government managed post office and health care: a race to the bottom

If you want to see into the future what the fiscal position of universal health care will look like in 10 years (or sooner), enjoy this blurb about US Post office (copied below).   A large and complex sector of the economy that is turned over to the government for central planning cannot (by definition) be sensitive to changing market dynamics.   It is a fact that no expert or group of smart bureaucrats can design or manage a massively complex sector of the economy in a dynamic, sustainable fashion.   Government management of health care does not mean better allocation of national resources, more efficiency and social justice.  Govt management means a combination of higher prices, lower productivity, less innovation, forced rationing and/or chronic fiscal deficits. 

Just because the US spends more of GDP on health care than countries with socialized health care like France does not mean the market is failing in the US.  we have failed the market by injecting massive subsidies and regulations into the health care system.   We spend so much on health care because the government provides massive subsidies for individuals to be over insured, which artificially increases demand for health care.  We use health care we don’t need!!! That is the result of government policy, not the market. 

The market suffers from a garbage in garbage out problem.  if you feed the market distorted signals (like subsidies for health insurance), you will get garbage outcomes.

50+ years of massive govt subsidies for private health insurance has manifested in an inflation and access crisis in US health care.  the market cannot deliver a perfect result, but the market result will always be better for society than a government planned result. 

Otherwise, we could imagine money growing on trees and free-lunches provided by government.   Intelligent people don’t believe in fairy tales … do we???  Why do we believe in free lunch promises by politicians??    

Return to Sender: Reforms for the Failing Postal Service

By R. Richard Geddes | National Research Initiative
NOVEMBER 3, 2011

The US Postal Service is facing a fiscal crisis. The demand for its core activity of mail delivery has collapsed, and further declines are likely. The Postal Service has exhausted all of its $15 billion borrowing capacity from the US Treasury, and is expected to run out of cash in the middle of 2012. Given the Postal Service’s fiscal crisis, and the need to adjust to market realities, it is time to put the Service on a course toward meaningful structural change that will give it the ability to adjust to demand for its core activity of delivering physical mail.