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The GOP's answer to Obama, Bushcare!
The GOP's answer to Obama, Bushcare!
Edward Lazear might be a Stanford business school professor, but he has to be the most tone-deaf policy advocate in the country. In a Politico Magazine article, Lazear attempts to sway ... um, someone ... towards what he calls, "Bushcare!"

Honestly, I only clicked on the article because I thought it was a liberal attempting to spin Republican Obamacare replacement attempts - but no! Lazear is actually trying to sell his reform as "Bushcare."

Like all Republican healthcare reform alternatives, it is equal parts vague, inadequate, and disingenuous. He seems to want to replace the tax preference for employer-provided health insurance (health insurance isn't taxed as compensation) with a tax deduction of $15,000 for couples and $7,500 for individuals.

My favorite part is how he opens by pointing out ...

... the Affordable Care Act will cause employment to fall by the equivalent of 2.5 million full-time workers (and this) is just the latest of Obamacare’s negative surprises

This loss of jobs comes from the fact that Obamacare undermines the link between employment and health insurance - reducing "joblock." And just paragraphs later, Lazear extols "Bushcare"...

Under the current system, part of the cost is borne by others because the tax system does not treat employer-provided health insurance as income. As a consequence, a dollar spent by the employer or worker costs less than a dollar to that worker. The Bush plan would eliminate that distortion, replacing the non-taxed status of employer-provided health insurance with the standard deduction. By eliminating the link to employers, health insurance becomes more like auto insurance, where the consumer has appropriate incentives to shop around.
So which is it Prof. Lazear? Is 2.5 million less workers a bad thing because they can leave their jobs now they don't depend on their employer's health insurance plan? Or should we be eliminating the link to employers? Isn't it the same result through different means?

Obviously, "Bushcare" would lead to the end of joblock and result in less workers as well, presumably more (which isn't necessarily a bad thing). Lazear is either stupid because he doesn't get this - or he's disingenuously spinning facts to garner support. I going to lean towards stupid, because he also seems to think that labeling this "Bushcare" would actually help.

I will give him points, however, for actually identifying the two core problems with the nation's health care system:

First, it is expensive. Health economists, among them Daniel Kessler at Stanford, have shown convincingly that the United States spends a larger share of its gross domestic product on health care than other countries ... The second problem is the large number of uninsured Americans who do not have reasonable access to health care and who obtain the health care that they do receive in inefficient ways, such as using emergency rooms ...
Obamacare actually address these twin issues. Unfortunately for Lazear's "Bushcare," deduction-plus-taxing-health-insurance-premiums-as-compensation does not. If someone is uninsured and can't afford health insurance how does a tax deduction help. Not enough money is not enough money. Less tax really only helps high income earners who (usually) pay higher taxes.

If it was a tax credit, which would put money in people's pockets regardless of income level, it might be slightly interesting. But that might help low-income people so it never occurred to Lazear. Also, using tax credits to help individuals afford health insurance is also known as Obamacare.

But, you know what, I'm willing to overlook these issues. I agree with Prof. Lazear, Republican's should definitely run on "Bushcare" - it's a guaranteed winner!

P.S. Seriously, though, where does Politico find these guys. (oh, ya, the Hoover institute) The label, "Bushcare," is totally unlikely to appeal to liberals, conservatives, along with the general electorate. Who does he think his target audience is?

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