In the latest example of a multi-billionaire "knowing" what is best for the average American, Berkshire founder Warren Buffett told PBS that UK-style single-payer healthcare would be the best system for the US.
While Buffett admits that he’s “no expert” on health care, that apparently hasn’t deterred him from broadcasting his amateur opinion far and wide. Buffett, the world’s fourth-richest man with an estimated net worth of $73.3 billion, says that America is “such a rich country” that it “can afford” to provide health care to all its citizens.
“"With my limited knowledge, I think that probably [single payer] is the best system. Because it is a system, we are such a rich country, in a sense we can afford to do it. But in almost every field of American business, it pays to bring down costs. There's an awful lot of people involved in the medical - the whole just the way the ecosystem worked, there was no incentive to bring down costs."
As Buffett explains, US health-care costs have ballooned from 5% of GDP in 1960 to 17% recently, while corporate taxes have fallen. But what Buffett ignores is how increasing regulation – particularly onerous coverage mandates imposed by Obamacare – have been driving this trend.
“Well it does. I mean in terms of our competitiveness in the world; health care in 1960 was 5 percent of GDP. And there's only a hundred cents to the dollar. So it's gone from 5 percent to 17 percent. And it keeps going up. Corporate taxes have gone down from 4 percent to 2 percent. So corporate taxes are way less of a factor in American competitiveness than overall business than medical costs."
America is home to the world’s largest share of millionaires and billionaires, and they control more than 60% of the economy's total wealth, and that share is expected to surpass 70% by 2021.
Meanwhile, financial circumstances for middle- and working-class employees are growing increasingly dire. What little wage inflation exists in the US economy is attributable to managerial-level, supervisory positions while the bulk of job creation remained with minimum-wage jobs. In fact, as Albert Edwards noted last month, when one strips out the impact of the bosses, average hourly wages are actually shrinking.
Rising home prices and rents have pushed the percentage of Americans spending more than half their income on rent to the highest levels seen in decades. To make matters worse, half of Americans are living paycheck to paycheck.
All of this is happening against a backdrop of ballooning national debt, which is rapidly nearing $20 trillion, while annual debt service payments, which swelled to $400 billion in 2017, are also surging.
Indeed, another tax hike is the last thing the middle class needs. But tell us again, Mr. Buffett, about how rich America is.
See below for a complete transcript of the interview:
WOODRUFF: "Something that affects all businesses is the cost of health care in this country and you've been vocal about that. You argue right now, in fact, that the cost of paying for health care can affect a company even more than taxes."
BUFFETT: "Well it does. I mean in terms of our competitiveness in the world; health care in 1960 was 5 percent of GDP. And there's only a hundred cents to the dollar. So it's gone from 5 percent to 17 percent. And it keeps going up. Corporate taxes have gone down from 4 percent to 2 percent. So corporate taxes are way less of a factor in American competitiveness than overall business than medical costs."
WOODRUFF: "As we sit here today in Omaha, the Republicans in Congress are madly trying to figure out what to do to replace ObamaCare, the Affordable Care Act. Do you have a firm idea in your mind what ought to be done about ObamaCare? Everybody acknowledges there's been some problems."
BUFFETT: "I think that's way outside of my circle of competence. But I would say this. You can't have that five go to 17 and move on to 20 and 22 or 24 percent, because there are only a hundred cents in the dollar. Health care is gobbling up well over $3 trillion a year. It's just about the same as federal, the federal budget, I mean it's getting up there."
WOODRUFF: "Are we now at the point where the country does need to think about some sort of single-payer system in some more or another?
BUFFETT: "With my limited knowledge, I think that probably is the best system. Because it is a system, we are such a rich country, in a sense we can afford to do it. But in almost every field of American business, it pays to bring down costs. There's an awful lot of people involved in the medical -- the whole just the way the ecosystem worked, there was no incentive to bring down costs."
WOODRUFF: "It sounds like what you're saying with a single payer system it's easier to figure out a way to?"
BUFFETT: "More effective, I think."
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On Monday, Senate Republicans, led by Mitch McConnell, released 'modest' revisions to the "draft" healthcare bill that was dropped last week. The only substantive change appears to be the addition of a "waiting period" on those who allowed their coverage to lapse for a period of 63 days or more during the prior coverage year.
"Starting in 2019, individuals who had a break in continuous insurance coverage for 63 days or more in the prior year will be subject to a six month waiting period before coverage begins. Consumers will not have to pay premiums during the six month period."
Here is a summary of the changes:
Here are the changes in the revised version of the Senate GOP health care bill, just released: pic.twitter.com/hJ0sAQLHkI— Frank Thorp V (@frankthorp) June 26, 2017