It’s not just about big government

The recent budget deal is even worse than I imagined.  Here’s Ravi Smith, from the previous comment section:

By repealing IPAB, which is essentially a cap on Medicare spending, the Republicans have massively increased the size of government. In the long run, that will probably be more important for sustainability than any of the tax changes or immediate spending items.

Conservatives used to try to argue that while the GOP would not cut spending, at least they would not increase it as fast as the Democrats.  But even that is no longer true, and the reason is that the GOP is no longer either a small government or a big government party; they are something much worse, the party of crony capitalism.  They are the party that forces the Pentagon to spend money on weapons that ever single military expert says are unneeded.  They are the party that wants to shovel more spending into the insatiable medical industrial complex, even when every health expert tells us the spending is utterly worthless.  They want to shovel more money to big agriculture, even though every economist will tell you it does nothing to prevent agriculture from becoming increasingly dominated by big farmers.

The Democrats also want to spend a lot of money on providing health care, but at least they have a slightly defensible reason, providing health coverage for the needy.  The GOP would rather double spending on Medicare and gut spending on Medicaid, as long as it enriched wealthy people in the healthcare industry (while denying coverage for the poor.)

One thing the left and right seem to agree on is that the GOP is the small government party.  That explains why the media are paying little attention to this fiasco.  But they are both wrong.  The GOP is the party of crony capitalism–small vs. big government plays no role in the modern political debate between the right and the left.  America has become a European country.  If it’s stupid bigots vs. stupid utilitarians, I’m with the stupid utilitarians.

The right used to mock the Democratic Party claims that high government spending does not hurt the economy.  Now I see conservatives engaging in “magical thinking” that would put 1960s-era liberals to shame.  All this orgy of spending is not a problem (we are told) because the GOP won’t pay for it with higher taxes.  Instead we’ll just borrow the money!  I’m not surprised that Trump thinks this way, he’s never had the slightest interest in reality.  But I am sort of surprised by the number of conservatives drinking the kool-aid.

So let me make it really simple.  There’s a pie.  The GOP is about to give the government sector a much bigger slice of that pie.  That means the private sector will get a smaller share of that pie.  And no amount of deficit spending will change that fact, unless you believe that pouring hundreds of billions of dollar into ships and airplanes with no military purpose, and into an out of control medical sector, will magically cause “the pie” to grow.

Here’s the National Review:

Republican congressional leaders have announced a deal with Democrats to bust discretionary spending caps by nearly $300 billion over the next two years. Appropriations will rise by 13 percent this year. . . .

[That 13% growth is in contrast to NGDP, which will rise by about 4.5%.  Think slices of the pie.]

The Republican Congress that aggressively pushed President Clinton on spending then turned around and rubber-stamped President Bush’s domestic spending spree. Now the GOP Congress that admirably fought President Obama’s spending agenda is set to bust the budget caps under President Trump.

So let’s see, we only get spending restraint when we have a GOP Congress and a Democratic President.  Pity Hillary didn’t win. Seriously, I think things would actually be about the same if Hillary had won.  The GOP would have done a deal of no repeal of Obamacare and a massive domestic spending increase in exchange for corporate tax cuts.  (That was my prediction before the election, and I’m even more convinced today.)  The only difference is that we wouldn’t have an embarrassing buffoon in the White House, with his finger on the nuclear trigger.

Hey Tea Party, how’s your support for Trump working out?



39 Responses to “It’s not just about big government”

  1. Gravatar of StatsGuy StatsGuy
    10. February 2018 at 14:06

    Find myself agreeing with you on just about every post these days… so I never feel a need to commend 🙂 However, I will say that I’m relieved that Hillary did NOT win, because you are quite correct we’d have the exact same outcomes that we have today but the alt-right would have more ammunition. Assuming Trump’s minders don’t actually let him close to the button.

    Thank you for the link to the Cochrane post. Thought provoking commentary on the instability of equilibrium points and future consumption expectations.

