The Affordable Care Act creates a new health insurance marketplace (the exchange). But because of the great uncertainty about what buyers will enter the market and who will buy what product, the law creates three vehicles to reduce insurance company risk.
Politicians and bureaucrats are notorious for manufacturing euphemisms -- clever but deceptive substitutes for what they really mean but don’t want to admit. That’s how the phrase “revenue enhancement” entered the vocabulary. Some of our courageous friends in government couldn’t bring themselves to say “tax hike.”
“It is difficult to make predictions, especially about the future,” says a proverb often attributed to Yogi Berra. Imagine the world of freedom, or lack of it. Who could foresee the technologies that make our lives so rewarding and convenient? The same technologies have us all under the government’s giant microscope. Thankfully, the brave have turned the microscope around.
In the months since Edward Snowden revealed the nature and extent of the spying that the National Security Agency (NSA) has been perpetrating upon Americans and foreigners, some of the NSA's most troublesome behavior has not been a part of the public debate.
National Treasury Union President Colleen M. Kelly recently described the 2014 IRS budget allocation as “woefully inadequate.” But the agency has not proven itself to be an efficient steward of taxpayer dollars. Here are ten ways the IRS lost the trust of the American people.
It’s easy to be negative about the U.S. economy these days. Find a glint of silver, and folks come running to point out all of the dark clouds looming about. This, of course, is what we got last week when the monthly jobs report was released from the U.S. Department of Labor (DOL). Folks pooh-poohed the number of jobs and whining that they’re not enough or that it’s less than a bunch of economists thought that it might be. But you know what? Stuff ’em.
Given how poorly states like California and Illinois have funded the pension funds for their own employees, one would think that this would stop dead in its tracks any plan to have the government assist in managing private sector funds too. The spate of recent activity, however, suggests otherwise.
Facts are easy. You can check facts. What supporters of the Affordable Care Act are doing, on the other hand, transcends factual bungling. It’s far more advanced: a warping of reality so debauched it looks like something out of a tale by H.P. Lovecraft.
The problem for NSA apologist is that when guys like Snowden disclose that the government conducts comprehensive surveillance in ways that would have made 1984’s O’Brien drool, it puts the entire progressive agenda in jeopardy.
The east coast and parts of the southern U.S. were to varying degrees paralyzed by blizzards a few weeks ago. The snow as expected rendered the roads treacherous, and in anticipation of slick streets, shoppers flocked to the grocery stores in advance.The rush into grocery stores, and its aftermath, offers worthwhile lessons in economics.First up, […]
The financial world is plodding along like a drunken sailor avoiding debt collectors by keeping no cash in his wallet. It’s not the kind of calm that’s going to last or end well. But the storm will have to wait until after the Olympics.What a game! We’ve never watched ice hockey closely before. But watching […]
“When they come for my gun, they will have to pry it out of my cold, dead hands,” is a common refrain I often hear from the Neo-Cons when there is a threat, credible or otherwise, that the U.S. government is going to take their firearms.And, when I hear this crazy talk, I agree with […]
The highest form of charity, argued the 12th-century Jewish philosopher Maimonides, is when the help given enables the receiver to become self-sufficient.But our systems of state charity — aka welfare — have too frequently had the opposite effect: They have actually created dependency. It is time to rethink the way we help people.I’m going to […]
In times of war and national emergency, it’s sometimes necessary to sacrifice civil liberties to secure vital gains in public safety. In those cases, we may have to accept a loss of privacy or freedom rather than invite mass slaughter of Americans.The National Security Agency’s domestic phone records collection is not one of those.Never have […]
President Obama crowed in his State of the Union speech about the economy, even mentioning “a rebounding housing market.” Maybe he was referring to friends in high places, like the seller of Penthouse One in New York, which just closed for $50.9 million, all cash. Millions of mere-mortal homeowners likely wanted to throw something at […]
The nonpartisan Congressional Budget Office is acting in a bipartisan way to cover up the biggest single threat to the bipartisan political alliance that is stripping America of its wealth: the United States Congress.There is no question that the following policy is bipartisan. Democrats and Republicans in Congress are completely agreed that the following information […]
