Research Paper: Obamacare Good for the Economy?

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[. . .] (Farazmand, 2001)

However social policies have been reflected in a number of areas including education, poverty and Medicare. There has been great progress post globalization where there was a revision of this trend where government moves the welfare services to the private sector to help it continue the services is unique to the United States, while in other countries the duality exists with the states bearing the burden of not only providing but also maintaining and innovating such services. (Farazmand, 2001)

There have been success previously in the medical policies and there is no reason why in the case of the Obamacare also it would not be a success. For example the medical policy like accountable care organizations -- ACO has solved the issues like incentive, gain sharing and cost reduction arrangements, and the methods of evaluating financial risk, and lastly the clinical integration are questions of policy. (Peterson, 1999)

It also means that there would be predictability in the form of clearer guidelines and would bring about the better corporate practice of medicine which has now been accepted as a doctrine in many states like California, Colorado, Illinois, Iowa, New York, New Jersey, and Texas and such a doctrine has created a policy that actually prevents a doctor and hospitals from employing physicians in the provision of out-patient services. Secondly the involvement of the Government would enhance the quality of the care. The basis of this is the economic priorities.

Economic factors

Some of the issues between both these types also relate to the quality of care that the patients get. There are issues that the non-profits offer more patient based and cost effective services but are of poor qualities but the high cost private services are better. The reverse is also being argued. Congress provides reduction in taxes and other subsidies to see that the patient gets better service with non-profits and the health industry generally. Investor owned systems will raise the rate of hospital care for the patients while the non-profit increase the cost of medical care in terms of operations but subsidize the patient cost. Thus one is based on profit entirely and the other is based n service. Somehow the non-profit is not being favoured as of now with more growth in the investor created profit systems. Newly there are issues that the non-profits offer more patient based and cost effective services but are of poor qualities but the high cost private services are better. The reverse is also being argued.

Congress provides reduction in taxes and other subsidies to see that the patient gets better service with non-profits and the health industry generally. That is why in this case the Government is keen to create a policy that would be beneficial to both the sectors. The congress has set up many study groups and while these groups made different recommendations in the health care sector, none have come forward with a statement that shows the declining quality of service in either of these types of organization. (Torrisi; Hansen-Turton, 2005) For example the normal methods of treating the abusers are by using the counselling centres and also the de-addiction centres that have various methods of effecting a cure. However the counselling and the programs have not been able to provide full changes and often the abuser shows recidivist tendencies. Many agencies like the medical researchers try experiments to see the effects of drugs and the methods of nullifying the craving.

However the actual treatment requires support of the family, the will for the abuser to change and many factors will determine the success of the programs. No doubt some of the social care measures and the universal health policy proposed by the President is a welcome action for the underprivileged of the society. However evidence shows that such programs always backfire in the well-being of the economy as a whole on account of the fact that all these programs need revenue to be generated for the maintenance that requires more taxes, and consequently inflation and more price rise, making the same services ironically unreachable in the log run. There are thus a lot of economic negative factors that would affect the U.S. economy as a whole the basis of which would be the programs like the universal health.

Negative factors that will affect the economy:

Primarily the rising cost of Medicare "is placing an increasing burden on current and future taxpayers, as well as exacerbating the poor financial condition of a program on which America's seniors depend in their retirement. The traditional program's fee-for-service payment system, in which doctors and hospitals are paid a fixed price for each and every procedure or service that they perform, encourages an increase in the volume of services provided, which drives excessive spending." (Moffit; Senger, 2013)

The system as hoped does not deliver quality care but creates unnecessary costs and higher spending as well. The programs like Obama care and universal health care result in a lot of taxes. One tax that Obama had to content with, which was used to fund the social program was the corporate tax. It is pointed out that the unusual burden on the corporate for financing state ventures eventually brought on the depression. The corporate tax is the curse for economic growth. According to the former Presidential adviser Boskin (2010) President Obama should look up corporate income tax. This suggestion was put forth in 2010. At that time the U.S. had the second-highest corporate income tax rate of any advanced economy. On the other hand the countries like Germany and Canada reduced their corporate tax rate, rendering American companies in poor position globally. (Boskin, 2010)

Though the deductions for interest and other features helped in reduce tax, corporate tax sees to it that there is no investment and the capital has become internationally mobile. Again the taxes along with corporate tax suffer a second tax as the dividends are taxed. It was shown in 2010 that the capital from the U.S. is moving out and in future the corporate tax will cause the workers too bear the burden because of the lower tax for the competitors. To cite the Organization for Economic Cooperation and Development Boskin states that 'corporate taxes are found to be most harmful for growth, followed by personal income taxes and then consumption taxes.' (Boskin, 2010) Many types of taxes like consumption tax, a value-added Tax, the Fair Tax retail sales tax all go to hamper the economic growth. Thus to eliminate the negative effects of the corporate tax would mean increasing the GDP and future wages significantly.

Why is the government taxing so?

The need for revenue is acute. Government spending has gone out of control, and some of the adventures abroad are the reason for this. The major revenue for the government actions come from corporate taxes. The government also spends on other issues and these are also clubbed together in considering the overall effect. For example one government expenditure is for example in Afghanistan. The cost incurred by the U.S. And the cost of the projects that Afghanistan can never fulfil on their own makes the issue more pointed. For example the building security cost $82 million contract just for the Afghan Defence University. Another out lay of $40 million a year to operate it is necessary. Likewise there has been another $11.4 billion program to construct nearly 900 facilities for the Afghan National Security Forces -- ANSF. (Farazmand, 2001) This is only the tip of the iceberg. (Dixon; Younglai, 2012)

Thus it was hoped that Obama will go with a tax break. That would be almost impossible and then the Obama care must be shelved. Though the Obama administration's corporate tax reform plan will end 'dozens and dozens' of tax breaks, and the White House's election-year call for higher taxes on the wealthy. (Dixon; Younglai, 2012) As of now companies are subject to differing levels of taxes, and a cut in the top 35% corporate tax rate and the counter balance was suggested in manufacturing tax break for oil and gas companies, and according to Obama the bulk of other tax cuts would go and the place of the corporate tax would be taken by them. Thus it is shifting the burden.

The consequences in the economy:

This single tax for example the corporate tax now is higher than the average of all other countries. (Miller; Hutton, 2004) The tax burden that is created by the corporate taxes and investor-level taxes on dividends and capital gains now include corporate equity. Usually the burden of the tax is shifted to the investors of the domestic capital. Some of these taxes also are passed down to the labour. This is because the union wage premiums in the U.S. "increase sharply when state corporate income tax rates go down. (Hassett; Hubbard, 2012) Now the president will reduce the corporate tax… [END OF PREVIEW]

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Obamacare Good for the Economy?.  (2013, April 6).  Retrieved April 21, 2019, from https://www.essaytown.com/subjects/paper/obamacare-good-economy/7013445

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"Obamacare Good for the Economy?."  6 April 2013.  Web.  21 April 2019. <https://www.essaytown.com/subjects/paper/obamacare-good-economy/7013445>.

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"Obamacare Good for the Economy?."  Essaytown.com.  April 6, 2013.  Accessed April 21, 2019.
https://www.essaytown.com/subjects/paper/obamacare-good-economy/7013445.