Outside the Beltway

MIRACLES

James Joyner · Tuesday, October 28, 2003 · 1 comment

Megan McArdle has a new Tech Central Station column in which she talks about a seemingly inescapable phenomenon for planners, especially those in government: the belief that seemingly insurmountable problems will miraculously solve themselves. She applies this to both health care and Iraqi reconstruction.

A single payer system will fix some people’s problems, mostly low-income people who lack health insurance, and who have a disease with a well-developed treatment. But lowering the cost to consumers of health care increases demand for services, and pushes up costs to taxpayers; to curtail those costs, the government eventually resorts to rationing or price controls, which result in shortages and diminished innovation. Ultimately, a single payer system would improve the lot of the uninsured at the expense of the elderly, and those who have diseases for which no good treatment has yet been invented.

Perhaps there is a legitimate argument to be made that the tradeoff is worth it. But ask a single payer advocate about those tradeoffs, and it’s likely that they will explain that that’s not the kind of single payer system they’re going to implement; they want the kind that provides lots of innovation, and all the health care people need, while costing less than our current system. Ask them to provide an example of a government bureaucracy that has managed to combine high levels of service with low costs, and you will get a vague explanation about the glories of preventive care, or (my favorite), the government’s well known ability to reduce red tape and administrative overhead. But it doesn’t really matter what the explanation is, for every one of them seems to rely on a monolithic government bureaucracy transforming itself, against all experience, into a low-cost, high-performance, customer-focused powerhouse. That’s where the magic happens — if we all wish hard enough.

True. I support a single payer system in theory, but have no idea how to implement it while still preserving innovation, freedom of choice, and some degree of cost efficiency.

As for Iraq,

[My] inclination to support the war rested on the assumption that once it was over, we would be ready, willing, and able to rebuild Iraq after we invaded. If we aren’t going to do this, why invade in the first place? In order to convince the world that we’re the superpower equivalent of a malevolent toddler who smashes anything that catches his eye? Even if you didn’t support the war, isn’t the folly of refusing to pay for reconstruction evident? If we pull out now, with Iraq in a shambles, we’re writing Al-Qaeda’s recruitment brochure for them. And we’re utterly destroying any credibility we might have with the rest of the world.

But while I still think we can help Iraq transform itself into a functioning free society, I’m terribly afraid that we won’t.

Bad enough that anti-war protesters — who were terribly, terribly concerned about the plight of Iraqis before we invaded — are now staging demonstrations to urge us to pull out immediately now that we’re the only thing standing between those Iraqis and anarchy. But there are actually rumors that the White House is contemplating accelerating our departure, which seems lunatic to even discuss when the country doesn’t appear to have a functioning anything.

Even more incredibly, the Senate, which voted for the war, is now demanding that we make the Iraqis shoulder half the costs of reconstruction. The sum in question, $10 billion, is almost equal to Iraq’s entire annual GDP; for us, it represents approximately one tenth of a percent of our national income. That we are even thinking about beggaring Iraqis over so trivial a sum boggles the mind. And I’m beginning to wonder if my support for the war didn’t rely on a Miracle Mile in which our government, in defiance of my basically libertarian instincts, had the desire and the will to do whatever it takes to help the Iraqis become prosperous and free.

We clearly overestimated the amount of the reconstruction that could be paid for with Iraqi oil resources while perhaps underestimating (or at least downplaying) the cost of the reconstruction.