An Economic Argument Against Government-Run Healthcare

24 07 2009

While rare situations do occur where one is refused medical coverage because they do not have health insurance, it is certainly the exception. In our current system, we do not have a pandemic problem of refusing care to those who don’t have insurance.  It’s due to the same principle that if you see an injured person on the street, you feel an unwritten moral responsibility to help that person. If you don’t, while you may not be criminally charged, you could be sued under civil law under a negligence tort for example. I would argue that one reason that a hospital would refuse care would be due to the excess demand for care in emergency rooms. Doctors can’t treat everyone and some are bound to end up wanting. This problem will only worsen with a government run system.

 I have heard the argument many times that current policy holder’s end up paying for the uninsured in the form of increased insurance premiums. While it is correct that insurance companies pool risk, just remember, it is usually the most risky that are insured in the first place. It is simple “adverse selection.” Adverse selection means that the individual’s demand for insurance is positively correlated with the individual’s risk of loss or injury. So a risk tolerant person is more likely than a risk averse person to have a health insurance policy. I will also argue that moral hazard plays an important role in this. Once we insure the masses, their behavior will likely change and become more tolerant to risk, thereby causing an increase in demand for medical attention. How can we possibly treat so many new people with the no increase in the amount of doctors providing that care? In fact, who on earth would want to become a doctor when the costs incurred during med school alone will clearly outweigh the benefits of being a doctor. We all know that payments to doctors will be as little as possible if the government takes over the system (we see this already with Medicare) and it will be virtually impossible for a doctor to make a profit, much less a living. So the inevitable result will be that the supply of healthcare providers will decrease while the demand for healthcare will significantly increase. We will have to deal with a severe shortage of health treatment. This is when the government begins to explore the rationing of care.

Do you really think that costs will decrease if there is a government health system? You may have a comparable monthly premium, but if you account for the massive tax increases that must accompany this policy, you will see that your costs will increase significantly! Consider this argument too…premiums are so high because there are a multitude of regulations requiring insurers to cover a multitude of unnecessary illnesses and injuries. A 20 or 30 year old, for example, should not have to buy a health care policy that covers Alzheimer’s or elderly care, or a woman should not have to purchase maternity care if she cannot medically bear children. If the government would just rescind these ridiculous regulations, there would be a strong market for a wide range of insurance policies that would be offered at various rates depending on the coverage promised. What a simple solution that would be…and cheap!

 Our current system is certainly not perfect, but it is not broken. It is still one of the best in the world. I would argue if President Obama is so concerned that the uninsured person may have some sort of a catastrophic injury and not be able to foot the bill, why doesn’t he just set up a fund to give grants to those who really DO have such an event in their life. That way, government can help only those who really need it without forcing others who don’t need it and don’t want it to pay for a forced insurance policy. While that solution is not optimal either, it is certianly better than a complete overhaul and government takeover of the health system.

 Let’s consider auto insurance for a moment. It is important to note that we are only required to carry liability insurance. The reason is simple. It is because our vehicles can cause irreparable harm or death to another person who had no choice in the matter. You must also take note that we are NOT required to retain comprehensive and collision coverage (unless we have a lien on our car, for which that reason is obvious). We must only maintain liability coverage due to the incredibly high risk of our vehicle (which if it has a lien, is owned by someone else) damaging the property of, seriously injuring, or killing a third party. It’s all about the high probability of very dangerous negative externalities. With health coverage, we would not cause irreparable harm to another by injuring ourselves and going to the doctor. We are only directly harming ourselves. In fact, I’ve gone to the doctor without insurance and I guarantee, no one else paid for it, they sent me the bill…and quickly I might add.

 My final argument is that while the uninsured may make the premiums of the insured go up to some extent, another lower cost way to fix that problem would be for the government to just compensate doctors for treating those uninsured people? That would create an incentive for doctors to treat those who can’t pay and remove the problem all together.

It seems to me that the ones who are always so “willing” to pay more taxes to help the “poor” are usually the ones who are squawking about higher insurance rates and want a government take over of the system? Just take your higher insurance rates as your gift to the uninsured poor person. Wouldn’t you say?


Did You Know? Hate Speech Is Okay As Long As It’s Coming From A Liberal

21 04 2009

Carrie Prejean, also known as Miss California, is not only beautiful, she is classy, smart, and true to herself. She was asked an incredibly difficult and politically divisive question during the last round of the Miss USA pageant and answered the question honestly, truthfully, and with courage even though she knew in her heart the ultimate cost would be her dream; to be crowned Miss USA. This in an incredible display of this woman’s integrity, self-confidence, and dignity and she deserves to be respected for her opinions, popular or not.

