Obamanomics and the meaning of reduced medical costs

My fellow bloggers from the right have roundly panned the president's ideas on health care reform. And rightly so. I have one stupendously obvious contribution to that mound of criticism. One so obvious that it doesn't often warrant mention among the more elegant criticisms.

Health care spending accounts for a large portion of the gross national product.

The repeated aim of the Obama administration is to reduce health care spending. Ergo, it is a promise to reduce the size of one large segment of the U.S. economy.

Now, what specific benefits might accrue because of a reduction in health care spending? One is fairly obvious: Consumers get to spend the dollar saved from health care on another part of the economy. But for an overall benefit to the economy, that dollar must be spent on something more beneficial to the economy than health care spending.

I am not clear on any existing assurance that the dollar spent otherwise will result in economic improvement. Essentially, that dollar is taken away from medical profits, salaries, research or equipment. A number of those losses seem to add up to reduced quality of medical care--but that returns us to some of the more elegant criticisms of Obamanomics.

Aside from the above, only one potential benefit occurs to me: So long as the reduced costs are confined to government expenses, the reduced costs will put less of a drain on government funds, which in turn creates the potential for a reduced federal deficit. I say "potential" because of the propensity of government to spend whatever money it has (and then some) regardless of whether some of its programs shrink in cost.

The reduction in costs to the federal government also portends a decrease in the quality or amount of services. Can you say "rationing"? Sure. I knew you could.

I share the concerns of many that the Obama administration's plans, especially as augmented by an economically clueless Democratic leadership, will spell deep trouble for the United States in the future.