Single Payer Healthcare

Senator Warren said this week that Democrats should campaign on the promotion of single payer healthcare.

As reported in the Wall Street Journal, she said, “President Obama tried to move us forward with healthcare coverage by using a conservative model that came from one of the conservative think tanks that had been advanced by a Republican governor in Massachusetts. Now it’s time for the next step. And the next step is single payer.”

This appears to be an effort to tie the Affordable Care Act’s shortcomings to the Right. It shouldn’t work. The final version of Obamacare was pushed through by the Left without a single Republican vote.

Nevertheless, we should welcome the opportunity to have a public discussion on the merits and drawbacks of a single payer healthcare system.

Ronald Reagan spoke in the early 1960s about what was then termed “socialized medicine”. He quoted Norman Thomas who once said, “The American People will never vote for socialism, but under the name of liberalism, the American People will adopt every fragment of the socialist program.”

That is what we are seeing here. It was predicted that the Affordable Care Act was designed to be a stepping stone to socialized medicine. Now, the Left is pursuing that next step.

To have a politician come out in favor of single payer healthcare is an opportunity to have a public discussion about whether or not this is a good thing for the country, especially with a large percentage of the millennial generation opposed to capitalism.

According to Wikipedia, “Single-payer healthcare is a healthcare system in which the state, financed by taxes, covers basic healthcare costs for all residents regardless of income, occupation, or health status.”

Ronald Reagan, in that same talk, pointed out that healthcare in the United States has historically been something to be envied – doctor/patient privacy, the right to choose a doctor, the right to switch doctors. He then asked that we look at it from the doctors perspective.

Under single payer healthcare, if the government is paying our medical bills, it’s a very short step to our doctors being considered government employees. From there, it’s a downward spiral. Our doctors lose freedoms. If the government pays the bills, do they gain the ability to control where a particular doctor chooses to practice, or what specialty a medical student is allowed to study? Does the government then gain the ability to determine a doctor’s pay?

The medical profession is roughly one-sixth of the American economy. If these types of things are allowed to happen to our medical professionals, it’s only a matter of time before Socialism creeps into other, or all, aspects of our economy.

These are the types of questions we need to be discussing publicly if we are seriously considering a single payer healthcare system. Let me encourage you to go to youtube and search “Reagan socialized medicine”. It’s ten minutes well worth your time.

-John Anchor

Mark Zuckerberg

Facebook founder and CEO Mark Zuckerberg gave a commencement address at Harvard last week in which he proposed the following:

“Every generation expands its definition of equality. Now it’s time for our generation to define a new social contract. We should have a society that measures progress not by economic metrics like GDP but by how many of us have a role we find meaningful. We should explore ideas like universal basic income to make sure everyone has a cushion to try new ideas.”

So let’s explore…

Universal basic income would, by definition, involve some form of wealth redistribution. The government doesn’t have money to give away. Every dollar it has was made somewhere in the private sector and paid to the government in the form of taxes.

Sure, the government prints money, but it’s not an indefinite supply.

(Increasing the money supply has consequences like runaway inflation and reduced value of the dollar versus other currencies. It’s not somewhere we want to go.)

So universal basic income would mean the federal government would redistribute tax dollars to the whole population.

This is the opposite of Capitalism.

This is the opposite of what made Mr. Zuckerberg rich.

This is the opposite of the system that made the United States of America the economic superpower it has become. One country carries a fourth of the world’s gross product, and it’s us.

So why won’t this work?

Because incentives matter.

Mr. Zuckerberg’s argument: Universal basic income would give everyone a cushion to try new ideas. He said he was able to take a chance with Facebook because he knew he had something on which he could fall back.

As great as that sounds, it’s a utopian dream. It’s not realistic. It’s not how the real world works.

The truth is that the United States is successful because capitalism gives its participants the incentive to keep the fruits of their hard work.

Universal basic income provides no such incentive.

History repeats itself. We’ve been through this. Centuries ago. See the story of Thanksgiving as told through the journal of William Bradford.

Initially, the community set up by the Pilgrims was socialistic in nature: common garden, everyone is allowed to take as much corn as they needed.

Bradford wrote: “For this community was found to breed much confusion and discontent, and retard much employment that would have been to their benefit and comfort, for young men that were most able and fit for labor and service did repine that they should spend their time and strength to work for other men’s wives and children without any recompense…”

Then they changed. Instead of a community garden, they divided the land. They said each family can keep as much corn as they could grow themselves. They provided incentive.

Bradford wrote about the difference in his journal: “This had very good success. For it made all hands industrious, so as much more corn was planted than otherwise would have been.”

Through Capitalism, the Pilgrim community produced more corn than they were able to eat themselves. They sold, or traded, the excess.

This is exactly why the United States economy has been so successful over the years. It’s because Capitalism, when allowed to properly function, works!

It’s not perfect, but it’s better than anything else out there. Rather than providing universal income, we should the system.

-John Anchor

The Immorality of Socialism

“The big gap in the world is between those countries that have adopted free-market capitalism, and became rich, and those that haven’t, and stayed poor.”

-John Mackey, Whole Foods Co-Founder

 Let’s look at one of these socialist, anti-free-market countries: Venezuela.

“The country ended 2015 with an estimated 10% contraction in its GDP, 275% inflation, widespread shortages of consumer goods, and declining central bank international reserves…The Venezuelan Government’s response to the economic crisis has been to increase state control over the economy and blame the private sector for the shortages.”

Put another way in Forbes:

“(Venezuela) decided that the poor couldn’t buy toilet paper so let’s change the price of toilet paper. To below that market clearing price: thus the shortages that appear as sure as eggs is eggs in these situations. This is the wrong way to do it.”

In 2010, the private sector controlled two-thirds of the Venezuelan economy. 

“Shopping malls (were) filled with middle- and upper-class Venezuelans browsing through Lacoste shirts, Guess jeans, and Montblanc pens. Sales…declined in the recession, but just about everyone who (could) afford it (seemed) to own a Blackberry, and Scotch whiskey (flowed) liberally in upscale restaurants at the equivalent of $110 a bottle.” (Washington Times)

But even at that time, the government was selectively nationalizing companies, setting up state run supermarkets, and ranting against capitalism. 

In a shining example of incentives inherent in private, free-market systems contrasted against the work-just-hard-enough-not-to-get-fired attitude that is common in shared asset markets, a state run food distributor left 2,700 shipping containers rotting in a port beyond their expiration dates. Other state run companies were operating below production capacities and had begun relying on government subsidies. 

Just five years later, the Venezuelan economy was in shambles, and shortages were abundant. The Washington Times piece linked below offers a great hindsight look into how not to manage an economy. 

It stands to reason that if a rising tide lifts all boats, a receding waterline eventually leaves these boats dry. History teaches us that a socialist, anti-free market system makes everyone poor. 

-John Anchor

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John Mackey

Venezuela Statistics

Venezuela 2015

Venezuela 2010