Category: Spending

The Wacky World of Politicized Economics

Michael Kinsley analyzes the federal student loan program and forgets that more than two scenarios are possible.

Here’s how the program works: Banks and other private companies lend money to students. The federal government pays part or all of the interest — currently 7 or 8 percent. The government also guarantees the loans.

What is wrong with this picture? Well, the government itself borrows the odd nickel to finance the national debt. This borrowing, obviously, is also guaranteed by the government. For that reason, it carries an interest rate of only 3 or 4 percent. If the government can borrow money at 3 or 4 percent, why should it pay 7 or 8 percent for the privilege of guaranteeing loans to someone else? Wouldn’t it make more sense for the government to lend the money itself?

The third possibility is that the government could remove itself from student loans entirely, which is the only legitimate position for it to take. Let the market develop solutions, including appropriate insurance mechanisms to pool the risk of adults without a credit history borrowing money for an activity that can’t be securitized. Let’s find out that it can’t or won’t be provided by the private market before we decide it must be provided by the government.

But there’s a bigger flaw here. If the government begins taking on more and more borrowing responsibility, it will not be able to continue at its rates. At some point that guarantee becomes worthless. Or more likely, people realize that the guarantee isn’t as guaranteed as it’s been sold.

Think about the IOU issued for social security. Carry the logic further, as Mr. Kinsley wishes us to do here, into trusting the government to provide all sorts of services. At what point do we reach the threshold where there aren’t enough people in private industry to create sufficient new wealth for the government to redirect this wealth into “guaranteed” services, via taxes? At some point, money becomes worthless and life becomes nationalized. That attractive 3 or 4 percent interest rate will mean nothing.

I won’t pretend to know what that threshold is. I think we’re closer than we collectively believe. I’d suggest that people like Mr. Kinsley think we’re further away, but I fear that’s giving them too much credit. I don’t think they believe a threshold exists, much less where we are in relation to it. That’s dangerous.

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Mr. Kinsley demonstrates his contempt for individual preferences in his conclusion:

… the “one-size-fits-all direct loan program.” This would be no bad thing, but it doesn’t seem to have been the case. I’m not sure what “one size fits all” means here, but if it refers to the interest rate that students and their families have to pay, it’s true that there is only one rate in the government program, compared with many in the private one — all of them higher, but maybe there are people for whom the variety is worth it.

Who doesn’t want a free lunch, right? But let me make an effort.

The variety is worth it for me, since I am not in the process of taking out student loans, nor do I expect to do so in the future. A variety of interest rates, even if they’re higher, would be preferable. That way he who engages in the risk takes on the cost of the risk. Why should I help pay for every college student’s default risk through my taxes, which is how that interest subsidy is funded now, and would be funded under Mr. Kinsley’s plan?

As a matter of disclosure, I have an existing student loan from my college years that was and is subject to government guarantees. I would not have used the system as it was/is, if I’d had a choice. As I think I’ve written, a significant portion of my undergraduate debt was in my mother’s name. That’s just as irrational. The entire student loan situation in the United States relies on the faulty notion that college students are irresponsible children. Worse, we’ve added lending institutions and the American taxpayer to this assumption. Mr. Kinsley’s idea would deepen this idiocy.

I’m worth mass redistribution. Or maybe it’s just my vote.

I’m a few days late on this, thanks to being wrapped up in fantasy football, but John Edwards cares about me.

Democratic presidential hopeful John Edwards said on Sunday that his universal health care proposal would require that Americans go to the doctor for preventive care.

“It requires that everybody be covered. It requires that everybody get preventive care,” he told a crowd sitting in lawn chairs in front of the Cedar County Courthouse. “If you are going to be in the system, you can’t choose not to go to the doctor for 20 years. You have to go in and be checked and make sure that you are OK.”
…

“The whole idea is a continuum of care, basically from birth to death,” he said.

If I’m going to be in the system… How quaint. Do I have a choice? If and when I choose not to be part of the system, do I get to keep that part of my taxes devoted to covering me, as well as the portion that is my charitable “gift” to everyone else in this scheme?

