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Confronting Two Big Lies: A Strategy for Democratic Revival

by Dave Lindorff
Monday, 23 February 2009
Creating a national health system will not happen through bi-partisan compromise. Nor will the Social Security system be defended by compromising with those who have been committed to its destruction.
If Democrats want to come out of this economic crisis with a powerful mandate to continue running the country, they need to bag the nonsensical talk of “bi-partisanship” and tackle two big lies that have been stymieing progressives for decades.

The first lie is that the only solution to the nation’s deepening health care crisis, which now has over 42 million people—roughly one in seven Americans—living without any health insurance or ready access to medical care, is a combination of limitations on treatment and continued reliance on the private health insurance industry.

The second lie is that Social Security, the single most important economic “safety net” under the lives of America’s elderly, its disabled, and children who lose a wage-earning parent, is headed for “bankruptcy” and needs to have its already skimpy benefits cut back.

Let’s start with healthcare. The single biggest problem with health care in America is that because it is run largely as a profit-making venture, fully 20 percent of every healthcare dollar has to go towards paperwork to take care of both the billing, and the monitoring of those who do the billing, to make sure providers and insurers are not bilking the system and/or the patients. Another significant percentage of each healthcare dollar, despite all that paperwork, is wasted by fraud that goes undetected—either in the form of unnecessary treatments and medications, or simple billing fraud.

Just one example of this: Most hospitals, built with federal assistance under the Hill-Burton funding program, are required to provide a certain amount of free care to indigent patients who do not qualify for Medicaid or Medicare, but who also have no assets. But as anyone who has gone to a hospital emergency room without an insurance card knows, when the bill comes for such treatment, it can easily top $2000 for just a quick exam by a nurse practitioner and a dose of aspirin. Why? Because the hospitals want these absurdly inflated charges to count against their “uncompensated care” obligation. They know that poor patients are never going to pay these bills, so they later just shift them into their “free care” column. Insurers like Blue Cross or state Medicare programs don’t reimburse them at anywhere near those inflated rates, but that’s not the point.

In any event, where the big lie comes into play is in the politicians’ refusal to consider simply making Medicare, the healthcare program for the elderly, universal, which would effectively move the US to a Canadian-style health system, with a few tweaks. Sure, making the government the single insurer of all Americans would mean higher taxes, but any honest accounting of this shift would have to consider how much we ordinary middle-class and working-class Americans are paying now for health care. For those who have employer-funded health plans, they are typically paying anything from 20% to 100% of the premiums, or a portion for themselves and 100% for other family members. These payments can run into hundreds of dollars a month or even more. But really, the sums being paid by the employer have to be added into the cost too, because that is money that otherwise the employer could be paying out in wages. For many working families, we could be talking about as much as $10,000 a year or even more just for insurance coverage. And of course, these plans don’t cover everything. There are co-pays and deductibles that come out of the workers’ incomes, and that can total several thousand dollars a year. The politicians neglect to point out that by putting everyone on Medicare, all those costs are eliminated.

Furthermore, by making the government the “single-payer” insurer, the public’s bargaining power over private doctors and hospitals is enormously enhanced, allowing us, as the government, to bargain for lower rates for office visits, exams, and hospital stays and procedures. Choice of physician is actually expanded, because no doctor would be allowed to refuse to accept Medicare as payment in full, and there would be no other option for doctors to receive payment.

There is a reason why the percentage of Gross Domestic Product devoted to health care in the US is roughly 50% higher (and in some cases two times higher) than in any of the countries with socialized medicine, like Canada, Britain, France, Germany or Japan. There is also a reason why the health statistics—life expectancy, infant mortality, survival rates from various medical conditions, etc.—are higher in those countries than in the US.--and are higher even in much poorer countries that also have public health care systems. (There is also a reason why socialized medical programs have survived in all those countries even during periods when governments have been in the hands of conservatives—the public would rebel if any effort were made to eliminate them.)

As for Social Security, I always have to laugh when I hear conservatives intone about the threat that Social Security will be technically insolvent in 2041. These are, recall, the same people who a year ago didn’t have a clue that the economy was about to go into a death spiral. And we’re supposed to believe in their prognostications about the state of a program whose fortunes are very closely linked to economic growth models, not five years out or ten years out, but 32 years out. (The 2041 doomsday deadline is based upon a very conservative estimate for annual average economic growth over the intervening three decades.)

