Government: Miracle Worker

by Don Boudreaux on April 7, 2014

in Health, Myths and Fallacies, Reality Is Not Optional, Seen and Unseen

Here’s Steve Landsburg at his best: exposing the all-too-frequent illogic of, or the hidden presumptions within, claims that government programs are beneficial.  In this case, the claim is one made by the New Yorkers Jeffery Toobin, who asserts that Obamacare is succeeding because that program has allowed many people to receive health-care treatments that these people did not pay for out of pocket when they received the treatments.  (As Steve points out, it’s incorrect to assume that these people did not pay for all or part of their treatments through some other channels – channels that, while likely hidden from their (and Toobin’s) view, are nevertheless real in many instances.)

Here’s a slice of Steve’s post, but do read the whole thing:

So: Did Toobin mean that this particular income transfer from hundreds of millions of unidentified persons B to hundreds of millions of unidentified persons A is a self-evidently good thing? Surely he can’t mean to say “It’s always good for Bob to pay Alice’s bills” without telling us anything about who Bob and Alice are. Indeed, in this case, it wouldn’t be unreasonable for us to guess that the recipients are, on average, better off than the billpayers — it is, after all, not implausible, that those who have their acts sufficiently together to schedule and show up for a mammogram are, by and large, those who have their acts sufficiently together to show up for work and establish bank accounts.

But beyond that, and more fundamentally, even if Toobin knows something he’s not telling us about who’s paying and who’s receiving, and even if, in light of that information, he thinks this income transfer is desirable, and even if he feels confident that, if only he had shared that information, we’d agree with him, and even if he believes we trust him enough that he doesn’t actually have to share the information in order for us to nod our heads and say “Well, if Toobin’s for it then so am I” — even if you grant all of that, a pure income transfer cannot be a significant benefit of the health care law, because a health care law is an extraordinarily indirect and clumsy way to transfer income. If Jeffrey Toobin really wants to move vast amounts of money around from one large group of Americans to another, I’m sure he can write an interesting article about that — but it’s got nothing to do with health care policy.

A commenter on this post of Steve’s refers to Toobin’s misleading assertion as an example of “pre-Bastiat thinking.”  That commenter is correct.  I’m more inclined than Steve seems to be to explain Toobin’s assertion as being nothing more than an innocent instance of Toobin’s economic ignorance.  (Nevertheless, I do not excuse Toobin for writing so ignorantly about the matter.)


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