  2. Gravatar of msgkings msgkings
    10. February 2018 at 15:57

    @StatsGuy: sure Hillary as president would mean endless histrionics from the alt-right and the right in general, with Trump on some Fox TV show bloviating every night and tweeting even more, but even that’s better than the PRESIDENT bloviating every night. And we wouldn’t be the same international embarrassment we are now.

    Sumner is exactly right about Dem president/Rep Congress being the way to go. Fiscal policy was pretty good from 1994-2000 and 2010-2016.

  3. Gravatar of Bob Bob
    10. February 2018 at 16:48

    I am glad you are figuring it out… ideological bankruptcy has been there for a long time.

    Let’s not forget that, when it comes to economics, the tea party only cared about taxes, but never really about making actual cuts: This is more true every year, as the tea party was never young, and the age. They all want to cut spending in theory, but they would never agree on what to cut. They don’t want to cut the military, and won’t touch entitlements that could hit white males close to retirement. That doesn’t leave space for many cuts, other than those that mostly hurt people with a different skin color.

    Wanting to lower taxes with no consequences is not an economic policy. It’s like how I’d love to have a Ferrari, except I don’t want to pay for it now, and don’t want to have to maintain it. It’s an empty, fake want. There’s a few people in congress that would do cuts, but they’ll never have any support, because the number of people in the US that really would support lower government benefits and lower military spending is tiny: Nothing would destroy the GOP faster than having every candidate be a Paul Ryan clone.

  4. Gravatar of Benjamin Cole Benjamin Cole
    10. February 2018 at 16:48

    Oaky, we have been assured large federal budget deficits for the long run. At some point, crushing debt burdens.

    Gievn the premise, what should be monetary policy?

    Japan has some clues. QE, regularly. Or, in the next recession, or issue perma-bonds at 0.10% interest.

    This seems odd, but Japan already issues bonds near zero and so does Germany. Japan has been successful with QE for years, and the BoJ owns 45% of JGBs.

    In contrast, tighter money to offset federal spending might trigger another recession…and then even bigger deficits along with misery. We have seen that story before.

  5. Gravatar of Randomize Randomize
    10. February 2018 at 17:26

    The timing of the tax and spending bills make them even worse. If we were in a recession, I could at least forgive some desperate, ill-conceived efforts at a stimulus package. But to do all this during economic good times, when we should be cutting the deficit/GDP ratio? What the hell are they thinking?

  6. Gravatar of Negation of Ideology Negation of Ideology
    10. February 2018 at 18:06

    I totally agree that Republican Congress and Democratic President is the best for fiscal responsibility. But I think we need to Constitutional reforms beyond that. We already have Constitutional protections for free speech, and we should have similar Constitutional protections against budget deficits.

    It doesn’t need to be an absolute prohibition – you could have an independent financial control board, like the one Washington, DC had, have the ability to veto deficits. The members could be appointed to long staggered terms like the Fed.

    There is no reason to be running deficits when you have monetary offset, unless there is a large one-time cost like a major war.

  7. Gravatar of dtoh dtoh
    10. February 2018 at 18:17


    Regarding IPAB…. if you believe that having un-elected bureaucrats set reimbursement rates for medical treatment is a good idea take a look at Japan, which has a totally screwed up medical care system despite at least having the benefit (unlike the US) of a semi-competent bureaucracy.

  8. Gravatar of Massimo Heitor Massimo Heitor
    10. February 2018 at 19:13

    Here’s health care policy specialist Avik Roy writing about the 2017 GOP+Trump Health Care Bill:

    Concluding paragraph:

    “But any Republican conservative in the Senate who is thinking of voting “no” on this bill: how many times in your life will you have the opportunity to vote for a bill that fundamentally transforms two entitlement programs? How often will you get to vote for a bill that cuts spending by hundreds of billions of dollars? How often will you get a chance to make a difference for millions of your constituents who are struggling under the weight of rising premiums and exploding deductibles?”

