What Does Government Subsidized Housing Tell Us About The Future Of Health Care?
If you’ve ready anything about the losses on the books of the government housing entities like Fannie & Freddie, the losses are over the $200 billion market for the last couple years. In recent years, we’ve had a massive increase in FHA loans potentially sowing the seeds for massive losses in coming years (2011-2013). The overall picture is one of subsidized housing and massive losses in the public sector. Since losses are just plugged with tax payer dollars, the result is taxpayer funded subsidized housing.
If we move to the health care sector, and start analyzing what a government encroachment into this sector might look like, we should keep in mind the housing picture. Proponents of health care “reform” say that a public insurance plan is a great way to increase competition, and of course, if you want to keep your insurance, you can. Well, I can get a private mortgage through Bank of America or I can get one through FHA, but why do more than half of all mortgages now go through FHA?
My point is that by being able to run at an operating loss, government programs or “options” will always slowly take over market share. In the same way that FHA loans are now almost all new loans being originated, the public health care option would take over most health insurance policies. Would this be a sustainable or operate without incuring a loss? Of course not, and if you disagree, you’re extremely naive.
So, yes, we could move towards the government providing everything for us in life. They could charge less than the private sector which seems wonderful to people who have no clue about economics. The losses on the government books will pile up. These losses will be met with either higher taxes (unlikely) or more debt and printing press. My guess is that the debt will increase and so will the printing press activity (hello, inflation).
This is arguably the most important week in the health care “reform” debacle that has overtaken the political scene for the last year. I could go on and on about the circus-like performance of our esteemed leaders in Washington, D.C., but I’ll leave that for another day. For everyone who voted for “change”, the country is definitely changing, that’s for sure.