Recent difficulties with implementing the Affordable Care Act have increased opposition to the program. A majority of Americans now oppose it. Problems with the HealthCare.gov website are in all likelihood temporary. However, there are serious long-term problems, particularly considering long-term finance and labor supply issues. Given the mounting difficulties with and growing concerns about the […]
Amidst all the revelations about how the American people, many of whom are absolutely convinced they live in a free society, have their telephone calls, emails, website visits, and who knows what else under surveillance by their own government, let’s not forget the massive infringements on financial privacy that have gone on for decades.Consider, for […]
Image: ShutterstockBitInstant CEO Charlie Shrem, along with alleged co-conspirator Robert Faiella, was arrested by federal authorities last week for allegedly laundering more than $1 million worth of Bitcoins. This is a tiny amount compared to the largest drug-and-terrorism money laundering case ever. Yet when British bank HSBC was found guilty in 2012 of laundering billions, […]
Do you trust your doctor? Most patients assume their doctor is working in their best medical interests whenever he or she orders a diagnostic test or recommends a particular treatment. Customers might wonder whether an unscrupulous auto mechanic is being truthful when he recommends a brake job or a new transmission. But most patients trust […]
The exercise had an awesome name, inspired by the movies: “Quantum Dawn 2.”On July 18, scads of U.S. banks, stock exchanges and government agencies took part in a digital fire drill — a practice run in the event all of Wall Street came under massive cyberattack.This isn’t the first time banks have come under an […]
The faces of the Detroit bankruptcy are the thousands of pensioners whose promised benefits are suddenly part of the restructure negotiation. When Motown filed for Chapter 9 last July, the city had $11.5 billion in unsecured liabilities. The vast majority of this was pension and health care benefits owed to retired city employees.The images of […]
So you’ve maneuvered the Obamacare website, plugged in your top-secret information and found out how much you are forced to pay to avoid a fine.And for some of you, it turns out you qualify for a government subsidy — making the premium sound like a bargain. But signing on that line to accept the government’s […]
“Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.”As the inequality gap grows, there is an ideological battle unfolding in the West.On the one hand, there are those who think government can fix things. It must do more, tax more, […]
On Feb. 7 the United States will once again reach its statutory debt limit, meaning it cannot legally borrow any more money. Since the obvious option of cutting spending to match the amount of revenue that the government collects is off the table for some inexplicable reason, Congress will have to pass a new, higher […]
The New York Times published an interminable article on health care recently. Plenty of facts — how scrupulous are these journalists! — but the article displayed absolutely no comprehension of the basics of cause and effect. I was left wondering about the whole point.The article details how the health care system rewards specialists to an […]
For critics of the surveillance state, it is tempting to see President Obama’s speech a few weeks ago as a partial victory: Prompted by Edward Snowden’s leaks and the public pressure for National Security Agency reforms, he announced significant changes to the program that collects and stores information about all telephone calls. And he promised […]
Liberal supporters of the Affordable Care Act specifically, and big government in general, are quick with excuses for all the problems that Obamacare has been experiencing in these early days. We have heard: they did not have enough time, it’s complicated, it’s the insurance companies’ fault, we just need to make a few adjustments, and on and on. Do not believe any of these excuses; this is what happens when the government tries to substitute its wisdom for the market.
The failed website has received the most attention, but the problems in implementing this ultra complex law began long before the catastrophic launch of HealhCare.gov. Beginning almost as soon as the law was signed by President Obama, the administration has been struggling to make changes and adjustments in attempts both to fix flaws in the law and to appease special interest groups that support Democrats.
Since almost immediately after passage, union groups and some large employers have been applying for waivers from various facets of the law. Hundreds of waivers have been granted. The latest and broadest waiver is the one year delay in the employer mandate that would have gone into effect on Jan. 1.
