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Cato Dispatch for September 18, 2009

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(Links to outside sources were active as of the date of this dispatch; however, not all news sources maintain links to current stories indefinitely. Some links also may require registration.)

Baucus Unveils "Compromise" Health Care Plan

On Wednesday, Sen. Max Baucus, chairman of the Senate Finance Committee, released his health care reform bill. The plan does not include the public option favored by many Democratic leaders, but calls for the creation of nonprofit health care cooperatives. Writing in the New York Times, Cato scholar Michael D. Tanner has looked at all the elements — good, bad, and ugly — and says of the plan: "Sen. Baucus and his fellow 'Gang of Six' negotiators have labored mightily and brought forth a mouse—a steroid-enhanced, misshapen mouse, but a mouse nonetheless."

Writing in the New York Post, Tanner dissects the details of the Baucus plan:

The proposal isn't all bad. Most significantly, it drops the idea of a government-run "public option" in favor of co-ops. Government involvement with these co-ops would essentially be limited to providing start-up grants. The co-ops are unlikely to have much, if any, impact on the cost or availability of health insurance, but are far preferable to a government-run plan.

Baucus would also take the first tentative steps toward letting people buy health insurance across state lines. He'd allow states to establish interstate compacts for insurance purchases starting in 2015, and also let insurers develop national products that could be sold in any state. National plans would be exempt from state-mandated benefits.

This doesn't go far enough, and risks simply transferring regulation and mandates from the state to the regional or national level. Still, it looks like a tiny step in the right direction.

But in the end, this is still a plan that will make Americans pay more and get less.

Thursday's Cato daily podcast has more.

More Troops to Afghanistan?

The Obama administration is examining whether to send more troops to Afghanistan, a conflict that has dragged on for nine years, come this October. "My determination is to get this right," Obama said. "You have to get the strategy right and then make the determinations about resources."

Given the nature of the conflict in Afghanistan, a definitive, conventional "victory" is not a realistic option. Denying a sanctuary to terrorists who seek to attack the United States does not require Washington to pacify the entire country, eradicate its opium fields, or sustain a long-term military presence in Central Asia. In a new study, "Escaping the 'Graveyard of Empires: A Strategy to Exit Afghanistan," Cato scholars Malou Innocent and Ted Galen Carpenter suggest that Washington should narrow its objectives, treat al-Qaida's presence in the region as "a chronic, but manageable, problem," and withdraw U.S. troops over the next 12 to 18 months.

Writing at The Huffington Post, Innocent says that it's time for the U.S. to narrow its objectives and articulate exactly why our forces are engaged in the central Asian country:

The essential question now is not whether the war is winnable, but whether the mission is vital to U.S. national security interests.

From this perspective the current open-ended strategy fails. The United States and its allies must instead narrow their objectives. A long-term, large-scale presence is not necessary to disrupt al-Qaida. Indeed, that limited aim has largely been achieved, with the exception of capturing Osama bin Laden.

... Washington's hope for nation-building and counterinsurgency, particularly in the context of Afghanistan, is not so much misguided as it is misplaced. Containing al-Qaida and disrupting its ability to carry out future terrorist attacks does not require a massive troop presence on the ground. Committing still more U.S. personnel to Afghanistan undermines the already weak authority of Afghan leaders, interferes with our ability to deal with other security challenges, and pulls us deeper into a bloody and protracted guerrilla war with no end in sight.

The United States: Not the Freest Country in the World

Economic freedom around the world remains on the rise but it has declined notably in the U.S. since the year 2000, according to the Economic Freedom of the World: 2009 Annual Report, released by the Cato Institute in conjunction with the Fraser Institute of Canada. In 2000 the U.S. was ranked the second-freest economy, but it has fallen to 6th place this year. "The rule of law, government spending, and regulation are the areas where the United States saw the most troubling declines in its ratings this decade," comments Cato scholar Ian Vasquez.

Writing from Chile, which was ranked the fifth-freest country in the study, senior fellow Jose Pinera explains why his home country now has more economic freedom than the United States:

In 1975, of 72 countries, Chile was No 71. How did this happen? The explanation lies in what I call the "Chilean Revolution," because it was as important and transformative to my country as the celebrated American Revolution that gave birth to the United States. The exceptional political circumstances of this period have obscured the fact that from 1975 to 1989 a true revolution took place in Chile, involving a radical, comprehensive, and sustained move toward economic and political freedom.... This revolution not only doubled Chile's historic rate of economic growth (to an average of 7% a year, 84-98), drastically reduced poverty (from 45% to 15%), and introduced several radical libertarian reforms that set the country on a path toward rapid development; but it also brought democracy, restored limited government, and established the rule of law.

Chris Moody, editor, cmoody@cato.org