Calling President Jefferson
Written by Garth Snider on August 12th, 2011 at 12:41 pm
Posted in Economics
Every now and then if you look close enough you can make out a faint connection between two seemingly disparate events. In doing so, you can detect a whiff of the noxious by-product to the two events—the unintended consequence. This occurred most recently when it was announced that private health insurers were now mandated to cover female contraception for free. This announcement was made during the same two weeks during which our country was convulsed in the debate over raising the debt ceiling. At the core of the debt ceiling debate was the question: how are we were going to pay for the enormous unfunded liabilities, specifically Medicare and Social Security. 
While all the drama was playing out over the debt ceiling, the Obama administration declared that, for all intents and purposes, female contraception was to be a right backed by the United States Government. Specifically, the government now has the ability to force a private insurer to offer contraception without charge. With one fell swoop the administration eviscerated what was left of any reasonable interpretation of the Commerce Clause, and proactively interjected the United States government into both the moral and economic implications of giving Uncle Sam’s imprimatur
on contraception. 
The problem with the new official United States position on contraception is that it may be the straw that broke the proverbial camel’s back. For the consequences of the new rule may make it well-nigh impossible for us to pay our unfunded liabilities as we may never be able to have enough tax revenue to do so because we do not have enough Americans to tax. Notwithstanding the cacophonous bellowing of the environmentalists and feminists, there is no evidence that decreasing the number of children we have will increase our prosperity. The facts run to the contrary. We are on the tail end of the greatest economic expansion ever witnessed—and it occurred contemporaneously with the Baby Boom. But by by declaring that contraception is to be free of charge it is almost certain that we will have fewer live births in the next 50 years than we did in the last 50 years. That sentence is not hyperbole. It is in fact the underlying “good” that the law is intended to accomplish.
Notwithstanding the issue of as to where the consumer spending is to come from when there are fewer consumers to produce revenue (recall that 60-70% of our GDP is comprised of consumer spending), the big problem is that we have an aging population and the only way we are going to be able to pay for the unfunded liabilities is with tax revenue. We should put to the side any notion that Medicare and Social Security is going to be cut dramatically. Don’t listen to the Republicans. They may nibble around the edges— which is much more than the Democrats will likely ever do—but they are not going to cut it dramatically. For