The Democratic majority currently in control of the federal government thinks they need to manage one-fifth of the economy, because it's simply not fair for some uninsured American citizens, and because it just costs too darn much. They'd like you to believe that they have the plan, the experience, the genius to pull this off.
If much smaller responsibilities and programs are an indication, however, there's no evidence that, for our federal overseers, this is anything close to child's play. Witness the federal first-time homebuyers credit.
It's hard not to laugh when viewing the results of the federal first-time home-buyer tax credit. The credit, worth up to $8,000 for the purchase of a home, has only been available since April of last year. Yet news of the latest taxpayer-funded mortgage scam has traveled fast. The Treasury's inspector general for tax administration, J. Russell George, recently told Congress that at least 19,000 filers hadn't purchased a home when they claimed the credit. For another 74,000 filers, claiming a total of $500 million in credits, evidence suggests that they weren't first-time buyers.
Among those claiming bogus credits, at least some of them were definitely first-timers. The credit has already been claimed by 500 people under the age of 18, including a four-year-old. This pre-K housing whiz likely bought because mom and dad make too much to qualify for the full credit, which starts to phase out at $150,000 of income for couples, $75,000 for singles
The WSJ editorial notes the obvious, something that became apparent with the cash for clunkers boondoggle, that purchases are simply time-shifted, not increased, by such incentives.
While the credit seems to have boosted home sales, many of those sales would have happened anyway and have merely been stolen from the future. Meanwhile, the credit continues to distort the housing market and postpone the day when home prices can find a floor that is a basis for a stable recovery.
So designing a large health insurance program to "compete" in the private insurance market without distorting it, and ensuring that only those eligible to participate are enrolled, and providing timely necessary care and timely payments should be easy, no?
10/29/09 1320: Did I write "cash for clunkers boondoggle?" Yup.
Well, it’s in how Edmunds crunched the numbers. A valid way to evaluate the program economically, it says, is to look at how many people purchased cars that otherwise wouldn’t have been bought. The firm says that number is about 125,000 cars. By that measure, the government spent $24,000 to generate each sale of a new car.
For comparison, the average price for a new vehicle in August 2009 was $26,915, minus an average cash rebate of $1,667.
In all, the government spent $3 billion on a program that provided cash toward 690,000 car purchases – about $4,348 per car. That makes 565,000 people who got as much as $4,500 to buy a car they would have bought anyway, according to the Edmunds analysis.
Important point, here. The government, as much as Barack Obama and Nancy Pelosi want to think so, can't create a market, they can only distort one. And when they do, they do so with taxpayer dollars, and they do so much less efficiently than Adam Smith's invisible hand would.