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> Protecting the most vulnerable people and ensuring people don't fall into the trap of poverty is an investment that should occur at the governmental level. There are many such governmental investments that would alleviate serious long-term problems.

The United States spends 38% of GDP “investing in people.” https://en.wikipedia.org/wiki/Government_spending_in_the_Uni.... Even if you exclude the much maligned defense spending (where a lot of our science and technology investment goes), that’s $6.5 trillion that goes to investing in people or managing people who invest in people.

I’m amenable to the notion that we should invest more. For example healthcare and guaranteed meals for everyone under age 18.

But the idea that “America sees investment in its own people as wasteful spending” is just false. It’s a statement that’s so disconnected from reality that it makes me question the point that is really being made. Are people really saying spending a third of every dollar on welfare is nothing? Or is it a way to deflect from any efforts to criticize how that money is being used? Because if you keep telling people “America invests almost nothing in its people” that makes folks very defensive about the programs we do spend money on, and willing to overlook mismanagement of those programs.




These statistics don’t take into account things like the disproportionately high cost of healthcare in the US, so percentage of dollars spent isn’t an especially meaningful measure. Social Security payments maybe, but you would have to compare relative age of populations and account for how the wealthy escape paying into the system at anything like a progressive level.

As this article demonstrates, Americans are great at paying out lots of money into private systems without receiving good material returns on these investments. By contrast, for example, my great grandmother in the UK paid into various state taxes regimes all her life. In return, she received very good quality healthcare, home care and long term care in old age, and social housing after the death of her husband. She was a working class person who suffered a lot of hardship, but lived to be 99. In the US, she probably would’ve ended up bankrupt and dead on the street much earlier.


> These statistics don’t take into account things like the disproportionately high cost of healthcare in the US, so percentage of dollars spent isn’t an especially meaningful measure

Yep. The US spends more than double what countries with universal coverage spend on healthcare[1]. Those countries also have better health outcomes on nearly every metric[2] and manage to cover all of their citizens.

[1] https://en.wikipedia.org/wiki/List_of_countries_by_total_hea...

[2] https://www.healthsystemtracker.org/chart-collection/quality...


Doctors in the US are also grossly overpaid compared to other countries: https://www.medscape.com/slideshow/2019-international-compen...

We will need to reduce doctors salaries by atleast 50% if we want to tackle high healthcare costs..


Doctors' salaries are not responsible for skyrocketing healthcare costs in the US[1].

[1] https://i1.wp.com/investingdoc.com/wp-content/uploads/2017/0...


Whatever the growth in administrative work in health care may have been since 1970, administrative costs are not primarily responsible for our healthcare costs; even Elizabeth Warren's own estimates of admin cost savings in M4A peg them at under 15%.

Meanwhile: the dominant component of US health spending is in fact inpatient and outpatient procedures --- services delivered by physicians and trained health care specialists --- and those people do in fact make significantly more money in the US than they do in the UK, Europe in general, or Australia.


> Doctors' salaries are not responsible for skyrocketing healthcare costs in the US

Your chart doesn't show anything useful to the point you're trying to make. It shows a massive percentage increase in the admin side as expected, without showing the base it started from, and it does not show any percentage or specific figure break-out on related costs by each group.

You need to show each group and what is being spent on them. Ideally also show the cost increase related to physician and nurse total compensation over the last eg 10, 20, 30 years so we can see how much cost inflation there is related to that segment of US healthcare over the prime years of healthcare cost inflation.


For a supposedly free market country it's odd that the US allows the supply of doctors to be restricted. Removing restrictions on the numbers of doctors who can qualify would automatically reduce the average income while increasing the supply of doctors.

See https://www.quora.com/Who-or-what-controls-the-number-of-med... for more information.


"Doctors in the US are also grossly overpaid compared to other countries"

So are developers.


But you're on the wrong forum for people to complain about that.

Also, there aren't artificial barriers to more developers really... just an aggressive demand outstripping supply.


> These statistics don’t take into account things like the disproportionately high cost of healthcare in the US, so percentage of dollars spent isn’t an especially meaningful measure.

It depends what you're measuring. OP is talking about Americans' willingness to "invest in their own people." That's an issue of "money in" not "results out." On healthcare, for example, U.S. governments spend 8% of GDP. That's on the middle-high side compared to the rest of the OECD: https://www.oecd.org/els/health-systems/Country-Note-GERMANY.... We just manage to cover a fraction of the population for similar levels of spending. The same is true for our public education--we spend more get less.

