Last week, as major companies began announcing the preliminary estimated costs of just one portion of the national healthcare indenture, Representative Henry Waxman dressed up in high dudgeon and played the part of Captain Louis Renault from Casablanca. He was “shocked” to find gambling going on in this establishment.
Foul, he cried, and loudly. How can Caterpillar, AT&T, Prudential, Verizon, 3M, Deer & Co., Valero Energy, and AK Steel Holdings be taking gigantic expense reserves when the legislation was designed to reduce cost, improve care, increase access, and bring about world peace? It must, he said, be a conspiracy, and it is time again for the Democrat collective to sharpen its pitchforks. As if he did not know this was going to happen all along? Among its myriad of do-dads and ge-gaws, the bill ends the subsidy created in 2003 to keep companies from kicking retirees out of company prescription drug plans and onto the newly minted Bush Medicare drug entitlement. Since this tax relief officially ended with a stroke of Obama’s pen, accounting rules require such material events to be recorded in the period in which they occur whenever they affect a company. Foul, he cried again, there were no adverse consequences of the bill to see here.
You, dear reader, were asked to suspend disbelief because the press had done so an eternity ago. In the months leading up to the futile bi-partisan vote against the so-called healthcare bill, editorial pages across the country, including the lady on life support in Lancaster, Pennsylvania, beat the drum in support of this entitlement. They argued with conviction that other countries do it, so the U.S. should. As terrible as that fourth grade reasoning was, it gets worse. Absent was any critical thinking about the constitutionality of the mandate to enter into a private contract. Absent was any critical thinking about the true cost of the bill. Gone was any analysis of the real number of uninsured. So shallow was the reasoning of the editorial army of the fourth estate they actually believed that the CBO score showing deficit reduction was true. Or worse, did not care.
In their world, there were no adverse consequences to government intervention. Their convenient temporary belief in the infallibility of the CBO is so fervent, for example, that they are pathologically ignoring the fact that the CBO predicted last year that the Social Security had until 2017 before it became a deficit spender. Yet, here we are one year later and Social Security will be paying out more than it takes in; this year. This is the same CBO that says the Healthcare bill will reduce the deficit over the next 10 years. Mathematical Illiteracy does not even begin to define this problem, and I am not just talking about the hapless CBO.
So, in celebration of King Henry’s practiced revelation that the bill has consequences in the real world, we offer that the roughly $1.7 billion dollars already recorded as losses only means 28,378 private sector jobs lost for one year. This assumes the average cost of $59,909 per private employee based on statistics from the Bureau of Economic Analysis. But, do not worry, we will replace those jobs with federal government jobs at a mere $119,982 per worker, or $3.4 billion per year. That is one heck of a multiplier. It will only take 257,966 private sector workers paying a 22% net federal tax rate to support those government jobs.
So King Henry is directing his rage at the private companies that must comply with standard accounting rules (or risk jail time and lawsuits, by the way). He is demanding hearings on April 21st because these evil business people are the first to demonstrate the real world affects of this terrible legislation. I do not know which is worse; That King Henry did not know what was in the bill, or that he did and now pretends he did not. To paraphrase the famous Supreme Court Justice Potter Stewart: I shall not today attempt further to define socialism, but I know it when I see it. Mr. Waxman’s indignation is great theater, and as usual it is we who are about to pay the ticket price.
© Edward Hunter and Thanks for the Laughs, 2010