The Wall Street Journal, a formerly reputable newspaper that has turned into a Fox News-type of right wing rag since it…. well, got acquired by the owners of Fox News, has engaged in some inflammatory right wing math in an effort to attack Bernie Sanders. Their claim is that if Bernie were to have his way, it would call for an eye popping number “$18 trillion in new spending.” It is a complete partisan hatchet piece based on incomplete and ridiculous assumptions, and we wouldn’t be doing our jobs if we didn’t pick it apart before we sent it to the garbage chute where it belongs.
The Journal admits that of this alleged $18 trillion, most of this spending ($15 trillion to be exact) is supposedly attributable to Bernie’s single payer system of health insurance, where everyone who today is not eligible for Medicare (so, people under 65 and people who are not disabled), would be enrolled in Medicare and have it as a guaranteed right just like seniors do today. So let’s delve into some math for a moment.
- The fact that the Journal left out is that today, under our current private health care system, people spend way more than $15 trillion on health care. Forbes magazine, not exactly a friend of democratic socialists worldwide, estimates that our total spending on health will reach $3.2 trillion this year.
- To be fair, the Forbes number includes spending on current Medicare and Medicaid beneficiaries, which Bernie’s plan would leave in, so let us subtract those to determine how much spending we are left with on just private health insurance premiums, deductibles and copays. The 2014 spending for Medicare and Medicaid were estimated by the reputable Kaiser Family Foundation and amounts to a little less than $1.1 trillion.
- When you subtract that spending, that leaves us with $2.1 trillion dollars each year that Americans spend in the private health care system. When you do the calculations for the projected spending over the next ten years, and factor in the anticipated increases in costs of our private system (which have certainly been slowed down by the Affordable Care Act, but not eliminated) you are looking at spending of approximately $25 trillion.
Let that sink in for a moment. If we do nothing, not counting the money our government will spend on Medicare and Medicaid, Americans will spend $25 trillion over the next ten years on health expenditures. Did the Journal point that out? Of course not, because if they told you that, spending $15 trillion to replace $25 trillion worth of spending over the next ten years looks like a great bargain. But their point is not to educate the reader. Their point is to inflame and outrage the reader against plans that would stop the gravy train for private health insurance companies.
You may ask how Medicare is able to provide the same services at such lower costs. The reason is that unlike private companies, Medicare isn’t looking to make a profit, only to make sure that the money it takes in from members balances out the money they pay out in claims plus administrative costs, which no matter what Republicans tell you about the inefficiency of government, are significantly lower than those of private insurers. Unlike private insurers, Medicare doesn’t need to worry about making enough money to pass dividends to its stockholders, or to pay for advertising, or fancy corporate buildings, or multi million dollar compensations for CEOs, various other officers and directors, and so on. This is why every single country that uses a single payer system spends less in health care per person than the United States with a single payer system margin. Meanwhile, their systems manage to guarantee everyone health care while ours leaves, even with the Obamacare reforms, 35 million Americans uninsured. Think about how horrible our system is – it costs more to cover less people.
You may then say that’s great that Medicare will save us $10 trillion dollars, but someone still has to pay for the $15 trillion Medicare will spend. Where will this come from? Folks, I am not a fan of paying taxes any more than most of you, but I am happy to pay a tax to the Medicare Trust Fund if it means that I will stop cutting an even bigger monthly check (or have it withheld from my paycheck) to a private insurance company, and I will have to pay significantly smaller deductibles or co-pays every time I see a health care provider. So that money will come from us, but it will be a significant savings over what we pay to private insurance today.
So now that we have caught the Wall Street Journal in a lie by omission, let’s deal with the other items their bring up, which account for a combined $3 trillion over the next 10 years. That includes Bernie’s $1 trillion dollar job creating plan to rebuild our crumbling infrastructure, an increase in Social Security benefits, paid child care, tuition free colleges among others. How does Bernie plan to pay for $3 trillion in spending over ten years? He has already discussed this ad nauseum – a wall street speculation tax of $0.50 on every $100 of stock trades. It will not add a penny more in income tax, but it will raise each year an estimated $350 billion, or $3.5 trillion over ten years. As Bernie is fond of saying, America’s middle class and working class bailed out Wall Street when their greed brought down the stock market and crashed our nation’s economy in 2008 – now it’s time for them to help restore America’s middle class and working people by relieving them of the expenses that are hurting the most, which is student debt, child care while they are working, and inadequate retirement. The speculation tax would pay for all this new spending and then some. Take into account the fact that Bernie wants to also impose a higher tax on multi millionaire’s and billionaire’s income and capital gains, higher inheritance tax on multi million dollar inheritances, end multinational corporations practices of tax dodging by going off shore and other items, and the government would have approximately $6.5 trillion in new revenue, which leaves not only plenty of funds to pay for all these programs, but also to do the necessary paying down of our national debt which was racked up by Presidents Reagan and George W. Bush on out of control defense spending while simultaneously cutting taxes on top earners.
In conclusion, what the Wall Street Journal did, in true right wing scare tactics fashion, is put a scary number in front of people to scare them off Bernie. As soon as you spend 5 minutes looking beneath the surface of those numbers, you find that they actually result in massive savings for people because they prevent even bigger expenditures in private health care, and also pay for extremely valuable programs which will create jobs, pay some of Americans’ greatest expenses like child care and higher education, and last but not least allay the concerns of working families who feel they will never be able to retire by raising social security benefits. Bernie Sanders is the man America’s middle class needs in the White House.