Category Archives: Healthcare

Article by Peter Robinson 6/19/2009 @ 12:01AM Medical Analysis By Milton Friedman

Milton Friedman on Medical Care (Full Lecture)

Published on Feb 2, 2014

I have written about Obamacare over and over again on this blog. Dan Mitchell has shared many funny cartoons about Obamacare too. Milton Friedman has spoken out about government healthcare many times in the past and his film series FREE TO CHOOSE is on You Tube and I encourage you to watch it. It is clear that the federal government debt is growing so much that it is endangering us because if things keep going like they are now we will not have any money left for the national defense because we are so far in debt as a nation.

We have been spending so much on our welfare state through food stamps and other programs that I am worrying that many of our citizens are becoming more dependent on government and in many cases they are losing their incentive to work hard because of the welfare trap the government has put in place. Other nations in Europe have gone down this road and we see what mess this has gotten them in. People really are losing their faith in big government and they want more liberty back. It seems to me we have to get back to the founding  principles that made our country great.  We also need to realize that a big government will encourage waste and corruption. Also raising taxes on the job creators is a very bad idea too. The Laffer Curve clearly demonstrates that when the tax rates are raised many individuals will move their investments to places where they will not get taxed as much.

In 1980 I read the book FREE TO CHOOSE by Milton Friedman and it really enlightened me a tremendous amount.  I suggest checking out these episodes and transcripts of Milton Friedman’s film series FREE TO CHOOSE: “The Failure of Socialism” and “The Anatomy of a Crisis” and “What is wrong with our schools?”  and “Created Equal”  and  From Cradle to Grave, and – Power of the Market.

Milton Friedman – Health Care Reform (1992) pt 1/4

6/19/2009 @ 12:01AM

Medical Analysis By Milton Friedman

President Obama, the press, all the Democrats and a fair number of the Republicans in Congress share the same assumption about health care. Whatever you believe should be done about the problem, it sure is complicated.

Yet one man figured it out.

In 2001 the economist Milton Friedman read up on health care, discovered that the inefficiencies in our system trace back to a single policy mistake, worked out a policy test that would help us correct it and then described his findings in a few thousand words of plain English.

Since the end of the Second World War, Friedman explained, medical care in the U.S. has displayed three features: technological advances, increases in spending and rising dissatisfaction.

The first of the three was common to one sector of the economy after another. Agriculture, manufacturing, electronics, communications–all had experienced technological progress. Yet the two final features proved unique to health care. While we were paying less and getting more when buying food or computers, in health care the opposite was happening.

Why?

Because, Friedman saw, most payments for medical care are made not by the patients who receive the care but by third parties, typically employers. Since, in Friedman’s phrase, “nobody spends somebody else’s money as wisely as he spends his own,” this third-payer system by its very nature introduces inefficiencies throughout the health care system.

The reason for this wasteful third-party system? The tax code. Money spent on health care is exempt from the income tax only if the health care is provided through an employer. “We have become so accustomed to employer-provided medical care,” Friedman wrote, “that we regard it as part of the natural order. Yet it is thoroughly illogical.”

The policy mistake that produced this illogical mess took place during World War II, when the government imposed wage controls. Unable to compete for workers by paying them more, employers began providing medical care, and the new benefit spread rapidly.

When the Internal Revenue Service caught on, requiring employers to include the value of medical benefits as part of the wages they reported, workers, who had grown accustomed to the benefits, protested. Congress responded with legislation that made employer-provided medical benefits tax-exempt.

By the time the 1960s arrived, Americans were used to having third parties pay their medical bills. Thus the enactment of Medicare and Medicaid–under which the government, rather than employers, acted as the third party–seemed perfectly reasonable.

Friedman wrote: “Third-party payment has required the bureaucratization of medical care. … A medical transaction is not simply between a caregiver and a patient; it has to be approved as ‘covered’ by a bureaucrat. … The patient has little … incentive to be concerned about the cost since it’s somebody else’s money. The caregiver has become, in effect, an employee of the insurance company or, in the case of Medicare and Medicaid, of the government. … An inescapable result is that the interest of the patient is often in direct conflict with the interest of the caregiver’s ultimate employer.”

In that one paragraph of under 100 words, a diagnosis of our ailment.

What should we do about it? Ideally, Friedman argued, we should reverse the mistake that started all the trouble, repealing the tax exemption of employer-provided medical care. Yet Friedman was a realist. Vested interests, he recognized, would make such a radical reform impossible. Instead he believed we should seek incremental changes, asking of each proposal simply whether it would move health care “in the right direction.”

Expanding savings accounts that allow individuals control over relevant spending, Friedman argued, would move health care in the right direction. So would extending the tax exemption to all medical expenses, whether they are paid by employers or individuals. A “sweeping socialization of medicine [such as that] proposed by Hilary Clinton”–and, now, by Barack Obama–would not.

Wherever possible, reduce the role of third parties. Increase the autonomy of individuals. Get the government and vast, bureaucratic insurance companies out of the way, permitting the free market to work its effects in health care, just as it does in virtually every other sector of the economy.

That’s not too complicated, now, is it?

Peter Robinson, a research fellow at the Hoover Institution at Stanford University and contributor to RobinsonandLong.com, writes a weekly column for Forbes.

Milton Friedman – Health Care Reform (1992) pt 2/4

Milton Friedman – Health Care Reform (1992) pt 3/4

Milton Friedman – Health Care Reform (1992) pt 4/4

_____________________

Related posts:

Dan Mitchell on Obamacare Supreme Court Decision: “I’m disgusted that the Supreme Court once again has decided to put politics above the Constitution!” (Includes lots of videos and cartoons)

__________ Enzi statement on the Supreme Court’s King Vs. Burwell decision 5 Takeaways From Today’s Supreme Court Ruling on Obamacare Wicker Comments on King v Burwell Supreme Court Decision Senator Lankford Discusses the King v. Burwell Supreme Court Decision Congressman Steve King Response to SCOTUS King v. Burwell Ruling Obamacare and the Odious Anti-Constitutionalism of […]

Open letter to President Obama (Part 718) Cartoonists Go to War against Obamacare

Open letter to President Obama (Part 718) (Emailed to White House on 6-25-13.) President Obama c/o The White House 1600 Pennsylvania Avenue NW Washington, DC 20500 Dear Mr. President, I know that you receive 20,000 letters a day and that you actually read 10 of them every day. I really do respect you for trying to get […]

The Region – Banking and Policy Issues Magazine – Interview with Milton Friedman June 1992

______ Milton Friedman’s Free to Choose (1980), episode 3 – Anatomy of a Crisis. part 1 The Region – Banking and Policy Issues Magazine – Interview with Milton Friedman June 1992 In his new book, Money Mischief, economist Milton Friedman compares inflation to alcoholism; blames the rise of Chinese communism, in large part, on an […]

NEW RIVER MEDIA INTERVIEW WITH: MILTON FRIEDMAN Professor Emeritus of Economics, University of Chicago Senior Fellow, Hoover Institution

______ Milton Friedman – A Conversation On Minimum Wage Milton Friedman Interview Milton Friedman is Professor Emeritus of Economics at the University of Chicago and Senior Fellow at the Hoover Institution.Dr. Friedman received the 1976 Nobel Memorial Prize for Economic Science. Member of the research staff of the National Bureau of Economic Research from 1937 […]

Walter E. Williams: “Milton Friedman was an economist’s economist” Wednesday, Dec. 6 2006 1

________ Milton Friedman on Donahue – 1979 Uploaded on Aug 26, 2009 Dr. Milton Friedman, Nobel Laureate, promoting “Free to Choose” on the show Donahue. Walter E. Williams: Milton Friedman was an economist’s economist Print Font [+] [-] Leave a comment » By Walter E. Williams Published: Wednesday, Dec. 6 2006 12:00 a.m. MST Walter […]

FRIEDMAN FRIDAY 40 Years Later: Milton Friedman’s Legacy in Chile “Chilean Miracle” Struck a Blow against Communism When Needed Most José Niño April 22, 2015

_______ José Niño José Niño is a graduate student based in Santiago, Chile. A citizen of the world, he has lived in Venezuela, Colombia, and the United States. He is currently an international research analyst with the Acton Circle of Chile. Follow@JoseAlNino. 40 Years Later: Milton Friedman’s Legacy in Chile “Chilean Miracle” Struck a Blow […]

FRIEDMAN FRIDAY Milton Friedman came up with the NEGATIVE INCOME TAX

____ Milton Friedman – The Negative Income Tax The Conservative Case for a Guaranteed Basic Income NOAH GORDON AUG 6, 2014 Creating a wage floor is an effective way to fight poverty—and it would reduce government spending and intrusion. Swiss backers of a minimum income spread out coins in Bern. Denis Balibouse/Reuters Last week, my […]

FRIEDMAN FRIDAY Which Fed Bill Would Milton Friedman Have Liked? Posted on March 10, 2015by John Taylor

________________ Which Fed Bill Would Milton Friedman Have Liked? Posted on March 10, 2015by John Taylor Writing last week on the Cato at Liberty blog, Steve Hanke argued that Milton Friedman would have supported the “Audit the Fed” bill recently introduced in the Senate.  Steve’s reasoning is based on Friedman’s 1962 essay “Should there be an […]

5 myths that conceal reality by Milton Friedman

A great speech below: Here are the myths:Robber Baron Myth, The Cause of Great Depression Myth, The Demand for Government Service Myth, The Free Lunch Smith, and The Robin Hood Myth. 1) the Robber Baron Myth, 2) the Great Depression Myth, 3) the Demand for Government Service Myth, 4) the Free Lunch Myth, and 5) […]

FRIEDMAN FRIDAY SEPTEMBER 4, 2006 An Interview with Milton Friedman

_______________ FEATURED ARTICLE | SEPTEMBER 4, 2006 An Interview with Milton Friedman Milton Friedman* I recently sat down with Milton Friedman, a few days before his 94th birthday, to discuss the impact of two of his most important contributions to economics and liberty: A Monetary History of the United States, 1870-1960 [co-written] with Anna Schwartz, […]

FRIEDMAN FRIDAY The Social Responsibility of Business is to Increase its Profits by Milton Friedman The New York Times Magazine, September 13, 1970.

Milton Friedman on Self-Interest and the Profit Motive 1of2 Milton Friedman on Self-Interest and the Profit Motive 2of2 The Social Responsibility of Business is to Increase its Profits by Milton FriedmanThe New York Times Magazine, September 13, 1970. Copyright @ 1970 by The New York Times Company. When I hear businessmen speak eloquently about the […]

FRIEDMAN FRIDAY Levin on Milton Friedman: ‘One Thing to Have Free Immigration to Jobs, Another for Welfare’ By Michael Morris | January 16, 2015

____________ Levin on Milton Friedman: ‘One Thing to Have Free Immigration to Jobs, Another for Welfare’ By Michael Morris | January 16, 2015 | 5:12 PM EST During his show on January 15, 2015, Nationally syndicated radio host Mark Levin recalled the famed economist Milton Friedman and explored an important reason why open immigration, despite […]

FRIEDMAN FRIDAY Milton Friedman would oppose bailouts, Obamacare Robert Enlow | Tuesday Jul 31, 2012 6:02 PM

Milton Friedman on Medical Care (Full Lecture)

Published on Feb 2, 2014

I have written about Obamacare over and over again on this blog. Dan Mitchell has shared many funny cartoons about Obamacare too. Milton Friedman has spoken out about government healthcare many times in the past and his film series FREE TO CHOOSE is on You Tube and I encourage you to watch it. It is clear that the federal government debt is growing so much that it is endangering us because if things keep going like they are now we will not have any money left for the national defense because we are so far in debt as a nation.

We have been spending so much on our welfare state through food stamps and other programs that I am worrying that many of our citizens are becoming more dependent on government and in many cases they are losing their incentive to work hard because of the welfare trap the government has put in place. Other nations in Europe have gone down this road and we see what mess this has gotten them in. People really are losing their faith in big government and they want more liberty back. It seems to me we have to get back to the founding  principles that made our country great.  We also need to realize that a big government will encourage waste and corruption. Also raising taxes on the job creators is a very bad idea too. The Laffer Curve clearly demonstrates that when the tax rates are raised many individuals will move their investments to places where they will not get taxed as much.

