A new Health Justice Monitor commentary on the
government’s monetary power to provide health care.
“But can the government afford it?”: The wrong question for Medicare for All
By Don McCanne
Summary
Modern Monetary Theory establishes the principles that can — indeed must — guide the federal government’s spending on essential population needs, like universal health care. The government’s fiscal tools enable these commitments, even beyond what taxes can cover.
Excerpt
The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy
By Stephanie Kelton, Professor of Economics and Public Policy, Stony Brook University
To begin, I tackle the idea that the federal government should budget like a household. Perhaps no myth is more pernicious. The truth is, the federal government is nothing like a household or a private business….Uncle Sam has something the rest of us don’t – the power to issue the US dollar….
The sixth myth that we’ll consider is that entitlements are propelling us toward a long-term fiscal crisis. Social Security, Medicare, and Medicaid are the supposed culprits. I will show you why this way of thinking is wrong. Our government will always be able to meet future obligations because it can never run out of money….
The Health-Care Deficit
…our failure to provide proper insurance and care for every American isn’t because the government can’t “afford” to cover the cost. By settling for a system that provides coverage through a fractured web of private insurers, employer plans, and patchwork government programs, we’ve created a system of bottlenecks in which hospitals, providers, drug companies, and the private insurance companies can squeeze us for every last dollar….
Building an Economy for the People
In the United States, where we have an abundance of resources and labor, there is no reason we cannot embark on a policy agenda that results in provisioning our entire population with quality health services, providing each worker with adequate and appropriate advanced education and job training, upgrading our infrastructure to meet the demands of a low-carbon world, and ensuring adequate housing for everyone while redesigning our cities to be clean, beautiful, and nurturing of community spirit.
Commentary
This book was released last year to widespread critical acclaim. But listening to members of Congress and others in the policy arena it is clear that the message has not adequately penetrated our dialogue on the essential government spending that must now take place. If you read the entire book, which you should, you will be able to dismiss the budget hawks who oppose the spending that is needed to make our society the greatest in history.
Modern Monetary Theory reminds us how government spending is fundamentally different from household or business budgets. Sovereign currency governments, such as ours, have economic tools to expand resources to provide all essential needs for everyone. For those of us at Health Justice Monitor, that means that we can provide comprehensive, equitable, affordable, high quality health care services for absolutely everyone … even if higher taxes don’t fully cover the added government costs.
But that also means that those who establish our public policies, such as the members of Congress, must understand Modern Monetary Theory and how it can help us achieve our goals of health care justice for all.
—Don McCanne, M.D.
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The McCanne Health Justice Monitor (HJM) is a health policy blog focused on the U.S. health system failings and single payer reform. A core team of health policy experts and guest contributors write posts several times per month, addressing topics ranging from healthcare inequity and waste, distortions introduced by profit motives, racism and racial inequities in health care, climate and environmental justice, global health and more.
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