Bloomberg News' New Bash Target...Free Markets in Healthcare
I am not sure why or how Bloomberg reporter Ryan Donmoyer extrapolates from an unreleased Joint Committee on Taxation report that President Bush's healthcare reform proposal from the SOTU will do nothing for healthcare costs. As mentioned the report hasn't even been released and even Donmoyer characterizes it as "very preliminary", yet it "calls into question administration claims of cost and tax savings."
The report apparently says that the reform proposal will begin imposing higher taxes by 2011, and somehow this is supposed to mean that healthcare costs won't go down. Not even the Brookings Institution analyst that Donmoyer hauls in knows what it all means. The tone and content of the article is clearly meant to make Bush's reform proposal look dubious, either by being convoluted or simply unsuited to the putative goals. As someone employed by a leading financial media firm, Donmoyer ought to know that prices for goods and services and taxes are not the same thing and that higher taxes paid does not mean higher prices paid. In fact, if Donmoyer was at all proficient in healthcare economics he would find nothing wrong with Bush's reform ultimately generating higher tax revenue. As I posted on this blog, Glenn Hubbard - one of Bush's former advisors, a current Romney advisor, and a pro-free market healthcare reform advocate - has outlined in his book how removing the distortions currently embedded in the tax code will cause people to buy low cost, high-deductible insurance that is truly insurance and thus opt for increased cash wages in lieu of employer-provided healthcare and thus pay taxes on those higher cash wages. Here is how I reported it (here):
"Furthermore, as people are free to make real choices about what kind of insurance they need, they are likely to opt for high-deductible, catastrophic policies, which will result in them taking higher wages (i.e. less compensation in the form of healthcare) which will be taxed. The incremental taxes from those increased wages, can fund government subsidies for the thorny problems of the chronically ill and the truly poor."
If Donmoyer doesn't understand this he is overemployed, but I think he is just acting on orders from Al Hunt. It appears to be an institutional mission at Bloomberg to attack free market healthcare reform just like it was an institutional mission to spread the fiction of the jobless recovery. Donmoyer has been caught before peddling his biases as news, but I'm afraid his attempt to sow deeper doubt and skepticism was probably effective.
The report apparently says that the reform proposal will begin imposing higher taxes by 2011, and somehow this is supposed to mean that healthcare costs won't go down. Not even the Brookings Institution analyst that Donmoyer hauls in knows what it all means. The tone and content of the article is clearly meant to make Bush's reform proposal look dubious, either by being convoluted or simply unsuited to the putative goals. As someone employed by a leading financial media firm, Donmoyer ought to know that prices for goods and services and taxes are not the same thing and that higher taxes paid does not mean higher prices paid. In fact, if Donmoyer was at all proficient in healthcare economics he would find nothing wrong with Bush's reform ultimately generating higher tax revenue. As I posted on this blog, Glenn Hubbard - one of Bush's former advisors, a current Romney advisor, and a pro-free market healthcare reform advocate - has outlined in his book how removing the distortions currently embedded in the tax code will cause people to buy low cost, high-deductible insurance that is truly insurance and thus opt for increased cash wages in lieu of employer-provided healthcare and thus pay taxes on those higher cash wages. Here is how I reported it (here):
"Furthermore, as people are free to make real choices about what kind of insurance they need, they are likely to opt for high-deductible, catastrophic policies, which will result in them taking higher wages (i.e. less compensation in the form of healthcare) which will be taxed. The incremental taxes from those increased wages, can fund government subsidies for the thorny problems of the chronically ill and the truly poor."
If Donmoyer doesn't understand this he is overemployed, but I think he is just acting on orders from Al Hunt. It appears to be an institutional mission at Bloomberg to attack free market healthcare reform just like it was an institutional mission to spread the fiction of the jobless recovery. Donmoyer has been caught before peddling his biases as news, but I'm afraid his attempt to sow deeper doubt and skepticism was probably effective.
posted by Donny Baseball at 2:50 PM
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