Suddenly, A Trillion Dollars Is Too Expensive?
IF AMERICANS HOPE TO discuss health care, climate change, green
economics or public infrastructure with any degree of realism, then
the time has come to acknowledge that hearing someone say "a trillion
dollars" is no reason to panic. Politicians and pundits cite that
figure to argue that we cannot afford health care reform, following
recent cost estimates by the Congressional Budget Office (CBO), but
the plain truth is that we spend (and squander) more than that on
purposes not nearly so wise and humane as universal quality health
As a matter of fact, America's current health care system wastes
considerably more than a trillion dollars every year. We know that
because countries such as France, Germany, Japan and Finland, with
comparable standards of living to ours, spend roughly half what the
United States spends annually on health care per citizen, while
covering everyone and achieving better results. So if the total cost
of American health care over the coming decade reaches $40 trillion,
as economists expect, then we will be "wasting" approximately $20
trillion, or $2 trillion a year.
Compared with figures such as those, the CBO scoring estimate of $1.6
trillion over 10 years to reform the U.S. health care system is so
small as to be almost negligible. Constantly hearing numbers that
sound so large makes perspective even more important. When Princeton
health economist Uwe Reinhardt actually did the simple calculations,
he found that the price of reform amounted to only 4 percent of the
country's cumulative health care budget between next year and 2020. He
noted that this amount is much less than the annual increase in health
care spending over the past 10 years. And he also pointed out that on
the broader economic horizon, that $1.6 trillion represents only about
1 percent of the $170 trillion in gross domestic product that
Americans will produce over the same period.
Investing a trillion dollars or so in modernizing and improving our
health care system is a good bargain — especially when contrasted with
the maddening way that we have thrown away tax dollars over the past
several years. Undoubtedly the worst example of wasteful spending in
recent memory is the war in Iraq, that imperial misadventure so
beloved by the same conservative thinkers who incessantly bemoan the
supposedly unaffordable price of health reform.
Touted early on by its eager promoters as free, cheap or
self-financing, the war's ultimate cost is currently expected to run
as high as $3 trillion, according to Joseph Stiglitz, the Nobel
laureate economist who wrote a book on the subject last year with his
colleague Linda Bilmes. Even as the Obama administration is pulling
U.S. troops out of Iraqi cities in preparation for eventual
withdrawal, the Iraq war will remain a financial black hole in the
federal budget for many years to come as we continue to support the
injured veterans and to rebuild the damaged American military.
Yes, a trillion dollars is a significant amount of money, even on a
scale as large as the American economy. Had we avoided the stupid
waste of $2 trillion or $3 trillion on the war, we could have paid for
a long list of social goods that would have improved the lives of the
American people, enhanced their productivity and secured their future.
To name only a few of many better choices, we could have moved rapidly
toward alternative energy sources and reduced our dependence on
foreign sources of oil for about $500 billion, achieved universal
literacy in the United States for about $5 billion, rebuilt the Gulf
Coast damaged by Hurricane Katrina for about $200 billion, ended
hunger and all the diseases caused by poverty for another $200 billion
— and still have a substantial sum remaining to build new schools,
roads, bridges, railways and other badly needed infrastructure.
The senators who now claim that we cannot afford to spend a trillion
dollars to make long overdue changes in health care know exactly what
that amount can buy. They know because they have spent it, year after
year, on military misadventures and subsidies to big banks and
corporations, without stinting or whining. Why can we always afford
those trillion-dollar boondoggles, but never decent health care for
Joe Conason writes for the New York Observer (www.observer.com).