Just as an exercise, try to think back to 1977 for a minute. If you are in your 20s or 30s, you are excused, since you cannot think back that far. Let’s see: Jimmy Carter was president, oil was being rationed, the Vietnam War had only just ended, songs like the Eagles’ “Hotel California,” Manfred Mann’s “Blinded by the Light,” Bob Seeger’s “Night Moves” and the Sex Pistols’ “God Save the Queen” were topping the charts, and the biggest existential threat to mankind was nuclear war between the US and the USSR, which back then was still a country.

What will America and the world be like in another 32 years? You can bet that it will be as far removed from anything you can imagine as today is from what we were imagining back in 1977.

There are many things that should worry us a hell of a lot more about that distant future a generation hence than the financial condition of the Social Security Trust Fund. Just take the crisis of global climate change. In 2041, scientists are pretty certain that there will be no polar icecap in the summer. Now that is big—it has never happened in the history of mankind on this planet, and we know it is a change that will have profound impacts on climate all around the globe, many of them terrifying. But are any of those people who are all bent out of shape over the future of Social Security frantically calling for action to deal with climate change? No. In fact, oddly, the very people who get so worked up about the imagined crisis 30 years from now in a government program are the ones most likely to be unconcerned about climate change.

The big lie here is that Social Security is not some kind of savings account, where you get back what you put in, with accumulated interest. Social Security is a promise, by the government, and more broadly—this being still a democracy of sorts—by the public, to provide a basic income for retirees and the disabled. And the fulfillment of that promise at any given time is going to depend upon the political calculus of who wants to pay for that promise. I would argue that the system is largely self-correcting. That is, when the demands on the system are greatest, because of a larger number of retirees collecting benefits relative to working adults who are paying taxes into the system, those who are receiving assistance have a relatively greater political clout, because of their increased numbers. The Baby Boom population, which is the proximate cause of concerns about Social Security funds “running out” will also be the most powerful senior lobby in history when they (we, actually, as I am about to turn 60 myself!) are receiving Social Security benefits. With twice the voting strength of the already powerful senior lobby today, Baby Boomer retirees will be in a position to demand, and to get, decent retirement benefits, even if that means higher taxes on current workers and employers.

Nor does that imply a “generational war”—another boogeyman raised by conservatives. The younger working generation, by and large, will be the children and grandchildren of the Boomer retirees, and many if not most of them will be enthusiastically supporting their older relatives’ demands for better benefits. Just ask yourself, when have you ever heard a child complaining about the size of her or his parents’ Social Security check? And yet even today, current benefits are at least partially funded by current workers’ payroll deductions.

The point here is that progressives should resist any effort to lend credence to conservative calls for cutbacks in Social Security and Medicare. Any calls by Democrats, including President Barack Obama, for “bi-partisan” commissions to study Medicare and Social Security are simply cave-ins to ideologically motivated right-wing politicians and their corporate backers, who want to destroy two of the most important public-benefit programs run by the federal government. Democrats need to mount a “Hands Off Social Security and Medicare!” campaign to put themselves squarely in defense of these programs.

There is an urgent need to fundamentally change the way health care is run in the US, and the way forward is to expand Medicare to cover everyone. No longer will healthcare be primarily funded by employers, who are able to use that benefit as a way of holding workers hostage to their jobs (and discouraging them from going out on strike). No longer will we have one in seven Americans unable to see a doctor. No longer will we have staffs of medical personnel working at insurance companies with the sole responsibility of denying needed care to insured people. Longer term, we will find that as the grotesque profits are taken out of the system, the type of person who is attracted to the medical profession will change, from money-hungry entrepreneurs to people who are motivated by a desire to do good and to serve mankind.

Creating a national health system will not happen through bi-partisan compromise. Nor will the Social Security system be defended by compromising with those who have been committed to its destruction since the day it was established back in the New Deal. These are things that Democrats need to do in the face of Republican opposition. They are the bedrock progressive programs on which a lasting progressive American political system can be built.

Dave Lindorff in Washington

About the author: Philadelphia journalist Dave Lindorff is a 34-year veteran, an award-winning journalist, a former New York Times contributor, a graduate of the Columbia University Graduate School of Journalism, a two-time Journalism Fulbright Scholar, and the co-author, with Barbara Olshansky, of a well-regarded book on impeachment, The Case for Impeachment. His work is available at

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This story was published on February 18, 2009.