Obama didn’t campaign on a vision of completely nationalized healthcare, despite the popularity of this idea in liberal circles. We weren’t totally sure what his vision was, actually, though John McCain’s goal of de-linking health insurance from employment was one of the better ideas put forth during the whole campaign.
Regardless of where Obama stood during the campaign, we think a new, nationalized healthcare system has a real shot of becoming a reality in this environment. The reason is simple: It’s the easiest way for the federal government to undertake a massive bailout of cities and states, which are at their breaking point.
New York, California and several other public entities are in serious trouble, and will grow increasingly desperate for some kind of federal help. But direct intervention doesn’t seem likely or politically palatable. Asking the rest of the country to prop up bloated public spending in the north and in California will not fly.
Enter nationalized healthcare, a shadow bailout. The political mix is just right. It’s a popular idea among Democrats who hold more power in Washington than they have had in decades. The ranks of the un-insured continue to grow. Health care costs are a huge burden for public entities. It’s also huge for GM and Ford, which will burn through their cash before the auto market recovers in a meaningful way.
Bottom line: It’s a way to affect a major liability transfer to the federal government in the cloak of a social welfare program. Even without the aching states, Democratic power and growing frustration with the current system would give it a fighting shot. From where we stand today, it looks quite likely.