We can say with confidence that Americans love sales. They love good deals and “free” government services. Incentives matter and always will.
Washington’s first “cash for clunkers” program came and went quickly. The $2 billion set aside to cover the program for months was consumed within two weeks. As soon as it was launched, the ads flooded the newspapers and radio. New car buyers grabbed any clunker that moved and rushed to their favorite dealer. Auto makers reported record sales for the month. Why not? When the government is paying the incentive with your tax money, Americans will take what they can get. Bragging about their wonderful program, the Senate and Congress is wasting more of your tax money and adding a few more billions to the deficit.
Now, Washington is trying to convince us that more government “cash” for a “clunker” of healthcare plan will actually save money and improve quality of care. If the existing “cash for clunkers” plan is any predictor, we’re in for a wild ride to even higher deficits and a healthcare nightmare most Americans will hate!
There is no one healthcare plan, so let’s take a common sense look at how incentives are likely to play out. Once government-subsidized healthcare insurance is provided to an additional fifty million people for free or at a marginal cost, demand will explode. When millions of new patients unleash their laundry list of ailments that they have put off for years on the same number of already over-worked doctors, expect chaos not improved healthcare.
In free-enterprise economies, rapidly increasing demand usually results in increased prices. But when its businesses, insurance companies and the government that are paying those increases, demand continues to grow. Free services of any kind provide a strong incentive to seek more services. As a result, the funds budgeted for healthcare will prove as inadequate as the money set aside for the “cash for clunkers” program.
What do liberal politicians do when facing out-of-control costs? They increase taxes, add to the deficit by printing more money, pass price controls to cut costs or decline certain programs, procedures, or medications. Such choices just produce longer waiting for patients. Facing more work with less pay, many aging physicians will choose retirement. Those patients and healthcare service providers remaining are left with a disaster in the making.
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