This article on Fox News’ Forum is by John Lott. He explains the threat of predatory pricing as it relates to Obama’s health care plan.
First, Lott explains the stated goal of Obama’s plan:
President Obama is selling government health insurance to the American people as the way to save money. That government health insurance will merely provide competition to keep private insurance companies from gouging their customers.
But here is the problem with a parallel system run by the government:
There are a couple of problems with Obama’s argument. Government is just not known for its cost effectiveness or quality. And the way for government enterprises to survive is with massive taxpayer subsidies and charging customers prices below the firm’s actual costs, driving more efficient private firms out of business. These subsidies mean that when government enterprises “win” they do so by driving more efficient private firms out of business.
Here is an an example of how it works with USPS vs Fedex:
The U.S. Postal Service would often increase its first-class mail rate, where it had a monopoly, to raise money to subsidize its overnight delivery service where it faced stiff competition. For example, it raised first-class mail to thirty-three cents in January 1999 and simultaneously reduced the price of domestic overnight express mail from $15.00 to $13.70, even though it was already losing money at the $15.00 rate. The price, which was lowered in response to increasingly successful competition in overnight delivery from FedEx and UPS Overnight, remained below $15.00 for the next seven years. Clearly the Postal Service was not able to drive its competitors out of business with this maneuver, in part because its on-time delivery record and quality was poorer.
The government can run huge deficits, effectively transferring money from the productive private sector into their parallel public competitor, with the end goal being complete control of consumer purchases. Obama intends to run private companies out of business so that you have only one place where you can go to purchase health care: OBAMA. And you will do anything he tells you in order to get that health care.
It’s all about controlling your behavior by taking your money and then restricting your access to services. The end goal is that everyone will have equal life outcomes regardless of how hard they work, and how risky and/or immoral their lifestyle. Democrats do not trust you to keep the money you earn, and to spend your money on the things that you want. They think government knows best.
In his book “Freedomnomics”, Lott has even more examples of predatory pricing. I recommend that book, especially for the chapter on abortion and crime. Pro-lifers will find the book very useful. It’s important for people to understand that the more involved government gets in the free market, the less liberty we have as consumers.
These video clips feature one of the conservatives I like, Senator Tom Coburn! (H/T Club for Growth)
Tom Coburn is a medical doctor, and ran a medical business. He gives you the inside view of why American health care needs changing, and why big government socialism is not the answer. This is not just a lesson in health care. Listen closely – this is a lesson in economics, and it shows the vision of free-market capitalism, liberty and personal responsibility that drives the policies of the right-wing.
Part 1:
Part 2:
And here is Ronald Reagan talking about the loss of liberty that follows when a country adopts socialized medicine. (H/T Club for Growth)
This is the easiest way to learn about health care policy.
Note: If you prefer to learn about socialized vs consumer-driven health care with podcasts, click here.
More details from a think tank
Here is a comprehensive treatment of the problems of health care today, and the right way to reform it. This article by the founder of the Heritage Foundation, Edwin Feulner, Ph.D., is so long that it is exactly the kind of thing that lefties like commenter Jerry won’t have the patience to read! This is the best thing to read in this post if you can only read one thing.
Here is are some of the myths he corrects:
If you like your health care package you can keep it
“…a public plan will lead many employers to drop private health coverage for their workers and dump them into the public plan… According to independent analyses, as many as 119 million Americans could end up in a public plan….”
The end goal is not a single payer system
“…The “single payer” here is Uncle Sam, using taxpayers’ money, and not just paying the bills but calling the shots and deciding what care every American will get—or not get….”
The end goal is not a single payer system
“…Congress’s own watchdog–have issued preliminary estimates that the cost could be high as $2 trillion over 10 years, with most of that borrowed money…”
The quality of your health care will get better
“…Medicare has huge gaps in coverage. Medicaid’s quality is notoriously bad. They both offer substandard care compared to most private insurance plans…”
And of course his letter also gives conservative solutions to the problem of rising health care costs. The Heritage Foundation is my favorite think tank. Conservative across the board – not just on fiscal issues.
James Demint
And conservatives like James Demint are getting this message out to the public, too.
Sen. James Demint
Here is Senator Demint’s article in Forbes magazine. He answers the question: “What is the cause of our current health care problems? Is it the free market? Or is it government intervention into the free market?”
Excerpt:
…Washington politicians make it hard for individuals to own their own health insurance policies. Government gives tax benefits to businesses to provide group health plans to employees, but offers no such tax benefit to individuals who try to buy their own plan for themselves or their family. Government prevents consumers from shopping for better plans across state lines, which limits competition and drives up prices. Government health care programs like Medicare and Medicaid pay doctors and hospitals less than the full value of their services, and the difference gets priced into the higher premiums paid by people who do have insurance.
In other words, politicians deliberately restrict consumer choice, drive up prices, underpay doctors and hinder both access and portability. Then they turn around, blame the free market for the health care crisis and say the only way to save the system is a government takeover of health insurance in the form of a so-called “public option.”
And he’s goes on to explain conservative solutions to the problem of rising health care costs. A great article from one of my favorite conservatives.
The real costs of Obama’s plan
Keith Hennessey has an analysis of the costs of Obama’s new government-controlled, rationed health care plan. You may have heard that the CBO has issued an estimate about the costs of Obama’s plan: 1 Trilliion over 10 years. Keith says that the number is actually closer to 1.3 trillion.
