«
»

Cool, There's a Word For This

January 13, 2008, 9:14 pm

I have been calling it "the health care Trojan horse for fascism."  It is the phenomenon where government funding of health care is used as an excuse to micro-regulate individual behaviors.  Apparently, the economic term is "government financing externalities."

These kinds of "government financing exernalities" are commonly used
to justify government regulations that restrict individual freedom.
Liberals use these arguments to justify such regulations as mandatory
seat belt laws, smoking bans (because government may end up subsidizing
smokers' medical treatment if they get lung cancer), and most recently
restrictions on morgage terms (because the government may bail out
people who end up defaulting). Conservatives have their own favorite
government financing externality arguments. For example, many argue
that we should restrict immigration because otherwise the immigrants
might collect welfare benefits that are paid for by taxpayers.
Obviously, the greater the role of government in financing a wide range
of activities, the greater the number of potential government financing
externalities. The expansion of government spending facilitates the
expansion of government regulation intended to curb the negative
effects of the spending.

Government financing externality arguments generate their appeal
from the fact that they seem not to be paternalistic. We are willing to
let you hurt yourself, advocates implicitly suggest, but we can't let
your bad behavior hurt the taxpayers.

The libertarian solution to this problem is to eliminate the
government financing that created the "externality" in the first place.
I

Tags: , ,
Category: Regulation

8 Comments

  1. Craig:

    The problem with the listed example of conservative use of this practice is that conservatives don't want welfare programs. Liberals, on the other hand, want seat belt laws, smoking bans, etc. The health cost argument is just an excuse to help them get what they want (kind of like how global warming is an excuse to enact other liberal ideas).

    January 13, 2008, 11:20 pm

  2. such.ire:

    This is just nitpicking (I agree with the idea itself), but I don't think smoking bans necessarily are only justified by the "government subsidizing externalities" argument; instead, I think they are perfectly good examples of governments intervening to eliminate negative market externalities directly. Second-hand smoke causes a lot of problems, for example, even for non-smokers. Since we don't really have the pre-requisites for Coase's Theorem to apply, I'd say government regulation of smoking is perfectly fine. Creating mechanisms to solve negative externalities is partially what the government is for.

    January 13, 2008, 11:42 pm

  3. julian:

    We are a pioneering organization in India,venturing with a new
    concept of promoting Senior Citizens Short Term Resident Homes in
    India.This is a new venture aimed at targeting senior citizens abroad
    who want a good deal without the crippling expense. On the anvil is a
    cluster of old age comfort homes, independent cottages and similar
    facilities, which will tie-up with multi-specialty hospitals, nursing
    and paramedical assistance providers in INDIA.

    Why INDIA:
    India is fast developing in Medical science and Technology. Many
    people from across Europe come to India for medical treatment as it is
    cost effective and assured Quality in medical service. More over the
    cost of living in India is not so expensive when compared to Europe.
    With highly educated, skilled workers available at a much lower cost
    than in the West, India has become an attractive location for Health
    Care activities.
    Training and experience of Indian doctors is widely acknowledged
    particularly in the US and UK where they have made significant
    contributions to the delivery of healthcare in the host countries.
    Many of these doctors after having specialized and practiced in the
    West have returned home to set up impressive state of the art
    facilities with the latest in equipment, technology and service levels

    India provides world class, person centric, customized medical care
    at affordable cost and on demand, making it into a hassle free
    experience. We seek to restore health in a fashion that goes beyond
    simple healing. While your body and mind is cared for by outstanding
    specialists, in all probability also saving you thousands of dollars
    in the process, the magic of India and it's unique culture works on
    reinvigorating the spirit, to shape up once again to the challenge and
    stress of old age and living.
    For more details mail me at juliansebastian@hotmail.com with
    subject Senior Resident Homes.
    visit our alternative therepy page http://www.rosemaayurveda.com

    January 14, 2008, 5:29 am

  4. Mark Alger:

    ...and yet, there is no problem with government workers' joining unions, even though the government inevitably will end up financing over-inflated compensation packages.

    M

    January 14, 2008, 7:17 am

  5. BerthaMinerva:

    A bit off topic for this post, but on the subject of national health care as Trojan horse for all kinds of unsavory things, I was wondering what Coyote's take is on the news from Britain that the govt there now proposes that organs be harvested WITHOUT the deceased or the deceased family's consent.

    January 14, 2008, 9:04 am

  6. will:

    The concept of "Shared Resources" (air, waterway, roads, public buildings, national/state parks and forest, etc.) is that they are owned and shared by all the citizens and as such are regulated and controlled by the government, the representative of the citizens.

    These concept allows the government to regulate emissions into the air because we all share the same air. This becomes a rationale for regulating where people can smoke, since the results of smoking is expelled into the same air that others are breathing.

    If health care becomes a shared resource, i.e. paid for by the government, then it becomes inevitable that the government will regulate access, allocation and behavior. This is one of the many reasons to avoid government paid for health care.

    January 14, 2008, 10:01 am

  7. tribal elder:

    "A bit off topic for this post, but on the subject of national health care as Trojan horse for all kinds of unsavory things, I was wondering what Coyote's take is on the news from Britain that the govt there now proposes that organs be harvested WITHOUT the deceased or the deceased family's consent"

    SCARY STUFF. You can't sell your own kidney, but the gov't can give it away. Are UK residents (or at least deceased UK residents) now chattel for their owner-government to dispose of as it wills ? With gov't gatekeepers/rationers for health care, how long before someone sees that lengthening the time to get care in Nat'l Health will positively 'adjust' the actuarial experience on the benefits-paying (social security) side.

    January 14, 2008, 12:24 pm