Thursday, August 28, 2008

Big government is not a "great deal"

The Lexington Herald Leader editorial board still doesn't understand the role of basic economics in the health insurance marketplace. This leads them to promote a conclusion they can't justify and a solution that hasn't worked despite its repeated application over the last half-century.

"Money remains the biggest obstacle to Gov. Steve Beshear's campaign promise to insure all Kentucky children. It would require an additional $40 million from the state to cover all eligible kids."

"The federal government would pick up the rest."

"It's a great deal for states."

"Kentucky could spend $440 to cover a child in KCHIP, and the federal government would pay $1,560. The match is not quite that favorable for Medicaid, but it's close."

The implication is obvious: raise taxes, spend the money, and everything will be fine. Or the modern version, which involves simply borrowing the money first.

Americans are slowly coming to understand the economics of gas prices. If we subsidized $2 for every gallon of gas, that soon wouldn't be enough and we know it. Healthcare is no different.

The answer is less government spending on healthcare -- and less cost-increasing regulation. Not more.

1 comment:

Hempy said...

Nonsense. The answer is not "less government." That's not the kind of government our founders intended. They intended "good government" a concept that apparently is beyond the comprehension of "Bluegrass Policy Blog" (BPB).

BPB, like the Repugs, can't seem to grasp the concept of fairness in taxes -- that is, proportion despite it being clearly spelled out in Federalist Paper 12 by Alexander Hamilton. It's those pesky American values that Repugs and BPB can't seem to get their heads around.

Hamilton wrote:

"The ability of a country to pay taxes must always be proportioned, in a great degree, to the quantity of money in circulation, and to the celerity with which it circulates. Commerce, contributing to both these objects, must of necessity render the payment of taxes easier, and facilitate the requisite supplies to the treasury."