Kevin D. Williamson highlights for National Review Online readers an often-ignored problem linked to American health care: a recent supply-side decline.
The number of jobs in health care grew 63 percent from 1990 to 2008, providing one in four of the jobs created in those years, and, equally important, health care is one of the few sectors that has shown relatively strong growth in inflation-adjusted wages in recent decades. Losing that means losing a big piece of the employment picture, not just in total jobs but in real income.
Which puts us in a difficult position: Cutting Medicare and Medicaid spending will have ill effects on the job market, but not cutting Medicare and Medicaid spending will bankrupt the country.
This is a textbook case of why you do not want government trying to steer an industry or fixing prices. It is basically the same story as that of the mortgage meltdown: Government decides it wants to encourage X, so it sets up programs and pours money (or, in the case of housing, credit) into it. Prices go up, people make economic decisions — about buying, selling, saving, investing, setting up businesses, choosing a major in college — based in part on conditions dependent upon that policy, and then the inevitable day comes when, quelle surprise, the policy turns out to be unsustainable. And the whole thing falls apart. It is impossible to coordinate resources in the absence of a real functioning market, which we do not have in health care, which the ACA will not establish in health care, and which we have not really had in health care since Lyndon Johnson & Co. stuck their collective snout into the market in the 1960s. IPAB requires savings in Medicare that are in the end arbitrary, as such political targets must always be, and if other attempts to manage Medicare outlays are any indication, those targets are going to fluctuate with the political weather.
In real-world terms, this means that somebody somewhere has just entered a night-school course to qualify for an X-ray technician’s job that isn’t going to be there, and somebody else is getting a pink slip rather than a bonus this Christmas.