If you go back to the Roman times, you’ll find that the tax system eventually led to serfdom – it tied people to the land, making sure they paid their taxes or else, so that Caesar could fund the military. Yes – it was taxes that created serfdom. Yes – it is socialism that represents the model of 100% taxation. And this, I surmise, is why Hayek titled his warning against socialist planning “The Road to Serfdom.)

What about all those Acts passed in Great Britain before the American Revolution? Take the Navigation Acts and the Molasses Act. Were these not championed as reform movements? Surely, they were popular in Britain because they safeguarded British shipping interests through a program of prohibition (of continental shipbuilding) and subsidy (through tariffs). Yet clearly the colonists were not so impressed by these reforms.

Beethoven wrote Symphony #3 with Napoleon in mind, only to later realize that the man was primarily interested in self aggrandizement through war and conquest. He was popular at the time, and the population proved itself naive trusting such a man.

Many disaffected aristocrats were openly sympathetic to socialism; indeed, even championed its cause. Marx and Engels were unquestionably “bourgeois.” J.S. Mill wrote elegantly about the promise of socialism. Good intentioned and bad, both Mill and Marx were wrong about socialism.

But we need not go back that far. Many Western intellectuals looked abroad to Fascism as a great step forward for mankind. W.E.B Dubois and H.G. Wells were both in awe of the European strongmen of the 20th century. So, as a matter of fact, was J.M. Keynes (or at least appreciated their economic system, which consisted of planning from atop).

FDR was extremely cynical in promoting his Social Security scheme. He sold it to the people as “insurance,” and to the Supreme Court as just another tax (when they challenged his claim that it was actually “insurance”). He knew it was destined for cyclical bankruptcy, that it was not a stable and self-perpetuating program. So he told that court, Look, I know as well as you do that this really isn’t insurance. But I need revenue, and this is unarguably another source of revenue. Later generations can clean up my mess. And, by the way, it gives my party a big electoral advantage!

Keynesianism represents another fork in the road for intellectuals. Eminent economists of the day, including Paul Samuelson and Lionel Robbins, came to regard government interventionism as the purpose of economic advisory (Samuelson later “wrote the book.”) They did this while bucking ~200 years of established wisdom, and never refuting arguments they previously held to be true.

So the history of mankind is not, as we’d like to believe, only upwards and onwards. Many times we turn down dark alleyways and don’t realize it until it is too late. Eugenics, remember, was once a respected “science” as well.

In the context of the current healthcare debate, the point is this: central planning does not work because it cannot work. It has failed in the past, and will fail in the future. Any so-called reform that involves centrally planning resource allocation is regressive. We’ve known this, in theory and in practice, for almost 100 years now, and yet the supposedly enlightened GOP moderates don’t quite get it. I have no patience for such ignorance, and I wish you’d all wise up… and fast.

“Yet you stand here like Orval Faubus, refusing to end (what effectively amount to) employer provided insurance. ”

should say:
Yet you stand here like Orval Faubus, refusing to end (what effectively amount to) *subsidies to* employer provided insurance.

You have this precisely, 100% backwards. Question: who is kept out of the current system more – young people or older, more established people?

Since this entire movement is about provided healthcare to people “who aren’t well established,” who is more typically considered well established – middle aged peoples or young peoples? So, the logic being: add more young people with low premiums, and diversify the risk pools. This is done already in companies depending on policies!! Conclusion: The price of insurance would FALL for the sickly, because more young people would be paying into the system. They would do this voluntarily to protect themselves in the unlikely event of catastrophe. Is this not how all insurance works? Why do we not have the same problems with the car insurance market as we do with health insurance? Do you think we should have state car insurance? Do you think we should have our car insurance policy provided by our employers?

People, for all the confusion around this debate, it’s not such a mystery.

Yet you stand here like Orval Faubus, refusing to end (what effectively amount to) employer provided insurance. Stop restricting the access to health insurance by the young earners. Stop selling your country into statist schemes. Let people be free!

I will answer this question in detail, for I feel it is the last possible excuse for allowing so-called conservatives to encourage national healthcare. It also relates to the question of whether, and why or why not, extending public health insurance to all Americans would encourage entrepreneurship. Truth be told, I was not always zealously against nationalized healthcare. I considered it for what it was worth while in Canada, and one of the thoughts I had was that by providing a minimum level of comfort, creative brains could work out better market ideas than if they were forced (by necessity, of course) to work at low paying jobs that paid by the hour (i.e., no health insuance provided). So, while I ultimately decided against this idea, I think it is a good line of thinking. Ultimately, you must answer these questions by evaluating the alternative scenarios, and this I will attempt to do now. Imagine the following scenario.:

Scenario 1: A highly educated, intelligent young person with a mind towards starting her own business is employed at Banana Republic making $10/hr. She is paid overtime past 40 hours per week. No health insurance is provided, and she does not buy any on the open market. All told, over the course of her first year she makes $34,0000 in pretax income. She works a second job, part time as a bartender, and earns an additional $25,000. This assumes a commitment of 60 hours of work per week. She has the idea that she wants to start her own restaurant, and would like to spend 9 months creating the menu, picking out a suitable location, designing the interior, and developing a viable investment strategy. To be safe, she determines that she needs to purchase health insurance for 1 year, since she will be eating through her savings and would not have the money to pay out of pocket. She has saved enough to live off of, and currently resides with her parents. The insurance is estimated at $400/month, so $4,800/yr. To save this extra money, she needs 6 months. This is the world of the status quo.

