Thursday, September 10, 2009

Healthcare and Universities

Just a quick thought on that Obama speech.

First of all, Representative Wilson was right to call Obama a liar, because an omission of truth is still a lie. What Obama said is technically correct, in that HB 3200 does specifically state that undocumented immigrants are not eligible to receive care under the government option. The problem is that HR 3200 contains to method of preventing it from happening anyway. Republicans tried to amend the bill in order to apply the same safeguards currently used for social security and other benefits, but the Democrats struck it down—and Obama knows it. So, in my opinion, although Wilson’s behavior was a bit out of the ordinary, he was right. And why should he apologize? Democrats booed President Bush in his 2005 State of the Union address.

On another note, I’d like to draw attention to a little detail of Obama’s misleading and silly speech, taken from the full transcript.
“… The insurance companies and their allies …argue that these private companies can't fairly compete with the government, and they'd be right if taxpayers were subsidizing this public insurance option, but they won't be. I've insisted that, like any private insurance company, the public insurance option would have to be self-sufficient and rely on the premiums its collects.But by avoiding some of the overhead that gets eaten up at private companies by profits and excessive administrative costs and executive salaries, it could provide a good deal for consumers and would also keep pressure on private insurers to keep their policies affordable and treat their customers better, the same way public colleges and universities provide additional choice and competition to students without in any way inhibiting a vibrant system of private colleges and universities.”

Mr. President, I’m so glad you brought up public colleges and Universities. Because in the context of your speech, you claim that government interference in the marketplace is going to reduce costs. And you point to state run universities…well have you looked at tuition costs lately?

According to a Money Central article on the rising costs of education, “the price tag for a college education rose again last year. Tuition and fees increased 14.1% for public four-year institutions and 6% for private schools, according to the College Board. The retail cost of a college degree has more than doubled in the past two decades, far outstripping the regular rate of inflation.” The average annual increase has been between 5% and 8%.

The author points to the work of Cornell economist Ronald G. Ehrenberg, who “describes a kind of arms race among the nation’s top schools to have the best of everything: the best facilities, the best faculty and strong sports teams to engender loyalty among alumni donors.”

But what is the main cause for the increase? Financial Aid. Why? Because “most people dont pay the sticker price for college. Scholarships, grants and loans reduce the out-of-pocket cost for the majority of students. …As we’ve seen with the health-care system, if people aren’t feeling the real cost of their purchases, they have less incentive to change their behavior.”

Now what do you think will happen when you have government paid healthcare? If government-run universities can’t keep down their costs, and they continue to rise at rates far above the national rate of inflation, what do you think will happen with medical care under your plan?


Steve in KS said...

I have been asking people for months:

1. When the government began subsidizing and backing student loans, what happened? Tuition started rising faster than inflation.

2. When the government got involved in healthcare (medicare/medicaid), what happened to the cost in health services? They started rising faster than inflation.

3. When Reagan deregulated the airline industry, what happened to it? The airlines grew and the cost of a flight has come down considerably when adjusted for inflation. Average people can today afford to fly when it would have only been for a special occasion before.

It doesn't take an idiot to see a trend here. But, it sure takes one to not see a trend!

Shakedown Crews said...

Very good point. Add to that list another interesting point:
What happened when the Community Investment Act started changing banking rules and encouraging a loosening of lending for low income home buyers?

More money became available, and there were more buyers competing to buy homes.
It became a "sellers' market".
The prices of homes was decoupled from normal inflation rates and skyrocketed.
This caused investors to realize they could "flip" homes so they began buying and selling in a cyclical pattern.
This cycle continued and home prices became articificially high.

And then it all crashed, and with it our economy.