China just decided to spend $123 billion by 2011 to build a universal health care system for its $1.3 billion people. So they'll likely have universal health care before we will. This American exceptionalism thing is getting out of hand. But it's worth zooming in on why the Chinese are making this a priority right now: Chinese economists see universal health care as a way to induce consumption and economic dynamism. The Chinese have a high savings rate -- indeed, an absurdly high savings rate, between 30 percent and 40 percent of income -- and one of the reasons is fear of medical expenses. China lacks a safety net, and so people spend less because they need to plan for catastrophe. And if catastrophe doesn't befall, then they've simply spent less. Which is a problem when you're facing down a potentially long recession. And so China is trying to make it safe for its citizens to spend, which means making future expenses more predictable, which means offering health care coverage. The American situation is, of course, somewhat different. We spend, or at least spent, plenty. But if the Chinese save because they're worried about paying for medical care in the future, Americans yoke themselves to bad jobs or dying industries or hollowed-out regions because they're afraid of losing their health care coverage in the present. That's never exactly been a good thing, but it's more worrying now. We're about to have to adjust to an economy that's not powered by bubble-charged consumption. That's going to force a number of unpleasant changes in our standard of living. But one way to mitigate the harm is to free workers from the more useless drags on their productivity, and the instability of our health care system certainly counts.
