I recently reflected on Daniel Henninger's "Mad Max and the Meltdown," his theory on the moral and religious meltdown that preceded the financial one ("We Need More Than A Little Christmas"). In Henninger's essay, however, he mentions the comparable crises looming in Social Security and Medicare.
Amid all these downward-pushing pressures, occurring in plain sight, hardly anyone or anything stepped up to brake the fall. What happened? The answer echoing through the marble hallways of Congress and Europe's ministries is: regulation failed. In short, throw plaster at cracked walls. Trusting the public sector to protect us from financial catastrophe is a bad idea. When the Social Security and Medicare meltdowns arrive, as precisely foretold by their trustees, will we ask again: What were they thinking?
In the same paper, the Journal's editors describe the coming implosion of those entitlement programs as a "slow motion catastrophe." We've seen this approaching for some time now, but there is insufficient love of country among our lawmakers to do anything about it. What is new, however, is that the incoming administration has plans to make the situation considerably worse.
In "The Obama Health Plan Emerges" (Nov. 20, 2008), the Journal reports:
Today, health entitlements account for 4% of GDP but will rise to 7% in 2025 and about 15% in 2062. Not that the current level of benefits will ever be paid. According to the Medicare trustees, the program's excess costs over the next 75 years -- that is, the difference between expected outlays and revenues -- is more than $36 trillion, which even they acknowledge is several trillion too low given current trends. Even if Congress doubled all individual and corporate tax rates, it still wouldn't raise enough revenue to pay for Medicare and Medicaid.
The Obama-Baucus solution to this slow-motion catastrophe is to add tens of millions more people to the federal balance sheet. Because the public option will enjoy taxpayer sponsorship, it will offer generous packages to consumers that no private company could ever afford or justify. And because federal officials will run not only the new plan but also the "market" in which it "competes" with private programs -- like playing both umpire and one of the teams on the field -- they will crowd out private alternatives and gradually assume a health-care monopoly.
Obama's goal is to expand a system that is headed for bankruptcy so that it encompasses vastly more people and makes the problem vastly bigger and fiscally more deadly than it is now.
That's change, all right.