Chart of the day

I used to lecture about “job lock” as  a regular part of my health care policy lecture.  I largely stopped, not because it’s not important, but because there’s so much wrong with our current system and I only use three days to cover it.  It’s not an unimportant issue, though.  Basically, a lot of Americans are essentially trapped in their jobs for fear of losing health insurance in our employer-based system.  This, of course, leads to a fairly inefficient distribution of workers and stifles opportunities for entrepreneurship.  Austin Carroll demonstrates this nicely in chart form:

That’s almost a 14% increase in business ownership attributed to turning 65 and going on Medicare. It would seem that there are substantial gains to be had in moving away from the employer-based health insurance system. Is there really any good argument for retaining it?

Other than the fact that there’s always a fair amount of trouble in disrupting a major status quo such as this, I sure cannot think of one.  Of course, if the only reason to keep a bad idea is that it’s a pain to get rid of it, we could still have slavery.

The Soylent Green solution

In keeping with the “it’s not a business theme,” Yglesias has a great post on a really good reason we should not consider business a good analogy for what we’re doing with our government.  If we did run government like a business, the first thing we should do is get rid of all the old people.  Yglesias:

A state is fundamentally an ethical enterprise aimed at promoting human welfare. A business isn’t like that. If you’re trying to look at America from a balance-sheet perspective the problem is very clear. It’s not “entitlements” and it’s not “Social Security” and it’s not “Medicare” and it’s not “health care costs” it’s the existence of old people. Old people, generally speaking, don’t produce anything of economic value. They sit around, retired, consuming goods and services and produce nothing but the occasional turn at babysitting. The optimal economic growth policy isn’t to slash Social Security or Medicare benefits, it’s to euthanize 70 year-olds and harvest their organs for auction. With that in place, you could cut taxes and massively ramp-up investments in physical infrastructure, early childhood education, and be on easy street. The problem with this isn’t that it wouldn’t work, it’s that it would be wrong, morally speaking.

Now obviously an idea like raising the retirement age to 70 isn’t as wrong as mandatory euthanasia at the age of 70. But by the same token, it doesn’t “work” as well at boosting per capita GDP or cutting down on American red ink. And both ideas exist on a continuum of the same tradeoff—bolstering the living standards of old people is an economically inefficient undertaking that we sentimental human beings find ethically appealing. That’s not to say that the spot on the continuum occupied by current policy is the best possible way to make the tradeoff. But it’s simply to dramatize the nature of calculus we’re talking about. As a “business strategy” it’s ridiculous—on a par with preserving the natural beauty of the Grand Canyon or having the military pay health care costs of soldiers who are too injured to fight—but that’s because it’s not a business strategy.


%d bloggers like this: