No matter what kind of health care program we have, so called “universal coverage” won’t really happen. Universal coverage actually means in practice that the government rations health care. Under this system, those who need it most often can’t get enough of it, and those who need it least get too much.

Currently, health care constitutes 15 percent of our GDP, and its’ growth outpaces income. Other developed economies with so-called universal health coverage spend far less. Health care costs amount to about 10 percent of GDP in Canada and Germany, and 8 percent in the UK. What is it that these countries consistently do that we don’t? Simply put, they r ation health care. They do not call it rationing; but patients experience long waiting times in order to receive certain medical treatments, and some are declared ineligible for certain medical procedures.

That may not sound attractive but we all face this reality in one way or another. That means your 80 year old father with a heart condition will not receive life saving bypass surgery in the UK unless he can pay the full cost out of pocket. He would receive it in the US under most insurance plans currently in place. This begs the question of whether having marginal health insurance for everyone is worth signing over to the government the right to say who lives and who dies. In other words who gets to play God almighty with an individual's life or death crisis?

Furthermore, and perhaps more compellingly, creating a “single-payer” system such as a government-administered health care system may create, in effect, a regulated monopoly, much like, for example, the old AT&T telephone monopoly. Under the old AT&T system, the government permitted AT&T to maintain their monopoly control over the telephone system. Anyone over thirty-five can remember a time when it took almost a month to get phone service installed, and long distance calls cost a fortune. Now that the monopoly system has been dismantled, long distance phone calls are practically free, and your phone gets turned on the minute you purchase the service. What a difference competition made in terms of fostering innovation and consumer choice. Without competition in the telecommunications industry, we would not have the single greatest driver of global wealth in the world today – the Internet.

These are only an example of the possible results of some of the policies that have been proposed by Senator Obama viewed through the lens of economics. Of course, you will find economists who disagree with this analysis, and you may even consider the results of these policies as described to be a positive. But just the same, it’s important to consider the lasting effects of the choice you’re making before checking the ballot box next month.

Conclusion

These are some of the policies that have been proposed by Obama. The economic analysis of these policies does not mean that they are bad. It shows that these policies have economic impacts beyond the first order conditions. For example, higher taxes on the rich may reduce overall income, tax revenue and jobs but may also reduce the income gap between the rich and the poor. If you believe that the benefit of the reduction of the income gap outweighs the other consequences, then you may be in favor of that policy. That weighing of income inequality has been made by a number of societies during our life time –Soviet Union, China, Eastern Europe and Cuba. These societies, with the exception of Cuba, decided in the end, that the cost of income equality did not outweigh the benefits of a capitalist economy.