Sen. Warren, perhaps more than any member of Congress except Bernie and AOC, understands the reality of federal finances. This places her in a delicate position in a Democratic primary where her progressive cred is already being questioned by the progressive wing of the party. If she tells the truth, which is that Medicare4All is very deflationary at the beginning and might require a “TAX CUT” to minimize the unintended consequence of making almost a million people now working in insurance or provider administration involuntarily unemployed, that group will claim her Republican roots are showing.
Warren is a policy wonk that loves to get deep in the weeds of our fiscal and monetary policy, so it does tend to raise questions when she attempts to generalize or avoid such a question. Bernie also understands that “paying for” the program may be the worst thing we could do and may have a negative impact that will cause the spending to retrain and re-employ those workers to eat into the projected savings of the program, at least from the perspective of government deficits, which are pretty much only right-wing propaganda fodder anyway. He simply rattles off a bunch of taxation targets that he fully intends to raise taxes on simply because they make too damn much money, with or without programs to fund.
We will “pay for” Medicare4All the same way we pay for any spending by Congress. It will approve the bill, the President will sign it, and Treasury will instruct the Fed to mark up its spending accounts by computer keystrokes sufficiently to cover the expense. Nothing in that process involves taxation or government revenue, which it neither needs or uses except to mitigate inflation. The general economy can easily absorb the added demand from workers no longer having premiums and out of pocket expenses as it has been running on fumes since the mid-’80s with no income compensation for the rapid rise in those costs.
Will there be some shortages in infrastructure or specific talent in healthcare that could cause isolated inflation? Sure, but that will remain a cost to the government until market forces level them out, which is not inflationary in the general economy and will thus remain isolated to those instances. “Paying for the program with taxation” besides being a myth left over from the gold standard, wouldn’t negate the shortages anyway. The many economic advantages to having healthcare available to everyone with no cost at the point of purchase to the patient will be the single largest boost our economy could receive, now and in the future.
