MEADOR: Obama's well-intentioned plan spends same amount, risks similar economic problems

As of Oct. 30 at 9:00 a.m. Central time, the United States national debt stands at $10.5 trillion.

It's increasing at a rate of $3.84 billion per day.

In the time it takes me to write this column, it will increase by $160 million.

While the causes of such an astronomical figure are both complex and diverse, most of us can agree that George Bush's economic policy hasn't helped matters.

Whether it's the $1 trillion sinkhole that is Iraq or the recently passed $700 billion bailout, the Bush administration's economic policy has done little to help the nation's economy.

On this, Barack Obama and I can agree.

Further, we can agree that John McCain's economic plan - which is strikingly similar to Bush's - will not help matters.

While Sen. Obama and I can easily agree that there's a problem - and the McCain administration will only continue it - we can't agree on an alternative.

With the nation already running at a $10.5 trillion debt, any additional spending seems like a poorly conceived idea, to put it mildly.

Yet Obama's economic plan only increases government spending.

For example, consider his well-intentioned health care plan. His own campaign estimates that it will cost us $65 billion annually. "Such a generous benefit package, combined with Obama's promise to limit out-of-pocket health costs, would require enormous public subsidies," NPR reported on Sept. 30.

These figures don't come just from outside sources; the Obama campaign itself estimates the plan could add as much as $60 billion a year to the nation's $2 trillion health tab. Economists and news sources outside of the campaign have estimated the cost as high as $600 billion annually. Most likely, the actual cost will fall somewhere in between.

But even with a conservative estimate we're still talking about $100 billion annually. And the money to pay for that is simply nonexistent right now.

Admittedly, there is a need for health care reform, nearly every American agrees on that. The World Health Organization has placed the U.S. at 37th on its list of the world's best health care systems.

An Aug. 12, 2007 New York Times editorial also discussed the problems facing the American health care system and had a similarly critical take on it: "Many Americans are under the delusion that we have 'the best health care system in the world,' as President Bush sees it ... That may be true at many top medical centers. But the disturbing truth is that this country lags well behind other advanced nations in delivering timely and effective care."

While Americans can accept this as a problem, it would be wise to explore other, more fiscally responsible ways to address the issue than Obama's plan that will require billions of dollars annually when that money is currently nonexistent. One way would simply be digitizing all of our health records, rather than relying upon paper records.

But Obama, never the quitter, has ideas for how to secure the necessary money for his health care plan. One method is to pull troops out of Iraq and use the money previously budgeted for military expenditures.

But this doesn't solve the problem at all.

Consider: If I'm $100 in debt at the end of the month, I can't solve the problem by simply changing the way I'm spending my money. I need to spend less of it. If I'm spending $20 a month on iTunes, deciding to stop buying music and start buying books instead isn't going to solve my problem.

Obama is simply campaigning for reallocation of funds, not money-saving measures.

It's certainly a good idea to withdraw our troops, especially given the current economic condition of the United States, but simply diverting the spending toward something else won't solve the problem.

Another proposed method to cover the new expenses is tax increases, but Obama's tax plan is not likely to encourage economic growth. Obama's proposal includes an increased corporate tax and higher maximum income tax, raising it from 35 percent to 41 percent.

In a recent blog post, Harvard economics professor Greg Mankiw analyzed the plan and concludes, "Obama's proposed tax hikes reduce my incentive to work by 62 percent compared to the McCain plan and by 93 percent compared to the no-tax scenario."

Removing worker incentive will not help stimulate an already unstable economy.

Further, if a state-sponsored insurance fund were set up, it would create problems for privately owned insurance companies. Theoretically, people would be free to select which insurance plan to use, but the government-sponsored plan has a built-in advantage because it can draw on federal funding, whereas other privately owned companies could not.

In layman's terms, when private companies must raise premiums, due to a recession or other circumstances, the government-sponsored ones can keep them artificially low, while privately owned companies will have to raise prices, hurting the consumer. Consequently, it undercuts the ability of private companies to compete.

Put simply, Obama's plan, well-intentioned as it may be, is not viable because of its emphasis on increased spending and its poorly-conceived tax strategy.

While a change from the free-spending economics of the past eight years is certainly in order, simply diverting money we don't have from an expensive war in Iraq to an expensive health care system is not a good way to move forward.

Change is certainly needed, but it needs to be change for the better, not a more compassionate version of the same, failed policies of the past. Obama's ideas may come with different names and from a better speaker than Bush's, but they're more of the same.

Americans want and need real, responsible economic change.

Jake Meador is a junior English and history major. Reach him at jakemeador@dailynebraskan.com.