Why a Public Option Will Kill Competition

November 1, 2009 at 8:59 pm Leave a comment

Over at Cafe Hayek, economist Russ Roberts hits the nail on the head regarding why a public option in health insurance will kill competition.

[…]Obama uses the Post Office as an example of why the public option won’t hurt private competitors. His argument is that Fed Ex and UPS thrive even though there’s a Post Office. He forgets to mention that the Post Office has a legal monopoly on first class mail and still loses money. And he forgets that the struggles of the Post Office make it harder to claim that the public option will stand on its own without taxpayer support.

In countless examples throughout history, government attempts to provide competitive services have only served to make a laughing-stock of the politicians who naively believe that political decision-making can actually serve consumers best.


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