    And sure, this failed to pass, but definitely not for lack of effort or intent.

    This IPAB cut is being widely applauded by conservatives. From

    “Instead, the recent two-year budget bill killed it [IPAB] dead. That’s a welcome blow against the emerging technocracy–a bipartisan success for which all involved deserve applause. Where does that leave Obamacare? The law is dying the death of a thousand cuts with the individual mandate repealed, the HHS moving to protect religious freedom in the healthcare context instead of attacking it, and now, a stake through IPAB’s cold heart.”

    And also remember the sharp budget cuts pushed by the Trump administration in 2017. Citing a link from opposition media:

    Also, the 2017 proposed reforms to medicaid and the 2017 budget cuts both provoked hysterical opposition and outrage. You can’t be outraged at large pushes to cut spending and then turn around and say that the Trump GOP is not willing to cut spending.

    It’s simply not true that the current Trump GOP administration has not sought to cut government spending or shrink the scope of government. Sumner hasn’t mentioned the points I mentioned in this post because he’s not making a serious attempt at being objective or analytical, he’s just slinging mud here.

  9. Gravatar of dtoh dtoh
    10. February 2018 at 19:19

    Also, just so we’re clear on the numbers….

    The annual increase in discretionary spending was 72 billion, a 6% increase. The increase in excess of the NGDP growth rate was 18 billion…. 0.1% of the GDP pie. (I don’t know where NR came up with 13% unless they were measuring against the sequestration cap, which decreases by about 85 billion a year.)

    The US spends about 20 billion annually on ships and airplanes…..not hundreds of billions.

    Discretionary spending on agriculture was cut by 21%

  10. Gravatar of Alec Fahrin Alec Fahrin
    10. February 2018 at 21:21

    For once, I really am starting to agree that Clinton was the better choice in 2016. Not because she would be fit my views or be the better president, but because she would have caused a divided government that at least maintained fiscal policy.

    I now regret my vote for Trump.

    It was not the bigotry, the (idiotic) continuation of the Afghanistan war, the absolute lack of action on trade, the attacks on U.S. allies, or the defense of a wife beater.

    It was the fact the GOP took everything they could because he was unwilling to stand up to their thievery. They took foreign policy, domestic policy, and judicial policy away from Trump. Now he is a figurehead with a big mouth and control over nuclear weapons.


  11. Gravatar of Alec Fahrin Alec Fahrin
    10. February 2018 at 21:30


    Why do you assume that all those who disagree on a policy must be your bogeyman?

    Sumner is not a raging leftist, and your argument that proposing an inane budget in February 2017 that everyone knew would be completely disregarded somehow validates him increasing government spending 13% annually, is the very definition of overt hypocrisy or insanity.

    Less government spending as % of GDP is what the GOP always promises. But when they have the power of the purse, they expand that % faster than any Democrat in the last 70 years.

    Oh, and finally, the Democrats being fiscally irresponsible does not validate the GOP being fiscally irresponsible. Do you really not understand the concept of “two wrongs don’t make a right”?

    Either way, what we all believe is quite irrelevant.
    This debt WILL be paid for one way or another. And it will most likely cost us more in the long-term than it benefits us in the short-term.

  12. Gravatar of Alec Fahrin Alec Fahrin
    10. February 2018 at 21:50


    Maybe I am reading a different source, but

    This source states that the average increase is about $150 billion each year.
    The total federal budget was about $4 trillion over the last fiscal year. We have no clue what the total federal budget will be for this fiscal year since it has not been even proposed yet. I’d assume it’ll be significantly higher though. Why? Because the Democrats want to add more mandatory spending in the budget and got a soft promise from Paul for this (to be negotiated in five weeks). Supposedly $500 billion in more spending over the next two years.

    The discretionary spending was about $1.07 trillion (not including emergency funding). The new bill is a bit over $1.21 trillion in discretionary spending (before emergency funding).

    That’s about a 13% increase.
    So, where do you get your facts?

