Wednesday, August 05, 2009

Laffer, on Obamacare: 'Implementing Obama's reforms would literally be worse than doing nothing'

That qualifies as an understatement, but Laffer's solution makes sense: Address the health care wedge.


"An effective cure begins with an accurate diagnosis, which is sorely lacking in most policy circles. The proposals currently on offer fail to address the fundamental driver of health-care costs: the health-care wedge.

The health-care wedge is an economic term that reflects the difference between what health-care costs the specific provider and what the patient actually pays. When health care is subsidized, no one should be surprised that people demand more of it and that the costs to produce it increase. Mr. Obama’s health-care plan does nothing to address the gap between the price paid and the price received. Instead, it’s like a negative tax: Costs rise and people demand more than they need."

Elsewhere, you will read the expected reaction to the fact the public is starting to understand just how bad Obamacare actually is.

There will be a heavy political price for "progressives" to pay if they do not remove the obnoxious and statist portions from health care reform, and if they don't stop from pressuring the moderate Dems who got them into political power in the first place.


"Even the Democratic National Committee is trashing Democrats, presumably with a green light from Mr. Obama and Chief of Staff Rahm Emanuel. Mr. Obama’s political arm, Organizing for America, which is officially a wing of the DNC, is running ads to press Democratic Senators in Arkansas, Indiana, Florida, Louisiana, North Dakota, Nebraska and Ohio. The outfit has also staged demonstrations outside Senator Bill Nelson’s Florida offices. The campaign is heavy-handed enough that even Majority Leader Harry Reid denounced it as 'a waste of money.'

This intraparty smackdown is all the more remarkable because, by winning in swing or GOP-heavy districts and states, these Members have given Democrats their governing majorities. If there’s a voter backlash in 2010, these Members will also be the first to be washed out to sea. Yet it’s becoming clearer by the day that Democratic leaders view these moderates as mere cannon-fodder footsoldiers in the great liberal revolution of 2009. And if you have to shoot a couple of them yourself to keep them all marching straight, so be it."


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