Pandagon: A Real Pro-Growth Agenda

Um, what?

Via our beloved friend at The Liberal Conspiracy, we have to ask a question about Pandagon's "Pro-Growth Agenda". Pandagon says:

By reframing the health care initiative, you get businesses on your side and end the idiotic cries of socialism -- this is about keeping American workers competitive, why are you anti-American? You want all our jobs to go to France?

The United States has an unemployment rate between four and six percent, from year to year. France's rate is from nine to thirteen percent. That health-care thing isn't working out. Nice try, though, Pandagon.

UPDATE: The aforementioned beloved Liberal, Sovay, demands that I expand on my comment. Pandagon was just joking about France, she tells me, and so focusing on the joke is missing his point.

I'm not sure I agree--Pandagon probably is joking, but joking to make a point. The point ought to be refutable by refuting the joke. Sovay is a bit humorless on occasion--only now and then, when she's on about politics--so I'm going to go ahead and rebutt formally.

The policy Pandagon suggests isn't sound for this reason: health-care costs affect the economy regardless of who foots the bill. We aren't losing jobs to France, we're losing them to the Third World. We're not losing them to Socialist safety-net states, but to states which have no net at all. Their costs are lower, therefore wages and other structural expenses can be lower.

Health care is one of those structural expenses, yes. If the employer is paying for insurance, the cost of employing a worker is higher. However, if the employer gets a "tax credit" from the government for that expense, the money is still being spent. Unless the government is suddenly going to become willing to cut spending--pardon me a moment while I laugh bitterly--the government is going to need higher tax revenues to offset the tax credits. Those revenues are almost certain to be collected in the form of higher tax rates, which tax increases add to the cost of doing business just as much as paying for the insurance in the first place. (Indeed, Pandagon suggests paying for it by repealing the Bush tax cuts, which is to say, by raising tax rates from where they are now.) Moreso, the Pandagon policy adds a middleman--you now have to pay for the people who process all that tax-credit paperwork, government employees who have to be paid out of tax revenues. How are we going to pay for these new salaries on the public dole? Oh, right, there go those tax rates up again.

There's a reason that governments, like France, which have a thick socialist safety net also have massive structural unemployment. If you're really serious about outsourcing and unemployment, there are a few options, but increased socialist spending--even if it's disguised as tax credits--is not one of them. Protectionist trade policies are one response; a dismantling of parts of our own safety net, to make us more competitive with the Third World, another. Right now the Republican party seems to prefer the latter, and the Democratic party (including, I suppose, me) the former. There are not many other realistic options, but one thing that definitely won't fix the problem is drifting off into fantasies like these, whereby we can have increased socialist spending and also lower market unemployment.