Friday, June 18, 2004
Highways and health care
[Michael Manville, "Review: Twentieth Century Sprawl by Owen Gutfreund," The New York Press, 16 June 2004.]
Here is an interesting review of the new book Twentieth Century Sprawl by Owen Gutfreund. What does it have to do with health care, you ask? Well, as the author explains, the system of partial federal funding encourages states to spend more than they otherwise would. This is as true for Medicaid (which has a 40/60 state/federal split) as it is for highways. Read the following with health care spending, insurance, and Medicaid in mind and note the similarities:
The highways themselves were inevitable, but for a time it seemed they would be paid for directly by drivers, through the now-reviled but eminently sensible system called tolls. We have no interstate tolls, however: not because they failed (no toll road has ever gone bankrupt), but because a consortium politely known as "the highway lobby" insisted that drivers should never pay directly for the freeways.
What the lobby called for and got was a system that Gutfreund calls "highway federalism." The federal government, using gas tax revenues which by law could only be spent on highway projects would pay for 90 percent of any interstate project. Whatever state the freeway ran through would kick in the remaining 10 percent.
On its face, this looked like a great deal for the states. In reality it has had regrettable and sometimes disastrous consequences. Ten percent of a highway construction project may be a small proportion of that cost, but in absolute numbers it was often a sizeable proportion of a state's budget - particularly in smaller states.
And yet the states could hardly walk away from the money on the table. One result of our federal system is that states compete, and if everyone else is adding more highway mileage, the question of whether your state actually needs more is, well, just missing the point. Once everyone else has it, then you most certainly need it.
We would use our roads more judiciously, and they would be in better shape, if we paid for them more directly. But we prefer not to do this. We choose instead to move their costs into the abstraction that we call the tax base, and then with all our might we do all we can to make that abstraction disappear. We put our public obligations in a box and then regularly elect people who say they can kick the box off the boat without making the boat sink. And so to the myth of unfettered mobility we add the myth of politics without consequences. Both are corrosive; both demand a corrective. Now as ever, too much public policy is predicated on the maintenance of agreeable fictions.
[Richard B. Warner, M.D., "The Real Culprit," The Flint Hills Center, 15 December 1997.]
[Michael Manville, "Review: Twentieth Century Sprawl by Owen Gutfreund," The New York Press, 16 June 2004.]
Here is an interesting review of the new book Twentieth Century Sprawl by Owen Gutfreund. What does it have to do with health care, you ask? Well, as the author explains, the system of partial federal funding encourages states to spend more than they otherwise would. This is as true for Medicaid (which has a 40/60 state/federal split) as it is for highways. Read the following with health care spending, insurance, and Medicaid in mind and note the similarities:
The highways themselves were inevitable, but for a time it seemed they would be paid for directly by drivers, through the now-reviled but eminently sensible system called tolls. We have no interstate tolls, however: not because they failed (no toll road has ever gone bankrupt), but because a consortium politely known as "the highway lobby" insisted that drivers should never pay directly for the freeways.
What the lobby called for and got was a system that Gutfreund calls "highway federalism." The federal government, using gas tax revenues which by law could only be spent on highway projects would pay for 90 percent of any interstate project. Whatever state the freeway ran through would kick in the remaining 10 percent.
On its face, this looked like a great deal for the states. In reality it has had regrettable and sometimes disastrous consequences. Ten percent of a highway construction project may be a small proportion of that cost, but in absolute numbers it was often a sizeable proportion of a state's budget - particularly in smaller states.
And yet the states could hardly walk away from the money on the table. One result of our federal system is that states compete, and if everyone else is adding more highway mileage, the question of whether your state actually needs more is, well, just missing the point. Once everyone else has it, then you most certainly need it.
We would use our roads more judiciously, and they would be in better shape, if we paid for them more directly. But we prefer not to do this. We choose instead to move their costs into the abstraction that we call the tax base, and then with all our might we do all we can to make that abstraction disappear. We put our public obligations in a box and then regularly elect people who say they can kick the box off the boat without making the boat sink. And so to the myth of unfettered mobility we add the myth of politics without consequences. Both are corrosive; both demand a corrective. Now as ever, too much public policy is predicated on the maintenance of agreeable fictions.
[Richard B. Warner, M.D., "The Real Culprit," The Flint Hills Center, 15 December 1997.]
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