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GOP In Congress Pushes More Privatization Despite Dubious Record

For decades, Republican politicians have come up with many theoretical reasons that privately-run programs should be more efficient than government-run programs. However, empirical research into the matter has failed to consistently find an economic or operational benefit of privatization. Privatization of military operations, for instance, has led to infamous fraud, waste, delays and other abuses. Privatization of other government services has interfered with the oversight and transparency.

Still, Republicans keep pushing privatization programs. For example, in the U.S. House of Representatives yesterday, Congressman John Duncan and thirteen GOP colleagues introduced H.R. 1072, legislation that requires the privatization of government services in many agencies, without the context of study into whether such privatization would actually do any good.

Why do they do it? The rationale behind privatization lies in the ideology of economics, rather than in economics itself. The Republicans who sit in Congress today came of age during the Cold War, during which beliefs in the value of private business operations were amplified in order to provide a sense of contrast in American national identity, when compared to the identity of the Soviet Union. During the Cold War, assertions of the value of government programs came to be regarded by many Americans as practically treasonous.

The Cold War ended long ago, but an irrational, ideological fear of government remains. Preppers build bunkers from which they can defend themselves against jack-booted thugs from the FBI. Conspiracy theorists claim that the government is forcefully putting microchips under the skin of every American right now, although nobody has noticed any such thing actually happening to anyone.

For many Republicans, the threat of a Communist takeover of the United States remains a clear and present danger. They perceive Communist plots as the secret force behind health care reform, the minimum wage, emergency relief programs, and efforts to combat global warming. Any effort to provide useful services through the government to people living within the borders of the United States is attacked, and so, domestic issues challenges remain unmet, out of the anxiety that, somewhere, out there, THEY are preparing to take their revenge, and put every American into a commune for re-education.

11 comments to GOP In Congress Pushes More Privatization Despite Dubious Record

  • Dave

    Truman, you mentioned that the cold war ended long ago. Perhaps there were many reasons for its demise, but it would be hard to argue that Ronald Reagan, a Republican, didn’t play a large role in it. So it would seem to me that if there was some kind of Republican privatization ruse foisted on the public for ideological reasons it would follow that continuing the cold war would be in their ideological interest. Keep that contrast thing happening.

    You seem open to empirical knowledge so here’s some: In the 70’s I worked for Medicaid. In the 80’s I worked for a private health insurance company. In the private company every dime of the public’s premium was accounted for. In the government insurance office the waste of resources at the public’s expense was hideous. Absolutely hideous.

    • Horatio

      Dave, you’re using anecdotal evidence in contrast to the extensive body of research with clear standards that this article links to. That’s not convincing.

      You didn’t mention that Medicaid doesn’t siphon off huge amounts of money to investors.

      Also, your presumption is that the purpose of health care systems are to save money, rather than to provide effective health care.

      • Dave

        Insurance companies are not health care systems. The purpose of medical providers is to provide health care. The purpose of insurance companies is to create plans that help make it affordable. Same as a bank or credit union creating plans for making the purchase of a car or a washer and dryer more affordable. Health care in the U.S. did not become unaffordable for most people until the advent of Medicare and its consequent cost shifting by government, i.e. politicians, meddling in the market.

        • Horatio

          Dave, now you’re confusing association with causation. Health care became more expensive over time as health care procedures and medications became more expensive. Health care also became more expensive over time as the American food supply was industrialized and Americans developed sedentary lifestyles. As time progressed, Medicare was also implemented. It’s not at all proven that Medicare caused increases in health care costs.

          Insurance companies certainly are part of the health care system that we have cobbled together in the United States. The purpose of a health care system is to provide effective health care, not to save money, and the free market health care system that includes insurance companies has been rotten at delivering effective health care.

  • Update: An identical bill, S. 523, was introduced into the Senate by John Thune, co-sponsored by John Barrasso, John Isakson and Pat Roberts.

  • Mark

    I think that health care is a prime example of where the government could do a better job to lower costs and increase health outcomes than private business. All you have to do is compare health costs and outcomes (longevity, premature births, childhood deaths, chronic disease rates, etc.) in the US with other industrial countries, especially those with nationalized health care systems. Here in the US we spend far more than any other country (on a per capita rate) and our outcomes are worse. It’s clear to me that the for-profit health-care providers and insurance companies are not providing the highest level of healthcare for a reasonable price. The main problem with Obmacare is that it didn’t go far enough. If we really want to increase health and decrease costs, we need a national system. We need to get rid of the insurance companies. But that won’t happen as long as their lobbyists have control of our Representatives in Congress.

    • Dave

      Geez Mark. We need to “get rid of the insurance companies”? These are the people who invented health insurance. They developed the entire idea. No one ever had health insurance until a health insurance company offered it for sale at an affordable price. Individuals who wanted health insurance were free to purchase as much or as little of it as they wanted. Most health insurance was offered to companies at group rates as a way to attract and keep employees as part of their compensation program. Health insurance companies typically do not make “profits” from these plans. They make their money by holding premiums until the money is needed to pay claims. Usually any premium accrued that is in excess of the claims paid is refunded to the employer. During the time that the insurance company holds the premium they invest it and make their money from returns on the investment.

      Democratic politicians are aware of how this works, lie to the public about the insurance companies getting rich “profiting” from your medical needs, and get you to support sending them the premium instead. Once they “get rid of the insurance companies” they will be able to increase the premiums paid to the government and decrease the benefits paid out. The money Americans pay for their health insurance and other medical expenses is one of the last cash cows that this government can confiscate.

      • Horatio

        Dave, you’re playing a semantic game. The insurance companies could not be profitable if they did not withhold so much health care. They would lose tremendous amounts of money, because they’re not economically efficient as providers of health care. Instead, they’re economically efficient as providers of profits to investors.

        We don’t need health insurance. We need health care. Free market insurance companies have proved ineffective in delivering effective health care, so it makes sense to consider getting rid of the health care system that relies on insurance companies.

        • Dave

          Horatio, semantics has to do with using words in various ways in order to obfuscate the real issue. You have mistsaken plain-spoken words for semantic games, so be it. How does an insurance company withhold health care? They simply contract with individuals and companies stating plainly in the contract what they will pay for and what they will not.

          The real issue here is who will pay for what care. I would like to live in a country where I can buy the health care I want. You apparently want to live in one where someone else will tell you what you can have.

          • Horatio

            Dave, you calling it “plain-spoken words” is itself a rhetorical sleight of hand, used to distract from the lack of plain logic n your argument.

            You keep on changing what you say “the real issue here is” when you don’t like the logical conclusions other people are going to. Your arguments are full of leaps of logic, false premises, and irrelevant flourishes.

            Here we are, for example, discussing the many ways that insurance companies deny people health care, a point that you’ve generally agreed to, and now you’re suggesting that a health care system that includes insurance companies is one where someone else won’t tell you what health care you can have. It’s absurd, Dave.

  • Dave

    Horatio, allow one more irrelevant flourish. Seems it is irrelevant to you because you are convinced that insurance companies are siphoning off large sums of money from their health policies and giving it to their “investors” and, as I stated above, that is not the case. They earn their money by investing the premiums for short periods of time, no expense to the insured. Many large companies are what’s called “self-insured” and merely pay insurance companies to provide claim services. I think what would move the conversation forward is for you to cite just exactly how much money these companies have bilked from their insured’s and what funding mechanism was used.

    To your point of not needing health insurance but needing health care, that’s a little like saying drivers don’t need auto insurance, they need auto body repair centers. Should your government take your insurance money, shut everybody else down, and open its own body shops? Dang, what a flourish.

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