The single component of “health” “care” “reform” neatly encompasses all the broader trends about where we’re headed.
In 2003, Washington blessed a grateful citizenry with the Medicare prescription-drug benefit, it being generally agreed by all the experts that it was unfair to force seniors to choose between their monthly trip to Rite-Aid and Tony Danza in dinner theater. However, in order to discourage American businesses from immediately dumping all their drug plans for retirees, Congress gave them a modest tax break equivalent to 28 percent of the cost of the plan.
Ask yourself this: If you impose a sudden 35 percent tax on something, are you likely to get as much of it? Go on, take a wild guess. On the day President Obama signed Obamacare into law, Verizon sent an e-mail to all its employees warning that the company’s costs “will increase in the short term.” And in the medium term? Well, U.S. corporations that are able to do so will get out of their prescription-drug plans and toss their retirees onto the Medicare pile. So far just three companies — Deere, Caterpillar, and Valero Energy — have calculated that the loss of the deduction will add a combined $265 million to their costs. There are an additional 3,500 businesses presently claiming the break. The cost to taxpayers of that 28 percent benefit is about $665 per person. The cost to taxpayers of equivalent Medicare coverage is about $1,200 per person. So we’re roughly doubling the cost of covering an estimated 5 million retirees.
Now admittedly the above scenario has not been, as they say, officially “scored” by the Congressional Budget Office, by comparison with whom Little Orphan Annie singing “The Sun’ll Come Out Tomorrow” sounds like Morrissey covering “Gloomy Sunday.” Incidentally, has the CBO ever run the numbers for projected savings if the entire CBO were laid off and replaced by a children’s magician with an assistant in spangled tights from whose cleavage he plucked entirely random numbers? Just a thought.
If existing tax structures can’t cover the costs, what can we do? Start a new tax! The VATman cometh. VAT is Euro-speak for “value-added tax.” Americans often carelessly assume it’s merely a sales tax, but in fact it’s far more cumbersome than that, being levied at each stage “value” is added to a product or service. The consumer can’t claim back the VAT, but intermediate businesses in the production chain can. So self-employed individuals with relatively modest incomes wind up both charging VAT to their clients (25 percent in Scandinavia) and then claiming back the VAT they spent on the stamp and stationary they used to mail out the invoice. This is yet another imposition on businesses, taking time away from wealth creation and reallocating it to government paperwork. If the Democrats hold Congress this fall, I would figure on VAT sooner rather than later.
All of the above is pretty much a safe bet. What about the imponderables? Even Obama hasn’t yet asked the CBO to cost out, say, what happens to the price of oil when the Straits of Hormuz are under a de facto Iranian nuclear umbrella — as they will be soon, because the former global hyperpower, which now gets mad over a few hundred housing units in Jerusalem, is blasé and insouciant about the wilder shores of the mullahs’ dreams. Or suppose, as seems to be happening, the Sino-Iranian alliance were to result in a reorientation of global oil relationships, or the Russo-Iranian friendship bloomed to such a degree that, between Moscow’s control of Europe’s gas supply and Teheran’s new role as Middle Eastern superpower, the economy of the entire developed world becomes dependent on an alliance profoundly hostile to it.
Which is to say that right now the future lies somewhere between the certainty of decline and the probability of catastrophe. What can stop it? Not a lot. But now that your “pro-life” Democratic congressman has sold out, you might want to quit calling Washington and try your state capital. If the Commerce Clause can legitimize the “individual mandate,” then there is no republic, not in any meaningful sense. If you don’t like the sound of that, maybe it’s time for a constitutional convention.