Sunday, December 20, 2009

Yes, No, Maybe So

So say Krugman, Brooks and Munger in today's News and Observer (Krugman and Brooks are reprinted from NY Times) with regard to the Senate bill (Munger is really saying no as well).

My friend (and former professor!) Mike Munger uses the classic Libertarian analogy of car insurance not paying for oil changes to make the case for not subsidizing insurance and having folks face more of the true costs of their care. I agree with him in many ways. That is why I favor severely limiting if not abolishing the tax exclusion of employer paid insurance.

However, the analogy breaks down in an important way. When your car gets near the end of its life, you stop investing more to keep the old bag running. You just get another car. When we get old and sick, we spend more and more with less and less benefit. The structure of insurance is not the only difference between your car and your life.

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