Obviously he wouldn’t emphasize the womb-to-tomb feature bug if the answer to any of my questions was yes. Also obvious is the basic fact that, being unable to understand that government is the problem in health care, his proposal relies on reducing everyone to a lower level rather than working on (effective) ways to enable the unintentionally uninsured minority to mitigate their financial risk. Note, of course, that Edwards – and every other health care nanny currently running for president – misses this true issue in his quest for womb-to-tomb government services. That won’t earn my vote.

More thoughts at A Stitch in Haste and Cato @ Liberty

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I wouldn’t expect anyone else to have mentioned it, but a side issue from Edwards’ proposal involves routine infant male circumcision. As I’ve written, a liberal, progressive argument for universal health care and/or coverage is that the government will cease paying for unnecessary male circumcision. This will not stop.

Governments already fund unnecessary circumcisions today, when resources are limited. There is no significant push among politicians to redirect those funds into medically necessary expenditures (or taxpayer pockets). They do not care about the necessity of any particular intervention, or even health care in general. Universal health care is simply a means to create a new, dependent constituent group. If that constituency wants infant male circumcision, politicians will cover it. (I’d make an argument that bureaucrats will make the decisions, but doctors make the same mistake in an effort to please their constituents constituents’ parents.)

Politicians believe there is always another group to demonize and tax to fund whatever gift needs to be made to voters for their votes. I am unwilling to hope that any government run by these fools will miraculously reverse its stupidity. Such short-sighted adherence to self-interest is inherent in government whenever it’s controlled by those interested in the exercise of power. Neither rights nor logic plays any part.

Now add the context of a politician like Edwards who wants to mandate that you and I will undergo preventive care. Is it really a long leap to assume that such a stupid person could read the splashy headlines about male circumcision and HIV and ignore the context of voluntary and adult, as well as the truth that condoms remain far more effective at reducing the risk of HIV? Almost everyone in our culture has ignored these last three points in the two years since the first preliminary results were announced, so the answer is a clear “no”.

Politicians will continue to make the erroneous, incomplete argument that the cost-benefit analysis of infant male circumcision is a one-sided consideration, with benefits the only deciding factor. They rarely even recognize potential before the word benefit. If there’s a potential benefit to chase, they will assume that means one less disease to pay for out of the collective in the future. That is incomplete and morally defective, since it ignores the risks, the complications, and the rights interest of the child in making this subjective, medically unnecessary decision. That politicians, parents, and doctors make this error every day proves the fallacy of trusting in the economics of universal health care to rectify an ethical failing.

Should government miraculously reverse itself and stop funding infant circumcision, I still argue that this is largely irrelevant. Many parents will just pay for it themselves. I’ve read too many blog entries of parents fretting over the hundreds of dollars it will cost, yet, considering genital cutting either an “investment” in their son or a “necessary” expenditure so that the boy will be normal common, they proceed anyway, out of their own pockets. To be fair, there will be a long-term reduction, as fence-sitters will decide unnecessary surgery isn’t worth the money, but there will still be many boys facing the knife who should be protected. I’m not okay with that.

Anyway, who will make the argument that politicians embrace the individual rights of their children and refrain from removing healthy body parts from their own sons? I’ll theorize that at least one candidate running for president with a universal health care platform has ignored the violation of his¹ son’s rights and circumcised the boy, to say nothing of the members of the theoretical decision-making apparatus should a universal health care scheme be implemented.

¹ This ignores Sen. Clinton because I assume she did not have her daughter’s genitals cut. However, she should be included in any consideration of politicians and bureaucrats willing to perpetuate the violation of the genitals of male children.

Until I live in your house, I’m not responsible for your mortgage.

I, like you, am going to be at least indirectly hit by the current “liquidity crisis” mortgage bubble, even though I had enough sense to contract for a fixed-rate mortgage when I bought my house. (The wisdom of buying when I did, on the other hand…) That’s just the cumulative reality of living in a capitalist system. Some people will make stupid, avoidable mistakes, but the overall economy can absorb it and survive. Scott Adams talked about this wonderful reality of capitalism today:

This story made me think about one of the great wonders of capitalism: It is driven by morons who are circling the drain, and yet. . . it works!

Exactly.

I’d planned to write up this short-sighted essay that calls for a bail-out of homeowners.

The ultimate solution must not emanate from the Fed but from the White House. Fiscal, not monetary, policy should be the preferred remedy. In the early 1990s the government absorbed the bad debts of the failing savings and loan industry. Why is it possible to rescue corrupt S&L buccaneers yet 2 million homeowners must be thrown to the wolves today? If we can bail out Chrysler, why can’t we support American homeowners?

That’s nonsense, of course. Kip beat me to it and said everything necessary. Particularly, this:

…(Again, and this is important: The spike in foreclosures is not Mr. & Mrs. Bluecollar being kicked out of their single-family home; it’s Mrs. & Mr. Infomercial failing to flip their 20 “no money down” speculative properties. That’s one investor, twenty foreclosures, zero homelessness.)

If there are anecdotal cases of institutions engaging in false advertising, deceptive accounting, manipulating the legally incompetent, then fine — pursue them with the full force of the law. But the mere fact that many otherwise competent people, including financial professionals, happened to make very bad decisions is no claim check on the Fed, Congress, or taxpayers’ wallets.

Issuing that claim check would indeed induce an eventual moral hazard, even though “there’s never been a problem in terms of national housing price [sic] bubbles until recently”. If we assume that this price mortgage bubble is a one-off and won’t happen again, the pattern still exists for bailing individuals out of their mistakes. In the essay, we’re supposed to understand that such rescues work, thanks to the examples of Chrysler and the S&L mess. (The author doesn’t mention deposit insurance. Quite disappointing.) Yet, the presence of that pattern doesn’t constitute an incentive to behave badly? Really?

The government should not bail out people who made bad choices just because they made bad choices. Leave individuals and businesses to experience the consequences (and successes) of their actions when the consequences are merit-based. (Luck, in this context, is merit-based.) That’s the only way to build discipline in financial transactions. Intervention only negates the need to develop those skills.

Government-approved degrees, for free!

Via Hit & Run comes the news of a proposal from Sen. Max Baucus, a classic example of government’s perpetual ability to ignore incentives and consequences:

Montana Senator Max Baucus says he wants free college tuition to be offered for students majoring in math and science.

The Democrat says he plans to introduce legislation in the coming months that would give full scholarships to high school graduates majoring in math, engineering, sciences or technology.

Naturally, Sen. Baucus proposes this because the U.S. needs to be more competitive with students around the world. No doubt he has an idea of the perfect mix of math and science to non-math and science college degrees in the U.S. Central planners always do, since who could be silly enough to rely on something as outdated and obscure as salary to be an indicator of what’s in demand and what’s not. No, it’s much better to trust Congress. That way, everyone can be a rich scientist.

Sen. Baucus does have one hitch in his plan to prevent gaming the system for a free education. Students would have to “to work or teach in a related field for at least four years after graduation.” That should suffice to weed out the undesirables who want to use the system for personal gain. They’ll clearly just give of themselves for the greater good instead of getting a degree in math or science, working four years at a job they may or may not like, and then retreating to graduate school to retool with four years of salary and no debt. But the incentive to do that once they have a government-funded love of technology instilled in them is too low to contemplate.

And I bet no one would think to get a dual degree in science and . The extra classes would still be on the taxpayer dime since most schools don’t charge for extra classes beyond a certain threshold per term. But that would be absurd. No, we can expect the best and brightest to finally shake off their aversion to intellectually stimulating fields and choose to go into the already highest-paying fields because the benevolent government would now deem them worthy.

What’s next, federal athletic scholarships for American high school athletes to enable us to better compete against foreigners? It’s not right that our professional leagues are being taken over by kids from the Dominican Republic and David Beckham.

The “do anything, as long as it’s something” mentality of politicians never ceases to make my brain hurt.

P.S. There is a stipulation in the funding based on merit, right? One not already met by merit scholarships provided by universities and private charities?

I retract my praise of the Bush Administration.

Remember back to October when I wrote about this story:

In its statement, USAID said the funding “should not have occurred, and there will be no further circumcisions performed with U.S. Government funds until the PEPFAR Scientific Steering Committee reviews data from ongoing clinical trials and considers any recommendations on male circumcision from the normative international Agencies.” PEPFAR is the Bush anti-AIDS program.

I guess the “results” are in. Were they even in doubt?

President Bush’s $15 billion anti-AIDS program will begin investing [SIC!] significant money in making circumcision available to African men seeking to protect themselves from HIV, top U.S. health officials said Sunday.

Recent research showing that circumcision dramatically cuts the rate of HIV infection is highly convincing [ed. note: <sarcasm>I’m shocked.</sarcasm>], a delegation of U.S. officials, led by Health and Human Services Secretary Mike Leavitt, told reporters in Johannesburg.

Countries taking part in the President’s Emergency Program For AIDS Relief have been invited to seek money to expand access to the procedure.

If you want to know how carefully our $15,000,000,000 will be spent, guess:

Circumcision funding would be small at first, with budgets in the hundreds of thousands of dollars for individual countries. But it is likely to grow to be “an important part” of the program in coming months and years, said Kent R. Hill, an assistant administrator for the U.S. Agency for International Development.

Small at first, but likely to grow in the coming months. Surely we’ll have a definitive answer by then.

The cells in the foreskin of a penis are especially vulnerable [ed. note: Are we sure?] to HIV, and removing the foreskin makes a man about 60 percent less likely to contract the virus, studies in South Africa, Kenya and Uganda have shown. The research reinforces studies showing that regions with high circumcision rates generally have lower rates of HIV.

About those regions… “Generally” isn’t enough, unless you’re world health experts or the United States government. Then definitive proof isn’t necessary, nor is the obvious point that $15,000,000,000 buys a lot of condoms, which have a definitive, significantly higher success rate at preventing HIV, pregnancy, and other STDs than male circumcision’s “about 60%”. I’m sure the Bush administration is waiting for “broad international consensus” on the issue of condoms and their effectiveness.

As I said in October:

I’m not sure where funding AIDS prevention in Africa falls within the Constitutional responsibilities granted to the United States government, but that’s not my issue.

Today, it’s my issue. Where is funding AIDS prevention circumcision in Africa noted within the Constitution? Which article grants that power? All of the immoral actions of our government weren’t enough, so we had to have this? Really?

Of course, what could possibly go wrong with government handling HIV/AIDS policy? I’m sure our $15,000,000,000 will be spent wisely. It sure will buy a lot of garlic, beetroot, lemons and African potatoes.

Unfortunately, this is also support for another belief of mine. There is a push within the anti-circumcision movement to promote a single-payer health care system in the United States because it would presumably require the bureaucrats to stop funding unnecessary surgeries to fund necessary medical care. This will not work because our politicians are short-sighted. They make decisions for political gain. As long as there is a desire by parents to hack away parts of their sons and an ignorant denial of science and ethics acceptance that this is okay, infant circumcision will continue in America. It doesn’t matter if it’s funded by insurance, government, or parents. It will continue. Just because rationing decisions must be made does not mean that rational decisions will be made.

The worst part of this is easy to predict. This money will be used to fund infant circumcisions, regardless of what the parties involved are now claiming. That’s just the inevitable line of (non-)thinking from public health officials. If it wasn’t, we wouldn’t have seen the push for infant circumcision six days after the latest findings on voluntary, adult circumcision were released in December. Voluntary and adult always get lost. Always.

Never trust a politician with your wallet.

I understand the appeal of a Pigou tax to counter the negative effects of gasoline use/carbon output. Theoretically, it’s perfect because it puts the burden on the user creating the problem, which is where it should be. In practice, I see no reason to trust politicians to stay within the bounds of the plan and not dip a finger or shovel into the funds. For example:

President Bush spoke out Thursday against increasing the gasoline tax, an idea being discussed as a potential part of a new Congressional plan to shore up the nation’s bridges after the deadly collapse in Minneapolis.

I get the idea that those who use the road would be paying for the road. That’s fine, except why should bridges be federal expenditures? So why should a national gas tax, collected and managed by the Congress, be used in this capacity? And isn’t a gas tax supposed to offset the negative environmental outcomes of burning gasoline?

Representative James L. Oberstar, Democrat of Minnesota and chairman of the House Transportation and Infrastructure Committee, suggested this week that a tax increase might be needed to finance a proposed trust fund to repair bridges in the Federal Highway System, [sic] A large percentage of the bridges have been identified as having structural problems.

The key here is that, under current Congressional “leadership”, a large percentage of bridges managed by the federal government have uncorrected structural problems. The same legislative body that allowed this situation to develop without adequate (though, not necessarily appropriate) funding is somehow competent to manage a new influx of cash. Gotcha. I certainly trust the Congress to spend increased gas taxes where they’re needed. It’ll be just like shoring up Social Security with the trust fund receipts.

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On an amusing side note, President Bush is certainly bold:

Asked about the gasoline proposal, which could amount to an increase of 5 cents a gallon under schemes floating around Congress, Mr. Bush said, “Before we raise taxes, which could affect economic growth, I would strongly urge the Congress to examine how they set priorities.”

More than six years in and he’s finally suggesting that Congress examine how it sets priorities. It’s not like he could’ve vetoed any excessive spending and request that it be redirected to infrastructure. (Again, I’m only conceding that the federal government is involved in infrastructure, not that it should be involved.) No, he’s solely the tool of Congress to approve what they approve.

Or he could examine how he sets priorities. If I recall correctly, and I do, several years ago President Bush was busy demanding that the Congress pass a bigoted constitutional amendment. Apparently hating gays is a higher priority than preventing bridges from falling down.

Don’t just “Do Something”.

Never let it be said that Democrats in Congress aren’t living up to their promises to reform the system.

Farm bloc lawmakers yesterday offered the U.S. fruit and vegetable industry $1.8 billion in new federal grants over the next five years as part of a farm bill that would leave in place far larger subsidies for grain, cotton and dairy producers.
…

The package, unveiled yesterday by Committee Chairman Collin C. Peterson (D-Minn.), also increases funding for land conservation, wetlands protection and nutrition programs — popular with environmental groups and urban lawmakers.

House Speaker Nancy Pelosi (D-Calif.) called the package “a good first step toward needed reform.”

Right, so reform means keeping large subsidies and adding smaller subsidies. Can we have the old status quo?

I looked through the entire article, and the only mention of reform, defined quite loosely as a change in actions, is this:

Federal payments to private crop insurers would be reduced by about $1 billion over 10 years to free funds for other priorities.

An earlier subcommittee draft of the farm bill would have merely extended the current farm subsidy programs. The proposed new version would do away with some price guarantees and allow farmers to opt for an income guarantee instead.

Taxpayers will save $1 billion over 10 years, which will be immediately shifted to some other spending “need”. Like income guarantees. But at least Congress wants to phase out price guarantees.

I was not blind to the devil’s bargain in 2006 I used to vote for Democrats to replace Republicans. They’re both irresponsible. But I don’t know what’s worse, abandoning principles or being so stupid that you ignore the electoral justifications behind your victory. I’d already made up my mind that I won’t make that mistake in 2008. I’m just amazed that Democrats keep trying so hard to reinforce my decision.

I don’t think Maryland Gov. O’Malley is dense.

First, the obvious:

Maryland’s efforts to close a gaping budget shortfall next year could result in higher income taxes for the state’s more affluent residents — and a possible break for those earning less.

Gov. Martin O’Malley (D) and leading lawmakers say they are giving serious consideration to overhauling the state’s tax brackets, which are among the flattest in the nation. Everyone with taxable income of more than $3,000 a year pays the same rate.

To close a “gaping budget shortfall,” Maryland could try not spending so much money. Novel, I know, but it’s been known to work for middle-, lower-, working-, and even upper-class families where expenses exceed income.

But there are (Democratic, not that it really matters) politicians involved, so that idea is not only not feasible, it’s not “fair”.

O’Malley called the structure “patently unfair” this week, saying at a Democratic breakfast in Frederick that Peter Angelos, the wealthy trial lawyer who owns the Baltimore Orioles, should not pay the same rate as “the woman who cleans his office.”

“I’m in favor of progressive taxation, where people who make a lot more pay more,” O’Malley told reporters recently.

Does everyone in Maryland pay the same dollar amount to the state? Do Peter Angelos and his cleaning woman each pay $500, to pick a random tax amount? No? Then people who make “a lot” more in Maryland already pay (a lot) more. Anyone who believes otherwise is either too dense to be qualified for public office or a liar.

House Backs Meddling in Different Ways

When writing legislation to tinker with an already broken system, it’s best to understand which assumptions are flawed. First, the set up:

House Democrats pushed through legislation yesterday that would boost government-subsidized student loans and other college financial aid by $18 billion over the next five years, despite strong opposition from Republican lawmakers and a White House veto threat.

The legislation, passed in a 273 to 149 vote, would cut interest rates on federally backed student loans in half and increase Pell grants for low-income students. It would pay for the measures by slashing subsidies to lending companies by about $19 billion over five years and use about $1 billion of remaining savings to reduce the federal deficit.

Cutting subsidies is always good, but to divert the savings to grants and interest-rate cuts, as if Congress can legitimately and arbitrarily cut them to a desired rate and have the outcome be economic efficiency is folly of the highest order. This plan will no more help students go to college affordably than anything else Congress has tried since it began subsidizing higher education.

But that’s not the fun part. Consider this:

House Republicans also offered a plan yesterday to substitute increased Pell grant funding for the interest rate cuts. They said they favor that approach because more of the money would be targeted to lower-income students, whereas interest rate cuts benefit middle-income borrowers as well.

The most fundamental flaw in higher education is the silly notion that government policy should establish parents as best suited to pay for college. Nonsense. College students are adults, and should be expected to bear the burden. If their parents want to pay, fine. That’s a decision within the individual family. Government should not step in the way.

But undergraduates are almost exclusively lower-income students. They would be lower-income borrowers. If the student’s parents are middle- or high-income, but choose not to pay for college, how is that student any different than the student whose parents would pay for college if they could afford it? The outcome is exactly the same, except the student whose parents are lower-income will get free money from the government. Once again, the government is picking winners and losers based on criteria other than facts.

I wonder why?

[Rep. George] Miller said the changes were necessary to make college affordable to all Americans. “We have an obligation to make sure that students have the maximum opportunity to take advantage of a college education,” he said.

Congress does not have any such obligation. It only has a Constitutional obligation to stay out of the market for college and student loans. If having a college degree is so wonderful, and my two degrees suggest I think it is, supply and demand will sync without help from Congress.

Full disclosure: I received Pell grants all four years as an undergraduate. I also had to repay a significant portion of my student loans early because it was in my mother’s name. Government requirements wouldn’t let me borrow everything in my name, even though I received zero financial support. I repaid the loan early because it was restricting my mother’s access to credit for her needs.

Stirring Incomplete Information from Michael Moore

I touched on this yesterday, especially in the comments, but Michael Moore has trouble with facts. I wouldn’t call him a liar, because he’s a skilled propagandist. The facts, out of context, are still the facts. Forget that such abuse of context fails to reveal anything intelligent about policy. As long as it’s a fact, it can be defended.

That’s his tactic today in challenging CNN’s reporting on Sicko, with the requisite omission of any context. For example, Moore praises Cuba’s health system, although the WHO ranks Cuba 39th compared to the U.S. ranking at 37. Moore rebuts this “gotcha” moment from CNN by stating that he put this figure in the movie. Fair enough; I don’t doubt that he did. He’s generally guilty of omission, not commission. He’s a propagandist, so no surprises.

What he fails to do is provide any context for those rankings. The latest link I can find describes it’s methodology in determining that ranking:

In designing the framework for health system performance, WHO broke new methodological ground, employing a technique not previously used for health systems. It compares each country’s system to what the experts estimate to be the upper limit of what can be done with the level of resources available in that country. It also measures what each country’s system has accomplished in comparison with those of other countries.

WHO’s assessment system was based on five indicators: overall level of population health; health inequalities (or disparities) within the population; overall level of health system responsiveness (a combination of patient satisfaction and how well the system acts); distribution of responsiveness within the population (how well people of varying economic status find that they are served by the health system); and the distribution of the health system’s financial burden within the population (who pays the costs).

Broke new methodological ground. Oh, and employing a technique not previously used for health systems. Don’t forget comparing to what the experts estimate. Is it possible to have methodological flaws, or to at least draw irrelevant conclusions based on estimates?

But let’s get to the last two measures. For distribution of responsiveness, how many people in the United States are denied adequate health care, a question independent of whether or not they’ll face an economic burden from that health care? In the answer, would you rather be the average American or the average Cuban? I suppose if you believe that Moore’s visit to Cuba first-rate hospitals was more honest than mere propaganda from a Communist state, the answer isn’t obvious. But any answer other than the U.S. is wrong.

Of course, that doesn’t mean we have the financial burdens perfectly figured out, which is the last measure from the WHO. Again, no one is denied medical care, which should matter. Moore ignores that when he (apparently¹) fails to mention long waits and rationing for essential services in countries with single-payer health care. But specifically to funding, it’s not objective to decide that too many people face economic ruin (not a percentage of bankruptcies, as Moore states, but how many people?) from the system we have, so we should place the burden exclusively on taxpayers. That’s a pre-determined solution without concern for the actual problem, which is economic burden.

If we’re looking to reduce the economic burden from a health crisis, insurance to cover catastrophic medical care is the way to go. Have people pay for their own preventive care, or buy separate insurance for that, if they choose. But disentangle coverage for catastrophic events from coverage for routine care. The current situation we have where the two are co-mingled is largely a government-created problem. Fix the broken government incentive problem by removing improperly targeted incentives, such as tax-subsidized employer health insurance.

Instead we’re left with disingenuous framing of the problem while ignoring what would actually resolve the issues we face. This quote exemplifies focusing on wrong assumptions:

“It is especially beneficial to make sure that as large a percentage as possible of the poorest people in each country can get insurance,” says [Dr Julio Frenk, Executive Director for Evidence and Information for Policy at WHO]. “Insurance protects people against the catastrophic effects of poor health. What we are seeing is that in many countries, the poor pay a higher percentage of their income on health care than the rich.”

Dr. Frenk’s opening sentence is fine, if he understands the true problem. The rest of his quote suggests he does not. If he understood, he would’ve stated that insurance against catastrophic medical events protects people from the catastrophic financial effects. He didn’t, offering only the empty, obvious fact that the poor pay a higher percentage of their income on heath care than the rich. Of course they do, just like the poor pay a higher percentage of their income on food, housing, gasoline, clothing, and every other generally necessary expense. This is not news, nor is it specific cause for government intervention through economic redistribution² and health care financing and provision, contrary to what Moore believes.

Moore also thinks the 20 to 30 percent of Canadians who disapprove of their waiting times for health care don’t matter. The minority never matters to a populist, or the liberty lost to mob rule. Now ask yourself if Moore’s comparison of American and Cuban infant mortality rates, for example, might have a bit more nuance than he’s letting on.

Link to Moore’s rant via Boing Boing. Moore’s rant on CNN here.

¹ Full Disclosure: I still haven’t seen Sicko. Viewing it isn’t necessary for my analysis here. Also, I have no respect for the WHO, since it promotes a gender bias in unnecessary, forced genital cutting, and it’s incapable of understanding that circumcision to prevent HIV infection is better suited for sexually active adults who volunteer for the procedure based on their own evaluation, rather than forcing the surgery on infants who will not be sexually active for well over a decade.

² I wonder what Dr. Frenk’s position would be on taxes to pay for health care. Would he be as distressed that the rich pay a (much) higher percentage of their income in taxes than the poor? If it’s about fairness in percentage, a little fairness in analysis might be useful.