Verily on Economics (WARNING: Long)

[Emsworth]

Furthermore, our current health care system demands that companies shoulder the financial burden of their employees’ health. This both discourages companies from hiring the best workers simply due to illness and also eats into economic productivity by funneling money away from companies with sick workers. [...] The solution to this problem is universal health care, dare I say it, socialized health care.

Non sequitur. It is true that the current healthcare system essentially compels companies to directly provide for their employees' health insurance. It is also true that such a system is not optimal. However, it is not necessary to introduce so radical an idea as universal healthcare to solve the problem. On the contrary, one can simply amend the tax structure so as to abolish the incentives that employers presently have to pay for their employees' insurance costs.

You must be logged in to read this quote.

The idea of charging more than is necessary for a particular service is not unique to the healthcare system. It applies to every other business as well. Yet, one generally thinks of all those businesses as efficient, not inefficient. What sets healthcare apart--why does the profit motive lead to inefficiency in one instance, but not the other?

You must be logged in to read this quote.

One is simply replacing one "drag" on individual wages and corporate profit with another--namely, taxation.

You must be logged in to read this quote.

I absolutely agree that the "average" citizen needs a safety net that guarantees that a severe illness will not render him bankrupt. Unfortunately, a lot of people don’t quite see it that way. Health insurance is no longer something that covers only extreme cases -- emergency operations, for example. Instead, it has become something that one relies upon for prescription drugs (thanks, no doubt, to the manner in which the government has structured income tax credits, deductions, and so forth). Certainly, insurance costs would go down if we were to treat prescription drugs as ordinary monthly expenses rather than as extraordinary costs that must be covered by insurance.

But aside from all of the practical questions involved, there is also a philosophical issue. Generally, one does not adopt a purely utilitarian calculus when attempting to resolve questions of public policy. There are also normative issues to be considered. Moral claims are subjective; therefore, any debates involving morality are necessarily bound to be somewhat nebulous. Nevertheless, the philosophical discussion is certainly a worthwhile one. Is healthcare a positive right, and therefore something that the government must provide regardless of the practical consequences? Or, on the contrary, is there a right to property -- meaning that any universal healthcare system is tantamount to theft? Or, perhaps, does neither right exist, in which case the utilitarian consideration is paramount? 

[Emsworth]

that doesn;t solve the problem of unhealthy employees, it makes it worse.

On the contrary, the employees would simply have to buy their own insurance.

You must be logged in to read this quote.

How exactly do you draw this rather startling conclusion? Unless you are defining "efficiency" in an unconventional manner, your statement would be inaccurate. The profit motive is precisely what produces efficiency (relative to the alternatives, at least).

You must be logged in to read this quote.

In order for the government to do anything more efficiently than the free market, the government has more information than the free market--which is quite plainly not the case.

You must be logged in to read this quote.

One can eliminate those programs independently. It is not necessary to establish universal healthcare in order to reduce other forms of spending.

You must be logged in to read this quote.

Food is even more essential to individual health than prescription drugs. Should the government provide free food to everybody? Clearly not: food is regarded as nothing more than a normal expense--a product that individuals must provide for themselves. I propose that prescription drugs be regarded the same way. Insurance is (or at least should be) meant for unforseen catastrophes--house fires, automobile accidents, emergency operations.

You must be logged in to read this quote.

That is certainly the assumption you have made. But utilitarian analysis disregards entirely the issue of individual rights, which (in my opinion) ought to be paramount in any liberal democracy.

You must be logged in to read this quote.

That depends on your point of view. Suppose that a store compelled you to buy a product every day. It is taking away your money, but giving you something in return. Some people might benefit tremendously from the product, but for others, keeping their money might have been preferable. Would you not consider this act theft?

I am not, however, arguing against taxes in general, which are obviously essential to any government. However, if a particular tax is used for illegitimate purposes, then certainly, imposing that tax is tantamount to theft. Whether the particular purpose you propose is legitimate or illegitimate ought, therefore, to be determined, before one proceeds to consider the practical harms and benefits of the plan.

[Emsworth]

Which, currently, at least half of the population can't afford. Would we really like to have half of our workforce easily disabled by illness?

Instead of providing health insurance as a benefit, the employer would simply increase the employee's salary; the employee would then use the money to purchase health insurance (or, if he so desires, something else).

You must be logged in to read this quote.

Lower prices are not equivalent to greater efficiency.

The problem here is that you are focusing only on one particular part of the economy--the sector encompassed by the product that the government is providing. However, one must remember that acts in one particular sector of the economy have effects that might reach other sectors. To be concrete: when society produces more of one particular good or service, it  must produce less of some other good or service, because its resources are limited. However, there is no way to know beforehand how much of each good or service is optimal. The free market remedies this problem through the mechanism of prices. A rise in prices is a signal to increase production; a fall in prices, conversely, is a signal to reduce it.

This mechanism fails, however, when the government intervenes--whether by controlling the prices themselves, or by taking over production. In either case, it becomes impossible to reliably determine the appropriate quantities of production. In some instances, too little of society's resources might be devoted to the product in question, the consequences of which are obvious. On the other hand, too much of society's resources might be used up, in which case other parts of the economy suffer from shortages. This is precisely the problem that is likely to result from any socialized healthcare scheme; too much money is pumped into healthcare, and, consequently, too little into some other sector or sectors.

This would not be the case only if the government somehow had more information than the free market: if it knew more about the optimal distribution of resources. I see no reason to do anything but doubt such an assumption.

You must be logged in to read this quote.

I must be living in a very different country than you, if all of your compatriots are perenially ill. Most people I know are quite healthy, and would need to call upon insurance only rarely.

You must be logged in to read this quote.

Perhaps, then, there should be a high deductible--the insurance company would pay for prescription drugs only if the costs are particularly high.

You must be logged in to read this quote.

One's money is being taken away; hence, the right to property is being violated. When the money is used for something like national defense, I think the violation is justified--but here, I consider it unjustified.  

You must be logged in to read this quote.

But suppose that the product was "essential": water, for example. Would it be acceptable for a store to force someone to buy water, even if he did not desire it? (The fact that water is cheap is irrelevant to the analysis--the essential point is that A is forcing B else to buy something that A, and perhaps society in general, considers "essential," but that B does not wish to buy.)

You must be logged in to read this quote.

This situation arises precisely because of the problem I outlined earlier: the failure to emphasize insurance as something that is supposed to cover exceptional and unforseen expenses. High deductible insurance, if only the tax structure did not discourage it, would be significantly cheaper.