In 1980 I read the book FREE TO CHOOSE by Milton Friedman and it really enlightened me a tremendous amount.  I suggest checking out these episodes and transcripts of Milton Friedman’s film series FREE TO CHOOSE: “The Failure of Socialism” and “The Anatomy of a Crisis” and “What is wrong with our schools?”  and “Created Equal”  and  From Cradle to Grave, and – Power of the Market.

Milton Friedman would oppose bailouts, Obamacare

Milton Friedman would oppose bailouts, Obamacare

The United States a century ago was a highly charged magnet for immigrants around the world. Thousands entered Ellis Island each day on the hope of making a better life for themselves and their families. Two of those immigrants were Jeno and Sara Friedman; they would become the parents of Milton Friedman, one of the most influential and important economists of the 20th century.

Dubbed the “grandmaster of free-market economic theory” by the New York Times, Friedman’s writings, especially his 1980 book “Free to Choose” authored with his wife, Rose, refuted popular claims that “more government” would improve the quality of our lives. Milton Friedman was the most ardent spokesperson advocating the complete opposite. Voluntary choices of individuals rather than arbitrary dictates of the state, he argued, should be the default mode of human life. Government is justified only insofar as it preserves, protects, and defends individual liberty.

On [last] week’s 100th anniversary of his birth, one may wonder what the Nobel laureate would say about the more controversial policies now unfolding across America. What would Dr. Friedman have thought about the recent advances in school choice, the idea he developed in 1955? How would he react to government’s decision to tax Americans who do not purchase health care?

Would Dr. Friedman take a position regarding the financial impact of soaring public union pensions on state economies? As an expert on monetary policy, certainly Dr. Friedman would have an opinion regarding the federal government’s bailout of the financial industry and its impact on our personal freedom.

On school choice – the principle that all parents should have access to their child’s education funding so that they may choose whatever learning environment is best for their child – I believe Milton would say we’ve come a long way, but not nearly far enough.

Today there are 39 voucher and tax-credit programs in 21 states and the District of Columbia, offering more than 200,000 children educational freedom. In the past two years, more advancement has been made in school choice than in the previous 20 years. Yet most American parents still are not free to choose their child’s school. Limited by financial resources of their parents, children living within arbitrarily drawn boundaries are assigned to government-run institutions. The competitive, diverse, and innovative system of high-quality educational options Dr. Friedman advocated is not yet a reality.

On health care centralization

On health care, Milton likely would have disagreed with the massive centralization of an industry – a consequence of the Affordable Care Act. Moreover, its central tenet – that Americans are forced through taxation to engage in certain behaviors – resembles what Milton’s parents tried to escape when coming to the U.S. in 1894. The results, Friedman might have said, would be a lowering of quality accompanied by a significant increase in cost.

Friedman was particularly dismayed at how much unions continue to drive up taxpayer costs in places like California. Today, public employee unions and their largess have contributed to multiple cities to filing for bankruptcy. Friedman believed a free nation should never be held hostage to monopolies, including trade unions. He would have been heartened by progress made by strong leaders in several states to bring the public sector more in line with the private sector, yet Dr. Friedman would likely have agreed that much more needs to be done as teacher pension liabilities alone approach $1 trillion.

As for those bailouts, it is highly doubtful Dr. Friedman would support propping up any institution that cannot compete in the free market. Milton’s writings on monetary policy were sternly against actions that could cause inflation. But he also did not favor “easy money,” which has become the worldwide solution to the ongoing financial crisis. Friedman believed banks, governments, and individuals must keep their fiscal house in order.

Ultimately, we can rely only on Dr. Friedman’s writings to determine what he might have said to the issues we face today. Yet we can rest assured; at the core of his work was a commitment to the freedom of individuals over the collective force of a centralized government.

Just like in the early and mid-20th century, today the threat of central power and planning is threatening Americans’ freedom and quality of life. And although Milton Friedman is no longer with us, the vision he expressed through his writings endures.

Since his death in 2006, the Friedman Foundation has sponsored annual events around the world to spread the ideas espoused by Milton Friedman. On July 31, more than 140 events will be held in 50 states and in 44 counties honoring the life and legacy of Dr. Friedman, on what would have been his 100th birthday. From California to Chile, Vermont to Venezuela, Pennsylvania to Pakistan, and Illinois to Iran, thousands will gather to remember Milton Friedman and to keep his work alive.

These events are reminders that free markets are about much more than economics. As Friedman wrote in his book, “Capitalism and Freedom:” “Underlying most arguments against the free market is a lack of belief in freedom itself.”

Economic freedom lies at the heart of liberty; to live with the freedom to choose, to build our own lives, is what motivated people like Dr. Friedman’s parents to seek America’s shores many years ago.

_____________________

Related posts:

Dan Mitchell on Obamacare Supreme Court Decision: “I’m disgusted that the Supreme Court once again has decided to put politics above the Constitution!” (Includes lots of videos and cartoons)

__________ Enzi statement on the Supreme Court’s King Vs. Burwell decision 5 Takeaways From Today’s Supreme Court Ruling on Obamacare Wicker Comments on King v Burwell Supreme Court Decision Senator Lankford Discusses the King v. Burwell Supreme Court Decision Congressman Steve King Response to SCOTUS King v. Burwell Ruling Obamacare and the Odious Anti-Constitutionalism of […]

Open letter to President Obama (Part 718) Cartoonists Go to War against Obamacare

Open letter to President Obama (Part 718) (Emailed to White House on 6-25-13.) President Obama c/o The White House 1600 Pennsylvania Avenue NW Washington, DC 20500 Dear Mr. President, I know that you receive 20,000 letters a day and that you actually read 10 of them every day. I really do respect you for trying to get […]

The Region – Banking and Policy Issues Magazine – Interview with Milton Friedman June 1992

______ Milton Friedman’s Free to Choose (1980), episode 3 – Anatomy of a Crisis. part 1 The Region – Banking and Policy Issues Magazine – Interview with Milton Friedman June 1992 In his new book, Money Mischief, economist Milton Friedman compares inflation to alcoholism; blames the rise of Chinese communism, in large part, on an […]

NEW RIVER MEDIA INTERVIEW WITH: MILTON FRIEDMAN Professor Emeritus of Economics, University of Chicago Senior Fellow, Hoover Institution

______ Milton Friedman – A Conversation On Minimum Wage Milton Friedman Interview Milton Friedman is Professor Emeritus of Economics at the University of Chicago and Senior Fellow at the Hoover Institution.Dr. Friedman received the 1976 Nobel Memorial Prize for Economic Science. Member of the research staff of the National Bureau of Economic Research from 1937 […]

Walter E. Williams: “Milton Friedman was an economist’s economist” Wednesday, Dec. 6 2006 1

________ Milton Friedman on Donahue – 1979 Uploaded on Aug 26, 2009 Dr. Milton Friedman, Nobel Laureate, promoting “Free to Choose” on the show Donahue. Walter E. Williams: Milton Friedman was an economist’s economist Print Font [+] [-] Leave a comment » By Walter E. Williams Published: Wednesday, Dec. 6 2006 12:00 a.m. MST Walter […]

FRIEDMAN FRIDAY 40 Years Later: Milton Friedman’s Legacy in Chile “Chilean Miracle” Struck a Blow against Communism When Needed Most José Niño April 22, 2015

_______ José Niño José Niño is a graduate student based in Santiago, Chile. A citizen of the world, he has lived in Venezuela, Colombia, and the United States. He is currently an international research analyst with the Acton Circle of Chile. Follow@JoseAlNino. 40 Years Later: Milton Friedman’s Legacy in Chile “Chilean Miracle” Struck a Blow […]

FRIEDMAN FRIDAY Milton Friedman came up with the NEGATIVE INCOME TAX

____ Milton Friedman – The Negative Income Tax The Conservative Case for a Guaranteed Basic Income NOAH GORDON AUG 6, 2014 Creating a wage floor is an effective way to fight poverty—and it would reduce government spending and intrusion. Swiss backers of a minimum income spread out coins in Bern. Denis Balibouse/Reuters Last week, my […]

FRIEDMAN FRIDAY Which Fed Bill Would Milton Friedman Have Liked? Posted on March 10, 2015by John Taylor

________________ Which Fed Bill Would Milton Friedman Have Liked? Posted on March 10, 2015by John Taylor Writing last week on the Cato at Liberty blog, Steve Hanke argued that Milton Friedman would have supported the “Audit the Fed” bill recently introduced in the Senate.  Steve’s reasoning is based on Friedman’s 1962 essay “Should there be an […]

5 myths that conceal reality by Milton Friedman

A great speech below: Here are the myths:Robber Baron Myth, The Cause of Great Depression Myth, The Demand for Government Service Myth, The Free Lunch Smith, and The Robin Hood Myth. 1) the Robber Baron Myth, 2) the Great Depression Myth, 3) the Demand for Government Service Myth, 4) the Free Lunch Myth, and 5) […]

FRIEDMAN FRIDAY SEPTEMBER 4, 2006 An Interview with Milton Friedman

_______________ FEATURED ARTICLE | SEPTEMBER 4, 2006 An Interview with Milton Friedman Milton Friedman* I recently sat down with Milton Friedman, a few days before his 94th birthday, to discuss the impact of two of his most important contributions to economics and liberty: A Monetary History of the United States, 1870-1960 [co-written] with Anna Schwartz, […]

FRIEDMAN FRIDAY The Social Responsibility of Business is to Increase its Profits by Milton Friedman The New York Times Magazine, September 13, 1970.

Milton Friedman on Self-Interest and the Profit Motive 1of2 Milton Friedman on Self-Interest and the Profit Motive 2of2 The Social Responsibility of Business is to Increase its Profits by Milton FriedmanThe New York Times Magazine, September 13, 1970. Copyright @ 1970 by The New York Times Company. When I hear businessmen speak eloquently about the […]

FRIEDMAN FRIDAY Levin on Milton Friedman: ‘One Thing to Have Free Immigration to Jobs, Another for Welfare’ By Michael Morris | January 16, 2015

____________ Levin on Milton Friedman: ‘One Thing to Have Free Immigration to Jobs, Another for Welfare’ By Michael Morris | January 16, 2015 | 5:12 PM EST During his show on January 15, 2015, Nationally syndicated radio host Mark Levin recalled the famed economist Milton Friedman and explored an important reason why open immigration, despite […]

Taxmageddon and Obamacare: What Would Milton Friedman Say? Rich Tucker / @RichardBTucker / July 31, 2012

Milton Friedman on Medical Care (Full Lecture)

Published on Feb 2, 2014

Taxmageddon and Obamacare: What Would Milton Friedman Say?

“I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it’s possible,” economist Milton Friedman once said. So the Nobel Prize winner would undoubtedly be concerned this year asTaxmageddon, the one-year $494 billion tax increase that is poised to strike the economy in January approaches.

Friedman’s opposition to taxes was based on the idea that governments were inefficient in everything they did. “If you put the federal government in charge of the Sahara Desert, in five years there’d be a shortage of sand,” he quipped. By limiting government resources, he hoped to limit the size and scope of government.

Instead, the coming of Taxmageddon would make the federal government even more intrusive and influential. As such, it’s already slowing job creation, generating economic uncertainty, and reducing productive investment.

Friedman would also warn us about the dangers of Obamacare.

“The great achievements of civilization have not come from government bureaus,” he explained. “There is no alternative way so far discovered at improving the lot of ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system.”

Yet Obamacare takes our health care system in exactly the wrong direction. Instead of putting people in charge of their own health care decisions, “it imposes several costly new mandates and restrictions on health insurers and providers that will raise health care costs and therefore premiums.” Further,“Obamacare raises taxes and adds 17 new taxes or penalties that will affect all Americans.”

Friedman warned that government involvement would lead to socialized medicine and that it would be “very much against the interests of patients, of physicians, and of other health care personnel.” Why? Because “you invariably get lower quality and a lower quantity of medical care.”

In one of his most famous quotes, Friedman pointed out that “there’s no free lunch.” Every government “benefit” is paid for by somebody.

