Those Troublesome Government Guarantees

Joe Lieberman says he will vote no on any health care bill containing any form of public option:

Rather, his objection is based on fiscal risk: "Once the government creates an insurance company or plan, the government or the taxpayers are liable for any deficit that government plan runs, really without limit," he says. "With our debt heading over $21 trillion within the next 10 years...we've got to start saying no to some things like this."

He's got a point. It was the implicit government guarantee of Fannie Mae and Freddie Mac that let them get away with the financial shenanigans that helped lead to last year's financial crisis. Everybody knew that the taxpayer was ultimately on the hook, which let Fannie and Freddie borrow cheaply and take risks that a private actor wouldn't take. Just so, the taxpayer de facto will be on the hook for any losses suffered by a public option plan, no matter what the law purports to say de jure.

Comments

[Grant]

While I appreciate Lieberman's position on this (simply because it might scuttle the whole "reform" attempt), I believe the far more troubling issue with current "reform" proposals is the individual mandate. Compelling citizens to purchase goods simply because they are citizens raises some very serious issues in my mind.

[save_the_rustbelt]

Having worked with the hoary technical details of Medicare and Medicaid for 30+ years, the idea of the government as efficient administrator of health care programs is just unreal.

(Most of Medicare's administrative work if done by private Fiscsl Intermediaries, i.e., private insurers working as contract program administrators.)

Conspiracy theory says the public option is being put inplace to drive private insurers out of business, to create a self-fulfilling proohesy of government knows best and does best.

Maybe, maybe not, stilla really bad idea.