THIS should not be a surprise to anyone. Vermonts single-payer health care system has been banking on the federal government providing part of its funding. (Literally, banking on it.) But anyone who knows anything about government finance knows that every program government starts - no matter at what level - soon starts to feel the pinch of insufficient dollars. Thats because (1) the programs always grow larger - both in terms of the number of beneficiaries served and in the range of benefits offered - than the initial projection, (2) the programs always cost more to implement and run - even at the original size estimation - because of the inherent inefficiency of government that is centered in unionized labor pool demands and in the simple fact that there is no bottom line profit required, so no direct incentive on employees or program administrators to hold down costs (nobody loses their job if the program fails to meet performance objectives, or if costs grossly exceed budget), and (3) politicians always assume the best-case scenario, which is always too rosy to be remotely realistic - but which makes it much easier to sell the project to the public, and allows politicians to even fool themselves into believing they are promoting a public good at a bargain price (one that never, ever materializes). So, it has been clear from before the beginning of Vermonts new health care system, that (a) the program itself would be vastly more expensive than advertised, and (b) federal support dollars would dry up. After all, as the federal government grows its own range of programs, each of which is more costly than estimated, the dollars each program has to operate with shrinks, or the tax rate jumps. Usually, theres some combination: our taxes go up and our services go down, because the dollars collected are being spread ever more thinly across a growing range of programs and services - each of which is getting bloated in terms of people served, services offered, and labor and implementation costs. Sooner or later, that has to lead to the federal government telling states that there are no longer enough federal dollars to sustain federal commitments to help fund state programs. Thats whats happening in healthcare. Since it was predictable that Vermonts rosy political promises - that our health care costs would be contained by the support from the federal government - was so much hot air, it has been predictable that we would quickly face funding shortfalls. And the - ahem! - Vermont Tea Party has been saying that for years. Often, Vermonts Republican candidates for statewide office have also been saying it. Of course, the Democrat administration and state legislature have been mocking and deriding its critics, and the public has continued to vote for free stuff rather than reduced government. It was easy to predict Vermont Health Connects looming problem. You cant keep increasing the number of programs government funds from taxes, and increase the scope of each of those programs, without running short of money. And when government runs short of money, it never decreases its programs or the expansion of its programs. Nor does it trim staff or even put a moratorium on staff pay increases. What it does is trim services to the public while increasing the amount charged to the public. Taxes go up and services go down. Government officials and workers get paid more for delivering less to the end-user. Now Vermont is facing a $20 million shortfall for Vemont Health Connect. Apparently, nobody in the State House expected that would happen - which is in itself sufficient reason to vote them out. Nor did they make any advance preparations for even the possibility that one day the free federal dollars would be reduced, or altogether eliminated. Nope. Anyone who raised the issue was told some version of, there is no funding problem on the horizon as far as we can see, or there is nothing to worry about now. Apparently, unlike businesses that have to plan 5 years ahead to keep solvent, government doesnt look past today. The bigger problem is that this confession of a $20 million shortfall is a rosy scenario: its the best face Montpelier can put on the problem, not the worst, or even a middle-road analysis. So, we can predict that the problem will be bigger than confessed, that politicians will try to hide the bigger cost, that services will decline more rapidly, that Health Connect customers will have to pay more out of pocket for routine services, and especially for non-routine medical care, and that taxes will rise more sharply than we will like. So, our taxes rise, government services decline, and in the end we are less able to take care of ourselves because more of our earnings are in government coffers, where they are being unwisely allocated. I think thats the real crime: in the name of increasing services, government takes more of our money. Then, because it wont contain the costs of those services, but keeps expanding them, each recipient receives less services over time, but taxes keep going up. As taxes go up, we have less money to provide for ourselves, making us more dependent on government-provided services and programs. Its a vicious cycle in which government bloats, and government workers get steady pay increases and secure benefits while private citizens get poorer, fewer benefits, and become more dependent on government help. But the quality and quantity of government help declines over time, even as the taxman demands ever more to pay for that diminishing help. Its a slow process, but over time, in the name of helping more people with more needs, this cycle decreases the standard of living for all of us. But we all know that. We are living it daily. And daily, it becomes more obvious.
Posted on: Sat, 01 Nov 2014 10:57:06 +0000
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