Creating a Market in Coupons for Dead Technology

For those who can’t wait to have government take over health care and make it super fantastical and free, maybe another example will demonstrate the fallacy of this idea. The ongoing stupid party surrounding the subsidization of television as a right inherent in Congressional action protecting consumers from the forced national conversion to digital television continues with a new twist: Consumers have already demanded more $40 coupons than Congress authorized.

As of this past Sunday, consumers who request a $40 coupon to help offset the cost of a converter box are being placed on a waiting list. They may not receive the coupons before Feb. 17, when full-power television stations will shut off traditional analog broadcasts and transmit only digital signals.

Members of Congress are now scrambling to find ways to allocate more money to the program.

“We saw a massive spike in coupons in the past six weeks,” said Meredith Atwell Baker, head of the National Telecommunications and Information Administration, an agency within the Commerce Department that runs the coupon program. She said a record 7.2 million coupons were ordered in December, while the agency was expecting roughly 4 million requests. She urged consumers to make sure at least one television set is ready for the transition, with or without a coupon.

The government guessed incorrectly in its attempt to centrally plan the American television viewing method and failed to fund nearly half the unsurprising demand. When something is “free” (i.e. offered below market value), consumers will demand the service or good more than they would at the market price. Who knew? Yet, Congress is competent to predict exactly how many doctors we need? It can accurately predict how many maternity beds we need?

“[NTA has] left us precious little time to respond,” said Rep. Edward J. Markey (D-Mass), chairman of the House Commerce subcommittee on telecommunications and the Internet. “They’ve created a mess by not admitting that there was not sufficient funding until the very last minute. So now we’re looking for creative ways of solving the problem.”

Perhaps if the market could respond to a signal as clear as rising demand, the price could rise to compensate for a finite supply. Nope. Just get in line and pray enough coupons expire. Or find more money for every critical demand, since every demand is critical. Somewhere.

It’s clear that Congress doesn’t understand the inevitable, arbitrary rationing that results when artificial demand intersects with finite supply. But health care will be different. Somehow.


Want to know why I’m not a big fan of consumer advocacy groups?

“NTIA is going to stop processing coupons precisely at the time when people need them the most,” said Joel Kelsey, policy analyst for Consumers Union. “Whatever Congress decides to do, it needs to be done as soon as possible to help people through this complicated transition,” he said.

When people need them most. Congress is throwing money around recklessly, with a potential $1,000,000,000,000 deficit for the fiscal year, and we’re discussing television as a need worthy of public subsidy. There is no way to advocate for that, unless the system is broken.