Not a shocker that Jeff Sachs has come out to endorse Bernie Sanders. However, I am trying to make sense of the following:
On health care, Sanders’s proposal for a single-payer system has been roundly attacked as too expensive. His campaign (for which I briefly served as a foreign policy adviser) is told that his plan will raise taxes and burst the budget. But this attack misses the whole point of his health proposals. While health spending by the government would go up in the Sanders health plan, private insurance payments would disappear, generating huge net savings for the American people.
If I am at all thinking about this correctly, either Sachs/Sanders are adherents of “trickle down economics” or they are advocating enormous cuts in the well-being of medical professionals throughout the country. How so?
(1) Sachs as trickle-downer: if today we spent 18% of our income on health care, and, say, the new Medicare for all would end up having us spend 10% of our income on it, if you take the AD models seriously then you would be horrified that these reduced expenditures would crush American economic growth. No one of course thinks this when it comes to health care spending, which seems to indicate to me that they are simply cherry-picking AD arguments when it suits their political preferences. With that said, if you think that nationalized health care would not hurt doctor and nurse salaries, yet there would be tremendously lower spending by every American on health care, I can only imagine that the Sanders-crowd thinks that all of this extra money in the pockets of me and you would end up being spent elsewhere, and that this spending would therefore benefit everyone else, raise wages elsewhere and so on. Isn’t this the “discredited trickle-down economics” that everyone talks about so much?
(2) Sachs as enemy of doctors: if in fact we are going to be spending half-as-much on health care in the future as today, then doctor and nurse pay are going to have to fall precipitously, no? Just think of how many more college graduates are going to end up taking a shot at Wall Street instead of medical school? Already a shockingly high number of my own graduates pursue careers on Wall Street, and almost all of them openly admit that they are only doing it for the money – none of them wakes up in the morning going, “I can’t wait to more efficiently allocate capital throughout the economy today!” More of them will, when opportunities to make large dollars in medicine are diminished.
These two points are not mutually exclusive of course.
Read the whole piece from Sachs, it is horrifying, and in my view immoral. Yet most readers would applaud it, and give it the moral high ground it most surely does not deserve. It is no better argued and thought out than what you can expect from students in a freshmen writing class. It seems our economists have long since left the world of science and are nothing more than advocates. It makes it very hard for the general public to take seriously any ideas we may have when this is the stuff they are inundated with.