Economic nonsense

From Sarah Rubenstein at the Wall Street Journal Health Blog:

Barack Obama wants to make it easier for patients facing bankruptcy because of medical bills to eliminate those debts.

[University of North Carolina Professor Melissa] Jacoby says current bankruptcy law hasn’t kept all medical debts from being forgiven, but she interprets Obama’s statement as meaning that there would be fewer hurdles for patients to wipe the slate clean.

You can’t “wipe the slate clean”.  If a patient owes a medical practice, imaging facility, laboratory, or hospital money, then the money owed is paid or it isn’t.  If the money isn’t paid, then those who are willing to pay will be charged more to make up the difference.  Or some other service will be curtailed.  Or someone will not be hired who otherwise would have been.  Or the facility will close down because it is unable to meet expenses.  Or some or all of the above. (Hat tip: Dr. RW)

There is an alarmingly low level of understanding of basic economics at the highest levels of government and business.  People who don’t pay their bills were once disparaged as deadbeats and ne’er-do-wells.  Now, there is no sense of shame associated with taking goods and services without paying for them.  Nor does there seem to be much of a sense that there is anything amiss about this sort of arrangement.  One wonders what Mr. Obama’s reaction would be if a reporter at a press conference asked him why the law should not come to the aid of the productive and resourceful in society rather than to those who try to default on their financial obligations.

We are living in an age of Alice in Wonderland economics.  Automobile moguls are flown in private luxury jets to Washington, D.C. to ask the government to transfer tax dollars from the working class to their companies’ coffers.  The town of Edwardsville, Alabama (population 194) asks in apparent seriousness for $375 million in federal bailout money.  Health insurance companies gladly accept premium payments from patients and their employers and then cancel the policies when the patients have the audacity to get sick and expect their health insurance to be there for them.  Slovakia, a nation that has existed for a mere 16 years and with a population of 5 1/2 million people is considered a safer investment risk than the state of California.  Worse still, as such stories come to light, the principle parties in each successive account of fiscal irresponsibility and personal dishonor seem to feel, if anything, mere embarrassment rather than shame, the notion that they have done something wrong and must both make amends and take what wisdom they can from their mistake apparently beyond their comprehension.

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