Mar 15 Debunking the White House's Myths

This WSJ article does a stellar job of debunking the Obama administration's myths about what the Democrats' health care legislation will do. Here's a great example:

Insurance premiums will fall. Dan Pfeiffer, Mr. Obama's communications director, took to the White House blog to claim that the plan "will make insurance more affordable by providing the largest middle class tax cut for health care." So subsidies are really tax cuts?

Insurance subsidies are transfer payments in which government takes money out of the private economy and gives it to someone else. Subsidies thus put an even larger share of health-care spending in government hands. When you subsidize something, you get more of it, which means higher demand for insurance and health-care services. Combine this with new mandates that have raised costs in every state where they have been tried, and you will get higher premiums.

The Obama administration is asking the American people to suspend their understanding of Supply and Demand 101. They're asking the American people that greater demand and flat or declining supplies will lower costs.

Try running that theory past an economist sometime and see if that economist can keep from laughing in your face. It isn't likely that the economist will keep a straight face.

The WSJ also makes a great point in highlighting the Obama administration's dishonesty in calling subsidies tax cuts. It isn't possible to honestly say that the Obama administration won't need to raise taxes to pay for their subsidies. This tax increase will dig deep into the middle class, too.

About the Cadillac Tax:

Not to worry, says Mr. Orszag, the tax would still create a "gradually increasing incentive to seek higher-quality and lower-cost health plans." In other words, some future Congress will impose the pain Democrats refuse to impose today.

Mr. Orszag also says these future politicians won't block the tax because this "would violate the statutory pay-go law just enacted." He's referring to the same "pay-go" rule that Congress has violated to the tune of $800 billion or so just in the last year.

Mr. Orszag is referring to the pay-go law that Harry Reid and Speaker Pelosi just ignored. What could possibly go wrong? I can't summarize things better than this:

ObamaCare's real cost-control plan boils down to this: First subsidize coverage so much that costs explode, raise taxes as much as possible to pay for it, and when that isn't enough hand power to an unelected committee to limit treatment and control prices by government order. This is what Democrats are voting for.

Comments welcome at LFR.