When government subsidizes prices, will it instead inflate prices?
*Texas Straight Talk, by Congressman Ron Paul, August 3, 2009:
"There are limits to how much government can tax before it kills the
host. Even worse, when government attempts to subsidize prices, it has
the net effect of inflating them instead. The economic reality is that
you cannot distort natural market pressures without unintended
consequences. Market forces would drive prices down. Government
meddling negates these pressures, adds regulatory compliance costs and
layers of bureaucracy, and in the end, drives prices up.
The non-partisan CBO estimates that the healthcare plan will cost
almost a trillion dollars over the next ten years. But government
crystal balls always massively underestimate costs. It is not hard to
imagine the final cost being two or three times the estimates, even
though the estimates are bad enough.
It is still surreal that in a free country we are talking only about
HOW government should fix healthcare, rather than WHY government should
fix healthcare. This should be between doctors and patients. But this
has been the discussion since the 60’s and the inception of Medicare
and Medicaid, when government first began intervening to keep costs
down and make sure everyone had access. The result of Medicaid/Medicare
price controls and regulatory burden has been to drive more doctors out
of the system – making it more difficult for the poor and the elderly
to receive quality care! Seemingly, there are no failed government
programs, only underfunded ones. If we refuse to acknowledge common
sense economics, the prescription will always be the same: more
government.
Make no mistake, government control and micromanagement of healthcare
will hurt, not help healthcare in this country. However, if for a
moment, we allowed the assumption that it really would accomplish all
they claim, paying for it would still plunge the country into poverty.
This solves nothing. The government, like any household struggling with
bills to pay, should prioritize its budget. If the administration is
serious about supporting healthcare without contributing to our
skyrocketing deficits, they should fulfill promises to reduce our
overseas commitments and use some of those savings to take care of
Americans at home instead of killing foreigners abroad.
The leadership in Washington persists in a fantasy world of unlimited
money to spend on unlimited programs and wars to garner unlimited
control. But there is a fast-approaching limit to our ability to
borrow, steal, and print. Acknowledging this reality is not
mean-spirited or cruel. On the contrary, it could be the only thing
that saves us from complete and total economic meltdown."
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
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