Now that our season is over...

[kaelistus]

I can't believe people are actually arguing for Private fire departments... Hmm..

So we've got a couple of options on how they work:

Option 1: They only put out the fire in the houses that pay.
OK, but what happens if the fire starts next door? It could start small, but by the time it spreads to your it might be too huge to control and your city burns down. Insurance company can't afford to pay for the whole city*. Everyone loses.

Option 2: They put out the fire everywhere.
I chose not to pay for it because someone else will. Nobody does. City burns down. Everyone loses.

Are there any other options I'm missing?


* Even if they could, it's still a loss because saving your house is much better than getting paid for the materials/possessions that constitute your house.

[mnagowski]

But the cost/benefit calculus is extremely different. If the costs of a proposal outweight the benefits then it's a bad proposal even if it produces some good.

I disagree that the costs of the health care reform outweigh the benefits. And thankfully a lot of well-respected economists, public health scholars, doctors, and the majority of the American public disagree with you as well. And that's even far underestimating the long term benefits of a healthier, richer, more productive country.

Because, really, let me tell you how much it sucks to wake up one day and realize that if you lose your job you will lose your insurance and that you will never be able to be insurable again, and thus never be able to have a job again, let alone have any much sense of a normal life. I'm probably never going to be able to walk around the block, ice skate, or take a hike again, but doesn't it make sense to at least keep me healthy enough to sit in front of a computer and work?

[KeithK]

But the cost/benefit calculus is extremely different. If the costs of a proposal outweight the benefits then it's a bad proposal even if it produces some good.

I disagree that the costs of the health care reform outweigh the benefits. And thankfully a lot of well-respected economists, public health scholars, doctors, and the majority of the American public disagree with you as well. And that's even far underestimating the long term benefits of a healthier, richer, more productive country.

Because, really, let me tell you how much it sucks to wake up one day and realize that if you lose your job you will lose your insurance and that you will never be able to be insurable again, and thus never be able to have a job again, let alone have any much sense of a normal life. I'm probably never going to be able to walk around the block, ice skate, or take a hike again, but doesn't it make sense to at least keep me healthy enough to sit in front of a computer and work?

Well, obviously you think the benefits outweight the costs or you wouldn't be speaking positively about the bill. :-)  I don't agree that the dollar cost is worth the benefit (I expect the costs to be much higher than advertised).  But the cost is not just measured in money. There's a cost in freedom as well. Among other things the law says that the government has a right to force you to buy a commercial product that you may not want. This is a tremendous increase in government power and loss of freedom. As a corrolary it says that you can't choose to buy the kind of insurance you want - you have to buy what the government decides is proper. If I want catastropic insurance only because I'm young and healthy - sorry, not acceptable.

I have no doubt that there are benefits from this bill.  Some people may be very much benefited by it. But again, that doesn't necessarily outweigh the costs when all factors are considered (which is necessarily a subjective measure).  It also doesn't by any stretch mean the particular law that we just passed is the right way to address the problems that do exist.

[KeithK]

I can't believe people are actually arguing for Private fire departments... Hmm..

Kyle is a radical libertarian *. I'm sympathetic to that philosophy because my ideal is probably closer to that than to our current government/regulatory scheme. Even if you don't think it's possible or practical to implement the ideal it can be instructive to discuss it.

It's at least as useful to consider radical libertarianism as it is to discuss communism.

* My description Kyle... apologies if you'd characterize differently

[ugarte]

It's at least as useful to consider radical libertarianism as it is to discuss communism.

True, since the repeated total failures of communism to produce a tolerable state don't keep it out of the discussion.

I only wish every regulation and every deregulation weren't evidence that we are on the road to ... something.

[Jim Hyla]

Well, I think I'm done. When people think that insurance companies are going to form private fire companies for each of their insured; and traffic laws are not needed, just drive by conventions, then I have nothing to add other than, go find that society and live there. I don't think you'll be moving soon.

Check.  I'll file you in the "If you don't like it, move!" bucket.