So what was the famous controversial question asked by gay blogger and Miss USA judge Perez Hilton?

“Vermont recently became the 4th state to legalize same-sex marriage. Do you think every state should follow suit? Why or why not?”

Her answer:

“I think it’s great that Americans are able to choose one or the other…I believe that a marriage should be between a man and a woman, no offense to anybody out there, but that’s how I was raised, and that’s how I think it should be between a man and a woman.”

It is obvious by Perez Hilton’s sheer disgust with her answer and his hate-filled comments after the show that he really didn’t want to know the answer to why not same-sex marriage, as he pretended to ask, but simply hoped to pressure her to say why same-sex marriage should be implemented in every state. He couldn’t even contain himself after the pageant. He personally attacked Miss California in his video blog expressing his disappointment and calling her a “stupid Bit*h.” He ranted, cursed, and personally attacked Miss California; basically throwing a fit in his video. Perez Hilton has shamed the entire gay rights movement with his reaction to Miss California’s answer. During his video blog, he actually claimed that he is not mad at her because she doesn’t support same-sex marriage, but because she “doesn’t inspire” and “doesn’t unite.” Even after his publicized blog rant, Mr. Hilton explained during an interview with Julie Chen of CBS News, that since Carrie Prejean represents California, a state that has recently outlawed same-sex marriage through Proposition 8 (a proposition added to the ballot by the people of California by the way), she should have been “better prepared” to answer the question and that she “alienated millions of people” because of how she answered, not what she answered. “Better prepared” must mean that she should have answered it the way he thought she should have. What a crock! Mr. Hilton has so perfectly shown how intolerant the Left is of any opposing opinions and views!

So where are the lawmakers, the ACLU, and the outcries of the public against hate-speech?? Hate-speech laws are the darling of liberals and the Democrat party. If the libs are so against “hate-speech,” they should be willing to hold one of their own to the same standards, but we all know better than to expect that. If Mr. Hilton’s rant against Miss California was not hate-speech, than we have some serious problems here. Hate-speech is not only reserved for verbal degradation against race and sexual orientation, but also includes degradation against religion and ideology. It seems that the current (completely unconstitutional) laws against hate-speech are only enforced against those evil conservative Christian “rightwing extremists.”

So what if Miss California answered the famous same-sex marriage question the other way? What if she said that she wished all states would follow Vermont’s lead and legalize same-sex marriage? This would have been a perfect follow up question for Julie Chen in response to the diatribe spewed out by Perez Hilton during the CBS News interview. Even Shanna Moakler, Miss USA pageant Co-director, called Miss California’s response “insensitive” and “not compassionate.” Ms. Moakler has also claimed Miss California’s answer alienated sponsors and caused them to feel “a sense of betrayal.” Does anyone naively think she would have been called insensitive for offending conservative sponsors had she answered in support of same-sex marriage? No way! It would have been a non-issue. I am ashamed of you Ms. Moakler and Mr. Hilton for your insensitivity and intolerance of Miss California’s personal ideology.

Carrie Prejean a.k.a Miss California has had a great attitude throughout this whole insane ordeal. Instead of being upset and complaining to Donald Trump about the stupid question asked by Mr. Hilton, she has taken the higher ground. She has not only congratulated Miss North Carolina on her win, she has offered to get together with Mr. Hilton for lunch to better explain her response to his question, she has offered Mr. Hilton her love and support as a person and has shown him much respect, respect that has not been reciprocated back to her in the least.

While Miss Prejean is being demonized for her honest response to a question that should have never been asked, the one who should be the outcast is Perez Hilton for behaving like such a schmuck. In his insistence for the American people to accept his beliefs, lifestyle, and morals, he has clearly demonstrated he is not capable of accepting the beliefs, lifestyle, and morals of those who think differently than himself. Mr. Hilton and those like him are guilty of the very intolerance they are trying to prevent. They are fighting for their own liberty, but at the expense of the liberty of others.

I support you Carrie! I am encouraged that you had the bravery to speak your heart, even knowing the ultimate cost of your answer. God bless you and everyone like you!


Tea Parties Protest Both Bush and Obama Spending!

18 04 2009

While you would never know it given the lack of coverage from the media, the Tea Party protests that sparked up all over the country on April 15th, were great successes. Average Americans are protesting the encroachment on individual freedoms, regulation of private business, tax increases, now and in the future, and fiscal irresponsibility. Up to 750 protests ensued across America on April 15th and continue to this day. Hundreds of thousands of people gathered to express their opposition to our irresponsible government. It’s not only the bailing-out of failed companies; it is the superfluous expansion of liberal social policies as well. Under the guise of urgency, the Obama administration has blatantly incorporated a mass expansion of liberal social policies to the “economic stimulus,” which have nothing to do with economic recovery. 

