The geniuses who thought it would be a profoundly good idea for the government to get into the home ownership business by sponsoring enterprises that buy mortgages and resell them as securities have a new plan. Now these Washington whizzes want to do to your EKG what they did to your IRA and 401(k) by getting into the health-care business.
Before we consider the pitfalls of Obamacare, let's turn to a New York Times article of Sept. 30, 1999. "In a move that could help increase home ownership rates ... the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from other lenders." Franklin Raines, the company's chairman, declared, "Fannie Mae has expanded home ownership for millions of families in the 1990s by reducing down payment requirements."
It sounded like a good idea. Expand home ownership. Make it more affordable. The government will back it. The wages for this government "reform" of sub-prime lending are $4.7 trillion in bailouts and growing, according to the special inspector general for the Troubled Asset Relief Program.
Expand health-insurance coverage. Make it more affordable. The government will back it. Anyone who believes government-backed insurance is the cure for health-care ills should seek immediate medical attention for short-term memory loss.
Journalist Michael Kinsley said a gaffe is when a politician tells the truth by accident. Enter President Obama, who said, "The reforms we seek would bring greater competition, choice, savings and inefficiencies to our health-care system." He got the last part correct.
What about those savings? An analysis by the Congressional Budget Office says a government health-care plan would dramatically increase federal spending and the deficit. The favored House plan would cost more than $1 trillion over 10 years, yet generate only about $500 billion in savings. Even Treasury Secretary Timothy Geithner's TurboTax couldn't calculate that as net savings.
We don't have to take the CBO's word for it. Massachusetts enacted health-care reform in 2006 that mandated individual insurance and created a public authority to offer state-subsidized coverage. Yet the Massachusetts experiment is a regulatory and financial disaster, with a large percentage of residents lacking coverage and costs far above projections.
Greater competition? Just as Fannie Mae and Freddie Mac came to dominate the mortgage market with government backing, so will government health insurance. No private insurer can compete with a leviathan that can consistently operate at a loss with taxpayer subsidies.
And choice? Here's all you need to know. Sen. Tom Coburn, a physician, introduced an amendment to the health-care bill championed by Sen. Ted Kennedy that would require members of Congress to enroll in any public plan. A bare majority of 12 Senate Health Committee members chose to support the measure. Eleven voted against it.
Is health care too expensive and inaccessible to too many Americans? Yes. But a government takeover of medical care will have all the success of Medicare, which is scheduled for insolvency in 2017.
A far better alternative would empower individuals with health-care tax credits to buy health insurance and doctors with tort reform that eliminates frivolous lawsuits rather than empowering government with control of a new sub-prime market for health insurance.