Well, I have to respond to this, because that's not what I said. I didn't say anything about leaving if you don't like it. I'm not that kind of person and hope that you would be able to see the difference in what I wrote. "go find that society and live there. I don't think you'll be moving soon." Meaning, I don't think you'll leave because that society doesn't exist and I doubt it ever will. OK?

[Rosey]

Kyle is a radical libertarian *.
...
* My description Kyle... apologies if you'd characterize differently

To be most accurate, I'd describe myself as a market anarchist or anarcho-capitalist.  "Libertarian" will do in most social situations because when most people hear I'm an anarchist they want to know how only 3 people can manage to flip a car over.

[Rosey]

Well, I have to respond to this, because that's not what I said. I didn't say anything about leaving if you don't like it. I'm not that kind of person and hope that you would be able to see the difference in what I wrote. "go find that society and live there. I don't think you'll be moving soon." Meaning, I don't think you'll leave because that society doesn't exist and I doubt it ever will. OK?

While I do grok the subtle difference between the two sentiments, in practical terms they amount to the same thing because the implication is that I will never have the freedom to create such a society with like-minded folks.  In a world in which every scrap of land is owned by a government (and if you dispute this, try not paying your property taxes and find out who really owns the land), this is a very difficult proposition without a change in attitude away from centralization.

[Swampy]

You're right, but only if we ignore the impacts on future generations and animals, or an intrinsic ethic of protecting the environment. Considerations such as these are not amenable to resolution by claims for damages. Also, don't forget about our limited knowledge regarding unintended environmental consequences, as Fred Hayek was fond of pointing out.

This Exxon Valdez business is a red herring.  Yes, it's horrible that it happened, and yes, a private company was at fault.  But where's the evidence that a state-run oil company would not have similar spills or cause the exact same unintended environmental consequences?  Remember, the argument here isn't (yet) whether the petroleum infrastructure should exist at all, but whether it would be better for society if it were run by the government than by private corporations.  I would actually think that a state-run company would be more dangerous to society.  Since it's not in competition with other oil companies, it has less incentive to avoid problems, since it knows the government must bail it out and cover the damages anyway.

You know, it's possible to have several publicly owned,non-profit enterprises competing with each other.

Also, as I said elsewhere in my post, I don't think the main line of debate should be between government and private corporations. In the U.S. at least, the distance is not very great.

[Rosey]

I can't believe people are actually arguing for Private fire departments... Hmm..

I take it this is the "OMG, you people are so stupid: this can't possibly work!" kind of "can't believe"?

So we've got a couple of options on how they work:

Option 1: They only put out the fire in the houses that pay.
OK, but what happens if the fire starts next door? It could start small, but by the time it spreads to your it might be too huge to control and your city burns down. Insurance company can't afford to pay for the whole city*. Everyone loses.

Option 2: They put out the fire everywhere.
I chose not to pay for it because someone else will. Nobody does. City burns down. Everyone loses.

Are there any other options I'm missing?

You provide a false dichotomy.  Read up, because I already outlined a potential way this might work out.

FWIW, if one admits the legitimacy and possibility of limited government, local fire protection is one of those things I don't think any minarchist would find unreasonable.  I'm not arguing that public fire departments can't work, only that private fire departments just might possibly be feasible.

[Rosey]

Now your response is probably that rational action by the other owners/insurance companies will prevent the losses from getting to this point.  Maybe so.

That would be part of my response, yes. :-)  E.g., the total destruction of a city (e.g., Chicago, SF earthquake, Katrina) is a disaster, something that government today handles through emergency funds.  There's no reason, however, that this can't be handled through reinsurance, where your insurance company pays to be part of a much larger pool.  The main difference between the two (government and reinsurance) is that one is a business and must make money, while the other taxes people for it in a way unrelated to disaster risk or just prints the money out of thin air.  Which do you think encourages bad planning and a lack of foresight?

Sure, letting someone else put out my fire may cause a lot of water damage.  But that's a risk I may be willing to take.

And if you're willing to take that risk, more power to you.  My insurance will still prevent my house from burning down or will pay out if it does.

