I read Barry Ritholtz's blog(The Big Picture) everyday, like I do TGOS. The funny thing is, he didn't write about it but a commenter on his blog posted the link in the comment section. I don't know much about Karl Denninger, except that he's a Wall Street, or related, guy. And he put up a post titled, The True Intent of Health "Reform". In it he makes the claim that the real intent of the health care bill before Congress is to institute a single-payer Canadian style system. Join me over the flip to see the details.
First off, I know he quotes Turdblossom(that's Karl Rove in case anyone didn't know) and The Heritage Foundation. Secondly, even if they make a good case, don't a lot of people here want exactly(or at least close) to what Canada has? But lets get to the crux of the matter.
First, Denninger, with the help of the above mentioned right-winge groups/people argue that the mandates, as currently written in the bill are unconstitutional. Denninger quotes Randy Barnett, Nathaniel Stewart and Todd F. Gaziano of The Heritage Foundation(through the WSJ):
The purpose of this compulsory contract, coupled with the arbitrary price ratios and controls, is to require many people to buy artificially high-priced policies to subsidize coverage for others as well as an industry saddled with other government costs and regulations. Congress lawfully could enact a general tax to pay for these subsidies or it could create a tax credit for those who buy health insurance, but that would require Congress to "pay for" or budget for the subsidies in a conventional manner. The sponsors of the current bills are attempting, through the personal mandate, to keep the transfers entirely off budget or--through the gimmick of unconstitutional taxes or penalties they dub "shared responsibility payments"--make these transfers appear to be revenue-enhancing.
This "personal responsibility" provision of the legislation, more accurately known as the "individual mandate" because it commands all individuals to enter into a contractual relationship with a private insurance company, takes congressional power and control to a striking new level. Its defenders have struggled to justify the mandate by analogizing it to existing federal laws and court decisions, but their efforts do not withstand serious scrutiny. An individual mandate to enter into a contract with or buy a particular product from a private party, with tax penalties to enforce it, is unprecedented-- not just in scope but in kind--and unconstitutional as a matter of first principles and under any reasonable reading of judicial precedents.
Congress has a responsibility, pursuant to the oath of all Senators and Representatives, to determine the constitutionality of its own actions independently of how the Supreme Court has previously ruled or may rule in the future. But it is very unlikely that the Court would extend current constitutional doctrines, or devise new ones, to uphold this new and unprecedented claim of federal power.
The point being, to Denninger and the three gentlemen from the Heritage Foundation, that the mandates will be found unconstitutional by the Supreme Court, eventually. Denninger also claims that it's no coincidence that the reforms don't kick in until 2013(or 2014). In fact, here is what he claims will happen:
Here's how it will happen.
1. Congress will pass and Obama will sign something containing this "individual mandate."
2. This will generate immediate lawsuits which will begin their way through the system, headed for the United States Supreme Court. That process will take several years. Note that the so-called "benefits" of this reform will also take several years to show up. This is not an accident.
3. Meanwhile, the taxes begin immediately. This is exactly what happened in the 1930s by the way - taxes were raised right into the maw of an economic recession, and helped turn it into a Depression. Such it will be this time as well.
4. Young, healthy people will pay the "fines" under protest and refuse to buy coverage (it's cheaper than complying with a $15,000/year mandate to pay the $750/year fine!) and join said lawsuits in Step #2. This will in turn begin to force private companies out of the system (remember, there are also price controls in there!) as adverse selection will not be eliminated as promised.
5. At some point the courts will strike the individual mandate. Free to not pay the fine or buy insurance and prevented from raising rates adverse selection will collapse the remaining private health insurers.
I don't know that the taxes, as he calls them, kicks in right away. Someone can enlighten me on that. I also love this part:
For good or bad, you will get both rationing and a tax-funded medical system in The United States.
Does he forget that we already have rationing in the United States? He also makes a claim that both parties are controlled by the "medical device and pharmaceutical industry". No shocker there!! I am sure a lot of people would agree with that statement. And in the next breath, he seems to admit that our health care system isn't nearly as good as it should, or can be. I also want to highlight his ending comment. To wit:
Mark this Ticker and come back to it in three or five years - I'd make a fairly large wager that this is exactly what we will not only get but what is the true intent behind this "bill."
I am going to bookmark it. If only D.C. Democrats were really so devious. Do Ben Nelson and HoJo know they're helping lead us down the path to single-payer health care?
I don't know how true Denninger's claims are. While a lot of people here aren't fans of the mandate, because you have to buy insurance from a private company, I don't know whether this can be successfully challenged. Does anyone want to take a bet on what the Supreme Court would do? It sounds like a vexxing case for Roberts, Alito, Scalia and Thomas. Do they side with the people(and against government intrusion .. in their minds), or do they side with their corporate buddies? Interesting stuff to be sure.
I'd love to have TGOS community weigh in on this. Do you think the Democrats are really stealthly plotting the way to single-payer health care here in the U.S.? What say ye!!