A Modest Proposal

Obamacare mandates that health insurance companies use 85% of their premiums to pay for health care, allowing only 15% for overhead and reserves. Since lots of people think this is a good idea, I suggest we apply the same reasoning to the government. If we do, we can achieve a major reduction in the deficit without anyone paying higher taxes and without any decrease in services.

How do we do this?

In fiscal 2012, the Federal government spent $451.9 billion on welfare. Since only 30 cents on the dollar goes to recipients of government assistance (in contrast to private charities, where 70 cents of the dollar makes it to the recipients), that means that only $135.57 billion made it to the recipients, with the remainder eaten up by bureaucracy (overhead).

Using the standards of Obamacare, $135.57 billion should be 85% of the total spent on welfare. Doing the math, that means that we should add $23.92 billion for overhead, the 15% of the total that private companies are allowed to have, for a grand total of $159.49 billion. Subtracted from the current amount of $451.9 billion, and you get a savings of  $292.41 billion.

Just think, simply by applying the genius of Obamacare’s health insurance rules to the government, we can shrink the deficit by over a quarter without cutting any services or spending, simply by streamlining bureaucracy and overhead the way the government is demanding private companies do it.

I know, you think it’ll never work because the government has to have more bureaucracy than a private business. But that is to argue that the government can never be as efficient as private business, and if that’s the case, shouldn’t we be looking for private sector solutions to problems rather than adding more bureaucracies and departments to the government?

I say we should have them play by the same rules as the private sector. If we can obtain nearly $300 billion in savings just from welfare, imagine what we could do if we did the same throughout the government!

That would be change we could believe in.