The presence of neighbors fire service who might be obligated to put out your fire reduces the potential cost for the fire ($10k water damage < $500k loss of entire property, for instance).

On what basis are you suggesting the insurance company would "issue" a summons to arbitration? Certainly for damage to the other guys property, but I'm assuming that the his fire company puts out my fire before it damages his property. Cost of services rendered? Seems a stretch since I didn't request any services.

They still have a claim because they had to spend money to defend the policyholder's property against the negligence or aggression of the neighbor.  This is the sort of arena in which courts/arbitration and precedent start to ferret out the details of natural law, which may vary in subtle ways from place to place: e.g., in a city there's going to be a much stronger presumption than in the countryside that one is responsible for ensuring that one's own property does not present a hazard to neighbors.

It's also likely that the policyholder will be paying more in a neighborhood with lots of uninsured homes than he would in a fully-covered neighborhood.  This recasts the free-rider problem in a way that implies the likely resolution: people will pay more or less for insurance coverage depending on relative risk, where risk includes the behavior of others in the neighborhood.  It's no different from paying more for comprehensive car insurance in the Bronx than in Scarsdale: lower income area => higher crime rate => greater risk of one's own car being stolen => higher premiums.  People would begin to segregate themselves by their level of risk aversion (something that is likely to be very highly correlated with income), and put peer pressure on non-conformists.

[Swampy]

But the cost/benefit calculus is extremely different. If the costs of a proposal outweight the benefits then it's a bad proposal even if it produces some good.

I disagree that the costs of the health care reform outweigh the benefits. And thankfully a lot of well-respected economists, public health scholars, doctors, and the majority of the American public disagree with you as well. And that's even far underestimating the long term benefits of a healthier, richer, more productive country.

Because, really, let me tell you how much it sucks to wake up one day and realize that if you lose your job you will lose your insurance and that you will never be able to be insurable again, and thus never be able to have a job again, let alone have any much sense of a normal life. I'm probably never going to be able to walk around the block, ice skate, or take a hike again, but doesn't it make sense to at least keep me healthy enough to sit in front of a computer and work?

Well, obviously you think the benefits outweight the costs or you wouldn't be speaking positively about the bill. :-)  I don't agree that the dollar cost is worth the benefit (I expect the costs to be much higher than advertised).  But the cost is not just measured in money. There's a cost in freedom as well. Among other things the law says that the government has a right to force you to buy a commercial product that you may not want. This is a tremendous increase in government power and loss of freedom. As a corrolary it says that you can't choose to buy the kind of insurance you want - you have to buy what the government decides is proper. If I want catastropic insurance only because I'm young and healthy - sorry, not acceptable.

I have no doubt that there are benefits from this bill.  Some people may be very much benefited by it. But again, that doesn't necessarily outweigh the costs when all factors are considered (which is necessarily a subjective measure).  It also doesn't by any stretch mean the particular law that we just passed is the right way to address the problems that do exist.

Keith, you're ignoring the main reason for this part of the legislation. It's a classic free-rider problem. Insurance is all about pooling resources to protect against risk. If people are "free" to choose any and all insurance, they're "free" play the odds while they're low risk, thereby making the cost to those of higher risk unaffordable. It's hard to see how this is an optimal solution in any way, particularly since international comparative data indicate much higher benefit/cost ratios associated with single-payer, universal systems.

Furthermore, there's freedom to act as an individual and freedom to act collectively. Are you assuming the former trumps the latter? If so, why?

We are not talking about a Pareto optimum here, either way. (It always amazes me how a a situation with extraordinarily rare conditions drives so much economic policy debates.) One person's "choice" to not have to purchase insurance necessarily impinges on another's "choice" to have universal health insurance. If you were allowed under the new bill to choose not to have to buy health insurance, how much would you be willing to pay in side-payments to everyone (even just on this list) who want both to have insurance for themselves and to know that you won't show up unconscious at an emergency room somewhere and receive high-cost treatment at the expense of everyone else (i.e. public expense)?

[Rosey]

It's a classic free-rider problem.