Friedman would have been 100 years old today. His wise counsel is missed, but the lessons he taught apply just as much to today’s debates as they did during his lifetime.

___________

I have written about Obamacare over and over again on this blog. Dan Mitchell has shared many funny cartoons about Obamacare too. Milton Friedman has spoken out about government healthcare many times in the past and his film series FREE TO CHOOSE is on You Tube and I encourage you to watch it. It is clear that the federal government debt is growing so much that it is endangering us because if things keep going like they are now we will not have any money left for the national defense because we are so far in debt as a nation.

We have been spending so much on our welfare state through food stamps and other programs that I am worrying that many of our citizens are becoming more dependent on government and in many cases they are losing their incentive to work hard because of the welfare trap the government has put in place. Other nations in Europe have gone down this road and we see what mess this has gotten them in. People really are losing their faith in big government and they want more liberty back. It seems to me we have to get back to the founding  principles that made our country great.  We also need to realize that a big government will encourage waste and corruption. Also raising taxes on the job creators is a very bad idea too. The Laffer Curve clearly demonstrates that when the tax rates are raised many individuals will move their investments to places where they will not get taxed as much.

In 1980 I read the book FREE TO CHOOSE by Milton Friedman and it really enlightened me a tremendous amount.  I suggest checking out these episodes and transcripts of Milton Friedman’s film series FREE TO CHOOSE: “The Failure of Socialism” and “The Anatomy of a Crisis” and “What is wrong with our schools?”  and “Created Equal”  and  From Cradle to Grave, and – Power of the Market.

Milton Friedman – Health Care Reform (1992) pt 1/4

Milton Friedman – Health Care Reform (1992) pt 2/4

Milton Friedman – Health Care Reform (1992) pt 3/4

Milton Friedman – Health Care Reform (1992) pt 4/4

_____________________

Related posts:

Dan Mitchell on Obamacare Supreme Court Decision: “I’m disgusted that the Supreme Court once again has decided to put politics above the Constitution!” (Includes lots of videos and cartoons)

__________ Enzi statement on the Supreme Court’s King Vs. Burwell decision 5 Takeaways From Today’s Supreme Court Ruling on Obamacare Wicker Comments on King v Burwell Supreme Court Decision Senator Lankford Discusses the King v. Burwell Supreme Court Decision Congressman Steve King Response to SCOTUS King v. Burwell Ruling Obamacare and the Odious Anti-Constitutionalism of […]

Open letter to President Obama (Part 718) Cartoonists Go to War against Obamacare

Open letter to President Obama (Part 718) (Emailed to White House on 6-25-13.) President Obama c/o The White House 1600 Pennsylvania Avenue NW Washington, DC 20500 Dear Mr. President, I know that you receive 20,000 letters a day and that you actually read 10 of them every day. I really do respect you for trying to get […]

The Region – Banking and Policy Issues Magazine – Interview with Milton Friedman June 1992

______ Milton Friedman’s Free to Choose (1980), episode 3 – Anatomy of a Crisis. part 1 The Region – Banking and Policy Issues Magazine – Interview with Milton Friedman June 1992 In his new book, Money Mischief, economist Milton Friedman compares inflation to alcoholism; blames the rise of Chinese communism, in large part, on an […]

NEW RIVER MEDIA INTERVIEW WITH: MILTON FRIEDMAN Professor Emeritus of Economics, University of Chicago Senior Fellow, Hoover Institution

______ Milton Friedman – A Conversation On Minimum Wage Milton Friedman Interview Milton Friedman is Professor Emeritus of Economics at the University of Chicago and Senior Fellow at the Hoover Institution.Dr. Friedman received the 1976 Nobel Memorial Prize for Economic Science. Member of the research staff of the National Bureau of Economic Research from 1937 […]

Walter E. Williams: “Milton Friedman was an economist’s economist” Wednesday, Dec. 6 2006 1

________ Milton Friedman on Donahue – 1979 Uploaded on Aug 26, 2009 Dr. Milton Friedman, Nobel Laureate, promoting “Free to Choose” on the show Donahue. Walter E. Williams: Milton Friedman was an economist’s economist Print Font [+] [-] Leave a comment » By Walter E. Williams Published: Wednesday, Dec. 6 2006 12:00 a.m. MST Walter […]

FRIEDMAN FRIDAY 40 Years Later: Milton Friedman’s Legacy in Chile “Chilean Miracle” Struck a Blow against Communism When Needed Most José Niño April 22, 2015

_______ José Niño José Niño is a graduate student based in Santiago, Chile. A citizen of the world, he has lived in Venezuela, Colombia, and the United States. He is currently an international research analyst with the Acton Circle of Chile. Follow@JoseAlNino. 40 Years Later: Milton Friedman’s Legacy in Chile “Chilean Miracle” Struck a Blow […]

FRIEDMAN FRIDAY Milton Friedman came up with the NEGATIVE INCOME TAX

____ Milton Friedman – The Negative Income Tax The Conservative Case for a Guaranteed Basic Income NOAH GORDON AUG 6, 2014 Creating a wage floor is an effective way to fight poverty—and it would reduce government spending and intrusion. Swiss backers of a minimum income spread out coins in Bern. Denis Balibouse/Reuters Last week, my […]

FRIEDMAN FRIDAY Which Fed Bill Would Milton Friedman Have Liked? Posted on March 10, 2015by John Taylor

________________ Which Fed Bill Would Milton Friedman Have Liked? Posted on March 10, 2015by John Taylor Writing last week on the Cato at Liberty blog, Steve Hanke argued that Milton Friedman would have supported the “Audit the Fed” bill recently introduced in the Senate.  Steve’s reasoning is based on Friedman’s 1962 essay “Should there be an […]

5 myths that conceal reality by Milton Friedman

A great speech below: Here are the myths:Robber Baron Myth, The Cause of Great Depression Myth, The Demand for Government Service Myth, The Free Lunch Smith, and The Robin Hood Myth. 1) the Robber Baron Myth, 2) the Great Depression Myth, 3) the Demand for Government Service Myth, 4) the Free Lunch Myth, and 5) […]

FRIEDMAN FRIDAY SEPTEMBER 4, 2006 An Interview with Milton Friedman

_______________ FEATURED ARTICLE | SEPTEMBER 4, 2006 An Interview with Milton Friedman Milton Friedman* I recently sat down with Milton Friedman, a few days before his 94th birthday, to discuss the impact of two of his most important contributions to economics and liberty: A Monetary History of the United States, 1870-1960 [co-written] with Anna Schwartz, […]

FRIEDMAN FRIDAY The Social Responsibility of Business is to Increase its Profits by Milton Friedman The New York Times Magazine, September 13, 1970.

Milton Friedman on Self-Interest and the Profit Motive 1of2 Milton Friedman on Self-Interest and the Profit Motive 2of2 The Social Responsibility of Business is to Increase its Profits by Milton FriedmanThe New York Times Magazine, September 13, 1970. Copyright @ 1970 by The New York Times Company. When I hear businessmen speak eloquently about the […]

FRIEDMAN FRIDAY Levin on Milton Friedman: ‘One Thing to Have Free Immigration to Jobs, Another for Welfare’ By Michael Morris | January 16, 2015

____________ Levin on Milton Friedman: ‘One Thing to Have Free Immigration to Jobs, Another for Welfare’ By Michael Morris | January 16, 2015 | 5:12 PM EST During his show on January 15, 2015, Nationally syndicated radio host Mark Levin recalled the famed economist Milton Friedman and explored an important reason why open immigration, despite […]

A Way Out of Soviet-Style Health Care Solzhenitsyn’s prophetic warning about the depersonalization of medicine. By MILTON FRIEDMAN Updated March 20, 2010 12:01 a.m. ET

Milton Friedman – Health Care Reform (1992) pt 1/4

Milton Friedman – Health Care Reform (1992) pt 2/4

A Way Out of Soviet-Style Health Care

Solzhenitsyn’s prophetic warning about the depersonalization of medicine.

Editor’s note: The following is excerpted from an article with the same headline by Nobel Prize winning economist Milton Friedman that was published in the Wall Street Journal on April 17, 1996. Friedman died in 2006. A related editorial appears nearby:

In a chapter in his novel “The Cancer Ward” titled “The Old Doctor,” Alexander Solzhenitsyn compares “private medical practice” with “universal, free, public health service” through the words of an elderly physician whose practice predated 1918. . .

Mr. Solzhenitsyn himself had no personal experience on which to base his account and yet, in what I have long regarded as a striking example of creative imagination, his character presents an accurate and moving vision. The essence of that vision is the consensual relation between the patient and the physician. The patient was free to choose his physician, and the physician free to accept or reject the patient.

In Mr. Solzhenitsyn’s words, “among all these persecutions [of the old doctor] the most persistent and stringent had been directed against the fact that Doctor Oreschenkov clung stubbornly to his right to conduct a private medical practice, although this was forbidden.”

In the words of Dr. Oreschenkov in conversation with Lyudmila Afanasyevna, a longtime patient and herself a physician in the cancer ward: “In general, the family doctor is the most comforting figure in our lives. But he has been cut down and foreshortened. . . . Sometimes it’s easier to find a wife than to find a doctor nowadays who is prepared to give you as much time as you need and understands you completely, all of you.”

Lyudmila Afanasyevna: “All right, but how many of these family doctors would be needed? They just can’t be fitted into our system of universal, free, public health services.”

Dr. Oreschenkov: “Universal and public—yes, they could. Free, no.”

Lyudmila Afanasyevna: “But the fact that it is free is our greatest achievement.”

Dr. Oreschenkov: “Is it such a great achievement? What do you mean by ‘free’? The doctors don’t work without pay. It’s just that the patient doesn’t pay them, they’re paid out of the public budget. The public budget comes from these same patients. Treatment isn’t free, it’s just depersonalized. If the cost of it were left with the patient, he’d turn the ten rubles over and over in his hands. But when he really needed help he’d come to the doctor five times over. . . .

“Is it better the way it is now? You’d pay anything for careful and sympathetic attention from the doctor, but everywhere there’s a schedule, a quota the doctors have to meet; next! . . . And what do patients come for? For a certificate to be absent from work, for sick leave, for certification for invalids’ pensions: and the doctor’s job is to catch the frauds. Doctor and patient as enemies—is that medicine?”

“Depersonalized,” “doctor and patient as enemies”—those are the key phrases in the growing body of complaints about health maintenance organizations and other forms of managed care. In many managed care situations, the patient no longer regards the physician who serves him as “his” or “her” physician responsible primarily to the patient; and the physician no longer regards himself as primarily responsible to the patient. His first responsibility is to the managed care entity that hires him. He is not engaged in the kind of private medical practice that Dr. Oreschenkov valued so highly.

For the first 30 years of my life, until World War II, that kind of practice was the norm. Individuals were responsible for their own medical care. They could pay for it out-of-pocket or they could buy insurance. “Sliding scale” fees plus professional ethics assured that the poor got care. On entry to a hospital, the first question was “What’s wrong?” not “What is your insurance?” It may be that some firms provided health care as a benefit to their workers, but if so it was the exception not the rule.

The first major change in those arrangements was a byproduct of wage and price controls during World War II. Employers, pressed to find more workers under wartime boom conditions but forbidden to offer higher money wages, started adding benefits in kind to the money wage. Employer-provided medical care proved particularly popular. As something new, it was not covered by existing tax regulations, so employers treated it as exempt from withholding tax.

It took a few years before the Internal Revenue Service got around to issuing regulations requiring the cost of employer-provided medical care to be included in taxable wages. That aroused a howl of protest from employees who had come to take tax exemption for granted, and Congress responded by exempting employer- provided medical care from both the personal and the corporate income tax.

Because private expenditures on health care are not exempt from income tax, almost all employees now receive health care coverage from their employers, leading to problems of portability, third party payment and rising costs that have become increasingly serious. Of course, the cost of medical care comes out of wages, but out of before-tax rather than after-tax wages, so that the employee receives what he or she regards as a higher real wage for the same cost to the employer.

