Jay P. Greene's Blog

I See Bankrupt People!

(Guest Post by Matthew Ladner)

Byron Schlomach and I had fun co-authoring this piece for the Goldwater Institute:

The supernatural thriller “The Sixth Sense” features a young boy who assists the ghost of a young girl in exposing her mother as her murderer. The mother, suffering from an uncommon mental disorder known as “Munchausen by Proxy Syndrome” had slowly poisoned her daughter to death.

While actual Munchausen by Proxy Syndrome (MBPS) is very rare, something much like it is sadly all too common in American policy-making.

MBPS involves a caregiver deliberately making another person sick. The caregiver may exaggerate, fabricate, or even induce symptoms. The perpetrator achieves a twisted satisfaction from deceptively gaining the attention and sympathy of doctors and others. Because the caregiver appears to be so caring and attentive, often no one suspects any wrongdoing.

In politics, many of our longstanding, serious policy problems are similarly inflicted upon us by our alleged caregivers. Two obvious examples of this political slow-poisoning: runaway costs in heath care and higher education. Simply put, government policies have spun heath care and higher education costs out of control.

These damaging cycles of cost inflation are the direct result of the MBPS-like policies administered by the federal government. When citizens raise concerns that health care or a college degree are financially out of reach for many, politicians show their compassion by administering more of the bad medicine that created the problems in the first place.

Consider health care. The problem is people can’t afford it. Although history shows medical care prices do not inevitably rise, medical inflation more than doubled general inflation from 1960 to 2006. If medical prices had not raced ahead of general inflation, health care would represent 7% of the American economy rather than the current 16% and growing. While many politicians want to make the availability of health insurance the issue, the real issue is that medical care is becoming increasingly less affordable, reducing accessibility.

Americans went from paying the lion’s share of medical costs ourselves to depending on government (Medicare and Medicaid) and employer-provided health insurance to pay for us. Consequently, price has become no object and we have become uninformed and unwise shoppers for medical care. Providers have become wasteful, often taking advantage of this distorted market, competing on a non-price basis.

All of this has occurred because government tax policy has encouraged employers to pay us in health benefits instead of cash. Add Medicare and Medicaid bureaucracy to the mix, and you’ve got a perfect prescription for out-of-control costs and increasingly reduced accessibility.

What are politicians offering as a solution? The Obama administration offers more of what got us here in the first place: expanded insurance, expanded market regulation, expanded Medicare, Medicaid, and SCHIP. As we pay even less out-of-pocket, medical prices will only get higher and medical services will only get more expensive and less accessible.

Amazingly, higher education costs have been rising at a rate even faster than medical cost inflation. Since 1982, the average cost of college tuition and fees has increased by 439% while median family income increased by a mere 147%. Think of it as compound interest for putting college financially out of reach and/or crushing families with debt.

Again, President Obama has proposed more of the same: a $4,000 tax credit for higher education expenses. Sounds great, but based on decades of bitter experience we have every reason to believe that if Obama’s tax credit plan passes, universities would simply hike their tuitions and fees. Congress has been chasing its own tail on college affordability for decades: while providing ever-increasing subsidies, costs continue to go up, so it repeats the process again and again.

Please- no more Congressional medicine!

Obama’s policy plans will simply add more fuel to the fire, leaving our very serious affordability problems in higher education and health care unaddressed. This is not change that we can believe in, but more of the same.

Like the MBPS abuser, politicians often come across as compassionate as they indulge their pathologies. If our politicians suffer from MBPS, we suffer our own sort of insanity in allowing ourselves to be victimized by it year after year. Our form of insanity could be referred to as Battered Taxpayer Syndrome, and it is time to call a halt to it.

It is a fallacy for the public to judge our leaders by their stated intentions, rather than the results of their decisions. Why is health care so expensive in the United States? Why the crushing debt for college educations of no greater worth than those obtained decades earlier at far less cost? Sadly, it’s because of federal policies whose follies have been repeatedly reinforced.

Rather than Munchausen by Proxy politicians, we need leaders who will follow the Hippocratic Oath: first, do no harm.