Public-plan proponents have feigned ignorance of how such an option would crowd out the public market. The answer is simple: a public plan would be a political, not a market, entity. Its justification is premised on a belief that the insurance market is not competitive and that insurers price oligopolistically, retaining excessive profits. Even if this were true, the public plan would have no way of knowing when it had priced away its more efficient market competitors’ oligopolistic profits. It would not know that it had destroyed these “inefficient” profits until it had lowered its premium prices to a level too low for private insurers to match. Or, as a flowchart:
It is inevitable that the government will stack the deck in favor of its own offering. Even if it is not openly subsidized, the public plan will almost certainly be able to outsource expensive administrative duties to government bureaucracies with their own operating budgets. It will likely have powers to impose its prices on providers that its private competitors will not. And it is absurd to think that the government would simply allow its plan to disappear if it failed to operate within its budget. The public plan’s political structure and mandate to drive down prices blindly guarantees that a bailout will be needed sooner rather than later.
In an attempt to encourage reader participation, I’ve enabled commenting for visitors without Commentarius accounts. This will allow people to make somewhat more anonymous comments. At the very least, my progressive friends and frenemies will hopefully feel more comfortable pointing out the gaping holes in my arguments.
However, I’m now switching comment moderation on – which means I will be reviewing some comments before they are posted. I intend to be pretty aggressive about policing vitriol (other than my own of course!). I welcome debate, but only dispassionate debate. The combination of emotion and anonymous internet commenting rarely produces anything worth reading.
But feel free to send me hate mail!
This is one of my favorite Heritage charts:
The projections for the growth in these programs are pretty staggering – and worth taking a look into later. Yesterday, Christina Romer (Chair of Obama’s Council of Economic Advisers) testified before the House Committee on the Budget. She said that only a small part of the growth in Medicare spending was attributable to demographic people (more old people needing health care and living longer), and that most was due to the increased cost of health care (page 4 of this link).
The graph above seems to contradict that claim. Why would Medicare grow so much faster than Medicaid if demographic changes were not a very large part of the cost increase? I don’t know whether Ms. Romer is correct. I’ll probably be rooting through the CBO’s website later this week to see how exactly they came up with their numbers.
I have another blog post up on ATR’s website. It’s about Christina Romer’s testimony today to the House Committee on the Budget.
Disclosure: I am an ATR Associate (intern).
I have a new post up on ATR’s blog on “Obama’s Health Care Bait and Switch”. A clip:
If you want more of something, subsidize it. If you want less of something, tax it. Obama’s plan to provide an “affordable” (read: subsidized) public insurance option is guaranteed to increase health care spending. His plan to tax the wealthy is just as sure to discourage entrepreneurship and prolong the recession.
Disclosure: I am currently an ATR Associate (intern).
I’ve been scouring Andrew Sullivan’s blog for information on the turmoil in Iran. It’s apparently the best source for news/rumor about the protests.
Like Sullivan, I’m hopeful that Ahmadinejad and Khamenei have bitten off more than they can chew. It will be a great moment for freedom and democracy if their regime falls – hopefully in a way that yields a stable representative government. I worry that Sullivan’s coverage is a little bit Pollyanna-ish. On his blog every twitter-reported protest seems millions strong and the police stand aside like lambs. But there are also plenty of videos where the police do beat protesters, and there has been at least one large pro-Ahmadinejad demonstration in Tehran, so we’ll have to wait and see.
If Ahmadinejad falls, the main question in the US will likely be – which party gets credit? It’s probably mostly nonsense to talk in the short-term about credit for a country’s internal politics, but it’s likely nonsense. The leftist position seems pretty clear: Obama, by offering to negotiate with Ahmedinejad, undermined his hostile rhetoric and created space for more dovish politicians. By contrast, neoconservatives will argue that the close proximity to Iraq’s less managed democracy sharpened Iranians’ hunger for the real thing. Which argument is better? Check your political affiliation and decide accordingly.
The elections in Iran look like a fraud.