Health care subsidies over 6 years
Keith took at closer look at the CBO’s 1 Trillion estimate, which includes only ONE area where money will need to be spent (subsidies for the poor). He found that many items in the Democrats’ health care bill were not included in the CBO estimate!
Excerpt:
The budgetary effects of neither the individual mandate nor the employer mandate are included in this score. I think CBO will find these provisions would raise revenues for the government and reduce the deficit. While the leaked draft of Kennedy-Dodd was specific about the employer mandate, the official version has just the placeholder language, “Policy under discussion.” Both mandates leave wide discretion for the Secretaries of Treasury and HHS to create a level and structure of taxation “to accomplish the goal of enhancing participation in qualifying coverage.” It is extremely difficult for CBO and their tax counterparts, the Joint Committee on Taxation (JCT) staff, to estimate something like this.
The estimate does not include the budgetary cost of expanding Medicaid to childless adults with income below 150% of the poverty line. I expect that this will add hundreds of billions of dollars to the cost over the next decade.
It does not include the requirement that health plans define “children” as dependents up to age 27. I expect this will raise costs.
It does not include the effects of the Medical Advisory Council’s ability to define benefits, or the requirements that plans rebate premiums to the insured. I think this too will raise costs.
It does not include the budget effect of having a “public plan option.”
There are a bunch of other programs in the bill, including a new disability program and lots of new public health programs.
Keith will be posting more articles on his blog as he calculates the real costs of Obama’s plan.
Obama thinks that you are more satisfied with the service at your local DMV than you are with Amazon.com. And he plans to make sure that you are dealing with government bureaucrats, not with private businesses, when you need health care. Who gives you better service? The government, that isn’t trying to compete with anyone to meet your needs? Or private businesses, which do need to compete to earn your business?
Further study
You can watch some videos containing horror stories from countries that have adopted single-payer health care, too.
This article is long! You will have to print it out and read it in little bits. It took me 15 minutes to read!
The title is “How Will Conservatism Become Credible Again?”. Paul Ryan is one of the “ideas” conservatives in the Congress. His job is to think up new bills and initiatives that reflect conservative ideals.
Let’s learn about America
Here, he talks about how the conservative vision of government values liberty and personal responsibility over equality of outcomes and “social justice”:
Nowhere was the Western tradition epitomized more memorably than in the Declaration of Independence. By “the laws of nature and of nature’s God,” all human beings are created equal…not in height, or skills, or knowledge, or color, or other nonessentials…but equal in certain inalienable rights – to live, to be free, and to fulfill their best individual potential, including the right to the “material” such as property needed to do this. Each individual is unique and possesses rights and dignity. There are no group or collective rights in the Declaration. Nor does basic human equality imply “equal result.” It means “equal opportunity”: every person has a right not to be prevented from pursuing happiness, from developing his or her potential. The results should differ from one to another because “justice” or “fairness” gives each individual what each has earned or merited.
The great conservative purpose of government is to secure these natural rights under popular consent. Protecting every person’s life, liberty, and pursuit of happiness should be the great and only mission of legitimate government.
He talks about how the Constitution’s purpose is to enable prosperity through free market capitalism:
The authors of the Constitution surrounded economic freedom with a multitude of guarantees: freedom of contract against government interference… private property rights… patents and copyrights…standard weights, measures, and monetary values…punishment of counterfeits…freedom under law for interstate and foreign commerce…enforcement of agreements in law courts… uniform bankruptcy laws, and other protections.
They promoted Smithian free markets to produce resources for strong military defenses and to keep America free of economic dependency on other nations. But they also expected commercial life to encourage certain moral qualities: personal responsibility to work, save, create businesses, hire employees, pay off their debts, earn the rewards of merited effort, moderate appetites, practice honesty and justice in business dealings, self-discipline, industriousness, timeliness, plus trust and confidence in other persons.
And he talks about how America is a country where social conservatives and fiscal conservatives should be united:
A “libertarian” who wants limited government should embrace the means to his freedom: thriving mediating institutions that create the moral preconditions for economic markets and choice. A “social issues” conservative with a zeal for righteousness should insist on a free market economy to supply the material needs for families, schools, and churches that inspire moral and spiritual life. In a nutshell, the notion of separating the social from the economic issues is a false choice. They stem from the same root.
Did you know that Republicans believe in the right to life, the sanctity of marriage and the public expression of faith? These values were present at our founding, and Republicans hold to them because they are American values.
Since America’s first political principles establish a high but limited mission of securing the natural rights of all, conservatives should expect government to fulfill that entire mission…by enforcing every human being’s natural right to life, which is the first clause of the social compact that formed America, the Declaration of Independence.
A credible conservatism will also seek to secure the privileged legal status of marriage. The traditional family must be protected as the indispensable mediating institution for developing the moral qualities of a free people.
A credible conservatism will resist the purging of faith from the public square. It will make public space for the practice of faith because belief is a central pillar of a free and prosperous society. Nor can government welfare programs substitute for the faith-based love that unites citizens in free bonds of charity and compassion.
Recommended for my readers from at home, or abroad, who need a refresher on the vision of conservatism… or a breath of fresh air from the fetid leftist gasses emanating from the White House.
WINTERY KNIGHT 
