The $800 Hammer

The government has heavily subsidizes healthcare and public education for the past 40 years, the two industries whose costs have increased at double the rate of increase compared with every other expense. These industries were encouraged to squander all the subsidies by the same government that gave them. There is a phenomenon that wildly increases the cost of whatever is heavily subsidized. It’s cash push inflation that doesn’t allow the marketplace to work. The best way to lower prices in these two sectors is to dramatically cut off demand. These are third-party payer industries, but if everybody cancelled their health insurance and stopped showing up at school or the doctors’ offices and hospitals, prices would be drastically reduced.

For both of these industries, the market would not have allowed these increases on its’ own. In retrospect, both industries have failed and are broken beyond repair. These costs have been artificially increased beyond their value. We now have a reason to reduce these subsidies for healthcare and education, we’re broke. I predict we would see quality and productivity improvements in these industries if we do reduce the amount of money going into them. We should also eliminate unnecessary tasks they have been performing (think malpractice insurance reform).

If you inspect the processes and activities in place in private and parochial schools, you’ll get a good idea of what public schools should be able to eliminate. A hint, it is said that if all the government required paperwork documenting the design and production of an airplane had to be loaded on that plane, it would be too heavy to take off.