The Student Loan Lesson for Health Reform

Monopoly - Pennybags

From now on, any time you need care, just come ask my permission!

(Guest post by Greg Forster)

In case you missed it, you’ll definitely want to check out Stephen Spruiell’s NRO column on what we can learn about health care reform from looking at the federal student loan program. “Reform” means irreversible steps that must inevitably end in dictatorial socialization.

It’s important to begin with the understanding that we don’t have a free market in health care as it is. What we have is a government-mandated cartel. Pretty much all the problems people complain about arise from the mandatory cartelization of health care. The question is whether we’re going to stick with this lousy command-economy cartel, or switch to an even worse direct government monopoly.

I’ve noted before how the already-complete monopolization of the education sector provides a general model for the ongoing monopolization of health care. But Spruiell’s article on how government muscled its way to becoming the sole student lender in America demonstrates that the education monopoly provides not only a general model, but a step-by-step tactical plan:

  1. Sponsor a huge, hubristic attempt to monopolize the market.
  2. When you lose that fight, fall back on the comparatively “reasonable” “compromise” of massive subsidies.
  3. Sit back and wait for the massive subsidies to badly distort the market, creating widespread suffering and injustice.
  4. Whip up public anger over the injustices you’ve created, directing blame away from yourself by demonizing the private service providers.
  5. Offer a “public option” as a way to “control costs” and “keep the private sector honest.” Subsidize the public option so it offers a better deal.
  6. Watch the “public option” become the dominant service provider, and then a de facto monopoly.
  7. Demonize the remaining private providers because they’re not as good as the public option.
  8. Outlaw the remaining private providers so everyone must now come to you.
  9. Begin reshaping the government service provider to meet your needs, taking advantage of your complete freedom to order everything however you want, since there are now no alternatives and thus no way for anyone to effectively resist you.
  10. Lie back and enjoy your tyrannical rule over a nation of willing slaves.

On federal student loans Congress is about to take step 8. On schooling generally we’ve long since completed step 6, but the periodic attempts to progress to step 7 have (so far) been successfully repulsed. On health care we are now being invited to take step 5.

The game is pretty simple. Most games are, once you read the box top and know what’s going on.

The only question that matters is: at what point does the progression become irreversible? I suspect that if we ever arrive at step 10, it will be primarily because at some prior stage, the people who were smart enough to see what was going on assured themselves that the point of no return had not yet been reached, when in fact it had.

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5 Responses to The Student Loan Lesson for Health Reform

  1. Patrick says:

    In my debates with the people on the left, and this is only my experience, they don’t seem to care that we have a government created cartel and that the government rules and regulations have created the problem. I can point to the 53 government mandates on health insurance, including the one that has me covered for drug abuse – even though I’ve NEVER used a drug – and coverage for chiropractic care or acupuncture, even though I don’t want or need that service. They don’t care when I point to Nevada state law that prohibits insurance competition between companies out of state and they certainly don’t care that Nevada’s small population means a smaller risk pool and high premiums to the point where health insurance in California is $470 cheaper per person. No matter how many alternative solutions you give to help reduce costs, they don’t care unless the solution is universal healthcare.

  2. Greg Forster says:

    Yup, that’s my experience with them, too.

    The good news is, many people who are not solidly “on the left” and are not yet heavily invested in the debate do respond to this stuff if you present it to them clearly and patiently.

    Too bad we don’t have leaders, or think tank folks, who can do that.

  3. Patrick says:

    http://blogs.reuters.com/great-debate/2009/07/20/the-three-urban-myths-of-healthcare-reform/

    Just read the article and then the comments. Reasonable article – lots of irrational comments.

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