  13. Gravatar of Dtoh Dtoh
    11. February 2018 at 00:36

    I get my facts from the OMB. Suggest you look there rather than at secondary sources. The increase of 150 billion is against the sequestration limit. The sequestration limit goes down every year so to get the actual increase you need back out the decrease in the sequestration limit.

  14. Gravatar of Bob OBrien Bob OBrien
    11. February 2018 at 07:39

    “So let me make it really simple. There’s a pie. The GOP is about to give the government sector a much bigger slice of that pie. That means the private sector will get a smaller share of that pie.”

    Why should the government give any slice to the private sector. Our constitution calls for the government to perform government functions not private functions!

  15. Gravatar of Alec Fahrin Alec Fahrin
    11. February 2018 at 08:33


    Then post the source.

    My sources state, $1.07 trillion discretionary to $1.21 trillion discretionary in FY2019. The FY 2018 budget stuck within the BCA, so this is a 13% increase in the non-mandatory spending, and let’s not even discuss the gigantic “emergency” budget they will pass in March.

    Of course, the BCA already was violated by these “emergency” budgets for a long time. The adjusted figure was about $1.2 trillion in FY 2018. Most analysts are stating that this “emergency” budget to be passed in March will be increased at least as much as the budget caps were. Unless you think we are not going to fund the continued wars in Afghanistan/Libya/Syria/Iraq/Yemen/Niger/etc.

    This is why multiple sources are saying $500 billion will be close to the final two year increase in the budget. We have no certainty though, since Congress hides its proposed budgets until the night of the final vote. Nonetheless, I’d assume the people who work in Congress know better than us what the final amount will be.

  16. Gravatar of Paul Zrimsek Paul Zrimsek
    11. February 2018 at 14:00

    THE party of crony capitalism? I think the crony capitalists are a little better than that at hedging their bets.

  17. Gravatar of Massimo Heitor Massimo Heitor
    11. February 2018 at 17:44

    Sumner isn’t a raging leftist… but he absolutely has a raging case of “Trump Derangement Syndrome”, as he calls it.

    I can respect disagreeing points of view. But some people make good points of disagreement. Other people make idiotic points. That is a subjective judgement made on the listener’s end.

    Sumner has economics expertise that I don’t have. I do respect that. I seek out experts to inform me on things that I wouldn’t otherwise know. But Sumner’s technical expertise is also mixed with Trump derangement syndrome, and I have to separate the two.

    I feel the same way about The National Review. I respect and learn from what they write. Their post arguing against this spending bill is informative and seems level headed. But the editors there also make many terrible points and have their own grudges and biases and I have to separate the good from the bad when I read them.

    I understand and agree with, “two wrongs don’t make a right”. Of course, Democrat wasteful spending doesn’t excuse Republican wasteful spending. I didn’t imply otherwise.

    The spending bullet items in the NYT article don’t seem unreasonable. I’m seeing mostly $90 billion for disaster relief and $166 billion increase in military spending. NR strongly supports the military spending, while Sumner strongly opposes it. I’m not an expert on these issues, but Sumner’s argument seems quite glib, “every single military expert says are unneeded”.

    You repeat the core argument here that the GOP only opposes Democrat spending, not Republican spending. Repeating the point doesn’t make it better.

    A more reasonable analysis of the GOP on fiscal responsibility would acknowledge recent efforts to reform Medicaid and slash spending from Federal Agencies like the EPA and the Department of Education. Omitting that seems like a biased analysis. Also, I’d like to see what the Trump administration does for the rest of it’s term. If they make no serious attempts spending cuts or fiscal responsibility moves, I will have to agree with the accusations made here. But I think that judgement might be a little premature at the moment.

  18. Gravatar of foosion foosion
    11. February 2018 at 18:26

    The GOP have bought into a simplistic version of Keynesianism – govt spending, aka fiscal stimulus, is good for the economy. Vote for spending increases and tax cuts to help a Republican president, scream about deficits when there’s a Democratic president. Throw in a good measure of helping the donor class and you explain a whole lot.

