Q&A Friday #104: Why Is ObamaCare So Bad If Social Security And Medicare Are So Great?

Question: “How would you answer Kristof’s “Wrong Side of History” piece in the 11/18 NYT? If Medicare, Social Security and similar past advances of the welfare state didn’t do us in, why should anyone believe this one (healthcare takeover) will be the one that kills our economy? Are we suffering from a “boy who cried socialism” effect from past protestations?” — oldch

Answer:

First off, here’s the close of Kristof’s column. It gives you a rough idea of his argument:

It’s now broadly apparent that those who opposed Social Security in 1935 and Medicare in 1965 were wrong in their fears and tried to obstruct a historical tide. This year, the fate of health care will come down to a handful of members of Congress, including Senators Joe Lieberman, Blanche Lincoln, Ben Nelson and Mary Landrieu. If they flinch and health reform fails, they’ll be letting down their country at a crucial juncture. They’ll be on the wrong side of history.

Since it’s political death for a politician to criticize Social Security or Medicare, Kristof thinks he’s on safe ground making this argument.

However, I’m not a politician, so I can tell you the truth: We have frighteningly large Social Security and Medicare obligations as a nation coming due in the next few decades and we have NO IDEA how we’re going to pay them off. In all likelihood, either a lot of people who paid into the program are going to be ripped off or it’s going to lead to crushing levels of debt we may never have a realistic possibility of paying off. You may say, “Well gee, Social Security and Medicare have worked out pretty well for the people who have been on the program so far!”

That’s true — unless they died before they got their benefits — and if you forget that anyone who lived long enough to collect and had invested the same amount of money would have been much, much better off. Even setting that aside, Ponzi schemes often work out great — until the end, when people get left holding the bag.

PS: Medicare is part of the reason your medical bills are so high now. The government underpays for services and they pass the costs on to you. Still happy with it?

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