Health Care and Deficits/Debt: Dave Ramsey Spinning in Ted Kennedy's Grave

Don't you like this absurdity of "paying for" a new health care "overhaul"? Yes, it is objectively an absurdity, and I am going to explain exactly why.


Let us start off with President Obama and his Treasury Secretary: "We can't sustain deficits like this and still maintain an economic recovery." Obama and Geitner are RIGHT when they say this, but then contradict themselves with their actions and other statements. The proposed health care "overhaul" is one of those contradictions.


The Obama Administration had to revise its estimate of the accumulated deficits over the next 10 years from 7 (or so) TRILLION dollars to approximately 9 TRILLION dollars. Those are the very kind of deficits that Obama and Geitner have eloquently said (if only they meant it) that we "can't sustain". Ten years is "sustaining those unacceptable deficits. It gets worse.


You will note that the estimates for the next ten years both do not include health care "overhaul" and envision large deficits over a long period of time. In other words, we have not only spent money that we don't have--bu idling our debt which will eventually lead to skyrocketing interest rates and inflation. We are further projecting that we will CONTINUE to spend money we don't have for the next ten years. That means we need EVERY PENNY to offset the spending we are already projecting, without health care "overhaul", and cannot afford ANY new Federal programs (much less a massive new entitlement in health care). We are not "paying for" the programs we now have, and it is ridiculous to talk about "paying for" health care.


To show this concretely, let us go to Dave Ramsey. Dave Ramsey is the financial advisor whose primary advice is that people stop spending money that they don't have: that people become "debt free". The headline is a reference to the fact that the approach to Federal spending must drive Ramsey crazy--thus the reference to "spinning in Kennedy's grave", even though Ramsey is very much alive. Kennedy, of course (at least in virtual reality, as far as his spirit is concerned) is not really using his grave, having Risen (or been called) from that grave to somehow rescue the Obama health care plan.


Therefore, let us apply Dave Ramsey common sense to the deficit. Assume you are an individual with $100,000.00 in present debt (credit cards and loans outside of your house). Assume, further, that you have rejected the Dave Ramsey approach, and have decided that you need to spend one million dollars MORE THAN YOUR REVENUE over the next ten years to maintain the lifestyle you want. Forget how impractical this is. Your Federal government is planning to do exactly this (on a scale of trillions).


You can see the problem here. Such an individual, spending beyond his means, is going to be accumulating a CRUSHING debt from which he can never recover. However, assume that this individual gets Dave Ramsey religion, or says he does. Thus, he goes out and gets a second job, and comes up with "savings" (perhaps including promised "discounts" from present creditors) on that million dollars in projected spending. So far so good.


Wait a moment, though. What if that individual decides he NEEDS to spend, or thinks it is "compassionate" to spend, another $100,000 per year on health care/health insurance for his COUSINS. Can he afford it? Assume that this new job, and "savings", add up to $100,000.00 a year (total fantasy when applied to any presently proposed health care "overhaul"). No problem, right? You just use the new $100,000 in revenue to "pay for" the health care for the cousins (who otherwise might get the health care from employers, hospitals, etc. without it being provided by their generous cousin, or might not want to get health care at all by choice).


WRONG. It is this reasoning that should have Dave Ramsey spinning in Kennedy's grave. Dave Ramsey recommended that this guy (who we are assuming, but Ramsey has given similar advice to real individuals spending beyond their means) that he start cutting into his debt by extra jobs, reduced spending, etc. That is because if he does not do that his current level of spending will OVERWHELM him with debt he can't handle--even the present level of debt being too high. What happens if this guy trying to follow Ramsey's advice spends every extra cent of revenue he can raise, and every penny he can save, on NEW SPENDING? Right. He is NOT "paying for" the new spending. He is simply digging himself further into the hole of spending money he does not have, on a consistent and continuing basis.


That is why it makes no sense to talk about "paying for" health care "overhaul". We NEED EVERY PENNY we can raise and save to try to keep our already projected spending from overwhelming us. The Congressional Budget Office, and almost all independent observers (including Obama, when he is admitting that he has to spend money to "insure" those 50 million uninsured) agree that health care "overhaul" will ADD substantially to the deficit.


It does not matter. Even if health care "overhaul" did not add one single penny to the deficit, we could not afford it, because we need every single penny of additional revenue (and "savings") to keep our spending from overwhelming us. We can't afford to divert any such resources to a NEW Federal program. In fact, we desperately need such efforts to SAVE Medicare and Social Security, which are in extreme danger from spending money we don't have.