Saturday, November 09, 2019

Elizabeth Warren's Funny Money

As much as it was beginning to annoy the media, Elizabeth Warren would have been better served to continue refusing to answer questions about how she was going to pay for her “Medicare For All” plan.

One has only to examine the first item in her plan to see that what she is proposing makes “smoke and mirrors” look more substantial than a fleet of nuclear bombers.

Bear in mind that the plan will cost $3.2 trillion per year, and total government spending in 2019 was $4.45 trillion. Given that we are currently spending $1.3 trillion on health care, the $3.2 trillion cost of her “Medicare For All” plan will be more than the $3.15 trillion of non-health care spending by the government, so funding is not a trivial issue.

“First,” she says, “we’re going to use the $1.6 trillion of current spending on Medicare and Medicaid.” She actually says $16 trillion, because she adopts the popular fantasy of using numbers for a decade, but since the government only budgets for one year at a time I’m going to call her on using bogus numbers and stick to using real ones.

The first problem with her claim here, is that in 2019 we are spending only $1.3 trillion, so there is already a $300 billion hole in her funding plan, and we are still on the first line item of her plan.

The next problem is that she is evaluating apples by counting oranges with that claim, in that she is discussing funding and citing spending, which are two different things. The government is spending more than it takes in, and one item that is definitely operating at a deficit is Medicare. Medicare taxes, in fact, only cover about half of what is spent on Medicare payouts, and other health care spending is operating on the same 35% deficit that the government does.

So, and you can do your own math on this, the actual funding that she will get for her plan by claiming existing funding, rather than existing spending, is $800 billion. That is barely half of the $1.6 trillion she claims will contribute toward funding of her plan, so just by examining the first line item of her laundry list we see that she is already $800 billion short on her claim.

The rest of the items are no better, and most of them are worse, so this funding plan is really no better than her claims of Native American heritage.

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