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Wednesday, December 24, 2008

In the Long-Run, We are All Healthier

Jacob Hacker argues that health care reform should be part of the stimulus package:

A Healthy Economy Medicine is the best stimulus, by Jacob S. Hacker, The New Republic: As we move deeper into the recession, most economists are urging President-elect Obama to spend big money right away in order to stimulate ... the economy. The sticking point for a lot of people, however, is the long-term budget picture...

In fact, we have a magic bullet for short-term spending and long-term saving--health care reform. During the campaign, skeptics complained that a health care overhaul would involve a lot of upfront costs and that the saving would only come later. But that's exactly what we need right now. Health care involves major spending in the near future, but, more than other initiatives, it will put a brake on federal outlays in the far future.

All this argues for temporarily throwing fiscal caution to the wind when it comes to health care reform. The idea of spiking the deficit now may seem frightening, but it's a lot better than the alternative--and it could actually make it easier to bring universal health care to America. ...

The typical items on the stimulus menu--infrastructure spending, general aid to the states, benefits for the jobless, investments in new forms of energy--have a lot going for them. But they shouldn't blind us to the fact that government health spending is also an extraordinarily effective way to boost the economy. ...

[F]ixing health care isn't just a recipe for better access to medical care. It's an immediate economic lifeline for working families, giving them back part of their income to use on other things. It's also a rescue package for state and local governments burdened by Medicaid and S-CHIP, for doctors and hospitals who treat the uninsured and inadequately insured, for community institutions that help people in distress--in short, for all the rapidly fraying threads of our health care safety net. Put simply, most of the money we spend upgrading coverage and spreading it to the uninsured is going to go directly into the pockets of people who need help now. ...

The beauty of all this spending is that it will mean higher wages and employment, a more flexible labor market in which people feel free to change jobs or strike out on their own without risking their health and finances, and, yes, less pressure on public and private budgets down the road. We'll be running up hefty federal bills for a while. But we'll be doing so confident we're going to improve the economic standing of millions of Americans and our long-term budget situation in the bargain.

    Posted by on Wednesday, December 24, 2008 at 01:17 AM in Economics, Fiscal Policy, Health Care | Permalink  TrackBack (0)  Comments (34)


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