Home > Uncategorized > Red Scare 2018: socialism and healthcare

Red Scare 2018: socialism and healthcare

from David Ruccio 

A specter is haunting the United States—the specter of Medicare for All. All the powers of old America have entered into a holy alliance to exorcise this specter: Wall Street and Big Pharma, Trump and McConnell, Fox News and the American Enterprise Institute.

Now, “coincident with the 200th anniversary of Karl Marx’s birth—and, more important, on the cusp of the 2018 elections—the Council of Economic Advisers has joined the alliance:

socialism is making a comeback in American political discourse. Detailed policy proposals from self-declared socialists are gaining support in Congress and among much of the electorate.

The fact is, socialism is on the rebound in the United States. And healthcare is the top issue for voters in the midterm elections (with 71 percent of respondents saying healthcare is “very important” in making their voting decisions for Congress this year, and at least a quarter choosing health care as the “most important issue,” topping all other issues). Moreover, more than half of Republicans (52 percent) in a new American Barometer poll say they support Medicare for All.  


That’s why the White House decided to issue what, according to Kate Aronoff, “reads like a Red Bull-addled college freshman’s attempt to parse their introductory economics course through a first-response paper,” replete with a definition of socialism taken from the dictionary and a graphic representation of Milton Friedman’s “Four Ways to Spend Money.”

The ostensible reason for the report is to show how socialism, even if implemented peacefully and democratically, create “fundamental incentive distortions and information problems” that lower national income.

But the real target is a particular socialist policy, Medicare for All, to which most of the paper is dedicated. The rest is just an attempt to throw everything against the wall—from anecdotes through dubious calculations to a narrow selection of academic studies concerning the Soviet Union, Maoist China, Cuba, Venezuela, and the Nordic countries—and hope some of sticks to the one policy that, in the context of the United States, has long raised the specter of socialism.*

This policy would distribute healthcare for “free” (i.e., without cost sharing) through a monopoly government health insurer that would centrally set all prices paid to suppliers such as doctors and hospitals. We find that if this policy were financed out of current Federal spending without borrowing or tax increases, then more than half the entire existing Federal budget would need to be cut. Or if it were financed through higher taxes, GDP would fall by 9 percent, or about $7,000 per person in 2022, due to high tax rates that would reduce incentives to supply the factors of production. Evidence on the productivity and effectiveness of single-payer systems suggests that “Medicare for All” would reduce both short- and long-run longevity and health despite increasing somewhat the population with health insurance.

We knew this was coming. It’s almost ingrained in U.S. political discourse, that as soon as a policy to radically change the existing economic order becomes popular it’s smeared with the label of socialism. That’s what the two Red Scares, in the years following the two world wars, were all about.

Any maybe it will work again. But my suspicion is, people are fed up the ineffectiveness and inequality built into the current system of healthcare and won’t be scared off by the tired assertions about the opportunity costs of not being “free to choose” that are proffered by the Council.

In fact, instead of shrinking from the label, we need to recognize that Socialism is already acknowledged by all American Powers to be itself a Power. Moreover, it is high time for Socialists to openly, in the face of the whole world, publish their views, their aims, their tendencies, and meet this nursery tale of the Specter of Socialism with a manifesto of the movement in support of Medicare for All.


*Among the many laughable propositions in the Council’s attempt at economic red-baiting is its critique of the supposed inefficiency of “large state organizations” in socialist agriculture in the Soviet Union, Maoist China, Cuba, without a single mention of the negative effects of large private organizations in contemporary healthcare in the United States, through the ongoing wave of mergers and acquisitions in pharmaceuticals, hospitals, and health insurance.

  1. James Beckman
    October 29, 2018 at 2:19 pm

    Passports are required. So are drivers’ licenses, marriage licenses, birth certificates, voter registration, etc. But none cost big tax dollars & none would disrupt monopoly professions
    like medicine & pharma.

  2. October 29, 2018 at 3:02 pm

    The US Military is financed and operated by the Federal Government. The purpose of the military is to protect the lives and freedoms of American citizens. The purpose of health care is the same and more of us are threatened by medical issues than by foreign actions. Health care should, therefore, be financed and operated in a way similar to the military, both having the same purpose.

    • October 29, 2018 at 3:40 pm

      Well said, Charles, and indeed David in his concluding note. For me the scary Specter of Socialism I don’t wish to imagine is a State Socialism controlled by a Trump-like Stalin and his Republican-like Party. What keeps me going are the logical alternatives of “Small is Beautiful”: local credit supervision, local government, personal responsibility for maintaining rather than acquiring Nature’s wealth. (See E F Schumacher’s “Guide for the Perplexed”).

      • October 29, 2018 at 4:37 pm

        Thanks Dave Taylor. The Federal government has three responsibilities regarding health care. 1. Pay the bills using our money that is created by the US Treasury, 2. Promote development of health care infrastructure that is sufficient to provide health care for all Americans and 3. After funds are spent, extract excess money from the economy to forestall inflation, doing so in a fair way that establishes and maintains a modicum of equality among the citizens. The most important word in this statement is “After” because spending must precede tax collections. Taxes do not “pay” for anything no matter what the bookkeepers say. Taxes prevent inflation and, hopefully, fulfill a social responsibility of the government.

