An Open Letter to the Wall Street Journal on Its Bernie Sanders Hit Piece

[LiberalArkie]

By: Gerald Friedman
Professor of Economics, University of Massachusetts at Amherst

Gerald Friedman's research was cited in a Wall Street Journal story about Bernie Sanders's proposals for government spending. Friedman responds to that story below.

It is said of economists that they know the cost of everything but the value of nothing. In the case of the article "Price Tag of Bernie Sanders's Proposals: $18 Trillion," this accusation is a better fit for the Wall Street Journal that published it.

The Journal correctly puts the additional federal spending for health care under HR 676 (a single payer health plan) at $15 trillion over ten years. It neglects to add, however, that by spending these vast sums, we would, as a country, save nearly $5 trillion over ten years in reduced administrative waste, lower pharmaceutical and device prices, and by lowering the rate of medical inflation.

These financial savings would be felt by businesses and by state and local governments who would no longer be paying for health insurance for their employees; and by retirees and working Americans who would no longer have to pay for their health insurance or for co-payments and deductibles. Beyond these financial savings, HR 676 would also save thousands of lives a year by expanding access to health care for the uninsured and the underinsured.

The economic benefits from Senator Sander's proposal would be even greater than these static estimates suggest because a single-payer plan would create dynamic gains by freeing American businesses to compete without the burden of an inefficient and wasteful health insurance system. As with Senator Sanders' other proposals, the economic boom created by HR 676, including the productivity boost coming from a more efficient health care system and a healthier population, would raise economic output and provide billions of dollars in additional tax revenues to over-set some of the additional federal spending.


Snip

http://www.huffingtonpost.com/gerald-friedman/the-wall-street-journal-k_b_8143062.html

[cantbeserious]

1. Busted - Another HRC Bernie Myth Bites The Dust

eom

[Doctor_J]

2. "We can't afford single payer"

a monthly post by a persistent DUer, and of course right wing rags like WSJ. But of course the truth is that we can't afford NOT to adopt SP or something like it. Paying the insurance companies 20% or more in profits is not only obscene, it's untenable. Paying 10 times what people in other countries pay for prescriptions is also a travesty.

Unfortunately the ACA has made SP, or healthcare without the huge profits, almost impossible.

[passiveporcupine]

7. Not just prescriptions

Paying 10 times what people in other countries pay for prescriptions (and medical) is also a travesty.

bold in parenthesis mine.

[cascadiance]

12. "We" should be translated more correctly as *health insurance companies*

Yes, those companies and their OVERLY wealthy CEOs can't afford single payer, because if it is put in place, these jerks won't be allowed to be stealing so much of money they've been stealing from us for so many years any longer.

We, the PEOPLE, can afford and should WANT single payer rather than throwing money to these PARASITIC LEECHES!!!

[Enthusiast]

13. It's a major source of irritation.

And a pain in the ass. Persistent.

[Scuba]

3. Medicare for all, including dental, optical, hearing aids and mental health services.

And yes, we can afford it.

[fbc]

4. The Wall Street Journal has no more credibility than Fox News.

[Enthusiast]

14. Maybe even less. Sometimes.

[Hotler]

5. As my father would say....

don't try logic with me boy.

[blackspade]

6. Ouch, that was an epic beat down.

[Iwillnevergiveup]

8. Thank you, Prof. Friedman

You really laid it out.

K&R

[rhett o rick]

9. And it's interesting that the HRC supporters are now turning to the Wall Street Journal.

Makes sense. Murdock supports Clinton.

[cui bono]

10. Are they bringing this up now?

This was a couple months ago.

[hedda_foil]

15. I guess they believe in recycling.

[rhett o rick]

16. I am referring to another case where they used the WSJ as a source. Might as well have used Fox. nm

[tex-wyo-dem]

11. Big K&R!!

Mr Friedman corrects the record and smacks-down the WSJ for misrepresenting his research.

The RW does this all the time: they are quick to point out the costs of government programs, but fail to say anything about the value of those programs. In other words, unrecoverable costs with no return...complete bullshit, and usually very much the opposite.

[olddots]

17. huge K&R

now who is it that owns the Wall Street Journal ?????????

The bad guys are holding the chips but its time to call their bluff .

[yodermon]

18. Has the CBC scored a single-payer system in recent years ? n/t

[Stevepol]

19. Old news, but worth re-reading in case anybody asks.

This was originally published in September I think and pretty much put to rest, but Friedman's essay covers the bases very well and is worth reading carefully. The Single-payer system would save on two fronts. First, even though it would cost $15T over 10 years, taxes would pay for it and the taxes would come from in increase in a proportional income tax where each person pays what he's able to. Overall, that would save the individual tax-payer and the system as a whole. He says it would also save about $5T per year over the previous system. The cumbersome ACA system would be unnecessary. But second, perhaps the biggest benefit would be to the businesses that before had been forced to provide health insurance and since all businesses would be helped equally, it would encourage business and lead to greater growth and output. Very simple.