False.  The free-rider problem only applies to non-exclusionary goods/services.  You can make this argument for fire protection (as we've seen), military protection, etc., in which you benefit even when you don't pay.  You can't make this argument about health insurance.

Insurance is all about pooling resources to protect against risk.

Also false.  Insurance is about hedging risk.  Pooling is typically another result of insurance, but is not technically necessary for insurance to be economically feasible.

Furthermore, there's freedom to act as an individual and freedom to act collectively.

The latter is an oxymoron unless all the people involved agree.  Individuals can voluntarily associate to achieve things: in fact, that's how most things get done!  But, to paraphrase Ben Franklin, two wolves and a lamb voting on what to have for dinner is not freedom in any useful sense.

[Swampy]

Well, I have to respond to this, because that's not what I said. I didn't say anything about leaving if you don't like it. I'm not that kind of person and hope that you would be able to see the difference in what I wrote. "go find that society and live there. I don't think you'll be moving soon." Meaning, I don't think you'll leave because that society doesn't exist and I doubt it ever will. OK?

While I do grok the subtle difference between the two sentiments, in practical terms they amount to the same thing because the implication is that I will never have the freedom to create such a society with like-minded folks.  In a world in which every scrap of land is owned by a government (and if you dispute this, try not paying your property taxes and find out who really owns the land), this is a very difficult proposition without a change in attitude away from centralization.

Why shouldn't land be owned by society at large? With the possible exception of landfills, it's not as if anyone makes the land. You're assuming private property rights to argue for private property rights. This is a circular argument. You have to establish the desirability of private property not only in land but also land value independently first.

Both Henry George and U.S. housing policy (which deliberately makes private home ownership advantageous) are useful starting points for examining your statement.

Also, BTW, property taxes in the U.S. are usually on the combined value of land and structure, whereas George would have it almost entirely on land. So isn't your argument really that anything but a flat tax per head is confiscatory? And, isn't one of the the big flaws in this kind of tax the underlying assumption that individuals obtain wealth independently of society at large?

Lastly, what does centralization have to do with it? Property taxes are about the most decentralized form of taxes we have.

[mnagowski]

Among other things the law says that the government has a right to force you to buy a commercial product that you may not want. This is a tremendous increase in government power and loss of freedom.

Not really. You're not forced to buy the product. You can always just pay the tax. (And, if you don't make any income, you're not going to have to pay the tax, anyways.) The U.S. government has always had the power to levy revenues to provide public services.

I really think you're grossly overreacting with the word 'tremendous'. If you think the Health Care Reform Law represents a fundamental shift in U.S. public policy, you have 210 years of history working against you. In 1798 Congress passed, and John Adams signed into law, something known as "An Act for the Relief of Sick and Disabled Seamen". Provisions in the bill included:

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled - That from and after the first day of September next, the master or owner of every ship or vessel of the United States, arriving from a foreign port into any port of the United States, shall, before such ship or vessel shall be admitted to an entry, render to the collector a true account of the number of seamen, that shall have been employed on board such vessel since she was last entered at any port in the United States,-and shall pay to the said collector, at the rate of twenty cents per month for every seaman so employed; which sum he is hereby authorized to retain out of the wages of such seamen...

http://www.languageandpeace.com/blog/1StatL605.pdf

If I want catastropic insurance only because I'm young and healthy - sorry, not acceptable.

That's the feature, not the bug. I was young and healthy at the age of 23 as well, climbing mountains and competing in triathlons. But now at the age of 26 it is costing over $20,000 a year to keep me able to walk to the mailbox (of course pharmaceutical law has something to do with that as well, even though the drugs I am on were developed with taxpayer money). It's what the term insurance is all about -- risk pooling. And if the insurance markets aren't working because of obscene amounts of adverse selection and profiteering, it's completely within our government's powers to do something about it.

Come to me in twenty years and we'll see how the costs turned out. Most respected public finance experts think that the bill is going to end up being much cheaper in the long run. And at least there's an attempt to pay for this bill with revenue increases and spending reductions, which is something that the Republicans never bothered to do with their tax cuts, the Iraq war, or Medicare Part D.