What Dean Said

Dean Baker is spot-on in his analysis of the connection to the lack of national health care to the current troubles the Big Three auto companies are experiencing.

The Big Three are also not responsible for the broken U.S. health care system. If we paid the same amount for health care as Canada, G.M. would have accumulated an additional $22 billion in profits over the last decade.
That would be the savings if we assumed that General Motor’s health care expenditures were reduced by roughly 48 percent to be in line with expenses in Canada. Of course, not all the savings in this counterfactual would have gone to profits. Some of it would have gone to workers in the form of higher wages or to consumers in the form of lower car prices.

On the other hand, G.M. is also picking up the tab for many spouses and dependent children. It would not have to pay these health care expenses in a Canadian type system. So the $22 billion figure is probably not a bad first approximation of the additional money that G.M. might have today if the United States had a more efficient health care system.

The economic crisis we’re currently in, as well as the threat it poses to the short-term survival of a vital US industry should force Congress and the White House to move quickly towards universal, single payer healthcare. Sadly I don’t think our political elites of either party are so intellectually nimble as to grasp the necessity of real universal healthcare in the time needed to ensure a return to economic strength.

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