    Programs for the poor or middle class – try to slash. Help the donor class – how much would you like?

    They’ve moved beyond hypocrisy and parody.

  19. Gravatar of E. Harding E. Harding
    11. February 2018 at 20:12

    They are the party that forces the Pentagon to spend money on weapons that ever single military expert says are unneeded.

    I thought you liked Lindsey Graham and John McCain? Don’t you f*cking know that’s their whole schtick?

  20. Gravatar of Ravi Smith Ravi Smith
    11. February 2018 at 21:39

    I agree with you on the perils of price controls (and central planning in general). However, the choice we face is between open-ended Medicare spending and some spending limit with an executive empowered to determine reimbursement. Like almost all important executive agencies, it is run by a collegial Board with Presidential appointment and Senate confirmation. The second option is the one that reduces government spending.


    “Seriously, I think things would actually be about the same if Hillary had won.”

    I agree with this (and everything else). In a Madisonian system, policy is set by groups able to organize a majority across states on an issue-by-issue basis. I think the long-term solution to tackling the hordes of rent-seekers is to make it easier for ordinary citizens to organize. The ‘Neighborhood Legislature’ is an interesting idea in this vein (and it may be on your ballot this November).(

  21. Gravatar of ssumner ssumner
    11. February 2018 at 22:29

    Bob, Yes, but it’s far worse. Can you imagine Reagan trying to dramatically boost domestic spending.

    dtoh, I don’t think you know what IPAB is. This is not about free markets vs. price controls, this is about government spending programs with costs controls, and government spending programs with no cost controls. Medicare is NOT a free market. US government spending on health care is completely out of control, wildly out of line with any other country in the world, not just Japan.

    Do you favor government spending programs with no cost controls? Should Uncle Sam give doctors and hospitals and drug companies a blank check?

    And I don’t agree with the data in your other comment. The budget deficit in the US is skyrocketing at a time when it should be falling. Deficits usually fall during expansions. Ag spending bounces around depending on weather conditions, but previous attempts to rein in farm subsidy costs have been pretty much abandoned by the GOP. Actual spending figures will probably come in higher than estimated.

    A single airplane program (F-35) costs a total of over $400 billion to acquire, and then $1.1 trillion to maintain. And there are many other types of airplanes, and many types of ships. Even if you spread the cost out over many decades, I doubt the figure of $20 billion/year. The F-35 program alone must be close to that. Most of these weapons are unneeded–who is going to attack the US, when our military is stronger than the next 10 countries combined? Do we need these weapons to fight ISIS?

    Massimo, You said:

    “This IPAB cut is being widely applauded by conservatives.”

    What better evidence of the total intellectual bankruptcy of the conservative movement in America (outside Rand Paul). Unlimited welfare for the rich and nothing for the poor. What a lovely philosophy for conservatives.

    Harding, McCain opposes many of the weapon systems that Congress forces onto the military.

  22. Gravatar of ssumner ssumner
    11. February 2018 at 22:31

    Statsguy, Good to hear from you again.

  23. Gravatar of H_WASSHOI H_WASSHOI
    12. February 2018 at 05:55

    12. February 2018 at 06:54


    How does what the GOP is doing differ from a real-time test of MMT?

  25. Gravatar of mpowell mpowell
    12. February 2018 at 09:25

    Agree with most everything in this post. Really sad to see, but not that surprising. The maturity level in the Democratic party has never been that high and certainly don’t enjoy the direction the party was going with Sanders. But the Republican party has plummeted in the last 20 years. I didn’t expect it to manifest this blatantly though, with the limited majorities in both houses of congress.

    Ideally the Republicans get wiped out in 2018, but I’m pretty sure the tea partiers aren’t going to learn any lessons. It’s looking like the country will need to suffer another episode of 70s stagflation before the political class figures it out again.

