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DMV-ization of America

No question about it – we need a government, a police force, an army – but whenever possible, I believe in keeping  things in the private sector.  Looking at health care specifically, there are a number of structural challenges that make a public option significantly higher in its potential to harm than help:

The Danger Of The Government Becoming the Monopoly of Last Resort:
We have anti-trust laws to promote far competition, maximize economic growth and improve consumer offerings through choice. Allowing the government a huge role in the healthcare system is incredibly dangerous. While the government will essentially be creating a monopoly through a combination of legislation and their infinite ability to borrow funds – they also own anti-trust law – allowing for an incredible opportunity to manipulate legislation put in place to help small businesses and consumers.

Stifling Innovation and Quality of Care:
Innovation is a key driver of our economy – and central to the US regaining its global stature and recovering from the current economic meltdown. Competition and innovation are inexorably linked – you don’t see innovation at the DMV because it has nothing to lose or gain – it owns the market. Customer service and competition go hand in hand as well; hours of waiting to get a new license is quite annoying – but its nothing compared to hours of waiting during a health emergency.

Diseconomies of Scale:
At a certain size, a business grows too large to manage efficiently; for example it costs about $314,000 in capital for the private economy to create a job versus about $1.2 million per job created as a result of stimulus spending.

The Size of Our Current Public Debt:
Our public debt already amounts to nearly $40,000 for every living American – or $160,000 per family. And the price tag is quickly rising – given that the government is continuing to spend funds that they don’t have, in order to decelerate the rate of rapidly rising taxes for future generations, government funds must start going to projects that focus on collaboration with the private sector in order to reduce their incremental investment. It also allows the private and public sectors to share the risk and profit – this leads to greater incentives to make programs successful.


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