Thrifty Government?

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For Government Use OnlyIn speeches and press releases, the president has claimed that by assuming greater control over the health care industry, the government will be able to reduce the amount of money Americans spend on health care—while simultaneously improving the quality of care they receive.

How do President Obama and the Democrats pushing for health care reform propose to accomplish this feat? One of the key elements of their plan is reducing wasteful spending. Obama insists that government can do a better job of reducing waste than individuals and businesses can when they make their own health care choices. In fact, the president has declared that he can save “$500 billion over 10 years” by “rooting out waste and fraud and promoting quality and accountability.”

In a recent editorial, TU Guest Editor Amit Ghate challenges these claims at their root. Examining the issue in both economic and philosophic terms, he contrasts the nature of the decision-making process of individuals spending their own money to that of governments spending other people’s wealth. He writes, “When men are free to pursue their own values, they’re incentivized to act carefully. Notably, they evaluate their purchases to ensure that what they receive is worth more to them than what they give up — they profit from their exchanges.” He then goes on to show how radically this changes—in any area of the economy—when government usurps the individual’s ability to decide for himself what he values.

Posted by on August 28, 2009. Filed under Government & Law, Summer 2009. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry
  • Grant

    About three months ago, in need of supplemental income, I took a job to help prepare an auditorium for a sales convention. The work was entirely unskilled – hanging up signs, passing out fliers, etc – and should have only paid minimum wage. However, to my complete surprise, when it was all over I was paid nearly $25.00 per hour!

    I was curious, and when I looked into who these people actually were, I found some very interesting things. The company described itself as a “medical technology” company, and their primary business was providing customized software to the health care industry. I also noticed that it happened to be headquarted in Chicago. Knowing that President Obama hails from Chicago, and also knowing that one of his most touted ideas about how to reduce health care costs was the computerization of medical records, I couldn’t resist doing some more digging.

    Lo and behold, the CEO of this company is connected to The President. He was a donor to his Senatorial campaign, and the then-Senator spoke at a philathropic event hosted by this individual in 2006. The company’s website also features a press release heaping praise upon the American Recovery and Reinvestment Act of 2009 – legislation signed by The President featuring, among other things, $20 billion in grants to physicians who “agree” to computerize their medical records by 2014 (if they do not accept the grant and/or do not computerize up to a yet-to-be-defined government standard they will face a 3% reduction in their payments from Medicare).

    No wonder this company is so willing to pay someone more than three times the going rate to do completely mindless labor. With government cash in their future, and with “sales people” who, even though they will be nicely motivated by a week’s stay at a resort hotel and an elaborate sales conference, don’t have to do anything except politely threaten their “clients” with dire consequences if they do not buy what they’re selling, why not throw money around to people like me who don’t really deserve it?

    Although my experience was hidden behind layers of misleading verbiage, corporate formaility, and capitalist pretense, it is a striking example of how the government’s attempt to be thrifty with other people’s money manifests itself in the real world.

    (Don’t worry though… I most likely used that extra money to kick back with a beer and read an Objectivist’s blog, or to pay down my credit balance with BB&T).

  • Grant

    About three months ago, in need of supplemental income, I took a job to help prepare an auditorium for a sales convention. The work was entirely unskilled – hanging up signs, passing out fliers, etc – and should have only paid minimum wage. However, to my complete surprise, when it was all over I was paid nearly $25.00 per hour!

    I was curious, and when I looked into who these people actually were, I found some very interesting things. The company described itself as a “medical technology” company, and their primary business was providing customized software to the health care industry. I also noticed that it happened to be headquarted in Chicago. Knowing that President Obama hails from Chicago, and also knowing that one of his most touted ideas about how to reduce health care costs was the computerization of medical records, I couldn’t resist doing some more digging.

    Lo and behold, the CEO of this company is connected to The President. He was a donor to his Senatorial campaign, and the then-Senator spoke at a philathropic event hosted by this individual in 2006. The company’s website also features a press release heaping praise upon the American Recovery and Reinvestment Act of 2009 – legislation signed by The President featuring, among other things, $20 billion in grants to physicians who “agree” to computerize their medical records by 2014 (if they do not accept the grant and/or do not computerize up to a yet-to-be-defined government standard they will face a 3% reduction in their payments from Medicare).

    No wonder this company is so willing to pay someone more than three times the going rate to do completely mindless labor. With government cash in their future, and with “sales people” who, even though they will be nicely motivated by a week’s stay at a resort hotel and an elaborate sales conference, don’t have to do anything except politely threaten their “clients” with dire consequences if they do not buy what they’re selling, why not throw money around to people like me who don’t really deserve it?

    Although my experience was hidden behind layers of misleading verbiage, corporate formaility, and capitalist pretense, it is a striking example of how the government’s attempt to be thrifty with other people’s money manifests itself in the real world.

    (Don’t worry though… I most likely used that extra money to kick back with a beer and read an Objectivist’s blog, or to pay down my credit balance with BB&T).

  • Daniel Casper

    Even if the government can “save” $500b over the next few years, even if it could profit from selling health care, it would still require the sacrifice of property rights in order to do so. Also, it would only serve to weaken the current medical industry by creating a government-funded competitor which would take their market share. In the long-run, this would worsen the health-care market, and as Mr. Ghate pointed out, require more sacrifice of the individual to the collective. This is immoral and therefore should not occur.

  • Daniel Casper

    Even if the government can “save” $500b over the next few years, even if it could profit from selling health care, it would still require the sacrifice of property rights in order to do so. Also, it would only serve to weaken the current medical industry by creating a government-funded competitor which would take their market share. In the long-run, this would worsen the health-care market, and as Mr. Ghate pointed out, require more sacrifice of the individual to the collective. This is immoral and therefore should not occur.

  • A. Chambers

    Grant,
    That’s an interesting story. Compares nicely to the scene in Atlas Shrugged when James Taggart is ‘paying’ for the champagne that Orren Boyle is letting dribble down his chin, eh?
    Cheers,
    Amber

  • A. Chambers

    Grant,
    That’s an interesting story. Compares nicely to the scene in Atlas Shrugged when James Taggart is ‘paying’ for the champagne that Orren Boyle is letting dribble down his chin, eh?
    Cheers,
    Amber

  • Grant

    Amber,

    You’re right, it does. Exactly. Although, I don’t like thinking that the reason why I have to do work like that is because I’m an incompetent like Orren Boyle was.

    Grant

  • Grant

    Amber,

    You’re right, it does. Exactly. Although, I don’t like thinking that the reason why I have to do work like that is because I’m an incompetent like Orren Boyle was.

    Grant