Guns and Butter

by Mark Wilson

As Krugman observes, choices must be made. Americans used to be able to live a level of prosperity that was pretty much unthinkable in world history. The guns and butter metaphor is appropriate. Up to, and including, World War II, countries at war have had to be economies at war. During World War II, war became the economy. Corporations, as well as people, were “drafted”; car companies, for example, built tanks. Automobiles were hard to come by.

Lyndon Johnson noted, during the Vietnam War, that we could have both guns and butter; that is, we could operate a war economy and a peacetime economy simultaneously. Because of our collective failure to heed Dwight Eisenhower’s warning about the military-industrial complex, that’s what we’ve been doing for the past forty years.

Returning to Krugman, the problem with Medicare is that we can’t keep throwing any and all medical tests at individual medical problems. Economics is the study of scarcity: when it comes to medicine, however, we act as though there is an unlimited supply of medicine.

This fear of scarcity of medicine is what prompted the whole “death panel” pseudo-scare of 2009: bureaucrats! Telling me what medical care I could get! But what those people who accepted the death panel bromide either would not or could not realize is that medicine is allotted: your private insurance company tells you what it will pay for; if you want an organ transplant, you’ll need the approval of a board whose job it is to select only those candidates for which a new organ has utility in order to allot the scarce resource of organs.

If the United States is to survive, its citizens will need to start making choices. Gone are the days when we can have it all.