No matter what the Congress and the President do, “healthcare” reform will fail. It not only will not succeed, it cannot succeed, for a very simple reason: government cannot calculate.
I don’t mean that as a criticism of the government education. The people in congress may suffer from mathematics handicaps because to their experience in the government education system. But, regardless of the math skills of its people, government cannot make economic calculations because it simply cannot know the cost of the resources it attempts to reallocate. Without cost figures they simply cannot calculate the net benefit of any of their economic intervention.
Cost represents what an economic actor must sacrifice to get what he wants. To buy your iPod you had to give up something else, maybe a pair of shoes or 30 trips to Burger King. You had to give up something that you own. You expressed your preference for the iPod for whatever you gave up. But government cannot make that calculation.
Government owns nothing. Every resource it uses or redistributes it must take from someone else. Government does not have to make the difficult choices made in the market, which determine real cost. If government wants something, it takes it. It does not have a cost when it takes from someone who did sacrifice.
Government’s inability to calculate has one of two results. It either drives market prices too low, causing shortages; or it drives prices up too much, causing waste. In the case of something like “healthcare,” to which politicians feel so committed, government will tend to push prices too high. The evidence lies in the high medical care prices they claim to abhor.
Government efforts to reform a system that does not work well will only create one that works worse. Congress cannot avoid failure in this endeavor anymore than you can avoid having a rock you drop from falling to the ground.
People in favor of any “healthcare” reform should face the ethical question: should this country engage in massive theft in order to misallocate the medical resources available to its citizens?
