The Post Office, in trouble financially, might get a bailout from Congress:

Democrats moved Thursday to give special relief to the financially strapped Postal Service, which would be allowed to defer $4 billion in payments due at the end of this month to cover retirement benefits for its employees.

This scares me because it makes me think that Obama’s Public Option for healthcare will eventually be in the same situation. The post office and the proposed public option for healthcare are both government-run entities set to compete with private firms. In theory, the post office or public option are not meant to get subsidies in order to get an unfair edge over the likes of UPS, FedEx, Blue Cross Blue Shield, etc. If the public option ran a deficit, I have to think the government would step in to help them out. As such, I am inclined to believe that the public option will, in time, just become a huge liability that will only increase the deficit.

An Upset Patterns reader writes in:

In all your politicalness, I don’t hear you talking much about healthcare.

True.

A cookie-cutter libertarian answer to the problem of soaring cost in health care is similar to any issue: deregulate the industry, stop giving away goodies like medicare and medicaid, and don’t give tax-breaks to company-provided health care. All of these things distort the spontaneous order of the market for health care. Regulations drive up costs more than they benefit consumers. Freebies like medicare and medicaid mean that when people are buying healthcare, they aren’t using their own money, which means they’re more likely to buy more than they otherwise would. Tax-breaks to company-provided health care mean that companies are less responsible in buying the insurance, self-employed people are crowded out, etc.

All of this make sense to me. If one is to look at a graph showing the rising cost of health care over time, there are two major “blips” in the general trend: new tax policy related to employer-provided health care after world war II and the introduction of medicare. America, by having government currently spending 50 cents of every healthcare dollar, seems to have a tragic mix of socialized and capitalist medicine.

But maybe the “get the government out” answer is too simple. Do adverse selection problems in insurance mean that making everyone buy health insurance – even those who do not need it or want it – will lower costs and expand affordability? Is there a moral concern to provide health insurance to everyone, regardless of its effect on increasing the deficit? Are insurance companies actually – as people seem to believe – screwing people out of coverage?

Obama’s proposed “public option” is a relevant issue worth discussing. What needs to be considered:

  • Is this actually not going to raise the deficit? What makes it a public option if it’s not subsidized?
  • Obama himself said that “UPS and FedEx are doing just fine. It’s the Post Office that’s always having problems.” Why will a government-run system be more efficient than private ones?
  • This is a huge liability for the future. Programs like this one don’t go away. If costs of it get out of control in the future, as has happened with social security and medicare, it’ll be a gigantic strain on the budget.
  • The number of uninsured Americans is commonly said to be about 45 million. Well, of that number, a third make over $75,000. Those are people that could afford it but don’t buy it. Is making them be covered when they choose not to be really a good answer?
  • What about for people who decide, since they will get free health care no matter what, that they will start smoking, become obese, and become a crack addict? Should healthy people pay for them?

A last thought from The New Atlantic:

I’m a Democrat, and have long been concerned about America’s lack of a health safety net. But based on my own work experience, I also believe that unless we fix the problems at the foundation of our health system—largely problems of incentives—our reforms won’t do much good, and may do harm.