A second major change was the enactment of Medicare and Medicaid in 1965. These added another large slice of the population to those for whom medical care, though not completely “free,” thanks to deductibles and co-payments, was mostly paid by a third party, providing little incentive to economize on medical care. The resulting dramatic rise in expenditures on medical care led to the imposition of controls on both patients and suppliers of medical care in a futile attempt to hold down costs, further undermining the kind of private practice that Dr. Oreschenkov “cherished most in his work.”

The best way to restore freedom of choice to both patient and physician and to control costs would be to eliminate the tax exemption of employer-provided medical care. However, that is clearly not feasible politically. The best alternative available is to extend the tax exemption to all expenditures on medical care, whether made by the patient directly or by employers, to establish a level playing field, in terms of the currently popular cliche.

Many individuals would then find it attractive to negotiate with their employer for a higher cash wage in place of employer-financed medical care. With part or all of the higher cash wage, they could purchase an insurance policy with a very high deductible, i.e., a policy for medical catastrophes, which would be decidedly cheaper than the low-deductible policy their employer had been providing to them, and deposit all or part of the difference in a special “medical savings account” that could be drawn on only for medical purposes. Any amounts unused in a particular year could be allowed to accumulate without being subject to tax, or could be withdrawn with a tax penalty or for special purposes, as with current Individual Retirement Accounts—in effect, a medical IRA. Many employers would find it attractive to offer such an arrangement to their employees as an option. . . .

Milton Friedman – Health Care Reform (1992) pt 3/4

Milton Friedman – Health Care Reform (1992) pt 4/4

Milton Friedman on Medical Care (Full Lecture)

Published on Feb 2, 2014

I have written about Obamacare over and over again on this blog. Dan Mitchell has shared many funny cartoons about Obamacare too. Milton Friedman has spoken out about government healthcare many times in the past and his film series FREE TO CHOOSE is on You Tube and I encourage you to watch it. It is clear that the federal government debt is growing so much that it is endangering us because if things keep going like they are now we will not have any money left for the national defense because we are so far in debt as a nation.

We have been spending so much on our welfare state through food stamps and other programs that I am worrying that many of our citizens are becoming more dependent on government and in many cases they are losing their incentive to work hard because of the welfare trap the government has put in place. Other nations in Europe have gone down this road and we see what mess this has gotten them in. People really are losing their faith in big government and they want more liberty back. It seems to me we have to get back to the founding  principles that made our country great.  We also need to realize that a big government will encourage waste and corruption. Also raising taxes on the job creators is a very bad idea too. The Laffer Curve clearly demonstrates that when the tax rates are raised many individuals will move their investments to places where they will not get taxed as much.

In 1980 I read the book FREE TO CHOOSE by Milton Friedman and it really enlightened me a tremendous amount.  I suggest checking out these episodes and transcripts of Milton Friedman’s film series FREE TO CHOOSE: “The Failure of Socialism” and “The Anatomy of a Crisis” and “What is wrong with our schools?”  and “Created Equal”  and  From Cradle to Grave, and – Power of the Market.

_____________________

 

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______ Milton Friedman’s Free to Choose (1980), episode 3 – Anatomy of a Crisis. part 1 The Region – Banking and Policy Issues Magazine – Interview with Milton Friedman June 1992 In his new book, Money Mischief, economist Milton Friedman compares inflation to alcoholism; blames the rise of Chinese communism, in large part, on an […]

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________ Milton Friedman on Donahue – 1979 Uploaded on Aug 26, 2009 Dr. Milton Friedman, Nobel Laureate, promoting “Free to Choose” on the show Donahue. Walter E. Williams: Milton Friedman was an economist’s economist Print Font [+] [-] Leave a comment » By Walter E. Williams Published: Wednesday, Dec. 6 2006 12:00 a.m. MST Walter […]

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_______ José Niño José Niño is a graduate student based in Santiago, Chile. A citizen of the world, he has lived in Venezuela, Colombia, and the United States. He is currently an international research analyst with the Acton Circle of Chile. Follow@JoseAlNino. 40 Years Later: Milton Friedman’s Legacy in Chile “Chilean Miracle” Struck a Blow […]

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____ Milton Friedman – The Negative Income Tax The Conservative Case for a Guaranteed Basic Income NOAH GORDON AUG 6, 2014 Creating a wage floor is an effective way to fight poverty—and it would reduce government spending and intrusion. Swiss backers of a minimum income spread out coins in Bern. Denis Balibouse/Reuters Last week, my […]

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Milton Friedman on Self-Interest and the Profit Motive 1of2 Milton Friedman on Self-Interest and the Profit Motive 2of2 The Social Responsibility of Business is to Increase its Profits by Milton FriedmanThe New York Times Magazine, September 13, 1970. Copyright @ 1970 by The New York Times Company. When I hear businessmen speak eloquently about the […]

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____________ Levin on Milton Friedman: ‘One Thing to Have Free Immigration to Jobs, Another for Welfare’ By Michael Morris | January 16, 2015 | 5:12 PM EST During his show on January 15, 2015, Nationally syndicated radio host Mark Levin recalled the famed economist Milton Friedman and explored an important reason why open immigration, despite […]

Milton Friedman On Socialized Medicine

Milton Friedman – Health Care Reform (1992) pt 1/4

Milton Friedman – Health Care Reform (1992) pt 2/4

Milton Friedman – Health Care Reform (1992) pt 3/4

Milton Friedman – Health Care Reform (1992) pt 4/4

Nov 152014

 

A must see!

Nobel Laureate Economist Milton Friedman explores the unsettling dynamics set into motion when government imposes itself into the health care system. (1978)

Everything old is new again

– See more at: http://www.commonsenseevaluation.com/tag/milton-friedman/#sthash.cLJboBo8.dpuf

Milton Friedman on Medical Care (Full Lecture)

Published on Feb 2, 2014

The genius of Milton Friedman is that his economic insights are as powerful as they are timeless. Despite the fact that these comments were made more than thirty years ago in 1978 at the Mayo Clinic, they ring as true today as they did then. Milton Friedman’s six-part video series below on the economics of medical care is especially timely, in light of the fact that the Supreme Court ruled in favor of Obamacare this week and Milton Friedman predicted in this lecture that increased government involvement in health care would lead inevitably to completely socialized medicine. This Mayo Clinic lecture is also a testament to Milton Friedman’s effectiveness at delivering the message of individual liberty and limited government in a convincing and non-threatening way, as Milton explains diplomatically to an audience of physicians how the “power of organized medicine” led to significant restrictions on entry to their profession through the American Medical Association’s control over occupational licensing for physicians, which has contributed to the rising costs of medical care.

Milton Friedman: “I’m going to talk today about the economics of medical care. This in an area, in which we all know there has been a trend toward ever-greater government involvement. One step in this area inevitably leads to another. We have had an expansion of government involvement in the spending of money – Medicare, Medicaid funds, expenditures by the Department of Health, Education and Welfare for other medical purposes have been growing by leaps and bounds. They have gone from a very tiny portion of the total national expenditures on medical care to a substantial portion. If this trend continues, it inevitably leads to completely socialized medicine. I believe that this trend is very much against the interest of patients, physicians, and other health care personnel. And in the brief time I have to today, I want to explain why I believe the trend is so much against their interest, why it has occurred, and what, if anything can be done about it.”

Source…

– See more at: http://www.commonsenseevaluation.com/tag/milton-friedman/#sthash.cLJboBo8.dpuf

________

I have written about Obamacare over and over again on this blog. Dan Mitchell has shared many funny cartoons about Obamacare too. Milton Friedman has spoken out about government healthcare many times in the past and his film series FREE TO CHOOSE is on You Tube and I encourage you to watch it. It is clear that the federal government debt is growing so much that it is endangering us because if things keep going like they are now we will not have any money left for the national defense because we are so far in debt as a nation.

We have been spending so much on our welfare state through food stamps and other programs that I am worrying that many of our citizens are becoming more dependent on government and in many cases they are losing their incentive to work hard because of the welfare trap the government has put in place. Other nations in Europe have gone down this road and we see what mess this has gotten them in. People really are losing their faith in big government and they want more liberty back. It seems to me we have to get back to the founding  principles that made our country great.  We also need to realize that a big government will encourage waste and corruption. Also raising taxes on the job creators is a very bad idea too. The Laffer Curve clearly demonstrates that when the tax rates are raised many individuals will move their investments to places where they will not get taxed as much.

In 1980 I read the book FREE TO CHOOSE by Milton Friedman and it really enlightened me a tremendous amount.  I suggest checking out these episodes and transcripts of Milton Friedman’s film series FREE TO CHOOSE: “The Failure of Socialism” and “The Anatomy of a Crisis” and “What is wrong with our schools?”  and “Created Equal”  and  From Cradle to Grave, and – Power of the Market.

_____________________

Related posts:

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Walter E. Williams: “Milton Friedman was an economist’s economist” Wednesday, Dec. 6 2006 1

________ Milton Friedman on Donahue – 1979 Uploaded on Aug 26, 2009 Dr. Milton Friedman, Nobel Laureate, promoting “Free to Choose” on the show Donahue. Walter E. Williams: Milton Friedman was an economist’s economist Print Font [+] [-] Leave a comment » By Walter E. Williams Published: Wednesday, Dec. 6 2006 12:00 a.m. MST Walter […]

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_______ José Niño José Niño is a graduate student based in Santiago, Chile. A citizen of the world, he has lived in Venezuela, Colombia, and the United States. He is currently an international research analyst with the Acton Circle of Chile. Follow@JoseAlNino. 40 Years Later: Milton Friedman’s Legacy in Chile “Chilean Miracle” Struck a Blow […]

FRIEDMAN FRIDAY Milton Friedman came up with the NEGATIVE INCOME TAX

____ Milton Friedman – The Negative Income Tax The Conservative Case for a Guaranteed Basic Income NOAH GORDON AUG 6, 2014 Creating a wage floor is an effective way to fight poverty—and it would reduce government spending and intrusion. Swiss backers of a minimum income spread out coins in Bern. Denis Balibouse/Reuters Last week, my […]

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________________ Which Fed Bill Would Milton Friedman Have Liked? Posted on March 10, 2015by John Taylor Writing last week on the Cato at Liberty blog, Steve Hanke argued that Milton Friedman would have supported the “Audit the Fed” bill recently introduced in the Senate.  Steve’s reasoning is based on Friedman’s 1962 essay “Should there be an […]

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A great speech below: Here are the myths:Robber Baron Myth, The Cause of Great Depression Myth, The Demand for Government Service Myth, The Free Lunch Smith, and The Robin Hood Myth. 1) the Robber Baron Myth, 2) the Great Depression Myth, 3) the Demand for Government Service Myth, 4) the Free Lunch Myth, and 5) […]

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Milton Friedman on Self-Interest and the Profit Motive 1of2 Milton Friedman on Self-Interest and the Profit Motive 2of2 The Social Responsibility of Business is to Increase its Profits by Milton FriedmanThe New York Times Magazine, September 13, 1970. Copyright @ 1970 by The New York Times Company. When I hear businessmen speak eloquently about the […]

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____________ Levin on Milton Friedman: ‘One Thing to Have Free Immigration to Jobs, Another for Welfare’ By Michael Morris | January 16, 2015 | 5:12 PM EST During his show on January 15, 2015, Nationally syndicated radio host Mark Levin recalled the famed economist Milton Friedman and explored an important reason why open immigration, despite […]

Column: Don’t blame Heritage for ObamaCare mandate By Stuart Butler

Milton Friedman on Medical Care (Full Lecture)

Published on Feb 2, 2014

I have written about Obamacare over and over again on this blog. Dan Mitchell has shared many funny cartoons about Obamacare too. Milton Friedman has spoken out about government healthcare many times in the past and his film series FREE TO CHOOSE is on You Tube and I encourage you to watch it. It is clear that the federal government debt is growing so much that it is endangering us because if things keep going like they are now we will not have any money left for the national defense because we are so far in debt as a nation.