A big complaint coming from the Left is that conservatives never protested the increase in government spending and expansion during the Bush years. In reality, conservatives were fuming that Bush supported the first bail-out bill in September, 2008, signaling the beginning of trouble. Even then, fiscal conservatives, Republicans and Democrats alike, contacted their representatives, imploring them to vote against the stimulus bill. As we all know, Congress did not listen to the American people. Protest was building!


During the Bush years, government was growing, but much more subtly. While Bush significantly expanded welfare, Medicare drug benefits, and the Departments of Education and Labor, the expansions were spread out across his eight years of presidency. People were upset, but by the time the next expansion was implemented, the previous one was mostly forgotten. The main difference between Bush and Obama is the rate of change. Not only does Obama’s spending plan dwarf Bush’s, he has introduced this behemoth during the first 100 days of his presidency, when everyone is watching! The American people have woken up and will no longer tolerate this unnecessary spending. I believe the American people are more attuned to politics than ever before! Had Obama implemented these expansions little by little, we may have never seen the eruption of protests across the country. Fortunately for the American people, Obama did force this upon us! The sleeping conservative giant has awakened! Let’s not go back to sleep!

Adam Smith; A Wise Philosopher From The Past

14 04 2009

These quotes are from Adam Smith, a moral philosopher and author of The Wealth of Nations and The Theory of Moral Sentiments. Smith describes what arrogance politicians must possess to think that they have the wisdom to tell private citizens and businesses what they can or cannot do and force upon the people policies and laws they neither want nor agree with.

“The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it.” -Adam Smith, The Wealth of Nations

Another quote from Adam Smith:

“The man of system, on the contrary, is apt to be very wise in his own conceit, and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests or the strong prejudices which may oppose it: he seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board; he does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might choose to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on earily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder.

Some general, and even systematical, idea of the perfection of policy and law, many no doubt be necessary for directing the views of the statesman. But to insist upon establishing, and upon establishing all at once, and in spite of all opposition, everything which that idea may seem to require, must often be the highest degree of arrogance. It is to erect his own judgment into the supreme standard of right and wrong. It is to fancy himself the only wise and worthy man in the commonwealth, and that his fellow-citizens should accommodate themselves to him, and not he to them. It is upon this account that of all political speculators sovereign princes are by far the most dangerous.” -Adam Smith, The Theory of Moral Sentiments, Part VI, Section II, Chapter 2

While these quotes were written in the late 1700’s, they ring very true today.

Obama’s Economic Falacy

13 04 2009

President Obama is taking advantage of the economic downturn in order to further his radical economic agendas. The reality of the situation does not seem to play a role in how he makes his decisions. How does universal healthcare and forcing “green” energy on the American population stimulate any area of the economy at all? Robert J. Samuelson of the Washington Post has written a great piece explaining Obama’s “Economic Mirage.”

Hugo Chavez Praises A Socialist America

7 03 2009

Each day that goes by gets even more frightening than I thought was possible. I knew Obama was an extreme leftist liberal, but I (for sanity’s sake) remained optimistic that he would govern more as a centrist than a leftist. Well, as we all know, Obama is fighting as hard as he possibly can to implement as many liberal, socialist agendas as possible before the American people realize that he is changing the very fabric of this country. Is this really the “hope” and “change” that Obama voters were searching for? I think not.

Fox News reports that Venezuelan President Hugo Chavez is even cheering Obama on. Chavez claims that Capitalism in America has failed and Socialism is the only answer to our economic problems. I am confident that even those that voted for Obama in the presidential election appreciate the freedoms they enjoy every day and don’t want those freedoms and liberties stripped away from them by a dictatorial government. I don’t believe the majority of Obama supporters realized what and who they were really voting for.

After only two months in office, many on the Democrat side, even some liberal media pundits are beginning to get nervous about the radical policies being forced through Congress. Obama is not the only advocate for socialism; Nancy Pelosi, Barney Frank, and many other extreme leftist Democrats in Congress are happy to comply with Obama’s extreme policies. These people have pledged to uphold the constitution, but have done nothing but violate it. We Americans, both Democrats and Republicans alike, must fight against this if freedom is to win in the end.

Great Economist Of The Past Tells Us What We Need To Do!

5 03 2009

On June 22, 1975, famous Economist Friedrich Von Hayek interviewed with “Meet The Press” regarding how to best address the economic problems experienced since World War II. The questions asked by the interviewers could easily be applied to our current economic situation.

Please take a look at the links below to read the interview, listen to it, or better yet, read along as you listen. Believe me, it is well worth your time.

Transcription of Hayek on “Meet The Press:”

Full Audio Link to interview: