Smart. Sharp. Funny. Fearless.
Thursday, October 18, 2018

Today the Weekend Reader brings you Divided: The Perils of Our Growing Inequality, a collection of essays edited by David Cay Johnston, a Pulitzer Prize-winning investigative journalist, best-selling author, and regular contributor to The National Memo. The growing gap between rich and poor remains a dominant issue among the 99 percent, but without the support of a majority of elected leaders, the middle class diminishes while the 1 percent continues to thrive. In Divided,  journalists, activists, and political leaders explain the significance of repairing the middle class, and offer advice for rolling back the years of inequality created by American oligarchs.  

 You can purchase the book here.

America spends far more than any other modern country on health care yet alone lacks universal coverage. If America had in place the French system, which the World Health Organization says is the world’s best, the savings in 2010 would have been enough to eliminate the federal income tax that year.

Here is how much America’s health care system costs: in 2010 Americans spent $2.64 per person for health care for each dollar spent by the thirty-three other countries with modern economies. The United States spent $8,233 per capita compared with an average of $3,118 in the other thirty-three countries, according to data compiled by the Organization for Economic Cooperation and Development. And those are not simple currency transactions used to compare dollars: the OECD used PPEs (purchasing power equivalents) to get the best possible measure of relative costs.

A growing share of federal tax dollars, in direct spending and in tax breaks, is going to U.S. health care as the population ages. Yet while the thirty-three other modern countries provide universal care, about one in six Americans lacks health insurance and another one in ten is covered for only part of the year. America’s health care system, more accurately described as a sick-care non-system, totaled 17.6 percent of the economy in 2010, compared to an average of 9.2 percent in the other thirty-three countries, the OECD data show.

Buy From

Here is another way to think about the cost of health care. The World Health Organization says France has the best health care system in the world, while the United States ranks thirty-seventh. The French system cost 11.6 percent of its economy in 2010, six percentage points less than the 17.6 percent of the American economy devoted to health care.

How much is six percentage points of the American economy, the extra burden Americans bore compared to the French? In 2010 it was equal to almost the entire federal income tax, which came to 6.3 percent of American gross domestic product. In other words, all else being equal, if Americans had put the French system in place in 2010 they could have eliminated the federal income tax that year. In 2013 they could have eliminated about half of income taxes. That is just measuring the American costs that are above the French cost when measured as a share of the economy.

Now consider the total cost, public and private, of U.S. health care. It is significantly greater than the total of corporate and individual income taxes, as well as payroll taxes. For each dollar paid in all three of those taxes in 2010, health care came to $1.29.

Health Care Spending Graph for Divided Weekend Reader


Take a look at your pay stub to get an idea of the kind of money being spent on a system that fosters personal bankruptcy, bedevils small business, and leaves the United States ranked thirty-first among the thirty-four OECD countries in preventing premature death.

Capitol Hill Republicans say the federal government is “structurally and financially broken” and that “three programs—Medicare, Medicaid, and Social Security—account for over 40 percent of total spending.” These costs, the GOP says, are “harming job creation and growth,” while “projections of future spending growth are nothing short of catastrophic, both economically and socially.” The Republicans offer what they say is a solution—a promise to “empower millions of seniors to control their personal health care decisions,” a vow immediately followed by a promise to cut federal spending.