We have been spending so much on our welfare state through food stamps and other programs that I am worrying that many of our citizens are becoming more dependent on government and in many cases they are losing their incentive to work hard because of the welfare trap the government has put in place. Other nations in Europe have gone down this road and we see what mess this has gotten them in. People really are losing their faith in big government and they want more liberty back. It seems to me we have to get back to the founding  principles that made our country great.  We also need to realize that a big government will encourage waste and corruption. Also raising taxes on the job creators is a very bad idea too. The Laffer Curve clearly demonstrates that when the tax rates are raised many individuals will move their investments to places where they will not get taxed as much.

In 1980 I read the book FREE TO CHOOSE by Milton Friedman and it really enlightened me a tremendous amount.  I suggest checking out these episodes and transcripts of Milton Friedman’s film series FREE TO CHOOSE: “The Failure of Socialism” and “The Anatomy of a Crisis” and “What is wrong with our schools?”  and “Created Equal”  and  From Cradle to Grave, and – Power of the Market.

Milton Friedman – Health Care Reform (1992) pt 1/4

Milton Friedman – Health Care Reform (1992) pt 2/4

Column: Don’t blame Heritage for ObamaCare mandate

Is the individual mandate at the heart of “ObamaCare” a conservative idea? Is it constitutional? And was it invented at The Heritage Foundation? In a word, no.

The U.S. Supreme Court will put the middle issue to rest. The answers to the first and last can come from me. After all, I headed Heritage’s health work for 30 years. And make no mistake: Heritage and I actively oppose the individual mandate, including in an amicus brief filed in the 11th Circuit Court of Appeals to the Supreme Court.

Nevertheless, the myth persists. ObamaCare “adopts the ‘individual mandate’ concept from the conservative Heritage Foundation,” Jonathan Alter wrote recently inThe Washington Post. MSNBC’s Chris Matthews makes the same claim, asserting that Republican support of a mandate “has its roots in a proposal by the conservative Heritage Foundation.” Former House speaker Nancy Pelosi and others have made similar claims.

The confusion arises from the fact that 20 years ago, I held the view that as a technical matter, some form of requirement to purchase insurance was needed in a near-universal insurance market to avoid massive instability through “adverse selection” (insurers avoiding bad risks and healthy people declining coverage). At that time, President Clinton was proposing a universal health care plan, and Heritage and I devised a viable alternative.

My view was shared at the time by many conservative experts, including American Enterprise Institute (AEI) scholars, as well as most non-conservative analysts. Even libertarian-conservative icon Milton Friedman, in a 1991 Wall Street Journal article, advocated replacing Medicare and Medicaid “with a requirement that everyU.S. family unit have a major medical insurance policy.”

My idea was hardly new. Heritage did not invent the individual mandate.

But the version of the health insurance mandate Heritage and I supported in the 1990s had three critical features. First, it was not primarily intended to push people to obtain protection for their own good, but to protect others. Like auto damage liability insurance required in most states, our requirement focused on “catastrophic” costs — so hospitals and taxpayers would not have to foot the bill for the expensive illness or accident of someone who did not buy insurance.

Second, we sought to induce people to buy coverage primarily through the carrot of a generous health credit or voucher, financed in part by a fundamental reform of the tax treatment of health coverage, rather than by a stick.

And third, in the legislation we helped craft that ultimately became a preferred alternative to ClintonCare, the “mandate” was actually the loss of certain tax breaks for those not choosing to buy coverage, not a legal requirement.

So why the change in this position in the past 20 years?

First, health research and advances in economic analysis have convinced people like me that an insurance mandate isn’t needed to achieve stable, near-universal coverage. For example, the new field of behavioral economics taught me that default auto-enrollment in employer or nonemployer insurance plans can lead many people to buy coverage without a requirement.

Also, advances in “risk adjustment” tools are improving the stability of voluntary insurance. And Heritage-funded research on federal employees’ coverage — which has no mandate — caused me to conclude we had made a mistake in the 1990s. That’s why we believe that President Obama and others are dead wrong about the need for a mandate.

Additionally, the meaning of the individual mandate we are said to have “invented” has changed over time. Today it means the government makes people buy comprehensive benefits for their own good, rather than our original emphasis on protecting society from the heavy medical costs of free riders.

Moreover, I agree with my legal colleagues at Heritage that today’s version of a mandate exceeds the constitutional powers granted to the federal government. Forcing those Americans not in the insurance market to purchase comprehensive insurance for themselves goes beyond even the most expansive precedents of the courts.

And there’s another thing. Changing one’s mind about the best policy to pursue — but not one’s principles — is part of being a researcher at a major think tank such as Heritage or the Brookings Institution. Serious professional analysts actually take part in a continuous bipartisan and collegial discussion about major policy questions. We read each other’s research. We look at the facts. We talk through ideas with those who agree or disagree with us. And we change our policy views over time based on new facts, new research or good counterarguments.

Thanks to this good process, I’ve altered my views on many things. The individual mandate in health care is one of them.

Stuart Butler, Ph.D., is a distinguished fellow at the Heritage Foundation (www.heritage.org), where he is the director of the Center for Policy Innovation.

Milton Friedman – Health Care Reform (1992) pt 3/4

Milton Friedman – Health Care Reform (1992) pt 4/4

_____________________

Related posts:

Dan Mitchell on Obamacare Supreme Court Decision: “I’m disgusted that the Supreme Court once again has decided to put politics above the Constitution!” (Includes lots of videos and cartoons)

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The Region – Banking and Policy Issues Magazine – Interview with Milton Friedman June 1992

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______ Milton Friedman – A Conversation On Minimum Wage Milton Friedman Interview Milton Friedman is Professor Emeritus of Economics at the University of Chicago and Senior Fellow at the Hoover Institution.Dr. Friedman received the 1976 Nobel Memorial Prize for Economic Science. Member of the research staff of the National Bureau of Economic Research from 1937 […]

Walter E. Williams: “Milton Friedman was an economist’s economist” Wednesday, Dec. 6 2006 1

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_______ José Niño José Niño is a graduate student based in Santiago, Chile. A citizen of the world, he has lived in Venezuela, Colombia, and the United States. He is currently an international research analyst with the Acton Circle of Chile. Follow@JoseAlNino. 40 Years Later: Milton Friedman’s Legacy in Chile “Chilean Miracle” Struck a Blow […]

FRIEDMAN FRIDAY Milton Friedman came up with the NEGATIVE INCOME TAX

____ Milton Friedman – The Negative Income Tax The Conservative Case for a Guaranteed Basic Income NOAH GORDON AUG 6, 2014 Creating a wage floor is an effective way to fight poverty—and it would reduce government spending and intrusion. Swiss backers of a minimum income spread out coins in Bern. Denis Balibouse/Reuters Last week, my […]

FRIEDMAN FRIDAY Which Fed Bill Would Milton Friedman Have Liked? Posted on March 10, 2015by John Taylor

________________ Which Fed Bill Would Milton Friedman Have Liked? Posted on March 10, 2015by John Taylor Writing last week on the Cato at Liberty blog, Steve Hanke argued that Milton Friedman would have supported the “Audit the Fed” bill recently introduced in the Senate.  Steve’s reasoning is based on Friedman’s 1962 essay “Should there be an […]

5 myths that conceal reality by Milton Friedman

A great speech below: Here are the myths:Robber Baron Myth, The Cause of Great Depression Myth, The Demand for Government Service Myth, The Free Lunch Smith, and The Robin Hood Myth. 1) the Robber Baron Myth, 2) the Great Depression Myth, 3) the Demand for Government Service Myth, 4) the Free Lunch Myth, and 5) […]

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_______________ FEATURED ARTICLE | SEPTEMBER 4, 2006 An Interview with Milton Friedman Milton Friedman* I recently sat down with Milton Friedman, a few days before his 94th birthday, to discuss the impact of two of his most important contributions to economics and liberty: A Monetary History of the United States, 1870-1960 [co-written] with Anna Schwartz, […]

FRIEDMAN FRIDAY The Social Responsibility of Business is to Increase its Profits by Milton Friedman The New York Times Magazine, September 13, 1970.

Milton Friedman on Self-Interest and the Profit Motive 1of2 Milton Friedman on Self-Interest and the Profit Motive 2of2 The Social Responsibility of Business is to Increase its Profits by Milton FriedmanThe New York Times Magazine, September 13, 1970. Copyright @ 1970 by The New York Times Company. When I hear businessmen speak eloquently about the […]

FRIEDMAN FRIDAY Levin on Milton Friedman: ‘One Thing to Have Free Immigration to Jobs, Another for Welfare’ By Michael Morris | January 16, 2015

____________ Levin on Milton Friedman: ‘One Thing to Have Free Immigration to Jobs, Another for Welfare’ By Michael Morris | January 16, 2015 | 5:12 PM EST During his show on January 15, 2015, Nationally syndicated radio host Mark Levin recalled the famed economist Milton Friedman and explored an important reason why open immigration, despite […]

FRIEDMAN FRIDAY Whining Harvard Professors Discover Obamacare 3225 JAN 5, 2015 4:29 PM EST By Megan McArdle

Milton Friedman on Medical Care (Full Lecture)

Published on Feb 2, 2014

I have written about Obamacare over and over again on this blog. Dan Mitchell has shared many funny cartoons about Obamacare too. Milton Friedman has spoken out about government healthcare many times in the past and his film series FREE TO CHOOSE is on You Tube and I encourage you to watch it. It is clear that the federal government debt is growing so much that it is endangering us because if things keep going like they are now we will not have any money left for the national defense because we are so far in debt as a nation.

We have been spending so much on our welfare state through food stamps and other programs that I am worrying that many of our citizens are becoming more dependent on government and in many cases they are losing their incentive to work hard because of the welfare trap the government has put in place. Other nations in Europe have gone down this road and we see what mess this has gotten them in. People really are losing their faith in big government and they want more liberty back. It seems to me we have to get back to the founding  principles that made our country great.  We also need to realize that a big government will encourage waste and corruption. Also raising taxes on the job creators is a very bad idea too. The Laffer Curve clearly demonstrates that when the tax rates are raised many individuals will move their investments to places where they will not get taxed as much.

In 1980 I read the book FREE TO CHOOSE by Milton Friedman and it really enlightened me a tremendous amount.  I suggest checking out these episodes and transcripts of Milton Friedman’s film series FREE TO CHOOSE: “The Failure of Socialism” and “The Anatomy of a Crisis” and “What is wrong with our schools?”  and “Created Equal”  and  From Cradle to Grave, and – Power of the Market.

“Deplorable, deeply regressive, a sign of the corporatization of the university.”  That’s what Harvard Classics professor Richard F. Thomas calls the changes in Harvard’s health plan, which have a large number of the faculty up in arms.

Are Harvard professors being forced onto Medicaid? Has their employer denied coverage for cancer treatment? Do they need to sign a corporate loyalty oath in order to access health insurance? Not exactly. But copayments are being raised and deductibles altered, making their plan … well, actually, their plan is still extraordinarily generous by any standard:

The university is adopting standard features of most employer-sponsored health plans: Employees will now pay deductibles and a share of the costs, known as coinsurance, for hospitalization, surgery and certain advanced diagnostic tests. The plan has an annual deductible of $250 per individual and $750 for a family. For a doctor’s office visit, the charge is $20. For most other services, patients will pay 10 percent of the cost until they reach the out-of-pocket limit of $1,500 for an individual and $4,500 for a family.

The deepest irony is, of course, that Harvard professors helped to design Obamacare. And Obamacare is the reason that these changes are probably necessary.

The culprit is the “Cadillac Tax,” the hefty excise tax on high-cost plans.  The purpose of that tax is to hold down health-care costs, by making it much more expensive for employers to offer the kind of gold-plated benefit plans that shield consumers from virtually all the costs of their health-care decisions.

The economic logic is impeccable. Milton Friedman famously divided spending into four kinds, which P.J. O’Rourke once summarized as follows:

1. You spend your money on yourself. You’re motivated to get the thing you want most at the best price. This is the way middle-aged men haggle with Porsche dealers.

2. You spend your money on other people. You still want a bargain, but you’re less interested in pleasing the recipient of your largesse. This is why children get underwear at Christmas.

3. You spend other people’s money on yourself. You get what you want but price no longer matters. The second wives who ride around with the middle-aged men in the Porsches do this kind of spending at Neiman Marcus.