That suggests a very different narrative than what OP was saying. "We spend so much on education, why are our kids falling behind?" Versus: "Why aren't Americans willing to invest in education?"

The problem isn't that America isn't "willing to invest in its own people." It's that Americans get far less in the way of public services for the amount of money they spend. It's a problem of efficiency, not generosity.

> Social Security payments maybe, but you would have to ... account for how the wealthy escape paying into the system at anything like a progressive level.

The earnings cap for Social Security is common in OECD countries, and our cap is higher than most: https://www.forbes.com/sites/ebauer/2018/04/28/so-hey-why-no.... (Comparisons are a bit difficult. France, for example, has a cap on Social Security taxes, but no cap on healthcare payroll taxes. But the U.S. has no cap on Medicare taxes, and we pay Medicaid out of income tax, which is highly progressive.)

It's also funny you use the U.K. as an example. The maximum state pension in the U.K. amounts to about $10,000/year. The average U.S. Social Security payment amounts to $17,500 per year.

> As this article demonstrates, Americans are great at paying out lots of money into private systems without receiving good material returns on these investments.

Except health insurance, the U.S. is generally behind Europe in terms of privatizing public services. For example, not even Republicans are talking about privitizing Social Security, but some level of privitization of retirement accounts is common in other countries: https://www.ssa.gov/policy/docs/ssb/v66n1/v66n1p31.html. Australia, Denmark, and Sweden are examples of countries that have partially privitized their Social Security by imposing mandatory participation in private pension systems as part of the overall retirement system.

Transit systems in Europe are often privately operated, while in the U.S. they're almost all publicly operated.

91% of American students attend publicly managed schools, below the OECD average of 82%: http://www.oecd.org/pisa/50110750.pdf. Spain, South Korea, Belgium, Ireland, the Netherlands, and Australia are countries where 1/3 or more (70% in Belgium) of students attend private schools. In the OECD, it's common for private schools to receive government funding (via voucher-like systems). Sweden, Finland, Germany, the Netherlands, Ireland, and Spain, are examples of countries where private schools receive more than 60% of their funding from the government.

The EU is undertaking a vast reform that would require opening up local utilities to competition: https://europa.eu/rapid/press-release_MEMO-14-19_en.htm. Among other things, it could speed up the privatization of water systems in Europe (private water systems are already fairly common there, but basically unheard of in the U.S.)


USA seems to be around 26th in the world with that ratio.

https://data.oecd.org/gga/general-government-spending.htm


The USA has a unique situation with its defense spending though, which skews that ratio in a sort of unfair way. On that same data you linked, if you look at dollars per capita instead of %GDP, the US is actually 11th and ahead of Germany, Iceland, and the UK, etc.

Now really, the stats you linked probably aren't even all that correlated with social spending. It's more likely a measure of the scope of bureaucracy.


Not only that, most of those countries have socialized medicine -- but socialized medicine isn't exactly an anti-poverty program. When the government takes an extra $1 from someone at the mean income and then provides them with $1 in health coverage, it shows up as $1 in government spending, but that's not redistributive. If the program didn't exist they could have taken the $1 and used it to buy $1 in health insurance, which is what happens in the US. Socialized medicine is only redistributive to the extent that the money comes from someone other than who receives the benefit. For healthcare spending probably 80% of the money isn't that, because it's mostly going to insure the same people who are paying the taxes.

The US couldn't raise taxes by an equivalent amount unless the money specifically went to healthcare in an equivalent way (because otherwise taxpayers would still need to have that money to buy healthcare), so you couldn't use it to solve homelessness.

The problem is that Social Security and Medicare in the US completely dominate social spending, and they're also the same thing. Or worse, since Social Security even gives bigger payouts to wealthier people who had higher incomes before retirement -- the least it could do is give everyone the same amount.

So we end up in a situation where we are at the same time spending too much on government programs and not spending enough on government programs, not because the amount of tax revenue is too low, but because the money we currently spend mostly isn't actually going to anti-poverty programs or public infrastructure or scientific research etc.


>> When the government takes an extra $1 from someone at the mean income and then provides them with $1 in health coverage, it shows up as $1 in government spending, but that's not redistributive. If the program didn't exist they could have taken the $1 and used it to buy $1 in health insurance, which is what happens in the US.

