If Government’s Involved, It’s Not Free Market

A “public option,” according to one of its advocates, “is a free market choice.

Bzzt! Thanks for playing “Free Markets 101.”

A “public option” [read: government owned health insurance company] will require, as any insurance company does, huge financial reserves just to get going. Where will those reserves come from? The taxpayer. If government decides to compete against a local McDonalds by spending a few million to buy the equipment for and set up a Burger King, the BK isn’t simply another a “free market choice.” It’s playing on an unlevel playing field, tilted in its favor.

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Will people buy it (thus putting private companies out of business, leaving their insured out to dry)? Of course; the government plan will be able to hide its costs and thus offer a discount relative to companies.

“A full accounting shows that government programs cost more and deliver lower-quality care than private insurance. The central problem with proposals to create a new government program, however, is not that government is less efficient than private insurers, but that government can hide its inefficiencies and draw consumers away from private insurance, despite offering an inferior product.

I suppose it’s cold comfort that the president and his fans use the words of “choice,” “competition,” and “free markets;” in doing so they recognize that a great many people understand that while government can and does do some things reasonably well (run the military, most obviously), there’s no place for it in the commercial marketplace.

Cross-posted from State House Call.