The "Health" of the American Empire

As Barack Obama struggles against the forces of reaction and corporate greed to reform the American health care system, he is not merely seeking improved health care for tens of millions of Americans, he is fighting to make the American Empire affordable.

It made seem odd to juxtapose health care and the fate of the American Empire, but the two are joined at the hip.

The hopelessly inefficient American health care system is the most expensive in the world and as the American population ages it is becoming more costly by the hour.

In June, the Obama White House published the results of an analysis of the American health care system undertaken by the Council of Economic Advisors (CEA).

According to the CEA, health care expenditures in the United States now account for about 18 per cent of the country’s GDP. (That compares to about 10 per cent of GDP for health care in Canada.) If the U.S. were to remain on the same track, the CEA estimates that by 2040, 34 per cent of GDP would be accounted for by health care.

The implications for governments of such a scenario are immense. “Almost half of current health care spending is covered by Federal, state, and local governments,” says the CEA. “If health care costs continue to grow at historical rates, Medicare and Medicaid spending (both Federal and state) will rise to nearly 15 percent of GDP in 2040. Of this increase, roughly one-quarter is estimated to be due to the aging of the population and other demographic effects, and three-quarters is due to rising health care costs.”

Absurd as it may seem, without health care reform, according to the CEA the number of Americans who have no health insurance would soar between now and 2040 from 46 million to 72 million. If the U.S. were to achieve the efficiencies realized in other countries, the CEA estimates that the United States could reduce its health care expenditures by thirty per cent or as much as five per cent of GDP. At present, that would amount to a saving of about $700 billion a year. In fact, if the U.S. moved to a single payer system of the kind that exists in Canada, the savings, once the new system was in place could be as high as one trillion dollars a year.

In addition to the vast potential savings, Americans would be healthier as a consequence of reforms that bring everyone into the system. And while that is a quality of life benefit of staggering proportions, it would also generate greater economic output from the American work force, not least because Americans would no longer have to make retaining health care benefits a major consideration when they consider switching jobs.

What does all this have to do with the “health” or sustainability of the American Empire?

When we add to the wasting of a trillion dollars annually to sustain an inefficient health care system the expenditure of a trillion dollars a year on defence related matters----including the defence budget, additional costs for the wars in Iraq and Afghanistan, interest payments on the costs of past wars, veterans affairs, nuclear weapons research, etc.---it becomes clear that the United States is drowning in a sea of waste and debt.

American indebtedness is at the heart of the current global economic crisis. To the wastage on health care and the vast spending on the military, we need to add the rising net indebtedness of Americans to the rest of the world which totals several trillion dollars. (It’s no surprise that China’s central bankers are wondering out loud about how long they can sustain their enormous purchases of U.S. Treasury bonds and whether the U.S. dollar can continue as the global reserve currency.) There is the soaring American national debt, being driven upwards from about $9 trillion by federal government deficits that will exceed one trillion dollars a year well into the future. There is the ten trillion dollar debt owed by Americans as individuals, not least on their credit cards.

When Barack Obama faces the angry mobs of the American right to take a few quite modest steps on the road to health care reform, he is fighting for the viability of the American socio-economic system and its capacity to sustain a global empire. While this is not a cause that is near and dear to my heart, it is crucial to understand the stakes in the game. What continually endangers the American system is the unwillingness of the rich and the affluent in the United States to pay anything like their fair share of taxes and to reform the system so that it is not, as in the case of health care, grossly inefficient. The American Empire would not be the first in history to expire because of the greed and political folly of the rich. The wealthy in Rome and France lost empires, and many of them their heads, as a consequence of their cupidity.