As James Capretta has pointed out in these pages (September 1), Obama’s health-care plan is designed to evolve into a national health-insurance program along the lines of Canada’s. The resulting government monopoly or near-monopoly on health insurance would stifle innovation, require bureaucratic rationing, and infringe on freedom. But it would also move American politics permanently leftward.
When I have made this point before, left-wing writers — for example, Paul Krugman — have misunderstood it. They take me to be saying that national health care would be so successful that a grateful populace would give up its prejudices against big government. Not exactly. I have three other dynamics in mind.
First, the inevitable disappointments and failures of a nationalized system would just as inevitably be blamed on underfunding, creating a bidding war that liberals would usually win. On those occasions when voters understood that spending had to be controlled, they would prefer that liberals control it, so as to do the bare minimum necessary.
Second, the creation of a new health-care regime would alter the incentives for all the interest groups involved. In the short run, at least, squeezing money out of the government system would be more advantageous than abolishing it.
Third, the creation of a new system would make free-market alternatives look more radical to the public than they do now, because they would be more radical. The public’s aversion to risk, which now hurts advocates of liberal policies as much as it helps them, would only help them.
So national health insurance could be a lasting political success for liberals even if it is a colossal policy failure; it could, indeed, succeed politically because of its failures.