The Midas Touch

All government provided benefit programs are doomed to failure because they bypass the natural controls that price puts on every commodity and service.   Most conservatives seem to know this (and note I didn’t say Republicans), but liberals always claim that we didn’t do enough or find some corruption to pin the blame on.

The National Flood Insurance Program is failing (HatTip: A Stitch in Haste), but it isn’t because there was a catastrophe, it’s because you can’t insure anything that is in the control of the insured.  You can control whether or not you live in a flood plain so are in control of whether or not you will collect or not.  Most people that buy flood insurance are at a high risk of flood, meaning that premium collected needs to exceed the replacement cost of your home.  Who would buy insurance that costs more than just replacing your home outright?  No one, which is why no one provides flood insurance so the government feels compelled to provide it anyway.  

Medicare and Social Security are no different; the insured has 100% control over the costs.  If you had to provide for your own retirement, you wouldn’t retire until you had enough money to do so.  If the government picks up the tab, however, you retire at 65 whether you are capable of working or not.  With government provided healthcare, you will visit the doctor whenever it is even remotely possible you may have something wrong with you, if you were paying for it yourself you would only go when you were sure you really needed it.   The examples are nearly endless; victims from the recent hurricane are sitting around collecting unemployment and spending their $2000 checks from the feds on strippers and booze while there are countless Help Wanted signs in Louisiana.  They aren’t unemployed because there is no work; they are unemployed because the government is paying them to be unemployed. (HatTip: Louisiana Libertarian)

Programs such as Amtrak and NASA are a bit different, but still destined to failure.  Government runs a train that no one wants to use because no one else is willing to pay for it.  Why is train service for no one a public good?  NASA is also providing services that no one is willing to pay for, as a result we get a program that is unsafe, consistently over budget and consistently late in providing its promises.   At a time when the government is running a deficit to the tune of billions of dollars is this really a priority that we should be wasting tax payers’ money on?  

Education festers because administrators are more interested in securing funding than providing the best possible education.  Highway construction serves as a money laundering service for the politically connected.  How many more examples do we need before the public learns that everything that the government touches turns to shit?