Now the hypothetical difference(s):

STATE CARE
The question of insurance is moot. She is provided health insurance by the state. All her fellow working citizens will pay for her if she falls ill. To pay for the programs, she estimates that she pays $300/month in taxes at her current wages. When she needs care, she must go to the state, and endure long wait times. But she is young, and this does not yet taint her nationalistic feelings. The plan is a great source of national pride, and she is proud that her country provides insurance to all.

OR
FREE MARKET REFORM
She is provided with nothing from the state. If she quits, she will be uninsured and earning no money. She will have the money she has saved, and health insurance should she choose to purchase it. As a result of free market reform insurance for her cohort is only $200/month. This allows her to either work for 1/2 the period of time to provide for 1 year, or keep the additional savings. She enjoys all the advantages of a free market healthcare system, and although she realizes its perils, she recognizes that a responsible person can effectively plan for risks.

Some questions are in order:
1) In which case is she more motivated to be successful? What is the price of failure in both cases?
2) What coverage is actually cheaper for the girl when working? What is more expensive if she is not working?
3) In both cases, her success means more for society at a whole. But who pays for the price of failure in each case?
4) What is the likelihood that someone with such little work experience would be successful in business? What is the likelihood that the same person would be more successful with 5-10 years of real world work experience?
5) What happens, in both cases, if more and more people become unemployed? In which case does the price of medical care fall faster to accommodate those with less of an ability to pay? Which case had more rigid price rules, and by what mechanism are they investigated – through bureaucracy or through the interplay of market forces?
6) What system protects private property rights by allowing for lower and predictable tax rates?
7) Assuming the second case, what would be the problem with adding that all patients must be treated for life threatening illnesses/injury regardless of their ability to pay, and then letting a judge decide on said patient’s debt to society?

Sinz says, further:
“Anyone, Left or Right, who says “Now we start by scrapping the current group health insurance system and replacing it with….” is just blowing smoke. Never gonna happen.”

Oh, something will happen all right. You can be sure of that. Nature eventually has her way one way or the other, and a system that cannot adequately serve people’s needs and/or encourages national bankruptcy will have a day in the court of natural law. At least I am providing workable solutions that would endure in the long term, rather than cynically selling future prosperity for very short term gain.

It wouldn’t matter anyway.

“If we could decouple the tax incentives from employers”??? And if pigs had wings???

Both the doctrinaire Left and the doctrinaire Right wanted to decouple the tax incentives from employers; the Left via a single-payer system, the right via a free-market system.

But every single attempt to force Americans with generous group health insurance into something else has flopped. The public revolted against HillaryCare, because those who do well under the current system don’t want to give up what they already have.

By 2008, the mainstream Dems had learned their lesson. Both Obama and Hillary went out of their way to promise those who already like their group health insurance that they could keep what they already have.

That tends to limit the scope of reform. But it makes incremental reform attainable without a voter revolt.

Anyone, Left or Right, who says “Now we start by scrapping the current group health insurance system and replacing it with….” is just blowing smoke. Never gonna happen.

And note that Willy’s ideal would exacerbate this problem: if you were concerned with these people, you’d decouple the tax incentives from employers, and allow them to form a low-cost insurance pool: young people are low risk, and by averaging their risks you could likely provide adequate coverage for this cohort

If you form a low-cost insurance pool for the young people who are currently included in an employers insurance plan … the cost of covering the higher risk older people doesn’t stay the same.

And yet much of the innovation and dynamism in our economy comes from small businesses. (Microsoft was a tiny business once.)

Yet bright people who might otherwise want to go to work for a small business and help grow it, may be deterred by its lack of generous health insurance.

That’s the flaw in the argument put forth by “WillyP.” The tax breaks given to group health insurance are an UNFAIR advantage given to giant corporations over small business and the self-employed. We haven’t had a free market as WillyP would want. Instead, we had a distorted market in which large corporations could offer generous group health insurance in lieu of offering a well-run company. A prime example was General Motors.

You say you want to see more innovation and dynamism in the economy.

Yet if you want to quit your job and go into business for yourself (perhaps you have a great invention you want to sell), you’ll be deterred from doing so by the prospect of losing your group health insurance.

Even if you’re healthy, you’ll find that the premiums on individual health insurance are higher than they were on group insurance, and the tax breaks are much fewer.

And if you (or one of your dependents) already have a pre-existing condition, you may be unable to purchase individual health insurance at all.

In which case you may forget the whole thing and stay stuck in your dead-end job with your employer–just to keep that health insurance.

McCain’s proposal, which he unveiled during his 2008 campaign, was that states should set up high-risk pools for those with pre-existing conditions. Where the states would get the money for this, and how high the premiums would have to be, McCain didn’t explain.

The National Review proposed dealing ahead of time with health conditions. Under their proposal, you would buy a policy at a very early point in your life that insured you against the chance that you would get a chronic illness later in your life. If you did pick up that illness, the policy would pay off and compensate you for your inability to get health insurance from that now pre-existing condition. This seems analogous to how many of us purchased long-term disability insurance (LTD) while we were still young and healthy.

The difference, however, is that the premiums for LTD can be reasonably low because only a small percentage of us ever end up totally disabled. But a far higher percentage of us, like you for instance, acquire these pre-existing conditions eventually. For that reason, it seems to me that the insurance policies proposed by National Review would have to have very high premiums, in order to compensate folks for the chronic illnesses they may pick up in the future. Most of us will die of some illness, except those who perish in war or as victims of crime or fatal accident.

In short, while conservatives have toyed with ways to get around the pre-existing condition problem, they don’t appear to have scored them mathematically for how much they would cost, both to individuals and to governments. At this time, they all remain just half-baked ideas.