Tuesday, December 13, 2011

Government Healthcare and Keynsian Economics

I believe the government subsidizes healthcare because they REFUSE to encourage Americans to consume less.  They say, "This could only hurt the economy."  However, by encouraging lethargy and excess over the years, the government has, in essence, subsidized wasteful spending by the citizenry. 

It is always one subsidy to take care of the short-falling of another subsidy!  They argue:  "Last time, we just didn't spend enough.  This is the reason for this RECURRING situation."  This is a very circular argument to say the least!  It is a dogma that continually adds to the inevitable downside of these type policies; the consequences become more serious the longer we continue.

So, what happens if the government were to take a different approach?  What if, instead, they decided to form a committee to gather scientific evidence about all the health risks directly tied to our eating habits.  In addition, the committee would build a strong case and start initiatives to better educate the public about the consequences which exist from such behavior.  However, they avoid any subsidies, which can only create false demand and create hostility among market competitors due to fairness.

Likely, as with cigarettes, sound education would finally begin to overcome many of our vices (except for those that continue to CHOOSE to take part in risky behavior).  This would entail a likely decline in the market for unhealthy foods and behaviors.  The government would have you believe this is horrendous!  We have lost jobs! 

However, what happens in reality is a reallocation of employment to sectors such as the health food industry, gyms, etc.  This is a natural process.  Retrospectively, what occurred was that by subsidizing special interests, the government spurred a sort of false demand in economic sectors which otherwise would not have existed.  WITH THE USE OF SUBSIDIZING POLICIES, THE GOVERNMENT REALLOCATES EMPLOYMENT TO AREAS OF THE ECONOMY WHERE IT OTHERWISE WOULD NOT HAVE BEEN!

This is an unavoidable fallacy of Keynesian economics.

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