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Clunker Health Care Reform

Posted By J.D. Foster, Ph.D. On July 31, 2009 @ 11:38 am In Obamacare | Comments Disabled

The $1 billion “Cash for Clunkers” auto bailout Congress passed last June has run out of cash after one week. The House of Representatives is already readying a bill to pump another $2 billion into the program, setting a new land speed record for expanding foolish programs.

There are so many valuable lessons to be drawn from this sorry episode it’s hard to know where to begin. But the most important is the clear warning it sends for health care reform.

The Cash for Clunkers program is pretty simple. The government pays buyers up to $4,500 to trade in an old car to buy a new, more fuel-efficient car. There was never any doubt it would work in the sense that people with old cars would take the cash. If you pay college kids to drink beer, you’re likely to be successful increasing beer sales. The issue in both cases would be whether the program was wise. The answer in both cases is pretty obvious. [1]

But this was a simple program, and Congress botched it twice over, once by thinking it was a good idea and again by underestimating the demand and hence the cost. Congress is now debating a radical, government-driven restructuring of about a sixth of the economy, perhaps the most complex, most personal part of our economy – the health care system. Want to know the outcome if Congress were to send the President the legislation he wants? Look to the Cash for Clunkers program for a clue and multiply many times over.

We definitely need health care reform for all the reasons the President so eloquently and repeatedly reminds us. But as Stuart Butler explained [2], we need to start with those incremental reforms we understand fully and on which there is broad agreement, moving forward with further reforms in coming years as we learn more about what works and what’s a clunker.


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URL to article: http://blog.heritage.org/2009/07/31/clunker-health-care-reform/

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[1] The answer in both cases is pretty obvious.: http://www.foundry.org/2009/06/03/cash-for-clunkers-is-another-bailout-for-the-auto-industry/

[2] But as Stuart Butler explained: http://www.washingtontimes.com/news/2009/jul/30/big-bang-approach-all-wrong-for-health-reform/

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