4. You spend other people’s money on other people. And in this case, who gives a [damn]?

Most health-care spending in the U.S. falls into category three. In theory, the people who are funding our expenses–the proverbial middle-aged men in Porsches, except that they’re actually insurance executives and government bureaucrats–have every incentive to step in, cut up the charge cards, and substitute a gift-wrapped box of Hanes briefs with the comfort-soft waistband. In practice, legislators frequently intervene to stop them from exercising much cost-control. The managed care revolution of the 1990s died when patients complained to their representatives, and the representatives ran down to their offices to pass laws making it very hard to deny coverage for anything anyone wanted. Medicare cost-controls, such as the famed Sustainable Growth Rate, fell prey to similar maneuvers. The only system that exhibits sustained cost control is Medicaid, because poor people don’t vote, or exit the system for better insurance.

The result is a system where everyone complains that we spend much too much on health care–and the very same people get indignant if anyone suggests that they, personally, should maybe spend a little bit less.  Everyone wants to go to heaven–but nobody wants to die.

Unfortunately, this is what cost-control actually looks like, which is to say, like people not being able to spend as much on health care. Oh, to be sure, we could achieve this end differently–instead of asking patients to pay a modest share of their own costs (the article suggests that this amount is less than 10 percent, in the case of Harvard professors)–we could simply set a schedule of covered treatment, and deny patients access to off-schedule treatments, or even better, not even tell them that those treatments exist. But people don’t like that solution either, which is why medical dramas are filled with rants about insurers who won’t cover procedures, and the law books are filled with regulations that sharply curtail the ability of insurers to ration care. And the third option, refusing to pay top-dollar for care, would be a bit tricky for Harvard to implement, given that they run exactly the sort of high-cost research facilities that help drive health-care costs skyward. Nor do I really think that the angry professors would be mollified by being given a cheap insurance package that wouldn’t let them go see the top-flight specialists their elite status now entitles them to access.

Instead, they persist in our mass delusion: that there is some magic pot of money in the health-care system, which can be painlessly tapped to provide universal coverage without dislocating any of the generous arrangements that insured people currently enjoy. Just as there are no leprechauns, there is no free money at the end of the rainbow; there are patients demanding services, and health-care workers making comfortable livings, who have built their financial lives around the expectation that those incomes will continue. Until we shed this delusion, you can expect a lot of ranting and raving about the hard truths of the real world.

This column does not necessarily reflect the opinion of Bloomberg View’s editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Megan McArdle at mmcardle3@bloomberg.net

To contact the editor on this story:
James Gibney at jgibney5@bloomberg.net

_____________________

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Milton Friedman on the Energy Crisis (and ObamaCare to come) By Robert Bradley Jr. — July 31, 2013

Milton Friedman – Health Care Reform (1992) pt 1/4

Milton Friedman – Health Care Reform (1992) pt 2/4

Milton Friedman on the Energy Crisis (and ObamaCare to come)

By Robert Bradley Jr. — July 31, 2013

July 31st is the birth date of one of the great intellectuals of the freedom philosophy. Milton Friedman (1912–2006) would have been 101 today.

Friedman Legacy Day is being celebrated at 144 events: 90 in 44 states and Washington,D.C., and 54 events in 25 countries abroad. Here in Houston, a “Milton Friedman Rocks” party is tonight.

Friedman was more than a technical economist and early Nobel Laureate in this field; he was a popularizer of the case for free markets. His shorter tracts and biweekly column for Newsweek covered a variety of in-the-news issues, including energy. And he became more libertarian and appreciative of Austrian School economics (market-process economics), the rival to his Chicago School of economics, as time went on.

Friedman’s insight into the distortions from government intervention shortages are timeless. Consider this from Milton and Rose Friedmans’ classic, Free to Choose (1979: p. 219):

Economists may not know much. But we know one thing very well: how to produce surpluses and shortages. Do you want a surplus? Have the government legislate a minimum price that is above the price that would otherwise prevail…. Do you want a shortage? Have the government legislate a maximum price that is below the price that would otherwise prevail.

Still the major example of our time is the 1970s energy crisis in the United States–the result of price and allocation controls by the Department of Energy. But get ready for a new chamber of economic horrors.

With ObamaCare’s use of price and allocation controls–and the growing problem of Medicare today–shortages and strife are upon us in the all-important health care field. The Wall Street Journal article, More Doctors Steer Clear of Medicare, said as much this week:

Fewer American doctors are treating patients enrolled in the Medicare health program for seniors, reflecting frustration with its payment rates and pushback against mounting rules, according to health experts…. [T[he number [of doctors] who don’t participate in private insurance contracts, while smaller, is growing—just as millions of Americans are poised to gain access to such coverage under the new health law next year.

All said, health experts say the number of doctors going “off grid” isn’t enough to undermine the Affordable Care Act, but they say some Americans may have difficulty finding doctors who will take their new benefits or face long waits for appointments with those who do.

Rationing by time and inconvenience instead of dollars–just like those old gasoline lines! Anger, arguments, violence, waste, gaming–it will happen in waiting rooms just as it happened in the car queues.

Here is Friedman on the 1970s energy crisis:

“It is a mark of how far we have gone on the road to serfdom that government allocation and rationing of oil is the automatic response to the oil crisis.”

– Milton Friedman, “Why Some Prices Should Rise,” Newsweek, November 19, 1973.

“The present oil crisis has not been produced by the oil companies. It is a result of government mismanagement exacerbated by the Mideast war.”

– Milton Friedman, “Why Some Prices Should Rise,” Newsweek, November 19, 1973.

“Lines are forming at those gas stations that are open. The exasperated motorists are cursing; the service-station attendants are fuming; the politicians are promising. The one thing few people seem to be doing is thinking….

How can thinking people believe that a government that cannot deliver the mail can deliver gas better than Exxon, Mobil, Texaco, Gulf, and the rest?”

– Milton Friedman, “FEO and the Gas Lines,” Newsweek, Marc 4, 1974.

“The long gasoline lines that suddenly emerged in 1974 after the OPEC oil embargo … and again in the spring and summer of 1979 after the revolution in Iran, [came after] a sharp disturbance in the supply of crude oil from abroad.

But that did not lead to gasoline lines in Germany or Japan, which are wholly dependent on imported oil. It lead to long gasoline lines in the United States, even though … for one reason and one reason only: because legislation, administered by a government agency, did not permit the price system to function.”

– Milton and Rose Friedman, Free to Choose (New York: Harcourt Brace Jovanovich, 1979), p. 14.

“There is one simple way to end the energy crisis and gasoline shortages tomorrow—and we mean tomorrow and not six months from now, nor six years from now. Eliminate all controls on the prices of crude oil and other petroleum products.”

– Milton and Rose Friedman, Free to Choose (New York: Harcourt Brace Jovanovich, 1979), pp. 219.

“There has been an energy crisis because government created one. Of course, government has not done so deliberately. Presidents Nixon, Ford, or Carter never sent a message to Congress asking it to legislate an energy crisis and long gasoline lines. But he who says A must say B. Ever since President Nixon froze wages and prices on August 15, 1971, the government has imposed maximum prices on crude oil, gasoline at retail, and other petroleum products.”

– Milton and Rose Friedman, Free to Choose (New York: Harcourt Brace Jovanovich, 1979), pp. 219.

Appendix: Nixon’s Price Control Order (August 1971)

Richard Nixon is the father of the energy crisis–and the resulting politicization of energy. His price control order of August 15, 1971, one of the more infamous and devastating economic interventions in American peacetime history, caused oil shortages before the Arab Embargo of October 1973.

Here is what Milton Friedman said in ‘real time’ on Nixon’s surprise decision.

“I regret exceedingly that he decided to impose a ninety-day freeze on prices and wages. That is one of those ‘very plausible schemes … with very pleasing commencements, [that] have often shameful and lamentable conclusions’.”

– Milton Friedman, “Why the Freeze is a Mistake,” Newsweek, August 30, 1971.

“Individual price and wage changes will not be prevented. In the main, price changes will simply be concealed by taking the form of changes in discounts, service, and quality, and wage changes, in overtime, perquisites and so on…. But to whatever extent the freeze is enforced, it will do harm by distorting relative prices.”

– Milton Friedman, “Why the Freeze is a Mistake,” Newsweek, August 30, 1971

“By encouraging men to spy and report on one another, by making it in the private interest of large numbers of citizens to evade the controls, and by making actions illegal that are in the public interest, the controls undermine individual morality.”

– Milton Friedman, “Morality and Controls,” Newsweek, October 28, 1971.

Milton Friedman – Health Care Reform (1992) pt 3/4

Milton Friedman – Health Care Reform (1992) pt 4/4

Milton Friedman on Medical Care (Full Lecture)

Published on Feb 2, 2014

I have written about Obamacare over and over again on this blog. Dan Mitchell has shared many funny cartoons about Obamacare too. Milton Friedman has spoken out about government healthcare many times in the past and his film series FREE TO CHOOSE is on You Tube and I encourage you to watch it. It is clear that the federal government debt is growing so much that it is endangering us because if things keep going like they are now we will not have any money left for the national defense because we are so far in debt as a nation.

We have been spending so much on our welfare state through food stamps and other programs that I am worrying that many of our citizens are becoming more dependent on government and in many cases they are losing their incentive to work hard because of the welfare trap the government has put in place. Other nations in Europe have gone down this road and we see what mess this has gotten them in. People really are losing their faith in big government and they want more liberty back. It seems to me we have to get back to the founding  principles that made our country great.  We also need to realize that a big government will encourage waste and corruption. Also raising taxes on the job creators is a very bad idea too. The Laffer Curve clearly demonstrates that when the tax rates are raised many individuals will move their investments to places where they will not get taxed as much.

In 1980 I read the book FREE TO CHOOSE by Milton Friedman and it really enlightened me a tremendous amount.  I suggest checking out these episodes and transcripts of Milton Friedman’s film series FREE TO CHOOSE: “The Failure of Socialism” and “The Anatomy of a Crisis” and “What is wrong with our schools?”  and “Created Equal”  and  From Cradle to Grave, and – Power of the Market.

_____________________

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Milton Friedman on Self-Interest and the Profit Motive 1of2 Milton Friedman on Self-Interest and the Profit Motive 2of2 The Social Responsibility of Business is to Increase its Profits by Milton FriedmanThe New York Times Magazine, September 13, 1970. Copyright @ 1970 by The New York Times Company. When I hear businessmen speak eloquently about the […]

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Milton Friedman And ObamaCare November 4, 2013

Milton Friedman – Health Care Reform (1992) pt 1/4

Milton Friedman – Health Care Reform (1992) pt 2/4

Milton Friedman – Health Care Reform (1992) pt 3/4

Milton Friedman – Health Care Reform (1992) pt 4/4

 

Milton Friedman And ObamaCare

Milton Friedman

friedmandonahuees (2)Where is Milton Friedman when we need him most? His ability to explain complex subjects in simple terms is needed, especially with regard to the fiasco we know as the “Affordable Care Act.”

In politics, there is little truth. The denizens of this netherworld are not our best and brightest. Most do not consider ethics or truth as boundaries. As a result, it is difficult to differentiate between stupidity, disingenuous and downright lying when examining their positions. Truth, when it meets their desired ends, is not avoided, although it is rarely convenient.

The following exchange represents a typical example of the nonsense that passes for news. This one involves a confrontation between Megyn Kelly (Fox News) and Democratic Rep (NJ) Frank Pallone over ObamaCare. It was reported by the Daily Caller and is of note because of the absurd politician’s answers and the inept handling of them by the host:

PALLONE: They tell them where to get insurance. Look the bottom line is, if you are selling a lousy policy at a price that’s too high, nobody is going to buy it.

KELLY: That’s not true.

PALLONE: And so they are canceling these policies because they know people won’t buy them. It’s a competitive marketplace. That’s the problem.

KELLY: But they were buying them.

[CROSSTALK]

PALLONE: But they won’t buy them anymore when they have a better alternative.

KELLY: There were 15 million people who bought them and said “I like them.”

PALLONE: They’re not going to buy them anymore when they have a better alternative.

KELLY: Thanks to you.

PALLONE: Well, I can’t go out as an insurance company and sell a lousy policy anymore at a high price.

