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Universal Healthcare Probably Requires LOWER Taxes, Not Higher

Warren Mosler, one of the fathers of Modern Monetary Theory (MMT) on with Steve Grumbine over at Real Progressives, discussing the tax implications of a universal healthcare policy. Such a policy, along the lines of "Medicare-For-All," shifts health insurance spending from the private sector to the government. The interesting implication of this though, is that a lot of duplication of services will be eliminated. To have private health insurance markets, there's a lot of tasks that each private firm needs workers to do, such as advertising, administrative work, evaluating applications, etc. Each company hires employees to do these things. But in a universal healthcare policy, those tasks will shift to the government (which wouldn't even need to do all of them, most likely) and so duplication of work is eliminated. What this means is, universal healthcare spending, even if it added to the deficit, would probably be **deflationary** and increase unemployment. Suppose (using imaginary numbers) that the government needed 10,000 people to do administration for Medicare-For-All, but this causes 50,000 people to lose their jobs. This means that the government would need to LOWER taxes in order to ensure that there is enough total spending in the economy to create new jobs for the 40,000 people to enter into. If the government raised taxes, it would only reduce private spending, and make the unemployment problem even worse. So, universal healthcare probably requires LOWER taxes, not higher taxes. (How would the federal government pay for the program? The same way it does all spending: by crediting bank accounts. More on that here: Watch the whole video here: Follow Deficit Owls on Facebook and Twitter: And follow our sister page, Modern Money Memes:
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