Friday, April 16, 2010

My Tax Day Tea Party Speech in Iowa City re: National Healthcare

It will come as no surprise to this group that national health care cannot work. It cannot work because it violates economic law…and no, Mr. President, these are not laws that you can rescind. They are immutable laws of human action. You may ignore these economic laws, but these economic laws will not ignore you.

Like any socialist enterprise, National healthcare will bring excessive cost, shortages, and degraded quality of service. In short, it will fail to achieve all of its vaunted goals.

Since it makes healthcare a so-called free entitlement, demand will soar. It cannot do otherwise. This increased demand will swamp our healthcare providers—the hard working doctors, nurses, medical technicians, plus all the support services that accompany modern medicine. Some may believe that, yes, this may be so, but supply will catch up. Sadly they are mistaken.

The supply of all things related to healthcare actually will shrink, due to the other great evil—price controls. The law promises to hold down costs the old-fashioned way, by setting government-mandated maximum prices. So demand will increase while supply will decrease, creating all manner of shortages in the delivery of healthcare services.

This supply shortage will be exacerbated by the rising costs of healthcare. The elimination of private healthcare will remove the profit-and-loss incentive that is necessary for controlling costs of all kinds. The healthcare system will suffer from the same high costs as the Postal System and Amtrak. Without private owners with their own capital at risk, government bureaucrats will have little incentive to hold down costs.

Of course, a shortage of anything that cannot be relieved by price adjustments will mean that healthcare will be rationed. How? Perhaps it will be rationed by bureaucrats, as it is in every other country with a national healthcare system. Or it might be rationed by those who can wait the longest, which means that many will suffer and some will die before they receive proper care. This is the situation with our neighbor to the north. There is a reason that Canadians come to America for healthcare services and few Americans go to Canada, or Britain, or France, or Germany…

But it gets worse. Shortages, price controls, and rationing are just the near term problems. A long-term problem will be the diminished level of care and the end of medical innovations. How many here would like to return to the quality of care of 1950? Well, get sick in England and you will find out what decades of national healthcare can do to a once fine medical system. We have become accustomed to medical breakthroughs, new medical devices, and improved procedures. But with the medical system strapped for funds simply to keep things at their current level, much less will be spend on new and, initially at least, expensive care.

One last, but by no means final, problem is that of economic calculation. The healthcare system will not know how to treat patients most efficiently. And efficiency is just as important as is quality, because an efficient system will bring better quality care to more people. But price controls and government rationing will destroy all economic cues from the price system that are necessary to keep ANY service alive.

There are many, many more problems with national healthcare…I have not even mentioned the impact on business profits and worker employment…but here’s a hint…it will all go South.

All in all, national healthcare will throw America’s premier healthcare system into chaos…racked by corruption and incomprehensible government rules. It will go the way of all other national healthcare systems—it will become more expensive, access will diminish (even for the poor, who are served very well right now), and quality will diminish. This process will NOT stop, either. It is not as if our healthcare system will deteriorate to some new, lower plateau. It will deteriorate until, like government schools in our inner cities, even the poor will be afraid to utilize it. And, wasn’t it to aid the poor that is supposed to be the rationale for all this nonsense?

Real healthcare reform would eliminate current regulations on our healthcare system. Healthcare is a scare resource that must be integrated into the market to serve the peoples’ needs as expressed by their private expenditure of money. This is the process that has brought us unprecedented prosperity AND great healthcare. Now we are throwing it all away to pursue the discredited socialist dream of state control of what Lenin called “the commanding heights” of the economy. It worked so well for poor Russia that our own socialists just have to try it here in America. This law must be rescinded!

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