Now that I have gotten past my initial depression concerning the passage of the so-called health care reform bill, it is time to examine the consequences.

A person commenting on yesterday's post said I was too caught up in the political process, and not concerned enough about the money. My apologies to those who don't know me well enough to know that politics is a passion of mine. I am fascinated by the process. I also believe that understanding the process is a vital part of understanding how the overall system works, and can be helpful in predicting how things will go in the future. So let's look at the politics first, which may help in understanding what the future holds, for our health system, but also for our entire economic and political system.

As has been repeatedly pointed out by people far more learned about these things than I am, this piece of legislation is the most significant government intervention in our economic system to ever be passed with a narrow, party line majority. Social Security and Medicare were passed with significant bipartisan support. It seems to me that this will have enormous political consequences.

First, since they did not support this bill, and were unified in their opposition, it will be politically easy to run on the issue of repeal, as Bill Kristol advises. Conservative allies in the press, like the editors of The National Review and The Wall Street Journal, can continue to hammer away at the bill's deficiencies, and the GOP can use their ideas and research, along with their own, to make the case that passing the bill was a mistake the country cannot afford. Like the Contract with America in 1994, it can act as a unifying idea to coalesce the energy of the Tea Party movement and the general dissatisfaction, especially among white, middle-income men, with the status quo, the President, and the Democratic Party.

Second, many of the benefits of the bill do not appear until 2014, while some of the tax implications are immediate. I expect, as Megan McArdle does, that premiums will go up and small insurance companies will be taken over by larger ones. Higher taxes and higher insurance premiums will have the double effect of dampening any possible economic recovery between now and November, and cause more immediate and personal financial pain to rank-and-file voters.

Therefore, I agree with folks like Jay Cost and Pat Caddell who foresee a very bad mid-term election for the Democrats, that may even be enough to cost them control of the House, if not the Senate.

Now, as to the long-term implications of the bill. People like Richard Cohen want to see a Western European style system here in the U.S., not only for health care, but for the economy in general. What they seem unable or unwilling to recognize is that the Western European system is unsustainable. What we are watching unfold in Western Europe (and Japan, which follows a similar model) is a slow motion collapse. Demographically, the populations of these countries continue to age. More and more retirees are being supported by fewer and fewer young workers. Entrepreneurship and innovation are stifled by higher taxes and more regulations. Eventually, all it takes is a significant economic downturn to create a crisis, which we are seeing already in Europe, especially in Greece. They may weather this crisis, but another one is inevitable. Eventually, economic activity will be at such a low level (or so much of that activity will have fallen below the legal radar, with taxes being unpaid and rules and laws being ignored), that the state retirement and health programs will be unfunded, and the political system will collapse.

This process will happen here, too, unless we stop it. How to stop it? That gets us back to politics. Somehow, we must convince a critical mass of people who are already receiving or are about to receive benefits that it is wrong, and dangerous, to eat our seed corn. Somehow, middle class people must understand that they should not receive Social Security, if they have a private pension or some other government pension earned as an employee, or if they have sufficient income from their lifetime of investments. It is called means testing. The same applies for health care. If you can afford to pay for your own care, why should you get a government subsidy? It isn't about poor people. If our social welfare programs were limited to the poor, we would not be facing a fiscal crisis down the road. No. The expansion of the welfare state is so dangerous precisely because it expands to the middle class. Somehow, as a political matter, this must be made plain to the majority of voters. If it is not, then they will continue to support efforts to transfer money from the public treasury into their own pockets, which will result in economic disaster. History teaches us that economic disaster oftentimes leads to tyranny, especially if the disaster is caused by or accompanied by a financial meltdown of a government. Our American Republic survived the Civil War and the Great Depression. Will it survive the fiscal meltdown caused by runaway entitlement spending? I would rather we faced the problem before the crisis, rather than after we begin to feel its full effects.