Plans and Economic Reality

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For all of the talk from Keynesians that their goal is to help the private economy "gain traction," Keynesianism ultimately is about central government planning, be it monetary planning, government spending, or regulatory mandates. The ultimate mantra of the Keynesian is this: Statism equals prosperity.

Thus it is that in the wake of the Obama debate debacle, Paul Krugman has decided to go to war...over dueling medical plans, and his argument is this: Obama has a better "plan" than does Romney, and if Romney says otherwise, he is lying. One has to understand that what Krugman is arguing is that these plans are going to perform exactly as they are written, and that requires a huge stretch of the imagination.

When one peels away the rhetoric about the dueling "plans," one finds that the central assumption is that government central planning works. In Wonderland, we are supposed to believe that the Obama plan actually will result in expanded coverage at lower costs? Why? Because Obama says so. With the Romney plan, things will not turn out well? Why? Because Krugman says so.

Never before in economic history has government planning done what Krugman claims ObamaCare will do: create more need-fulfilling services while simultaneously using fewer per capita resources. That is the heart of the debate, not which candidate has the better central plan.

Krugman can throw out all of the ex ante projections he wants, but the point is that by expanding the regulatory and confiscatory state, and employing an army of bureaucrats to see that all of the jillions of rules are followed to the letter, ObamaCare -- or RomneyCare II, for that matter -- ultimately will result in higher real costs of medical care. And as people find that the heart of ObamaCare's "cost-cutting" measures really means denial of medical choices for those who are not politically-connected, the ensuing "crisis" will bring demands for even more government control.

The regulatory state is quite predictable in its outcomes, yet people continually go to the same dry well because that is what the Progressives who essentially control all of our major institutions claim will "solve" the latest set of problems. Whether the OC or RC plans are implemented, in the end we will find that central planning from Washington will mean deterioration of medical services.

As I see it, the real issue is not the red herring of whether Mitt Romney told the Truth According to Paul Krugman. No, the real issue is that Washington is embarking on a journey that will have outcomes that are much different -- and much worse -- than what is being promised. Paul Krugman is politically-connected and he is wealthy; he won't have to worry about being denied care.

But those people who are not in Krugman's privileged category are going to find that not only will the government actively restrict their medical care, it will do it in an iron-fisted way. Central planning is central planning, and all of the rhetoric in the world cannot change that hard and sad fact.