President Obama says he doesn’t want the government to run health care. He just wants a “public option” to keep the private insurers “honest.” Imagine that: A government bureaucracy keeping someone else honest. Physician, heal thyself!
But would a public option keep insurers honest? People who dislike markets often spin horrifying scenarios about big companies engaging in cutthroat competition and predatory pricing to drive their rivals out of business. But none of these folks ever see this danger in government “enterprises.” A public option will have sources of revenue no private insurer has: captive taxpayers, the U.S. Treasury, and the Federal Reserve. Do you mean to tell me this won’t permit the government program to engage in cutthroat competition and predatory pricing against the private insusers? And let’s not forget that it will be government that dictates what products the private companies can sell.