KELLY: People like — why do you get to decide what’s lousy? Why can’t the American people say ‘it’s lousy for you. For me, I like it.’

PALLONE: It’s capitalism. You can go out and buy whatever you want, but the insurance company realizes they can’t sell this lousy insurance policy anymore.

KELLY: They were selling it, sir. You are ignoring my point. They were selling it. Some 15 million Americans thought it was great. You didn’t like it, but they liked it. And then you and the president –

PALLONE: Now there are better alternatives.

I didn’t see the encounter. I rarely watch television news. It is safer for me and more so for my television that way.

Rep. Pallone attempts to use, of all things, free markets as a defense. His responses are laced with direct and indirect references:

  • “It’s a competitive marketplace.”
  • “… they [citizens] have better alternatives.”
  •  “It’s capitalism. You can go out and buy whatever you want …”
  • “Now there are better alternatives.”

His terminology is reminiscent of the late Milton Friedman who must be spinning in his grave if he heard the segment.

Frank Pallone is no Milton Friedman. Unfortunately, neither is Megyn Kelly. A defense of ObamaCare on free markets or competitive markets is an outrage. So too was the host’s inability or unwillingness to recognize that. “It’s a competitive marketplace” would have been, politely and effectively, the point at which Dr. Friedman would have obliterated Rep. Pallone’s position.

A competitive marketplace requires freedom on the part of both buyers and sellers. ObamaCare is a lot of things, but it is not a competitive marketplace. It reduce/eliminates freedom from both parties to a transaction. It is government coercion. What little competition and competitive markets existed in healthcare (as a result of prior governmental interventions) was eliminated with the passage of the ACA.

ObamaCare is classic central planning run amuck. It reduces choice, mandating by law what is “acceptable.” Regardless of what you prefer, you must buy what has been deemed acceptable by some unknown, pointy-headed bureaucrat. The threat of force backs up the “must.”

Neither buyer or seller gains from this legislation. Both have their freedoms restricted and are harmed. Government power and control is the only winner, again.

Consumer sovereignty no longer controls the insurance producers. Nor will it guide the service, delivery and quality of medical care forthcoming. These are now determined by a Politburo, indistinguishable in power and control from the old Soviet Union. “Death Panels” represent the extreme of a series of decisions that have nothing to do with buyer or seller.

Freedom and economics need not be complex. Anyone who saw Milton Friedman on television found his presentation simple and understandable. The classic video with Phil Donahue (provided below) illustrates his unique ability. A more relevant one about Socialized  medicine, which Mr. Friedman  presented at the Mayo Clinic 35 years ago, is also provided.

Few have Friedman’s capabilities. Yet how difficult would it have been to respond to Rep. Pallone with some simple analogy along the following lines?

I have always driven a Ford pickup because I like it, it meets my needs and it fits my budget. Now you have made it illegal for Ford to produce pickups or any car but a Lincoln. My “choice” is now limited to buying a Lincoln or a Cadillac. While they may be better cars, neither fits my needs or budget. Forcing me to accept your preferences has not made me better off.

Or, what about the obvious issue of coercion versus choice?

If the ObamaCare program is so good, then the legislation of penalties, fines and coercion would be unnecessary. People would flock to it out of choice, not compulsion. The reality is that it is not good and that is why you needed the force of law to make it work.

Enjoy the following clips and pray that someone with Friedman’s common sense and communicative skills steps forward to address the nonsense that passes for policy in Washington.

Milton Friedman on Medical Care (Full Lecture)

Published on Feb 2, 2014

I have written about Obamacare over and over again on this blog. Dan Mitchell has shared many funny cartoons about Obamacare too. Milton Friedman has spoken out about government healthcare many times in the past and his film series FREE TO CHOOSE is on You Tube and I encourage you to watch it. It is clear that the federal government debt is growing so much that it is endangering us because if things keep going like they are now we will not have any money left for the national defense because we are so far in debt as a nation.

We have been spending so much on our welfare state through food stamps and other programs that I am worrying that many of our citizens are becoming more dependent on government and in many cases they are losing their incentive to work hard because of the welfare trap the government has put in place. Other nations in Europe have gone down this road and we see what mess this has gotten them in. People really are losing their faith in big government and they want more liberty back. It seems to me we have to get back to the founding  principles that made our country great.  We also need to realize that a big government will encourage waste and corruption. Also raising taxes on the job creators is a very bad idea too. The Laffer Curve clearly demonstrates that when the tax rates are raised many individuals will move their investments to places where they will not get taxed as much.

In 1980 I read the book FREE TO CHOOSE by Milton Friedman and it really enlightened me a tremendous amount.  I suggest checking out these episodes and transcripts of Milton Friedman’s film series FREE TO CHOOSE: “The Failure of Socialism” and “The Anatomy of a Crisis” and “What is wrong with our schools?”  and “Created Equal”  and  From Cradle to Grave, and – Power of the Market.

_____________________

Related posts:

Dan Mitchell on Obamacare Supreme Court Decision: “I’m disgusted that the Supreme Court once again has decided to put politics above the Constitution!” (Includes lots of videos and cartoons)

__________ Enzi statement on the Supreme Court’s King Vs. Burwell decision 5 Takeaways From Today’s Supreme Court Ruling on Obamacare Wicker Comments on King v Burwell Supreme Court Decision Senator Lankford Discusses the King v. Burwell Supreme Court Decision Congressman Steve King Response to SCOTUS King v. Burwell Ruling Obamacare and the Odious Anti-Constitutionalism of […]

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______ Milton Friedman’s Free to Choose (1980), episode 3 – Anatomy of a Crisis. part 1 The Region – Banking and Policy Issues Magazine – Interview with Milton Friedman June 1992 In his new book, Money Mischief, economist Milton Friedman compares inflation to alcoholism; blames the rise of Chinese communism, in large part, on an […]

NEW RIVER MEDIA INTERVIEW WITH: MILTON FRIEDMAN Professor Emeritus of Economics, University of Chicago Senior Fellow, Hoover Institution

______ Milton Friedman – A Conversation On Minimum Wage Milton Friedman Interview Milton Friedman is Professor Emeritus of Economics at the University of Chicago and Senior Fellow at the Hoover Institution.Dr. Friedman received the 1976 Nobel Memorial Prize for Economic Science. Member of the research staff of the National Bureau of Economic Research from 1937 […]

Walter E. Williams: “Milton Friedman was an economist’s economist” Wednesday, Dec. 6 2006 1

________ Milton Friedman on Donahue – 1979 Uploaded on Aug 26, 2009 Dr. Milton Friedman, Nobel Laureate, promoting “Free to Choose” on the show Donahue. Walter E. Williams: Milton Friedman was an economist’s economist Print Font [+] [-] Leave a comment » By Walter E. Williams Published: Wednesday, Dec. 6 2006 12:00 a.m. MST Walter […]

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_______ José Niño José Niño is a graduate student based in Santiago, Chile. A citizen of the world, he has lived in Venezuela, Colombia, and the United States. He is currently an international research analyst with the Acton Circle of Chile. Follow@JoseAlNino. 40 Years Later: Milton Friedman’s Legacy in Chile “Chilean Miracle” Struck a Blow […]

FRIEDMAN FRIDAY Milton Friedman came up with the NEGATIVE INCOME TAX

____ Milton Friedman – The Negative Income Tax The Conservative Case for a Guaranteed Basic Income NOAH GORDON AUG 6, 2014 Creating a wage floor is an effective way to fight poverty—and it would reduce government spending and intrusion. Swiss backers of a minimum income spread out coins in Bern. Denis Balibouse/Reuters Last week, my […]

FRIEDMAN FRIDAY Which Fed Bill Would Milton Friedman Have Liked? Posted on March 10, 2015by John Taylor

________________ Which Fed Bill Would Milton Friedman Have Liked? Posted on March 10, 2015by John Taylor Writing last week on the Cato at Liberty blog, Steve Hanke argued that Milton Friedman would have supported the “Audit the Fed” bill recently introduced in the Senate.  Steve’s reasoning is based on Friedman’s 1962 essay “Should there be an […]

5 myths that conceal reality by Milton Friedman

A great speech below: Here are the myths:Robber Baron Myth, The Cause of Great Depression Myth, The Demand for Government Service Myth, The Free Lunch Smith, and The Robin Hood Myth. 1) the Robber Baron Myth, 2) the Great Depression Myth, 3) the Demand for Government Service Myth, 4) the Free Lunch Myth, and 5) […]

FRIEDMAN FRIDAY SEPTEMBER 4, 2006 An Interview with Milton Friedman

_______________ FEATURED ARTICLE | SEPTEMBER 4, 2006 An Interview with Milton Friedman Milton Friedman* I recently sat down with Milton Friedman, a few days before his 94th birthday, to discuss the impact of two of his most important contributions to economics and liberty: A Monetary History of the United States, 1870-1960 [co-written] with Anna Schwartz, […]

FRIEDMAN FRIDAY The Social Responsibility of Business is to Increase its Profits by Milton Friedman The New York Times Magazine, September 13, 1970.

Milton Friedman on Self-Interest and the Profit Motive 1of2 Milton Friedman on Self-Interest and the Profit Motive 2of2 The Social Responsibility of Business is to Increase its Profits by Milton FriedmanThe New York Times Magazine, September 13, 1970. Copyright @ 1970 by The New York Times Company. When I hear businessmen speak eloquently about the […]

FRIEDMAN FRIDAY Levin on Milton Friedman: ‘One Thing to Have Free Immigration to Jobs, Another for Welfare’ By Michael Morris | January 16, 2015

____________ Levin on Milton Friedman: ‘One Thing to Have Free Immigration to Jobs, Another for Welfare’ By Michael Morris | January 16, 2015 | 5:12 PM EST During his show on January 15, 2015, Nationally syndicated radio host Mark Levin recalled the famed economist Milton Friedman and explored an important reason why open immigration, despite […]

The Null Space Blog Milton Friedman on Health Care

Milton Friedman on Medical Care (Full Lecture)

Published on Feb 2, 2014

I have written about Obamacare over and over again on this blog. Dan Mitchell has shared many funny cartoons about Obamacare too. Milton Friedman has spoken out about government healthcare many times in the past and his film series FREE TO CHOOSE is on You Tube and I encourage you to watch it. It is clear that the federal government debt is growing so much that it is endangering us because if things keep going like they are now we will not have any money left for the national defense because we are so far in debt as a nation.

We have been spending so much on our welfare state through food stamps and other programs that I am worrying that many of our citizens are becoming more dependent on government and in many cases they are losing their incentive to work hard because of the welfare trap the government has put in place. Other nations in Europe have gone down this road and we see what mess this has gotten them in. People really are losing their faith in big government and they want more liberty back. It seems to me we have to get back to the founding  principles that made our country great.  We also need to realize that a big government will encourage waste and corruption. Also raising taxes on the job creators is a very bad idea too. The Laffer Curve clearly demonstrates that when the tax rates are raised many individuals will move their investments to places where they will not get taxed as much.

In 1980 I read the book FREE TO CHOOSE by Milton Friedman and it really enlightened me a tremendous amount.  I suggest checking out these episodes and transcripts of Milton Friedman’s film series FREE TO CHOOSE: “The Failure of Socialism” and “The Anatomy of a Crisis” and “What is wrong with our schools?”  and “Created Equal”  and  From Cradle to Grave, and – Power of the Market.

 The Null Space Blog

Milton Friedman on Health Care

The other day I came across a superb article by economist and Nobel laureate Milton Friedman on how to cure health care (H/TSwiss Economist who originally linked to the article, and who posted a comment about it on Enjoyment and Contemplation). The article is somewhat long but definitely worth reading, especially in light of the recent Supreme Court ruling on the Patient Neglect and Unaffordable Care Act (known as the Patient Protection and Affordable Care Act in Newspeak, or as “Obamacare”). The government naturally ignored all of Friedman’s advice in the Patient Neglect and Unaffordable Care Act, and Friedman hints at why the government’s health care reform will fail (despite the fact that Friedman died even before “Obamacare” was written).

