Tuesday, October 29, 2013

Obamacare: The Mother Of All Market Distortions (Updated)

Market distortion occurs when government imposes artificiality on markets through regulation. Such distortions always - always - always - cost the economy and individuals. I am not talking about laws of contract and fraud which set the parameters of the playing field for the operation of the free market, but rather regulations limiting free market decisions. Some are simply corrupt - i.e., the protection of vested interests. Others are more insidious and derive from the penultimate deceit of the left - that they are more intelligent than millions of individuals making their own decisions on how and what to purchase and sell.

Its hard to top the left's subprime housing crisis that brought our economy to its knees for market distortion. But that was a distortion that took fifteen years to bear its poisonous fruit. The biggest market distortion we are likely to see in our lifetimes and this side of the Soviet Union - one that is already bearing immediate fruit - is Obamacare. Healthcare is one sixth of our entire economy, and Obamacare is just starting to explode it.

The left has taken over our healthcare industry, mandating vastly expanded mandatory areas of coverage, from pregnancy, mental health, pre-existing conditions, "free" wellness checks, and "free" contraception, including the "morning after" abortion pill. They have mandated universal coverage - for supposedly an additional 30 million people - as well as subsidized coverage for lower and lower middle economic class. For this to work without adding to government debt, the middle and upper class are going to have to pay much more for their coverage, the young need to buy into the plans so as to subsidize the old and sick, and there is going to have to be a lot of new tax revenue to take up the slack for subsidies.

There is zero chance that this plan will work as advertised by Obama and the left. It will not save people money. It will not bend down the cost of health care. It will not provide universal coverage. It will not reduce the deficit. And of course, people who like their coverage will not be able to keep it at their choosing.

Some of these claims were knowing falsehoods.

Others seem to be attributable to the supreme conceit of the left, that they are smarter than the free market.

Because Obama has unilaterally put off the employer mandate to 2015, we are going to have to wait one more year to be able to take full stock of the near term impact of Obamacare in all of its 'glory.' But my full expectation is that it will add steeply to the deficit, that it will send the economy into even greater stagnation, if not outright recession, and jobs will further contract. It will be a far left trifecta.

The only good thing about this is that the far left owns this monstrosity. Whatever the right does, it should not agree to anything as a fix. Any attempt to put a band aid on this cancer will only extend out the pain. There is one answer only - repeal.

There will likely never be a greater experiment in socialist and Keynsian economic theory than the Obama administration policies in virtually all areas of government. The only question is whether the American people will ever take realistic stock of the outcomes.

Additional Updates: From Powerline on the higher costs of insurance under Obamacare:

For a succinct explanation of why Obamacare is making health insurance more expensive for millions of Americans, check out this short interview with Aetna CEO Mark Bertolini. Bertolini identifies three main factors: 1) Obamacare imposes a requirement that, on an actuarial basis, insurance cover at least 60% of health care costs. Currently, more than half of Americans who buy individual coverage are below 50%. 2) Obamacare imposes 4% to 5% additional cost in the form of new taxes and fees. Aetna alone will pass on $1 billion in Obamacare taxes and fees to its policyholders. 3) Obamacare mandates many coverages, whether customers want them or not, and requires insurers to provide subsidized coverage to those who are already sick.

And via Hot Air, there is Charles Krauthammer:

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