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POOR PEOPLE

This is the segment of the population that politicians cynically target the most. The equation is simple, it is far cheaper to buy votes from poor people than it is from rich people. Since politicians are vote maximizers, this is exactly what they do (for details see our article Politicians and Bureaucrats Job Security Through Misery).

Although this equation may be simple, the cause and effect cycle is not. Politicians want to buy as many votes as possible, hence, they design socialized health care system to target poor people. It would seem logical since they are the ones with the least access to health care. However, these very same politicians lack the budget to do so; hence they tax, borrow and print. As they eventually run out of money, printing becomes the only option (for an explanation see our lesson Deficits Debts And Inflation). As they print, they trigger inflation and with it they destroy the economy which harms poor people the most. Therefore, politicians have an increased excuse to support those public health care systems with more printing, which harms the economy even more and so on until the entire system collapses and then poor people end up in the worst possible conditions… which leads the new government to restart the cycle all over again.

Who loses? Poor people

Who wins? Politicians

To end this cycle the recipe is easy. Get the government out of the way.

Poor people are hard workers and good entrepreneurs instinctively. This is not a theory, this can be seen in countries with constant economic debacle cycles, typically Argentina and the likes. During the short stable period right after an economic collapse and before the next inflation cycle begins, poor people tend to do OK. They may not become rich, but they do obtain jobs and, most importantly, they start micro-companies. This is further helped by the fact that government regulations are ignored to a large degree hence creating a pseudo free-market.

In this environment poor people have the tendency to gain access to health care at reasonable prices. It is true that many make use of public services, but a clear trend can be seen towards private health care ones.

Of course, before this process can be made permanent, governments intervene by printing money and re-starting the destructive economic cycle yet again.

In summary, affordable health care for poor people is not political science-fiction, but a reality for as long as the government can be removed from the equation.

And what about the very or ultra-poor people? The dispossessed? Those that do not have neither the skills, energy or funds to get a job or start a micro-enterprise? You must remember that in a wealthy society people give more and freely than in our current and devastated economy. There will be non-profit organizations taking care of these people. How do we know this? History. For example, if we look again at the few periods in Latin American countries when by some sort of miracle the government did not interfere with the free market too much, we would see that many such NGOs flourished and were very successful indeed!

It is not that we ignore or despise poor people, we want the best for all! You, us and everybody else. Unfortunately, there is only one way of achieving this: the free market.

THE BEST SOLUTION

This is a difficult topic to address, but we will our best. The question is whether or not is it better (for the people) to continue funding the public system or switch entirely to the Austro-Libertarian system.

The current system does provide basic health care needs to those who cannot afford them. It is particularly necessary in times of economic upheaval such as today. On the other hand, the service that provides is mediocre at best, in a state of decay, relatively expensive and needs to be funded by printing money.

Switching overnight to the Austro-Libertarian system, on the other hand, will not provide health care needs to those who cannot afford them. These people will be left without services until the economy improves and everybody’s standard of living increases. The Austro-Libertarian system requires a whole package. It cannot be implemented partially. It needs complete de-regulation at all levels because a managed market will not provide the advantages of a free one.

Partial de-regulation in this area has been tried with disastrous consequences. This is to be expected because to de-regulate while at the same time preventing a free market from operating only increases profits for health care operators.

However, having said that, in the long term the Austro-Libertarian system offers drastically superior benefits for all people, poor and rich alike.

And so the question can be reduced to the following one: Is it preferable to continue suffering cyclic economic pains for the foreseeable future albeit with some amelioration for poor people or to suffer a larger shock now but enter into a prosperous and ongoing economic environment which will provide much better care for poor people?

This is indeed a difficult question to answer, particularly because the culprits, those who got us here in the first place, will escape punishment. Politicians got us into this mess and now it is up to us to clean it up. It is not fair because the dispossessed are those who are paying and will continue to pay the highest costs no matter which way we go. If it would be up to us, we would select the latter option because it offers a far better future, but that’s us.

In the end, we are powerless to do anything but it would seem history is doing it for us. Countries at the edge of the economic future are indeed moving into the Austro-Libertarian system, including health care. Government influences are decreasing and laws are being ignored; this is a fantastic step forward and we can only hope it will continue this way (for a more detailed explanation, please see our lesson When Countries Dissolve).

CONCLUSION

It was our intention to provide you with a quick snapshot of the issues a socialized health care system creates and why it is a terrible idea. But such systems cannot be rejected in our current politico-economic environment without creating massive damage to the most vulnerable people. Free markets need to be free to build; a partial solution is no solution at all. And so we wait for history to take place. It has begun and there is a still a long way to go. We can only hope you will be with us. Or not. Your choice.

Note: please see the Glossary if you are unfamiliar with certain words.

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