    So amazing that the best economic decade of the past 50 years (Clinton era 90s) is the most reviled by both parties. It should continue to be the example of how to run the country! (except maybe don’t chase the debt so low)

  26. Gravatar of Massimo Heitor Massimo Heitor
    12. February 2018 at 09:29

    @Alec Fahrin,

    Read Sumner’s comments:

    “What better evidence [support for IPAB repeal] of the total intellectual bankruptcy of the conservative movement in America (outside Rand Paul). Unlimited welfare for the rich and nothing for the poor. What a lovely philosophy for conservatives.”

    Sumner is trolling me. This isn’t supposed to be a serious argument at all.

  27. Gravatar of Carl Carl
    12. February 2018 at 09:41

    “we only get spending restraint when we have a GOP Congress and a Democratic President”. The evidence seems to back that up.

    It seems you can win political office by making sure your family gets a bigger slice of today’s pie. And you don’t win by caring whether there will be any pie left for anyone’s kids at the kids’ table.

  28. Gravatar of Steven Kopits Steven Kopits
    12. February 2018 at 12:01

    If what you right is true, Scott, then you’d want to endorse the proposed remedy at the link, I would imagine.

  29. Gravatar of dtoh dtoh
    12. February 2018 at 17:04


    “And I don’t agree with the data in your other comment. The budget deficit in the US is skyrocketing at a time when it should be falling.”

    I’m pretty sure my data is right. The deficit may be skyrocketing, but that doesn’t mean you should give NR a free pass with their bogus 13% number. This discussion should be based on facts not on the sky is falling rants of gold-standard loving, Austrian Luddites.

    “Do you favor government spending programs with no cost controls?”

    Not at all. All spending on medical care in the US is out of control… not just government spending on medical care. With a parallel private payment system in place, there are adequate benchmarks for setting Medicare reimbursement rates. There was no need for an independent panel on pricing unless the ultimate goal was to eventually eliminate the private payment system and go to a single payer system.

    “A single airplane program (F-35) costs a total of over $400 billion to acquire, and then $1.1 trillion to maintain. And there are many other types of airplanes, and many types of ships. Even if you spread the cost out over many decades, I doubt the figure of $20 billion/year.”

    It’s fifty year program. Annual acquisition cost will be around $7 to $8 billion. You can check the numbers. The US does not buy that many ships and airplanes and $20 billion goes a long way when you’re buying boats and planes. Paying for pilots, gas, mechanics, accountants and janitors is what costs money.

  30. Gravatar of Steve F Steve F
    12. February 2018 at 18:30

    Dtoh, thanks for your posts. I hope you’re right.

  31. Gravatar of Lorenzo from Oz Lorenzo from Oz
    12. February 2018 at 18:38

    Isn’t there some cutting of regulations going on?

    Anyway, mostly depressing at all angles.

  32. Gravatar of Massimo Heitor Massimo Heitor
    12. February 2018 at 18:52

    “Drastic cuts for State Department in White House budget”…

    I know this is small potatoes next to the bigger ticket increases for military spending. But it’s reasonable to keep an open mind to the rest of Trump’s first term as to what he does to spending levels.

  33. Gravatar of ssumner ssumner
    12. February 2018 at 21:46

    dtoh, You said:

    “With a parallel private payment system in place, there are adequate benchmarks for setting Medicare reimbursement rates.”

    This is wrong on multiple levels. Much of what that commission was supposed to do was determine medical need, not just cost. Studies show vast waste in the Medicare program. And the so-called “private” part of our system is also heavily socialist, and riddled with massive waste and fraud. Most of my own health care expenditures over the course of my life have been pure waste, only done because taxpayers were picking up much of the cost, pushing me into extremely inefficient and heavily subsidized “private” insurance schemes. So no, we cannot rely on the current system as being efficient, it’s the most wasteful system ever devised by man, anywhere in the world, in terms of total dollars wasted every year. I’m talking about at least a trillion dollars of pure waste, every year. I doubt even the Soviet economy was that bad.