This is ignoring that a private insurer will take a profit so not all that dollar is returned in the form of care/insurance.


Yes, and more importantly that the government has massively greater bargaining power than someone at the mean income.

I am glad to have the government buying my healthcare for me, because they get a good deal for that $1.


The government isn't bargaining at all. It's dictating prices at that point. But price controls break everything. If you set the price too low you reduce supply. If a company knows they'll have to charge $5000/patient for a drug in order to recover the billion dollars they spend developing it but they also know the government will only pay $1000/patient, they don't bother to develop it. Meanwhile if their lobbyists can convince the government to let them charge $10,000/patient then they're in fat city on the back of the taxpayer.

Calibrating that balance correctly is the exact thing markets are good at. When you're spending your own money, you may be willing to pay $4000 more for a better drug, but only if it's $4000 better.


So when a big customer like Apple or Walmart applies pricing pressure on a component supplier, how do they pick a number?


>because they get a good deal for that $1.

That's not usually how government works in my experience.


Sounds like you need a better government!


It's not ignoring that at all. The insurer's profit comes from the investment of capital. Before they make their first dollar they have to lay out money to acquire an office building to operate out of, hire lawyers and actuaries to establish procedures to operate under, maintain a large pile of money in reserve in case there are an unexpected number of claims etc. The profits are the returns on that investment, and if it wasn't a private company then the public would have had to supply that capital instead. You don't get out of paying for it -- otherwise it would be easy to avoid by having the government establish an independent non-profit insurance company.


> You don't get out of paying for it -- otherwise it would be easy to avoid by having the government establish an independent non-profit insurance company.

no one is arguing that we arent paying. The point is, you are equating costs between public and private, and private has to take profit. Government doesnt.

Do we actually know that healthcare is a profitable industry if (like the government would have to) you actually cover EVERYONE?


> no one is arguing that we arent paying. The point is, you are equating costs between public and private, and private has to take profit. Government doesnt.

The point is that it does.

The private insurance company makes a profit because it, for example, owns the building it operates out of. That portion of its profit is attributable to the rent it could have received by renting out the building to the National Health Service in the alternative, which would then have that amount as an ongoing expense. You're still paying the same amount of money to the capitalist who owns the building whether you call it profit or rent. And the government could buy the building, but then it has to pay to buy (and maintain, and forego property tax revenue on) the building -- you're paying for it one way or another.

> Do we actually know that healthcare is a profitable industry if (like the government would have to) you actually cover EVERYONE?

The first thing to note is that the government doesn't cover everyone. There are unavoidably procedures it will deem too expensive and not cover, the same as private insurance. We can't afford to spend a trillion dollars to save one life.

But independent of that, the only way an insurance company doesn't make a long-term profit is if it's mismanaged. If you want more comprehensive coverage then that causes the premiums to be higher, but either way they'll just consult their actuarial tables and set premiums that cover the expected claims.

Where people run into trouble with private insurance is that they don't bother to buy it. If you go in and get a catastrophic coverage quote when you're healthy, it's a reasonable premium, which (because otherwise the insurance is useless) includes the right to keep paying that premium instead of a higher one even if you're diagnosed with something. But in a free market, if you get diagnosed with cancer after not bothering to buy health insurance, the premiums when you go to get it would then reflect the cost of cancer treatment. At that point you're basically buying an installment plan rather than insurance, because the event to be insured against occurred while you weren't insured against it. This is why requiring insurers to cover preexisting conditions doesn't really work unless you also somehow induce almost everybody to buy health insurance ahead of time anyway.


> Not only that, most of those countries have socialized medicine -- but socialized medicine isn't exactly an anti-poverty program. When the government takes an extra $1 from someone at the mean income and then provides them with $1 in health coverage, it shows up as $1 in government spending, but that's not redistributive.

Well, socialized medicine also takes $1.5 from someone at 1.5× mean income, and $0.5 from someone at 0.5× mean income, and provides to both $1 in health coverage. In this sense it is redistributive and anti-poverty.


Yes, we’re ahead of places we think of as first world countries (Australia, South Korea, Ireland, and Switzerland. And we’re pretty close to Japan, the U.K., Israel, etc. We are closer to Germany than Germany is to France. The clustering in the OECD is pretty close.




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