Before the election, some commentators on the left like Matthew Yglesias mused that the vigorous debate in Iran proved that Obama’s attempts at detente were yielding fruit:
This is one of the virtues of expressing a clear desire for an improved relationship with Iran. Doing so lowers the temperature over there and opens up political space for disagreement about foreign policy objectives. It also clarifies that there’s a real upside to responsible behavior, and a real downside to pushing the envelope on nuclear issues.
One could certainly question his logic. After all, if Ahmadinejad’s opponents are arguing that Iran’s foreign policy has isolated the country, won’t Obama’s conciliatory rhetoric just undermine their position?
But now we have to deal with a more fundamental problem. We cannot work with the democratic opposition, because the recent election demonstrates that there is still no real democracy in Iran. Perhaps the fundamentalist regime will crumble in the face of a democratic uprising. If not, we are ratcheting down external pressure at the exact moment that the regime is poised to bulldoze internal dissent. And if the regime crushes the street protests – as I think likely – do we really want to legitimize Ahmadinejad with presidential conferences and a grand diplomatic bargain? Is there a way forward with Iran, or are we just giving up?
Apparently the Obama DOJ is moving to dismiss constitutional objections to California’s Proposition 8. Dale Carpenter elaborates:
More bluntly put, the Obama DOJ is saying that DOMA doesn’t discriminate against gays and lesbians because they are free to marry people of the opposite sex. No “homosexual” is denied marriage so homosexuals qua homosexuals suffer no hardship. Gay man? Marry a woman, says the DOJ. Lesbian? There’s a nice boy across the street. It’s identical in form to the defense of Texas’s Homosexual Conduct law in Lawrence v. Texas: a law banning only gay sex doesn’t discriminate against gays because it equally forbids homosexuals and heterosexuals to have homosexual sex and because it equally allows homosexuals and heterosexuals to have heterosexual sex. This sort of formalism has incited howls of laughter over the years when made by religious conservatives. Now it’s the official constitutional position of the Obama administration.
I expect some of my formalist conservative friends will be pleased.
I syndicated my previous post on marijuana prohibition to a friend’s blog. It generated a little bit of comment – from the blog’s founders, disavowing my position.
I posted a comment in response, arguing that a move to a permissive marijuana regime was not a step into the abyss. I’ve decided to repost it here, for the edification of all:
It is of course true that we need to have laws that punish those who use their freedom in ways that actually harm other people. But it is a far leap from the simple observation that “people may use their freedom in harmful ways” to an “I Robot” like conclusion that “therefore we need to take away freedom”. The obvious flaw in this type of reasoning is that it considers the harm of allowing freedom, but not the harm embodied in the loss of freedom itself.
So. How do we make sure that people are held accountable? We already do, of course. Query why current laws are insufficient. If someone commits manslaughter under the influence of marijuana, they are liable to the charge of manslaughter. If they destroy property, they are liable for the destroyed property. Do drugs make law violations more likely? I’m not sure, but if they did, they would also make the pre-existing penalties more likely. The penalties of law are self-scaling to the likeliness of their violation.
What about those harmed by marijuana usage? One straightforward way to redistribute wealth from those who impose risk through marijuana use to those who do not is to put a tax on marijuana. Lower taxes evenly across the rest of the population in proportion to the gain from marijuana taxes, and you have forced marijuana users to “pay a toll” to the abstinent population for the risk they impose on them. Alcohol taxes and gas taxes serve much the same purposes.
Nor do I particularly desire only a partial legalization. The fact that there may be no instantaneous diagnosis of marijuana intoxication is not particularly terrible. After all, alcohol legalization was never contingent on the invention of portable breathalyzers. Nor do breathalyzers enforce drunk-driving laws by themselves: police have to see someone driving dangerously or acting violently in order to respond to drunken behavior. Pot-driven risks would be policed in the same ways.
The greatest danger is that we legalize marijuana consumption in homes without generally legalizing marijuana sales. We do not want a “worst of all worlds” scenario with high consumption, a vital, still-violent black market, and an invasive police force that continues to substantially harass and restrict people’s freedoms. We should prefer a *very permissive* marijuana legalization regime (such as those surrounding alcohol and tobacco, to the extent that they can be called “permissive”) to the “slightly permissive” regime that is commonly advocated – where only consumption, but not production or sale, is legalized.