    Someone I know (who is on Medicare) recent went to the doctor with a mild cold. The doctor said just in case let’s keep you overnight. The bill was $6000. This stuff happens every day. (Of course she was fine.)

    So 40% of all weapons costs are the F35? I’ll take your word for it. In any case, the associated costs are part of the military budget, and also pure waste. We should cut military spending in half; no one is going to attack us, and it’s probably time for us to stop invading countries like Vietnam, Libya and Iraq, unless the military can come up with better strategies that what they’ve done so far.

    Here’s the bottom line. The deficit has recently risen from 500 billion to 1 trillion, at a time of growth, low unemployment and the nation not being at war. That’s just insane. Nothing like that has ever happened before in all of American history. There’s just no excuse.

    Lorenzo, There are definitely some cuts in regulations, but also some increases
    in regulations. On net I’d say there are cuts, but nothing game changing. The big inefficiencies are not being touched. (Admittedly the politics are difficult.)

    I’d rather they deregulate health care than coal mining.

  34. Gravatar of dtoh dtoh
    13. February 2018 at 17:53


    Whether we spend too much on medical care or defense are separate questions from whether the NR article on the current profligacy of the Republican party is accurate. It is not, and that was the point I was making.

    As to the former questions, they’re probably better addressed when you have time to post separately on them, but briefly….

    1) I think your $1 trillion number on medical care is too high.

    2) Spending much of my time in countries in close to proximity to China, I’m probably less of a dove on military spending than you.

  35. Gravatar of Scott Sumner Scott Sumner
    14. February 2018 at 08:56

    dtoh, I’m almost certain the $1 trillion figure is much too low. It’s probably closer to $2 trillion. We’d spend about 10% of GDP less than we do in a 100% free market.

    And medical waste explains much of the GOP spending waste. They are in the pocket of the medical industrial complex.

  36. Gravatar of dtoh dtoh
    14. February 2018 at 21:20

    In 100% free market, I think $2 trillion might be right, but 100% free market means….

    1) Eliminate licensing for physicians and other providers.
    2) Eliminate safety and efficacy regulations for drugs and devices.
    3) Allow hospitals to turn away poor and/or uninsured patients.
    4) Elminate patent protections to reduce R&D spending.
    5) Elminate all mandatory insurance pooling so poor people with chronic conditions don’t have to be treated.
    6) Eliminate government sponsored adjudication of malpractice disputes so they can be resolved more efficaciously with dueling pistols.

    Seriously, why don’t you do a post on this subject. I think we overspend on medical care, but IMHO it’s probably in the range of 2% to 3% of GDP.

  37. Gravatar of Scott Freelander Scott Freelander
    15. February 2018 at 21:35

    It’s hard to see how we’re not wasting more than $2 trillion/year on healthcare, just considering we spend around 18% of GDP on it, which is at least twice what any other developed country spends, with the possible exception of the UK. I’m just going on memory.

    We have a crony capitalist system.

  38. Gravatar of Valerius Valerius
    15. February 2018 at 22:23

    “unless you believe that pouring hundreds of billions of dollar into ships and airplanes with no military purpose … will magically cause “the pie” to grow.”

    I seem to recall a certain Nobel (memorial) prize winner asserting precisely that.

  39. Gravatar of dtoh dtoh
    16. February 2018 at 01:11

    @Scott Freelander

    Most other developed countries are around 11 to 12%.

    If you analyze the issues carefully, I think you will find the following reason for high medical expenditures in the U.S.

    1. The US population is much less healthy than most other developed countries because of a) obesity, b) high rates of smoking in the 1960s, c) extensive use of automobiles and therefore higher incidence of accident related trauma, and d) high rates of gun and other violence.

    2. Medical care is much better and therefore more expensive in the U.S.

    3. In many other countries, wages and prices are controlled and/or supply is rationed by the government.

    4. In the U.S. we subsidize employer provided insurance (including plans with low or no deductibles and/or co-pays.)

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