Our ObamaCare Future: Domestic Policies Dictated by China

Noam Scheiber’s piece is chilling if you want a domestic policy seperate from what China would appreciate. The piece correctly notes that with trillion-dollar deficits we can only afford policies that China approves us, but that certainly China (which has no socialized medicine) is in favor of socialized medicine in the United States

I’m actually wrapping up a piece on the U.S.-China economic relationship this week, and several Treasury officials have told me that, during the recent Strategic and Economic Dialogue, the Chinese confided that they would have been more concerned about the deficit had we not responded aggressively to the recession, even though the response made the short-term deficit larger. The Chinese understood the importance of running a big short-term deficit to offset our economic shocks and restore growth, these officials say. And the Chinese were apparently reassured when administration economic officials explained how much of the short-term deficit was a function of the recession and the financial crisis (about two-thirds). Not surprisingly, the Chinese are most concerned about the structural deficit (that is, the portion of the deficit left over once you strip out the effects of the economic downturn) and what happens to it over the long-term. Despite the ugly top-line numbers, that hasn’t really changed–there isn’t much reason to be more pessimistic about the long-term structural deficit than we were beforehand.

The further into debt Obama’s terrible policies (the “Public Option,” Geithner, Bernanke, and so on) put us, the more indebted (in every sense) we are to the Chinese Communist Party.

6 thoughts on “Our ObamaCare Future: Domestic Policies Dictated by China”

  1. I’m not following your train of logic from what’s in the article to how health-insurance reform will destroy national security. It seems to me that if you really thought the deficit was going to put us at the mercy of the Chinese–rather than create a “mutual balance of terror,” as most people think–you would want to (1) tackle component of the budget that are far more significant than health-care reform in creating our debt burden (such as historically low taxes and enormous military spending) and (2) be in favor of reforms designed to get the medicaid/medicare fiscal time-bomb under control. I know that you’re ideologically opposed to the plans currently under consideration, and there are good arguments there. But this kind of stuff just seems weird.

  2. D,

    I’m not following your train of logic from what’s in the article to how health-insurance reform will destroy national security.

    This is good, as I never made the claim.

    Indeed, debt dependence of the US on China, while limiting American options, may structurally serve to keep the peace, by making conflict less likely.

    I’m not sure I follow any of your points.

    (1) is deceptively worded, because the important term (“historically”) is included in a parenthetical phrase. However, one might as well criticize Britain for focusing on building an information economy is the country’s economy “historically” is based on wool exports. The continued growth in health care spending removes the ability of the United States government to balance the budget if it would choose to do so without destroying our security capacity. Indeed, your point (2) appears to recognize this!

    (2) must be aimed at someone else, as I’ve repeatedly called for reforms designed to control the cost of health care [1]. Indeed, I am more open than the President in this, as he does not have the courage to champion the “death panels” that are needed to do the job [2].

    Reading your comment, I feel you are attacking some generic Republican talking points instead of what I have written.

    [1] http://www.tdaxp.com/archive/2009/08/11/the-exploding-cost-of-health-care-and-death-care.html
    [2] http://www.tdaxp.com/archive/2009/08/13/death-panels-and-who-will-die.html

  3. If you want to throw around words like “deceptive,” you’re going to have to actually make an argument for why the structure of the US economy in 2008 necessitates lower federal tax rates than what existed in, say, 1996, 1984, 1965, or whenever. There’s nothing deceptive about pointing out that federal tax rates are at or near historic lows, and that health-insurance reform costs simply don’t compare to the consequences of relatively recent changes in US tax policy viz. the US structural debt.

    Anyway, you’re right. I did a “dive by” on the site after not reading it for a year, and I now see that I mistook the nature of your rhetoric. You’re actually in favor of far more rationing than I think we need!

    So cheerfully withdrawn.

  4. D,

    Thanks for the reply,

    If you want to throw around words like “deceptive,” you’re going to have to actually make an argument for why the structure of the US economy in 2008 necessitates lower federal tax rates than what existed in, say, 1996, 1984, 1965, or whenever.

    Are you arguing that the total tax burden is lower now than then, or that non-federal taxes should be counted “off the books,” regardless of cost-shifting?

    Regardless, this is a misdirection. You used a deceptive phrase, because of your conflation of historic and future costs. I called you on it.

    There’s nothing deceptive about pointing out that federal tax rates are at or near historic lows, and that health-insurance reform costs simply don’t compare to the consequences of relatively recent changes in US tax policy viz. the US structural debt.

    Certainly we could pay for ObamaCare through higher taxes, or through abolishing the Department of Defense and returning us to a pree National Security State posture, or some other method. I am trying to look at this in the context of what is likely, however.

    You’re actually in favor of far more rationing than I think we need!

    Not sure what you mean by this. Are you criticizing Daschle and Obama’s outlook for health care? Do you believe that subsdizing morbidity has the same social benefit as subsidizing health? Something else?

    [1] http://www.tdaxp.com/archive/2009/08/11/the-exploding-cost-of-health-care-and-death-care.html

  5. D’s most recent comment was not substantive, and so has been deleted. D is encouraged to respond in a coherent way, in which he either answers the questions put to him, defends his remarks, indicates points where he does not understand the discussion, or so on.

Leave a Reply

Your email address will not be published. Required fields are marked *