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With
passage of last week's bill, the American people are now the unhappy
recipients of Washington's disastrous prescription for healthcare
"reform." Congressional leaders relied on highly dubious budget
predictions, faulty market assumptions, and outright fantasy to convince a
slim majority that this major expansion of government somehow will reduce
federal spending. This legislation is just the next step towards universal,
single payer healthcare, which many see as a human right. Of course, this
"right" must be produced by the labor of other people, meaning
theft and coercion by government is necessary to produce and distribute it.
Those
who understand Austrian economic theory know that this new model of
healthcare will cause major problems down the road, as it has in every nation
that ignores economic realities. The more government involves itself in
medicine, the worse healthcare will get: quality of care will diminish as the
system struggles to contain rising costs, while shortages and long waiting
times for treatment will become more and more commonplace.
Consider
what would happen if car insurance worked the way health insurance does. What
if it was determined that gasoline was a right, and should be covered by your
car insurance policy? Perhaps every gas station would have to hire a small
army of bureaucrats to file reimbursement claims to insurance companies for
every tank of gas sold! What would that kind of system do to the costs of
running a gas station? How would that affect the prices of both gasoline and
car insurance? Yet this is exactly the type of system Congress is now
expanding in health insurance. In a free market system, health insurance
would serve as true insurance against serious injuries or illness, not as a
convoluted system of third party payments for routine doctor visits and every
minor illness.
While
proponents of this reform continue to defy all logic and reason by claiming
it will save money, I worry about cataclysmic economic events. Already
investors are more reluctant to buy US Treasuries, fearing that the
healthcare bill, along with other spending, will cause government debt to
explode to default levels. I had the opportunity last week to address my
concerns with both Treasury Secretary Timothy Geithner and Federal Reserve
Chairman Ben Bernanke, especially about the potential for the coming serious
inflation. I am not optimistic that these important decision makers truly understand
what is coming, why it is coming, and how best to deal with it.
The
Federal Reserve finds itself in an unprecedented and unenviable position. To
keep up with government spending and corporate irresponsibility, it has
increased the monetary base by nearly $1.5 trillion since September of 2008.
Excess bank reserves remain at historically high levels, and the Fed's
balance sheet has ballooned to over $2 trillion. If the Fed pulls this excess
liquidity out of the system, it risks collapsing banks that rely on the newly
created money. However, if the Fed fails to pull this excess liquidity out of
the system we risk tipping into hyperinflation. This is where central banking
inevitably has led us.
The
idea that a handful of brilliant minds can somehow steer an economy is fatal
to economic growth and stability. The Soviet Union's economy failed because
of its central economic planning, and the U.S. economy will suffer the same
fate if we continue down the path toward more centralized control. We need to
bring back sound money and free markets- yes, even in healthcare- if we hope
to soften the economic blows coming our way.
Ron
Paul
www.house.gov/paul
Congressman
Ron Paul of Texas enjoys a national reputation as the premier advocate for
liberty in politics today. Dr. Paul is the leading spokesman in Washington
for limited constitutional government, low taxes, free markets, and a return
to sound monetary policies based on commodity-backed currency. For more
information click on the Project Freedom website.
Published
with the authorization of Dr. Paul.
Copyright
Dr. Ron Paul
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