed of both pro and con, and to just use an old saw with CNN this and FOX this and name your radio commentator as rebuttal does nothing for the discussion. As i said, sorry.

9) Comment by Spudaroonski - 03/12/2012

@Chucky, do I really think that someone gets the news from just one source? After reading some of the comments that you and a few others post on this site sadly I have to say yes.

10) Comment by nimby? - 03/12/2012

DMJ , if a person isn't filing how will that work , or is unemployed showing only government benefits as income ? will subsidies cover their health cost , or fines ? if they choose not to pay will a bench warrant issued ? will they be actively pursued ? how will they be identified without proper identification ? those who play by the rules will continue to do so , as will those who don't .

11) Comment by InPVille - 03/12/2012

@postscript56: You may certainly stand by your statement if you wish. However, the quote I referenced from Mr. Hebert's indicates you didn't read the letter very carefully in its entirety because Mr. Hebert clearly sees a role for government. He just basically doesn't think that government spending money amounts to anything greater than other entities spending the same dollars in the economy.

12) Comment by Chucky - 03/12/2012

it seems Spudaroonski - that you get your news from Mad Magazine ,Do you really think someone gets the news from just one source ? Give the name calling and I get my info from aliens a rest. Obama Care has some good points and some bad but the bottom line is not mandatory for all.

13) Comment by DMJ - 03/12/2012

Enforceable? Good question. That remains to be seen. From what I understand, it may not be totally "enforceable" but it will be punishable. People won't get their tax returns back. Personally, my returns just about equal my insurance premiums; it'd be stupid not to buy insurance out of principle only to end up spending the money anyway in additional taxes and not even have the insurance to show for it. Know what I mean?

14) Comment by nimby? - 03/12/2012

DMJ , auto insurance is mandatory yet estimates are nearly one third of the drivers in this state do without . will the HCA be more enforceable ?

15) Comment by DMJ - 03/12/2012

Anyone else tired of the smug attitude that economists have? As if all economists agreed on everything. Hebert knows other economists with equal or greater credentials than himself disagree with him. He could mention this, but instead he simply states his opinion as if it were settled science, smugly adding that more people need to study econ and that thos who disagree with him are simply gullible. Blow it out your tailpipe, Hebert!

16) Comment by DMJ - 03/12/2012

Predictably absent from the letter is the recogniition that millions of additional people will have insurance (most through the private sector, some through Medicaid). No more unpaid bills to the hospitals driving up costs. No more waiting until the last possible moment to get health care, at which point it's more expensive than treating earlier. Typical data cherrypicking economist....

17) Comment by nimby? - 03/12/2012

the HCA is based on the premise that EVERYONE will have to buy into it , thus lowering costs . not gonna happen . certain groups have already been allowed to opt out . many will simply ignore the mandate . cost will make enforcement of this impractical , cost ineffective . emergency room services will continue to be abused . taxpayers will pick up the tab . a question to close with ; will the HCA require photo ID's for identification ?

18) Comment by postscript56 - 03/12/2012

pville - Hebert wrote "Governments do not create wealth, they merely redistribute it." From that statement I deduced that Hebert believes wealth is created without government playing any productive role. If he meant governments have a role to play other than redistribution, he probably should have written that. Therefore my comments are appropriate to the letter.

19) Comment by swinham - 03/12/2012

We may not all be economists, Mr. (Dr.?) Hebert, but we are not so stupid as to not know where federal revenues come from. Your letter is an insult to the intelligence of most people capable of reading it.

20) Comment by Maelstrom - 03/12/2012

Great economist: if the govt spends money, it's bad. No evaluation of the program, nothing about the fact that the feds already provide uncompensated funds to the state, no evaluation of benefits granted in this versus the costs of not providing this care. Just, they're spending money. Bad. Maybe it is, maybe it's not, but there's is nothing in this letter to really say it either way except his opinion.

21) Comment by Attila - 03/12/2012

You are correct about the tax and spend attitude of "progressives". They were formerly know as liberals. I guess that is because liberalism is about as progressive as cancer.

22) Comment by 8point6 - 03/12/2012

Great letter, Mr. Hebert. Don't look for any of my "progressive" friends to agree with you. They like tax and spend government.

23) Comment by InPVille - 03/12/2012

@postscript56: "If Robert believes. . .". The classic strawman argument. . . Claim something not supported by the author's statements or which contradict them and show that what you have inserted as the authors views are incorrect. Most conservatives I am aware of understand that government should play a protective role to avoid the excesses of naked capitalism. Our postscript56's argument fails if you but look at the following text in Mr. Hebert's letter. "I find it ironic that we look to government to protect our interests in the first instance. . .",

24) Comment by postscript56 - 03/12/2012

If Robert believes wealth is created without government he is a really bad economist. If nothing else governments create stability and security so that individuals may pursue wealth creation - instead of day to day subsistence. Here in America liberals believe those who benefit the most from our stability and security have the greatest obligation to contribute to the overall good of society as a whole. Conservatives believe they did it entirely on their on and don't owe a dang thing to anybody.

25) Comment by postscript56 - 03/12/2012

****Comment Removed for Violation of Terms of Use****

26) Comment by Spudaroonski - 03/12/2012

It sounds like this "economist" gets the bulk of his info from watching Fox and Friends.

27) Comment by misterfalcon - 02/12/2012

Today I learned that economists are really bad at economy.