Sunday, July 25, 2010

ObamaCare: price fixing scheme as the norm.

What has become more than apparent, through the health-care debate and now "law of the land", is that ObamaCare hinges on a price fixing scheme.

We know for a fact that no price fixing scheme, in all of recorded economic history, has ever been successful. Rather bad track record?!? Price fixing merely affects supply quantitatively and qualitatively. Or, alternatively, supply merely deteriorates in quality and the the new lower quality supply is rationed over time.

Looking beyond the basic price fixing scheme, Thomas Sowell, in his book Applied Economics, makes an excellent observation/argument that all government run health-care is always based on price controls. Moreover, Sowell explains "why" government run health-care is always based on price controls.

Sowell's observation may surprise you!

Paraphrasing Sowell, the legislator-politician has discovered that government run health-care is a very, very expensive proposition. That government run health-care, over time, eats up larger and larger and larger chunks of tax revenue that could be used for other existing spending programs or newly proposed/future spending programs. Hence it boils down to the competition among government spending programs that has lead the legislator-politician to employ price controls regarding government run health-care. Government run health-care price controls exist in order to leave behind more tax revenue for the legislator-politician's current and future spending programs.

If Sowell is correct, then Obama-Care is merely following a predetermined formula, set long ago, for any and all government run health-care program: price controls. That the price control scheme is employed by politicos as the politicos would rather impose qualitative and quantitative supply problems regarding government run health-care, to be experienced and dealt with by the participants of the government run health-care program, in favor of continued or proposed spending in areas far, far removed from the health-care arena.

The question that begs asking: is the participant in a government run health-care plan directly paying for exogenous politico spending areas, through qualitative and quantitative reductions in supply, by way of price fixing? For example, Jane needs a hip replacement. Jane must wait months and months for the surgery and is assigned to a less than up-to-date facility which lacks adequate staffing and adequate supplies. Does Jane's long wait and reduced quality of health-care translate directly to funding other politico spending programs? Jane's very long wait and quality reduction is funding an agriculture subsidy? Funding a pension payment for a retired government employee? Funding re-paving a roadway? Funding the department of education? Better yet, is Jane funding a newly proposed politico spending program?

1 comment:

  1. No, I don't think so. I think that Jane is paying the price of "cheap" care via waiting. The funding for other programs is there, even if Jane is not, nor how long she waits.