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Bills due for idea that others will pay

| Wednesday, July 5, 2006

"Somebody else will pay." No illusion dies harder than that. Americans fell into it in the mid-20th century and we might spend the rest of the 21st climbing out.

Somehow we got the idea that saving for old age wasn't necessary anymore. Social Security didn't promise this, exactly, but it was the idea that got into people's heads. The government wouldn't let old folks down. And the result• Forty-four percent of us have put aside nothing for retirement. Zero. And millions more not nearly enough to live as we'd like.

Health insurance fosters the same unrealism. It began as classic insurance, everybody paying smallish premiums so the few who get hit hard aren't wiped out. Big, unionized employers made health care a benefit. Nobody foresaw how costs would take off when what can never be free became "free."

For years now the left has touted a "single-payer system" in health care -- a euphemism for socialized medicine. The single payer is none other than all of us: the taxpayers. But the implied hope is that other taxpayers -- the rich! -- will pay more than we do. The root problem, which is absurdly inflationary health care, wouldn't be cured, but somebody else will pay. That's what sells it.

People who like to fool themselves in this way often point out how everybody else in the industrial world has national health insurance. Europe is way ahead of us. Why, 123 years ago even Germany's Bismarck socialized medicine, and everybody knows how tough he was!

Just the other day, though, the Iron Chancellor's successor a few generations removed, Angela Merkel, had to agree to prop up the financial integrity of the country's public health system, due to go some 7 billion euros ($9 billion) in the red in 2007.

Apart from some budget shifting, insurance contributions from German workers' pay will go up, which is exactly what General Motors and other hurting U.S. industries have asked unions for.

What won't go up is general tax rates, at least any more than they have lately. Europe's largest economy has high unemployment, an aging population (sound familiar?) and, most ironically, improved medical care, which extends people's lives. Result: they go to doctors longer.

The increase in workers' contributions will be about half a percentage point, according to Bloomberg News, from an average 14.2 percent of pay. Sounds like it's getting close to the 16 or 17 percent of Gross Domestic Product now sponged up by U.S. health care.

The head of a German think tank told reporters Chancellor Merkel's package may pay the bills short-term. But it misses the "structural reform" that socialized medicine deeply needs. "Only competition between insurers," he said, "leads to more competition between providers of health services and cost savings." These are not vintage times for the idea that "somebody else will pay."

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