Phony arguments for costly plan

President Obama repeatedly states two things about his national health care initiative that are not true.

The first untruth is that we cannot have truly long-term economic growth until we replace the present health care system with an entirely new government-imposed one. The second untruth is that the plan will end the explosion in health costs.

In fact, there have been periods in our country’s economic history when we’ve experienced relatively long-term growth with the health care system we have now.

The most recent was the nearly 25 years of growth that followed the 1981-82 recession (with a shallow slide in the early 1990s) when the Dow rose to 14,000, unemployment fell to about 4 percent, U.S. exports were booming, and new-business formation soared.

Indeed, during that time, the health care industry was one of the biggest and most dependable sources of job creation even when jobs became increasingly hard to find elsewhere in the economy.

As for reducing spiraling health care costs, just the opposite is likely to result as health care demands skyrocket, fueled by trillions of dollars in government subsidies that will be poured into the system, overburdening an industry struggling to keep up with the demands we place on it now.

“The health care overhauls released to date would increase, not reduce, the burgeoning long-term health costs facing the government,” said Congressional Budget Office Director Douglas Elmendorf on Thursday.

Meanwhile, despite claims that his health care plan will spur economic growth for years to come, Mr. Obama is pushing so-called health care reforms that will, in fact, weaken our economy.

The House and Senate bills making their way through the legislative system will impose draconian tax rates on investors and small-business owners, who will be forced to provide health insurance benefits that will drive many of them out of business.

Moreover, it will force the nation’s private insurers to compete unfairly with a federally subsidized public health insurance system that will impose expensive new health mandates on them and thus drive up their costs and their prices — driving many from the marketplace.

If timing in politics is everything, Mr. Obama and the Democrats couldn’t have picked a worse time to enact their sweeping nationalization of our health care system — in one of the deepest recessions since the Great Depression.

The administration says the higher taxes, penalties, regulations and other government mandates on individuals and businesses will not take effect until 2011, when it expects the recession to be over.

But government economists said last week that the economy could still be quite weak at that time and may not achieve full recovery for another five years. And this forecast does not take into consideration all of the cost burdens national health care will throw at it.

While the forecasts by a panel of 17 top Federal Reserve leaders said that the economy may grow modestly (between 2 percent and 3 percent), they suggested we could be facing a jobless recovery that would keep unemployment high throughout 2011 and beyond when companies will resist hiring many new workers.

Even so, if Mr. Obama gets his way, Democrats will pass a nationalized health program this summer that will sock the economy with one of the biggest entitlement programs and tax increases in American history. It will cost taxpayers and businesses more than $1.5 trillion over 10 years and trillions more after that.

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