Obama has publicly stated when promoting his government run health system, “if the private insurance companies have to compete with a public option, it will keep them honest and help keep prices down.” Aside from the fact that a basic study in economics clearly precludes that statement (students: read Economics in One Lesson by Henry Hazlitt), the idea that the government would ‘compete’ against private business is ludicrous.
How will private industry compete against the Government? Let’s see, private business must raise cash by convincing people to give it to them. The Government on the other hand, simply takes whatever money it wants from its citizens – at gunpoint if necessary. The Government has an unfair advantage when it comes to generating ‘income’ wouldn’t you say? Price fixing. The Government frequently engages in a practice of fixing prices at an artificial level. This can be done by the Government because they simply subsidize those prices by taking money from its citizens in the form of taxes. But what happens with price fixing schemes? Rationing. Oh but of course that won’t happen because we have geniuses in government who somehow are capable of confounding the laws of economics.
One fast trick the government plans to pull, is taxing employer provided health benefits to fund ‘free’ health insurance for all those who currently don’t have it. So working people receiving company paid health insurance will receive a nasty surprise on their W-2 forms. But the real tragedy here is that ultimately, businesses will cave in and let their employees opt out and go into the government health care system. There’s no level playing field when you compete with the US federal government. They make the rules, collect the taxes by coercion, and break contracts whenever they feel like it.
As more and more businesses opt out and the government system gets larger, the idea of private health insurance will go the same way education has gone. Everyone is forced to pay for the education system. The rich and well connected can afford to pay for their own privileged schools while the ‘masses’ suffer along in poor to mediocre government institutions. You’ll get the same treatment with government health care.
How can private business compete with the government? It can’t. Because the government plays by its own rules. Prints its own money. Collect taxes from citizens who have no choice but to pay them. Breaks contracts whenever it feels like it. And tells its subjects how to live, what to drive, and what to believe in.
In short, Obama is perpetrating a huge fraud on the citizens of the US with his government health care program. Don’t fall for it. .