Sirota’s misunderstanding of the “free-market” concept.
by David K. Williams, Jr. | 9:05 am, March 18, 2009 | Comments Off
In a recent column, David Sirota expressed dismay at certain Republicans’ position on health care.
On one hand, he declares, Republicans favor free market competition to solve the health care situation in the United States.
On the other hand, he says, Republicans oppose allowing government run health insurance to compete with private insurance on the open market.
Sirota finds this baffling and inconsistent.
It is neither.
I will attempt to explain. Private insurance companies have to make a profit. A government run program has no such requirement.
If a private company found itself losing to other health insurance companies, it must either improve its performance or die.
If a government run entity found itself losing to other health insurance companies, it asks Congress for more money.
See the difference?
A government run entity does not have to compete. It is not shackled by the quaint notion of profit. Losing money does not put a government run program out of business.
If one player can not lose, it ain’t competition.
Sirota asks why don’t Republicans “welcome a private-versus-public competition, believing that the former will easily trump the latter?”
The question is the economic version of, "When did you stop beating your wife?"
The question itself makes an incorrect assumption, from which nothing but an incorrect answer can follow.
I have never beaten my wife. The government never competes.
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