Beware of the big government tipping point

The last several months are a foreshadowing of a new era of government activism, rather than an unfortunate but necessary (and anomalous) emergency action. The US will soon shift from a market-based economy to a political one in which the government picks winners and losers and extends its reach and power in unprecedented ways, say Peter Wehner, a former deputy assistant to President George W. Bush and a senior fellow at the Ethics and Public Policy Center; and Paul Ryan, a Republican congressman from Wisconsin, and a member of the Budget Committee and the Ways and Means Committee.

This shift is exemplified by the desire of President-elect Barack Obama and the Democratic Congress to push the US toward government-run health care, say Wehner and Ryan:

  • For all his talk of allowing consumers to select their own health-care coverage, Obama's proposal, as he laid it out in his campaign, will provide strong financial incentives for employers and individuals to sign up with a new, Medicare-style government plan for working-age people and their families.
  • This plan will almost certainly use a price-control system similar to the one in place for Medicare, allowing it to charge artificially low premiums by paying fees well below private rates.
  • These low premiums will serve as a magnet for enrolment and will devastate the private companies trying to compete in the health-insurance market.
  • The result will be the nationalisation of the health-care sector, which today accounts for 16 per cent of U.S. gross domestic product.

    Nationalising health care will be profoundly detrimental to the quality of American medicine, explain Wehner and Ryan. In the name of cost control, the government would make private investment in medical innovation far riskier, and thus delay the development of potentially lifesaving treatments.

    It will also put America on a glide path toward European-style socialism. We need only look to Great Britain and elsewhere to see the effects of socialised health care on the broader economy, say Wehner and Ryan. Once a large number of citizens get their health care from the state, it dramatically alters their attachment to government. Every time a tax cut is proposed, the guardians of the new medical-welfare state will argue that tax cuts would come at the expense of health care – an argument that would resonate with middle-class families entirely dependent on the government for access to doctors and hospitals.

    Source: Peter Wehner and Paul Ryan, Beware of the Big-Government Tipping Point; Socialized health care fundamentally changes the relationship between citizens and state, Wall Street Journal, January 16, 2009.

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    FMF Policy Bulletin/ 20 January 2009
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