Next was the botched launch of HealthCare.gov, the website that was finally supposed to bring Obamacare to the masses. With three years to build a website and over $600 million spent, the American people were given a nonfunctional product of such low quality it would have been given an F as a term project in a college computer science course.
Even before the Obama administration and their contractors could fix the website, we moved to the next setback: cancelled policies. Over five million people have received cancellation notices because their insurance policies do not meet the minimum quality standards listed in the Affordable Care Act, set to go into effect on Jan. 1.
The president and his supporters are trying to convince Americans that all of these myriad problems with the implementation of Obamacare are simply bumps in the road, normal as part of any new program in its early days. However, that is not true. This is, in fact, exactly what one should expect when the government is in charge.
F.A. Hayek explained this all over half a century ago, most famously in his book The Road to Serfdom. At the simplest level the problem is that the government can never have enough knowledge to properly guide a market through a command and control structure. A free market can adjust itself as prices and quantities change in response to surpluses and shortages, to profits and losses. A huge amount of information is efficiently aggregated and transmitted to all the market participants through the simple mechanism of prices.
The failures in the implementation of Obamacare are not outliers, unfortunate events due to unforeseen circumstances. The problems that have occurred and which will continue to occur are to be expected whenever government is in charge. Even really smart people simply are not smart enough to match the functioning of a free market.
When the government runs a market, price signals are either completely missing or distorted. On the health insurance exchanges, many people will get free or highly subsidized policies. This means the prices they are basing their purchase decisions on are different than the prices on which insurance companies are basing their decisions to offer those policies. By basic economics, this will ensure that our nation will over-allocate resources to health insurance and health care.
The cancelled policies are a perfect example of government conceit expressed through command and control trumping individual choice expressed through a free market. If health insurance were free, nobody would choose to have one of the policies that are being cancelled as they generally provided rather limited coverage. However, health insurance is not free and so quite a few people find that their best choice is to purchase minimum coverage rather than to risk going completely uninsured. Now the wisdom of the government has decreed that people should not have the freedom to make that choice. We do not know best; government does.
Government can do some things, but generally the places the government “succeeds” are in areas where the free market would not work, such as the provision of public goods like parks or national defense. Even in these cases, the quantity the government produces may or may not be the correct amount and the cost to provide it is almost surely much more than the efficient cost.
In answer to critics who will argue that these temporary setbacks are to be expected when such a difficult and far-reaching project is attempted and everything will operate smoothly after a little while, two responses are appropriate. First, exactly which government services are so well done that they inspire such confidence? In general, people dread interacting with the government, cost overruns are normal, and problems are routine. Second, such difficulties are not common when the private sector does it.
The proof of this second response is simple. Three private sector programmers in San Francisco managed to build a website, healthsherpa.com, over a weekend that provides anyone who inputs their zip code with all their federal health insurance exchange options instantly. Given one more night, they added a subsidy calculator, so that now, in a few seconds, Americans can find out everything the HealthCare.gov website is supposed to deliver, but cannot.
Everyone should be forced to go to this privately built website before defending HealthCare.gov and see how well it works. You get all the information you need within seconds. The private sector site is $600 million less expensive and infinitely more useful.
Regardless of what the law’s supporters say, the problems with Obamacare are part and parcel of what to expect when the government tries to control an important sector of the economy. There is a reason why the Soviet Union could not deliver consumer goods to its citizens in either sufficient quality or quantity. Similarly, China’s recent economic success is inextricably tied to its leaders allowing free market economics more room to operate in many areas of their economy.
Ronald Reagan famously said “The nine most terrifying words in the English language are: ‘I’m from the government and I’m here to help.’” With the government about to take over one-sixth of the American economy, we are going to have many opportunities to remember those words.
– Jeffrey Dorfman
This article originally appeared here on Forbes.com.