Tag Archives: Taxes

Commentary

How government forces private firms out of business with predatory pricing

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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 Postal Service lost money on its overnight deliveries despite advantages that FedEx and UPS could only dream of.  The Postal Service is exempt from paying state sales, property and income taxes.  And it uses some of the most expensive real estate in the country — rent-free. The competition that Obama advocates between government and private insurance companies isn’t going to be any fairer.

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.

Mentoring

The Wintery Knight teaches capitalism… using short video clips!

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UPDATE: Welcome visitors from IMAO.us! Thanks for the link Harvey!

Have you ever heard an  American-Idol-watching Dummocrat approve of Obama plans to tax the rich? Watch this video from the Center for Freedom and Prosperity (H/T Hot Air) and learn the facts you’ll need to defeat them in a debate.

Here are a few more videos from America’s golden age when everyone could explain why the country was founded, and why our free market capitalist economy was the envy of the world. (I stole these from IMAO.us)

The importance of economic growth:

Civics: Part 1 of a 2 part set:

Civics: Part 2 of a 2 part set:

A mouse’s perspective on America’s greatness:

Have fun learning!

Commentary

Mark Steyn argues that big government means less liberty

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ECM sent this New Criterion article by Mark Steyn, Canada’s National Treasure, along with Ezra Levant, and Stephen Harper.

Have you heard about Paul A. Rahe’s new book entitled “Soft Despotism, Democracy’s Drift”? I heard an interview with the author on Milt Rosenberg’s radio show, and the podcast is here. But I also found this book review by Mark Steyn, which seems to be popular in the blogosphere. It’s a long read, but you will find it stimulating – especially the citations of Alexis de Toqueville. Prescient.

Excerpt:

…the consequence of funding the metastasization of government through the confiscation of the fruits of the citizen’s labor is the remorseless shriveling of liberty.Is it, as Mark Levin’s caller said, “inevitable”? No, not quite. But it seems like the way to bet. When President Bush used to promote the notion of democracy in the Muslim world, there was a line he liked to fall back on: “Freedom is the desire of every human heart.” Are you quite sure? It’s doubtful whether that’s actually the case in Gaza and Waziristan, but we know for absolute certain that it’s not in Paris and Stockholm, London and Toronto, Buffalo and New Orleans. The story of the Western world since 1945 is that, invited to choose between freedom and government “security,” large numbers of people vote to dump freedom every time—the freedom to make their own decisions about health care, education, property rights, and eventually (as we already see in Europe, Canada, American campuses, and the disgusting U.N. Human Rights Council) what you’re permitted to say and think.

If you think you can run a Christian life in a welfare state run by secular socialists, think again. Their goals and values are not your goals and values, and they will force their goals and values on you, and on your children.

And ECM also send me this article by Mark Steyn in the National Review, regarding single-payer health care.

Excerpt:

When President Obama tells you he’s “reforming” health care to “control costs,” the point to remember is that the only way to “control costs” in health care is to have less of it. In a government system, the doctor, the nurse, the janitor, and the Assistant Deputy Associate Director of Cost-Control System Management all have to be paid every Friday, so the sole means of “controlling costs” is to restrict the patient’s access to treatment. In the Province of Quebec, patients with severe incontinence — i.e., they’re in the bathroom twelve times a night — wait three years for a simple 30-minute procedure. True, Quebeckers have a year or two on Americans in the life-expectancy hit parade, but, if you’re making twelve trips a night to the john 365 times a year for three years, in terms of life-spent-outside-the-bathroom expectancy, an uninsured Vermonter may actually come out ahead.

In Canada, you can deliver babies yourself while you wait. (H/T ECM)

And the same thing happens in the UK.