Government Doesn't Ruin Health Care (or your country)

http://www.washingtonpost.com/blogs/ezra-klein/post/a-larger-welfare-state-can-mean-a-lower-deficit/2011/08/25/gIQAkL9ufO_blog.html

Most people believe that two things are proportional: the welfare state and deficits.  Is this true?

Not necessarily.  This is a classic example of oversimplification.  For example, Germany has a fairly large welfare state including pensions, health care, paid vacations and unemployment benefits. According to Ezra Klein, columnist for the Washington Post and his popular Wonkblog, Germany spends 25.2 percent of their GDP on the items listed above.  Greece spends 21.3 percent on the previously mentioned items. Yet, Germany has one of the strongest economies in the world (the strongest in Europe) and Greece is on the brink of default. 

Let’s think about this in the context of health care spending.  Look at the chart above.  In 1965, the cost of the U.S. and Canadian health care system was essentially the same.  Canada spent 5.9 percent of its GDP on health care.  The U.S. spent 5.7 percent. At that time, Canada was transitioning to its “socialized” system of health care – its single payer system. Over the course of the next four decades the cost of health care in the U.S. skyrocketed.  By 2009, Canada was spending 11 percent of its GDP on health care – and covering everyone.  The United States was spending 17.4 percent of its GDP and leaving 45 million uninsured.  That’s incredibly inefficient, resulting in the U.S. spending about $3,600 more per person, per year, than Canada. 

Critics of “socialized medicine” claim that it will bring larger deficits to the U.S.  If this were the case, wouldn’t Canada have bigger deficits than they do now?  They have a larger welfare state.  Clearly, this logic breaks down when one analyzes the data.