Who will pay for government-run health care?

11 09 2009

On TV tonight there was a town hall meeting featuring Timothy Geithner, our current Secretary of the Treasury.  I caught just a minute of it while changing channels.  Someone asked him if the government will have to raise taxes to pay for health care.   He wouldn’t give a direct answer — he rambled on about tax cuts for 95 percent of people.  One of the moderators afterwards said something like, “That sounds like a yes”, and Geithner said something like, “Do you want me to repeat my answer word-for-word?”  Don’t you like it how people can spin an answer so it sounds like they’re answering your question but they really aren’t?   (That’s why we must pay attention and look beyond what is said.)

Figuring out our government’s part in our economy is a complicated thing, and I figure no one person understands it all.  Most of us do realize that it’s in bad shape, though.   And it should be obvious that adding government-run health care will make the economy worse, because that’s a LOT of money that the government doesn’t have.  Let’s look at that idea for a minute from a simplified point-of-view.

If you spend more than you take in, you have to find the additional money somewhere, right?  Of course.  (Although the government can print more money, but that devalues the American dollar, which doesn’t help so much in the long-run.)  So besides printing more money, they have to either bring in more revenue (which is mainly from taxes) or borrow more.  As you no doubt know, the United States has borrowed a LOT of money.  The national debt is over $9 trillion now ($9,000,000,000,000 — look at all those zeroes!  Also, there’s other debt beyond the national debt, which is kept on different books.)  As you probably also know, there’s only a finite amount of money one person / group can borrow, which is called your credit limit.  If you reach your credit limit, people quit loaning you money, and America is getting close to that, because some countries are becoming hesitant to loan us money.  (On a related note, if you spend beyond your means too long, you eventually reach a point that you can’t recover, and then you declare bankruptcy.  It can happen to countries, and it has in recent history.)

Even before President Obama’s plan of government-run health care, he has spent record amounts of money, sending us further into debt.   Adding to the debt is nothing new — Congress has spent more than they took in for 40 consecutive years — but this year is a record pace.  You can’t keep spending more money without having that money to spend.  The money has to come from somewhere.

All that is a long way of saying I won’t be surprised at all if Obama raises taxes on most of us, in some form or another.  Actually, I’d be surprised if he didn’t.  I know what he’s said, but the fact remains: the money has to come from somewhere.

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