Ths issues raised in the Election of 2008 will linger well beyond the voting process. As the current recession persists, the underlying structural weaknesses of the US economy will come into relief. The economy will not respond to the routine monetary and fiscal policy interventions. The Reagan economic revival was driven by tax cuts, declining barriers to trade worldwide and deregulation of business. This paradigm is beginning to run is course. Increasingly, there will be a need for new programs for lowering the costs of business such as by reducing health care costs, opening new opportunities for growth such as by deregulating the energy sector and by increasing the efficiency in the delivery of social services such as retirement entitlements.
Tired minds on the Left see the problem simply a result of extreme deregulation of especially the financial sector that the Republicans encouraged. They have initiated several rounds of Keynesian fiscal stimulus and now they are suggesting public works programs for building the infrastructure. More on the nutty side, they are suggesting nationalization of 401K accounts. Overall, they hark back the the New Deal which was a failure and would be seen so if it was not associated with Franklin D Roosevelt and the aura surrounding him. It is possible that better sense will prevail and the most recent pronouncements from Nancy Pelosi and Barack Obama suggest a move to the center. Pelosi went so far as to suggest tax cuts whatever that means.
However, the Democratic frame of mind is unlikely to give up on socialized medicine or embrace private owned retirement accounts. They are also unlikely to soften their stand on renewable energy. Between now and the 2010 elections for Congress, we are going to see these issues take centerstage as the economy continues to stagnate just like the Japanese economy has been doing for the last twenty years. Aside from occassional spurts of growth, the Japanese economy has crawled despite numerous stimulus programs.
The onus of demonstrating the viability of an entirely private sector health care system lies with the USA. With the exception of Singapore, it is hard to point to any country which does not have a significant government role. To be sure, governments will still need to provide for the very poor in society. The needs of low income patients is best taken care of by providing an equivalent of a health stamps which can be used in any private hospital just as food stamps are used by the poor to buy grocery in any retail store.