First, Friedman explains why health insurance — unlike many other forms of insurance — is bought through one’s employer:

We have become so accustomed to employer-provided medical care that we regard it as part of the natural order. Yet it is thoroughly illogical. Why single out medical care? Food is more essential to life than medical care. Why not exempt the cost of food from taxes if provided by the employer? Why not return to the much-reviled company store when workers were in effect paid in kind rather than in cash?

The revival of the company store for medicine has less to do with logic than pure chance. It is a wonderful example of how one bad government policy leads to another. During World War II, the government financed much wartime spending by printing money while, at the same time, imposing wage and price controls. The resulting repressed inflation produced shortages of many goods and services, including labor. Firms competing to acquire labor at government-controlled wages started to offer medical care as a fringe benefit. That benefit proved particularly attractive to workers and spread rapidly.

Initially, employers did not report the value of the fringe benefit to the Internal Revenue Service as part of their workers’ wages. It took some time before the IRS realized what was going on. When it did, it issued regulations requiring employers to include the value of medical care as part of reported employees’ wages. By this time, workers had become accustomed to the tax exemption of that particular fringe benefit and made a big fuss. Congress responded by legislating that medical care provided by employers should be tax-exempt.

I had always wondered why health insurance was bought through one’s employer. It is indeed “thoroughly illogical”. Next, Friedman explains that the meaning of insurance has undergone a drastic change in the context of health insurance:

Employer financing of medical care has caused the term insurance to acquire a rather different meaning in medicine than in most other contexts. We generally rely on insurance to protect us against events that are highly unlikely to occur but that involve large losses if they do occur—major catastrophes, not minor, regularly recurring expenses. We insure our houses against loss from fire, not against the cost of having to cut the lawn. We insure our cars against liability to others or major damage, not against having to pay for gasoline. Yet in medicine, it has become common to rely on insurance to pay for regular medical examinations and often for prescriptions.

This is exactly what I was explaining in my argument against health insurance mandates. The problem with using insurance to cover regular medical expenses like examinations is that a third party (the insurance company or government) needlessly interferes with normal economic transactions between caregiver and patient, and the patient has no incentive to pay attention to costs since the insurance company is paying for the care (i.e. the costs are hidden from the patient). As Friedman puts it:

Third-party payment has required the bureaucratization of medical care and, in the process, has changed the character of the relation between physicians (or other caregivers) and patients. A medical transaction is not simply between a caregiver and a patient; it has to be approved as “covered” by a bureaucrat and the appropriate payment authorized. The patient—the recipient of the medical care—has little or no incentive to be concerned about the cost since it’s somebody else’s money. The caregiver has become, in effect, an employee of the insurance company or, in the case of Medicare and Medicaid, of the government. The patient is no longer the one, and the only one, the caregiver has to serve. An inescapable result is that the interest of the patient is often in direct conflict with the interest of the caregiver’s ultimate employer. That has been manifest in public dissatisfaction with the increasingly impersonal character of medical care.

This system results in high costs for health care due to the fact that

nobody spends somebody else’s money as wisely or as frugally as he spends his own.

This principle is the ultimate basis for conservative arguments against such heavy government involvement as created and perpetuated in the most recent health care reform — government cannot and does not spend money as wisely or frugally on health care as patients themselves, who are also most familiar with their health care needs.

Friedman gives a solution to reducing the high cost of health care:

A cure requires reversing course, reprivatizing medical care by eliminating most third-party payment, and restoring the role of insurance to providing protection against major medical catastrophes.

The ideal way to do that would be to reverse past actions: repeal the tax exemption of employer-provided medical care; terminate Medicare and Medicaid; deregulate most insurance; and restrict the role of the government, preferably state and local rather than federal, to financing care for the hard cases. However, the vested interests that have grown up around the existing system, and the tyranny of the status quo, clearly make that solution not feasible politically.

Note that Friedman’s solution does call for some government involvement, particularly for the “hard cases” (individuals with pre-existing conditions, the poor, etc.). The conservative approach to health care does not mean the poor and unhealthy must be neglected or that government has no role in health care — despite what many leftists think and would have you believe — but it does limit the government to its proper role.

A politically feasible approach to Friedman’s solution (that actually exists to some degree already) is a medical savings account:

A medical savings account enables individuals to deposit tax-free funds in an account usable only for medical expense, provided they have a high-deductible insurance policy that limits the maximum out-of-pocket expense…it eliminates third-party payment except for major medical expenses and is thus a movement very much in the right direction. By extending tax exemption to all medical expenses whether paid by the employer or not, it eliminates the present bias in favor of employer-provided medical care.

This solution not only restores the true meaning of health insurance as insurance against major, unexpected, and catastrophic health expenses, but it weakens the current model of employer-based health insurance. With employers paying less for high deductible health insurance plans than for low deductible plans, employees can receive more of their compensation in the form of wages rather than health insurance. Cash is more flexible than insurance, so employees can choose to either spend their extra wages on health care (their out-of-pocket expenses would be higher) or on whatever else they want to spend it on (for example, if they are healthy and don’t need much health care).

Given the clear benefits of medical savings accounts, can you guess what the Patient Neglect and Unaffordable Care Act does? Although the law does allow such accounts, it restricts what they can be used to purchase (non-prescription medications cannot be paid for with funds from such accounts) and limits the amount of tax-free contributions that can be made to the accounts.

For completeness, Friedman does briefly mention the leftist approach to health care and its benefits and drawbacks:

In terms of holding down cost, one-payer directly administered government systems, such as exist in Canada and Great Britain, have a real advantage over our mixed system. As the direct purchaser of all or nearly all medical services, they are in a monopoly position in hiring physicians and can hold down their remuneration, so that physicians earn much less in those countries than in the United States. In addition, they can ration care more directly—at the cost of long waiting lists and much dissatisfaction.

The reason why this government approach to health care leads to rationing and long wait times is, of course, explained by basic economics:

Legislation cannot repeal the nonlegislated law of demand and supply: the lower the price, the greater the quantity demanded; at a zero price, the quantity demanded becomes infinite. Some method of rationing must be substituted for price, which invariably means administrative rationing.

With artificially low prices due to insurance mandates (like the “free contraceptives” mandate) demand rises and the low or zero price product is over-utilized. Furthermore, although the government can use its monopoly position to hold down physicians’ compensation, doing so reduces supply in a system of rising demand so that even more rationing is required. There are obvious reasons why monopolies should be avoided, so the leftist desire for a government monopoly (which, unlike a private monopoly, also has the authority of law and armed force to coerce) is “thoroughly illogical”.

Developing a good system of health care is certainly a difficult problem that requires much serious thought and debate, especially when dealing with the “hard cases” like the poor and individuals with pre-existing medical conditions. Both the left and the right have solutions to this problem, although as Milton Friedman has shown the left’s solution has serious logical and practical conflicts with the laws of economics. The conservative approach outlined by Friedman, on the other hand, takes into account the laws of economics and gives patients the power to choose how best to spend their money — on health care as well as other expenses — rather than impose an “individual mandate” tax.

_____________________

Related posts:

Dan Mitchell on Obamacare Supreme Court Decision: “I’m disgusted that the Supreme Court once again has decided to put politics above the Constitution!” (Includes lots of videos and cartoons)

__________ Enzi statement on the Supreme Court’s King Vs. Burwell decision 5 Takeaways From Today’s Supreme Court Ruling on Obamacare Wicker Comments on King v Burwell Supreme Court Decision Senator Lankford Discusses the King v. Burwell Supreme Court Decision Congressman Steve King Response to SCOTUS King v. Burwell Ruling Obamacare and the Odious Anti-Constitutionalism of […]

Open letter to President Obama (Part 718) Cartoonists Go to War against Obamacare

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The Region – Banking and Policy Issues Magazine – Interview with Milton Friedman June 1992

______ Milton Friedman’s Free to Choose (1980), episode 3 – Anatomy of a Crisis. part 1 The Region – Banking and Policy Issues Magazine – Interview with Milton Friedman June 1992 In his new book, Money Mischief, economist Milton Friedman compares inflation to alcoholism; blames the rise of Chinese communism, in large part, on an […]

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______ Milton Friedman – A Conversation On Minimum Wage Milton Friedman Interview Milton Friedman is Professor Emeritus of Economics at the University of Chicago and Senior Fellow at the Hoover Institution.Dr. Friedman received the 1976 Nobel Memorial Prize for Economic Science. Member of the research staff of the National Bureau of Economic Research from 1937 […]

Walter E. Williams: “Milton Friedman was an economist’s economist” Wednesday, Dec. 6 2006 1

________ Milton Friedman on Donahue – 1979 Uploaded on Aug 26, 2009 Dr. Milton Friedman, Nobel Laureate, promoting “Free to Choose” on the show Donahue. Walter E. Williams: Milton Friedman was an economist’s economist Print Font [+] [-] Leave a comment » By Walter E. Williams Published: Wednesday, Dec. 6 2006 12:00 a.m. MST Walter […]

FRIEDMAN FRIDAY 40 Years Later: Milton Friedman’s Legacy in Chile “Chilean Miracle” Struck a Blow against Communism When Needed Most José Niño April 22, 2015

_______ José Niño José Niño is a graduate student based in Santiago, Chile. A citizen of the world, he has lived in Venezuela, Colombia, and the United States. He is currently an international research analyst with the Acton Circle of Chile. Follow@JoseAlNino. 40 Years Later: Milton Friedman’s Legacy in Chile “Chilean Miracle” Struck a Blow […]

FRIEDMAN FRIDAY Milton Friedman came up with the NEGATIVE INCOME TAX

____ Milton Friedman – The Negative Income Tax The Conservative Case for a Guaranteed Basic Income NOAH GORDON AUG 6, 2014 Creating a wage floor is an effective way to fight poverty—and it would reduce government spending and intrusion. Swiss backers of a minimum income spread out coins in Bern. Denis Balibouse/Reuters Last week, my […]

FRIEDMAN FRIDAY Which Fed Bill Would Milton Friedman Have Liked? Posted on March 10, 2015by John Taylor

________________ Which Fed Bill Would Milton Friedman Have Liked? Posted on March 10, 2015by John Taylor Writing last week on the Cato at Liberty blog, Steve Hanke argued that Milton Friedman would have supported the “Audit the Fed” bill recently introduced in the Senate.  Steve’s reasoning is based on Friedman’s 1962 essay “Should there be an […]

5 myths that conceal reality by Milton Friedman

A great speech below: Here are the myths:Robber Baron Myth, The Cause of Great Depression Myth, The Demand for Government Service Myth, The Free Lunch Smith, and The Robin Hood Myth. 1) the Robber Baron Myth, 2) the Great Depression Myth, 3) the Demand for Government Service Myth, 4) the Free Lunch Myth, and 5) […]

FRIEDMAN FRIDAY SEPTEMBER 4, 2006 An Interview with Milton Friedman

_______________ FEATURED ARTICLE | SEPTEMBER 4, 2006 An Interview with Milton Friedman Milton Friedman* I recently sat down with Milton Friedman, a few days before his 94th birthday, to discuss the impact of two of his most important contributions to economics and liberty: A Monetary History of the United States, 1870-1960 [co-written] with Anna Schwartz, […]

FRIEDMAN FRIDAY The Social Responsibility of Business is to Increase its Profits by Milton Friedman The New York Times Magazine, September 13, 1970.

Milton Friedman on Self-Interest and the Profit Motive 1of2 Milton Friedman on Self-Interest and the Profit Motive 2of2 The Social Responsibility of Business is to Increase its Profits by Milton FriedmanThe New York Times Magazine, September 13, 1970. Copyright @ 1970 by The New York Times Company. When I hear businessmen speak eloquently about the […]

FRIEDMAN FRIDAY Levin on Milton Friedman: ‘One Thing to Have Free Immigration to Jobs, Another for Welfare’ By Michael Morris | January 16, 2015

____________ Levin on Milton Friedman: ‘One Thing to Have Free Immigration to Jobs, Another for Welfare’ By Michael Morris | January 16, 2015 | 5:12 PM EST During his show on January 15, 2015, Nationally syndicated radio host Mark Levin recalled the famed economist Milton Friedman and explored an important reason why open immigration, despite […]

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