Listen to the broadcast of You Tell Me on KTBB AM 600, Friday, August 17, 2012.
Let’s imagine for a moment that Congress passes a law called the ”Access to Quality Home Entertainment Electronics Act;” “AQHEEA” as it would surely (and unfortunately) come to be called.
Imagine that upon full implementation of this law, every American household becomes entitled to a voucher redeemable at any electronics retailer for an LCD TV. In other words, a “free” TV from the perspective of the consumer.
Further imagine that the law provides that every household is entitled to a new voucher for a new TV upon the determination by a government panel that “significant technological advances in home entertainment electronics subsequent to the date of beneficiary’s last voucher” had occurred.
What would happen?
Well, here’s where your imagination doesn’t have to work very hard. The shelves of every seller of U.S.-compatible LCD TVs would be stripped bare in a matter of days if not hours. From that moment, and stretching into the indefinite future, LCD TVs would be in chronic short supply. If you wanted or needed an LCD TV, your name would go on a list and your government TV voucher would then simply represent your right to wait.
An absurd illustration you might say. But it’s not.
It has already happened.
The only difference between this imaginary scenario and the real world is the fact that instead of LCD TVs, the “free” commodity in question consists of access to a broad range of health care services including annual check-ups for seniors, breast and pelvic exams for women, contraceptives and a laundry list of tests and procedures as set forth by the U.S. Preventive Services Task Force.
The law mandating all of this is called “Obamacare.” And its central problem is that the health care industry no more has the capacity to provide all of these “free” services than the electronics manufacturing industry has the capacity to put a “free” LCD TV into every American household.
In both illustrations, the problem becomes that of demand exceeding supply.
In freely-functioning markets, when demand exceeds supply, the mechanism for clearing the market is price, denominated in money. (On the other side of this teeter-totter, when the price gets high, the market reacts by moving to increase supply.)
But when money is removed as the mechanism for clearing the market – as will happen under Obamacare and as is happening now under Medicare – causing the service provided to be widely perceived as “free,” the rising price gets paid in time. You get your free TV, you get your free mammogram.
But you have to wait.
Assuming that the purpose of a health care industry is to prolong and improve human life, legislating away money as the economic mechanism for clearing the market and substituting in its place time is the worst possible allocation of resources.
It is, after all, time that eventually gets us all. As my dad used to say, “If you live long enough, boy, you’re gonna die.”
Paying for health care in time, in the form of waiting for services, at best prolongs the discomfort arising from the condition that occasioned the need for health care in the first place and at worst leads to premature death.
If Congress were to ever consider a free LCD TV law, it is likely that those most in favor of it would be those least able to afford an LCD TV on their own. When LCD TVs became immediately scarce, the very same people would then feel they had been lied to.
So it will be when the laws of economics impose themselves upon the fantasy of Obamacare. And so again will the elderly and the poor suffer at the hands of government purporting to help them.