      • Craig
        October 29, 2018 at 6:24 pm


        Money itself does NOT cause inflation. The primary cause of inflation is having no better, more rational alternative to commercial agents understandably wanting/needing to raise their prices in an economic system of enforced austerity.

        That better, more rational alternative is implementing the dual policies of a universal dividend and a 50% discount/rebate policy at the point of retail sale that integrates price deflation into profit making systems, inverts systemic austerity and individual monetary scarcity into abundance for all agents and creates the first truly free flowing economic system.

      • October 29, 2018 at 8:38 pm

        Craig, yes, however what I outlined is NOT austerity! I am suggesting spending governed by resource availability and people’s needs.

      • Craig
        October 30, 2018 at 2:50 am

        I agree it’s less austere. Why not take it from mere healthcare reform and unnecessary taxation to paradigm change and transformed finance that will enable research on producing more with less resources and the ability to finance the off planeting of production….no matter how much it costs?

  3. October 29, 2018 at 3:13 pm

    The surprising thing in this election, I’m thinking of both the Governor’s race in Florida and in Maryland, is that the left candidate in each case knew, or should have known that these attacks were coming. Neither Gillum in Florida or Jealous in Maryland have taken up the socialist label, and indeed it is not one to one with Medicare for All or Single Payer. Social Democrats as well as DSA members and even just what’s left of the “liberal left,” generic progressives, have to be able to put forth convincing numbers to show that the average family, even if they pay more in taxes, saves money over premiums and out of pocket expenses under this system.

    The more difficult job is to explain how all the workers in the private plans will fare, and those on those private plans would also fare as we transition to a new system.

    It’s kind of crept up on the left that they would have to parry and convincingly reput the budget politics of the kind that Desantis in Florida and Hogan in Maryland put forth, and that David has done here.

    On the whole its a good sign the left can, and must engage at this level. But we haven’t done a good job of it; Jealous has been terrible in the Maryland race; Gillum has been better in Florida. Bernie Sanders has been invited back against Chris Cuoma’ CNN prime time show to engage in exactly this type of grilling. Hasn’t happened yet because we’re too busy falling apart with attempted mass bombings and now the reality of mass shooting, once again.

    As it try to argue to my progressive friends in the United State, the left is back to arguing the main point against the Republican Right once again, as we have been since the mid-1970’s and certainly since 1980: their theology of free markets, less government, lower taxes and obsessions with military spending…pretty close, except for trade, to Trump’s governing “policies,” with of course, a lot of distraction and zig-zagging. But that’s what got passed, and that’s the main current of debates between left and right. For a lot of the population, the basic ground of day to day economics is much more favorable to the left than in 1970’s 1990’s. The key question is: how many of the bottom 60% are going to vote?

  4. Helen Sakho
    October 30, 2018 at 12:39 am

    Whatever they believe they are doing or not, one wishes they would not inflict the rest of humanity with it. The trouble (like always) is the externalisation of all that is problematic to the rest of the GLOBE at an ever-increasing rate of profit. Worse will, no doubt, be exported and globalised. Nothing new or worthy of repetition at this point in time. All the best to American socialists, workers and the sick in America; they need to sort it out and undoubtedly will gain the respect and solidarity of the world. They need it. The key step forward is to educate the population, away from mainstream culture.

  5. Econoclast
    October 31, 2018 at 4:40 pm

    I’ve been a student of the virus called American anticommunism (which embraces the two red scares and certainly infects us today) since 1960. The first gave us J. Edgar Hoover. The second ruined many careers and indoctrinated the American public into believing that the Soviet system had anything to do with real communism, rather than the state capitalism that it was. The third, and current, makes socialism in any form a dirty word. And, in my view, the infection made Fidel Castro the most important figure in (reactionary) American foreign policy during my life.

    I receive 95+% of my health care from the Veterans Health Care System, a specific form of “socialized medicine”. My local VA (Portland OR) is the best-managed large organization I have encountered in a long life (83 years) experiencing diverse types of organization (corporate, governmental at all levels, cooperative of all sizes, non-profit, military, academic, etc.). It is efficient, effective, transparent, responsive, and run top to bottom by people who genuinely care and are selected and trained to act that way. These qualities are essential if traumatized veterans are to be healed.

    So, rather than “medicare for all” I want Veterans Health Care for all because it works, is cost-effective and always presents a healing face.

    One of the social habits that dismays me in political discussions in America is the duality: “if you are not a capitalist you must be a socialist”. This attitude, widely experienced, squelches serious discussions about how we can care for ourselves and nurture our humanity. I am not optimistic. It seems to me that current politics amount to little more than flailing around in desperation as the empire crumbles. I would love to be proven wrong.

    As a dear friend says, “socialism: the radical concept of sharing”.

    Thanks, David, for a good presentation, as usual.

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