The proposed “public option” for health insurance has raised fears about how it might crowd out private insurance and so worsen the options open to consumers. Proponents have offered compromises.
One would activate the government program only when performance by private companies was judged inadequate. Another would allow individual states to opt out of the national plan. That compromise is particularly meaningless, even ridiculous – one reason being the mobility of people across state lines.
The whole discussion, reflected in the l,500-page-or-so bill pending in Congress, illustrates the incoherence of ambitious government programs. Political horse-trading displaces informed analysis of how a program’s components might fit together.
Many years ago I kept Professor Wassily Leontief company for a couple of hours before he gave a speech. Leontief was famous for his input-output tables supposedly showing how the many sectors of an economy fit together and for his advocacy of “national economic . _ planning.” Citing examples in farm policy, trade policy, price controls, subsidies, and the like, I tried to counter with “public choice” explanations of why coherent planning was hardly to be expected from politics-driven government. Acknowledging the examples, Leontief said that they only underlined the need for his “planning.” In short, planning would overcome the inconsistencies of ambitious democratic government. This vain hope invites Ayn Rand’s favorite dismissive word: “somehow.” Similarly, the mishmash of healthcare proposals might work well – somehow.