Without Government Health Care Spending America’s Debt Would Be Almost Non-Existent

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This is starting (via Peter Suderman):

As a thought experiment, let’s suppose that medical expenditures had been self-financed since the inception of government health care in the 1960s. What would our debt and deficit look like today? To answer this question, I simply added the medical care expenditure deficit back into the total government deficit. The result is depicted in [the figure below[ and is astounding (at least to me). Outside of medical expenditures and revenues, the Federal government sometimes ran a surplus and sometimes ran a deficit from 1966 until 1980. Starting in 1980, and lasting until 1994, the government consistently ran a deficit outside of medical spending, but from 1995 until 2010, it consistently ran a surplus. In 1994, the cumulative excess spending would have reached a bit over $1 trillion. But by 1999, debt due to sources other than medical spending would have been completely eliminated by surpluses! The government wouldn’t have needed to borrow again until 2011.

Here’s the figure referred to:

Government has long promoted health insurance, and health care, as a third-party responsibility for Americans. Most Americans aren’t the direct customer for their health care. The bills go to their insurance companies. And most Americans aren’t the direct customer for their health insurance policies either. Employers provide health insurance for the bulk of Americans, with government coming in second.

This disconnect between Americans and their health insurance/health care is what is creating the health care cost bubble that is, in turn, clearly the primary driver of US national debt.

We need to get the government out of health care.

I’d only add that the unfunded liabilities represented by Social Security, which is already obligated to pay more in benefits than it is receiving in tax payments and is being forced to rely on a trust fund that was long ago replaced by government bonds, are significant as well though don’t show up in the budget.

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Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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