White House warns against 'socialist' policies like single-payer healthcare

The White House Council of Economic Advisers released a report Oct. 23 warning of the perils of socialism and its economic effects — particularly those of the proposed "Medicare for All," or single-payer healthcare.

The report, "The Opportunity Costs of Socialism," takes a historic look at some of the "most extreme" socialist policies — such as those of Maoist China, Cuba, the USSR and Venezuela — and uses their economic effects as a framework to evaluate recent healthcare proposals in the U.S.

"The Nordic and European versions of socialized medicine have been viewed as so desirable by modern U.S. socialists that they have proposed nationalizing payments for the healthcare sector (which makes up more than a sixth of the U.S. economy) through the recent 'Medicare for All' proposal," the report reads.

To finance Medicare for All without borrowing or tax hikes, the CEA estimates the federal government would have to cut more than half of its existing budget. Raising taxes to finance the proposal would cause GDP to fall 9 percent in 2022, according to the report. Although the proposal would expand health insurance coverage, the CEA believes it would reduce longevity and health by reducing innovation and availability of care.

"An open question for socialists is whether they recommend reducing living standards for poor and middle-income families if it serves the purpose of making the top 1 percent — or the bourgeoisie, or the kulaks, or the landlords, or the giant corporations — worse off too," the report reads.

It calls out several journalists and analysts in the footnotes for claiming single-payer programs are more efficient, "and thus are similar in spirit to Lenin and Mao."

One of the named journalists, Vox senior correspondent Sarah Kliff, provided a rebuttal, outlining evidence that shows governments that set healthcare prices can be more efficient and provide care at a lower cost to patients than the current U.S. system. "As Mao, Lenin, and I all agree (as do leaders of every other wealthy planet in the world): That’s a good thing," Ms. Kliff wrote.

She agreed with the CEA that the U.S. needs to debate the trade-off between affordable care and innovation. "I don’t know the answers — I don’t think there is one right answer for such a complex question," she wrote. "But I do think there is a strong body of research to suggest that countries that price regulate do end up with more efficient, cheaper healthcare systems as a result — and not just in Maoist China."

Read the full CEA report here.

Read Ms. Kliff's rebuttal here

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