Paul Ryan has made economic issues his main focus. He has a degree in economics so it makes sense that this would be a passion of his and I really appreciate that he is working very hard to come up with ideas and push the conversation regarding deficit issues. Unfortunately for Congressman Ryan, his plan is deeply flawed.
The first problem is that a his portion of his plan relies on tax cuts to return us to prosperity. History shows that cutting tax rates for the rich, as the Ryan plan would do, does not help the economy. It leads to more saving and a decline in the S&P 500. Further analysis shows that tax cuts do not get a very good bang for your buck when compared with other stimulative measures.
These tax cuts have been a Republican mantra since Reagan first put the trickle down theory in action. Years of analysis show that Trickle Down Economics does not work and even fiscal conservatives like the Daily Beast's Andrew Sulivan have acknowledged this with his recent statement on Real Time with Bill Maher where he said "There was a point in history in which you could say it was a theory that f we cut taxes o the rich growth would happen but look; we've had 25 years of it and i hasn't happened. And the growth has happened when we raised taxes a little bit under Clinton and George H.W. Bush."
While that portion of the Ryan plan is troubling the really disturbing part is his plan for Medicare and Medicaid. Ryan has said his plan for overhauling this system is "identical" to the system currently used to provide health care to Congressman and other public workers. The problem is that when compared to Medicare and Medicaid the costs for the health care coverage provided to Congressmen is increasing at a faster rate. If Congressman Ryan's goal is to reduce the cost burden of Medicare and Medicaid I'm not sure why he would choose a plan that has a history of costing more than Medicare and Medicaid.
What I really don't understand about this portion of the plan is why a Republican would think this is a good idea since it flies in the face of the belief of running the government like a business. Right now Medicare and Medicaid are the Walmart of medical insurance. They can get the best deals because they have the most leverage. The smaller insurance companies, like the Mom and Pop stores, don't have the same buying power and can't negotiate the best deals. Competition is good for the consumer but in this instance Americans are the business and the hospitals are the consumer. If government is to be run like a business we should be looking for ways to increase our buying power not dilute it.
If Ryan gets his way Hospitals can set the price because the more "choices" (insurance companies) we have the less buying power each of those choices has to offer. The Hospitals become the Walmart in this negotiating process and we become the vendor who is pinching his margin just for the privilege of dealing with them.
If you want choice just for the sake of having choice then the Ryan plan gives you that. What is doesn't give you is a way to reduce the costs of medical care. The reason for the rising cost of health care insurance is health care costs not Medicare or the insurance companies.
We should have an "us" versus "them" mentality in this fight to lower health care costs but we also need to understand that the government is the "us" in this fight not the "them".
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