Paul Krugman: Don't You Remember Who Serves Whom?

Promoted from the diaries by Vladimir.

In my diary entries I very rarely speak of my profession. I am an economist. No, I am not famous, or even well-known in my field. While I do post here on Redstate on occasion, I do not mention my profession because most of my postings have little to do with economics or are areas where economists’ views differ. However, in his recent article Yes, Medicare is Sustainable in Its Current Form Paul Krugman makes some statements to which I must respond. In his article, he states:


What is true is that the U.S. Medicare is expensive compared with, say, Canadian Medicare (yes, that’s what they call their system) or the French health care system (which is complicated, but largely single-payer in its essentials); that’s because Medicare American-style is very open-ended, reluctant to say no to paying for medically dubious procedures, and also fails to make use of its pricing power over drugs and other items.

So Medicare will have to start saying no; it will have to provide incentives to move away from fee for service, and so on and so forth. But such changes would not mean a fundamental change in the way Medicare works. (emphasis mine)

You chose the title for your article “Yes, Medicare is Sustainable in Its Current Form” and the proceed to describe how Medicare will have to “start saying NO” and you advise that Medicare should “use its pricing power over drugs and other items”.

Well, if Medicare will have to start saying “no to certain spending” then seniors can expect to get less from Medicare and you are changing Medicare. If Medicare starts using its pricing power then seniors can expect fewer doctors from which to choose and longer wait times and you are changing Medicare You suggest that Medicare move away from a fee for service program. Do that and you are changing Medicare

Gee, Paul Ryan‘s plan suggests moving away from a fee for service concept as well, but with one big difference. Under Ryan’s plan which is designed to give seniors the same health care that congressmen have, seniors have the choice of dozens of plans so seniors could choose the plan that most closely meets their needs and preferences. How many different plans will you allow, Paul? Hmmmm. Single Payer. Single means one. One means…no senior under your plan will have any choices So if there is only one provider who will decide which health treatments are “Medically dubious”? Oh that’s right. The unelected 15 member health board to be appointed by President Obama next year. Will this health board be made up of the people who believe that treating the elderly for cancer is “dubious” because they have so little time left to enjoy the cost of their treatment? Is this what you mean, Paul? Who decides for whom what their coverage should be? Shouldn’t seniors have a choice? Not be dictated to like little children?


I will remind you Paul, as is well-established in our economic discipline, that it is not up to us to decide for people what their preferences should be, but rather to enable them to better achieve their preferences, or in the words of a great economists F.A. Hayek “A society that does not recognize that each individual has values of his own which he is entitled to follow can have no respect for the dignity of the individual and cannot really know freedom.”


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