Everyone understands the law of supply and demand, the most basic economic principle. If the demand for something increases at a greater rate than the supply, the price goes up. If supply increases faster than demand, the price goes down. Simple, right?
Then how come politicians keep acting like they don’t get it? Government keeps increasing the demand for things by spending more money on them. When, as the law predicts, the price goes up, Washington spends yet more money, pushing the price up more. And so the upward spiral continues.
Take healthcare. For as long as I can remember politicians have bemoaned the rising cost of healthcare. So what is their solution. More healthcare spending, including Medicare, Medicaid and pressure on employers, public and private, to provide ever more comprehensive health insurance. More money equals more demand. More demand leads to higher prices.
What is needed is to reduce the demand and increase the supply. Reduce demand by providing incentives for Health Savings Accounts (HSA) and eliminating tax subsidies for employer-provided insurance. Health savings Accounts work like an IRA. The money you put in is tax free. Whatever you don’t spend, you get to keep tax-free.
If workers were taxed on the value of their employer-paid insurance, could use tax-free money to pay for medical expenses not covered by insurance and could keep any unspent HSA money tax free, they would have an incentive to opt for less comprehensive policies and shop for healthcare just like they do for everything else. For example, in areas not covered by insurance, like cosmetic surgery and laser vision correction, prices have come down.
On the supply side, what is needed is more options for people to find care, that is, more competition. Allow nurse practitioners to perform more routine procedures and encourage creation of more walk-in clinics in drug stores, shopping centers and other retail stores. Provide tuition subsidies to medical students who agree to practice for ten years in underserved communities or specialties in which there is a shortage of doctors.
We can reverse the upward spiral of healthcare costs by conforming the solutions to the inviolable law of supply and demand. (Ditto for education, but that’s another article.)
Wednesday, February 4, 2009
Monday, February 2, 2009
Double Standard
The latest example of the double standard is the Associated Press dictate that all AP stories mentioning our new President must refer to him the first time as President Barack Obama and thereafter may refer to him as Obama. Following that lead, other papers are falling in line. The Naples Daily News even refuses to print letters referring to him in any other way. This is all in the interests of civility and respect for the office. You know, just like when Bush was President.
Since we’re on the subject of Obamania, his image has become so ubiquitous that I’m starting to feel like I’m in some third world country where the dictator has his picture posted on buildings and billboards. There’s something eerily un-American, and dangerous, about all this unquestioning adulation.
Speaking of double standards, first there was Congressional approval of Treasury Secretary Geithner, whose jurisdiction includes the Internal Revenue Service, after he admitted that he “mistakenly” failed to fully report his income for several years. Even after an audit revealed the omission for the two years covered by the audit, he failed to refile and report the same omission for two prior years not covered by the audit.
Now comes former Dem. Senator Tom Daschle, nominee for Health Secretary, who failed to pay over $100,000 in taxes. Of course, it was an “honest mistake” and he’s really sorry. If confirmed, Daschle will be regulating the health care industry from which he has earned $220,000 in the last two years.
Imagine the outcry had either of these men had been chosen by a Republican President.
A couple of weeks ago a reader comment was inadvertently deleted from this blog. I apologize for the error. Your comments, pro or con, are welcome and appreciated. Thank you for reading Red, Right and Lou.
Since we’re on the subject of Obamania, his image has become so ubiquitous that I’m starting to feel like I’m in some third world country where the dictator has his picture posted on buildings and billboards. There’s something eerily un-American, and dangerous, about all this unquestioning adulation.
Speaking of double standards, first there was Congressional approval of Treasury Secretary Geithner, whose jurisdiction includes the Internal Revenue Service, after he admitted that he “mistakenly” failed to fully report his income for several years. Even after an audit revealed the omission for the two years covered by the audit, he failed to refile and report the same omission for two prior years not covered by the audit.
Now comes former Dem. Senator Tom Daschle, nominee for Health Secretary, who failed to pay over $100,000 in taxes. Of course, it was an “honest mistake” and he’s really sorry. If confirmed, Daschle will be regulating the health care industry from which he has earned $220,000 in the last two years.
Imagine the outcry had either of these men had been chosen by a Republican President.
A couple of weeks ago a reader comment was inadvertently deleted from this blog. I apologize for the error. Your comments, pro or con, are welcome and appreciated. Thank you for reading Red, Right and Lou.
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