Plastic Surgery and Third-Party Payer

Most people would say high prices are the biggest problem with health care in the United States. But high prices should be viewed as the symptom of the real problem, which is “third-party payer.” And what is third-party payer? It’s the fact that consumers purchase health care with other people’s money. And we should blame […]

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Third-Party Payer Hurts American Healthcare

I’ve shared many videos (here, here, here, here, here, and here) explaining how government has made America’s health system expensive and inefficient. I especially recommend my 2019 speech to the European Resource Bank. Now let’s add this video to our collection. One lesson to take from all these videos is that the main problem with America’s […]

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In a Single Graph, Everything You Need to Know about Third-Party Payer

The main problem with America’s health care system is government intervention (Medicare, Medicaid, the tax code’s healthcare exclusion, etc). The main symptom of all that intervention is pervasive “third-party payer,” which is the term for a system where people buy goods and services with other people’s money. And pervasive is no exaggeration. According to government […]

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Screwing Up Healthcare with Government-Created Third-Party Payer

In addition to speaking on tax competition at the European Resource Bank in Moldova, I also appeared on a panel about healthcare. I used the opportunity to explain how government-created “third-party payer” has crippled market forces in the United States and produced inefficiency and needlessly high costs. There are two visuals from my presentation I […]

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Government-Subsidized Third-Party Payer Is a Great Recipe to Make a Sector of the Economy More Expensive and Less Efficient

What’s the most effective way of screwing up a sector of the economy? Since I’m a fiscal policy economist, I’m tempted to say that bad tax policy is the fastest way of causing damage. And France might be my top example. But other forms of government intervention also can have a poisonous effect. Regulation, for […]

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Subsidies and Third-Party Payer = Inefficiency and Higher Prices

People sometimes think I’m strange for being so focused on the economic harm that results from third-party payer. But bear with me and we’ll see why it’s a very important issue. If you’re not already familiar with the term, third-party payer exists when someone other than the consumer is paying for something. And it’s a […]

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Birth Control, Third-Party Payer, and the Politicization of Health Care

America’s health care system is a mess, and we can assign almost all the blame on government. Simply stated, we don’t have functioning and efficient markets because Medicaid, Medicare, tax-code distortions, and other forms of regulation and intervention have created a system that is crippled by a third-party payer crisis. There’s no logical reason to […]

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The Higher-Education Bubble and Third-Party Payer

Taxes and spending are two of the most obvious burdens imposed by government, and I’m glad that many people are fighting against a political class that seems to have a limitless appetite for a bigger public sector. But politicians also can do great damage to an economy with mandates, regulations, and other forms of intervention. […]

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Government-Created Third-Party Payer Is the Number One Problem in America’s Health Care System

John Goodman of the NCPA has a great article about how the current healthcare system is heavily distorted by government policies that result in people making decision with other people’s money (or at least what they perceive as other people’s money). The excerpt below is a good summary of John’s key points, but I’ll add […]

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Abortion, Third-Party Payer, and the Cost of Health Care

A major problem with America’s healthcare system, both before and after Obamacare, is the fact that consumers very rarely spend their own money when obtaining healthcare. Known as third-party payer, this problem exists in part because government directly finances almost 50 percent of healthcare expenditures. But even a majority of supposedly private healthcare spending is […]

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Don’t Copy the United Kingdom’s Government-Run, Single-Payer Health System

I’m on my way back to the United States from England. My election-week coverage (starting here and ending here) is finished, but I’m still in the mood to write about the United Kingdom. Yesterday, I shared some “Great Moments in British Government” and today I want to look at the U.K.’s single-payer health scheme. The […]

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Taxpayers Are Getting Drowned by Government-Subsidized Flood Insurance

Government subsidies have an unfortunate habit of causing widespread economic damage and often result in huge burdens for taxpayers (though sometimes consumers are the ones getting pillaged). Fannie Mae and Freddie Mac subsidies contributed to a massive housing bubble that destabilized the entire financial system. Means-tested subsidies have undermined progress on poverty by trapping people […]

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Clinton and Trump (Clump?) vs. Taxpayers and Free Enterprise

When Donald Trump and Hillary Clinton agree on things, it’s always bad news for taxpayers. They both want to boost the capital gains tax rate on private equity investment. They both want to let the entitlement problem fester and worsen. They both want more federally financed pork-barrel spending on infrastructure. Now they both agree that […]

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Instead of Fighting to Protect Taxpayers, Politicians Are Enabling Medicare Fraud

Yesterday, I shared several stories that exposed the festering corruption of Washington. Today, let’s look at one issue that symbolizes the pervasive waste of Washington. Medicare is the federal government’s one-size-fits-all health program for the elderly. Because of its poor design, it bears considerable responsibility for two massive problems. It contributes to the systemic third-party […]

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The Left’s Pro-Single Payer Health Care Graphic: Right Diagnosis, Wrong Prescription

The new leftist website, Vox, has an article by Sarah Kliff on Vermont’s experiment with a single-payer healthcare system. But I don’t really have much to say about what’s happening in the Green Mountain State, other than to declare that I much prefer healthcare experiments to occur at the state level. Indeed, we should reform […]

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Italy’s Absurd Boondoggle Giveaway

I wrote a two-part series (here and here) in 2022 predicting that Italy was at risk of suffering a fiscal crisis. If and when it occurs, it will be because investors decide that Italy’s government might default (i.e., be unable to make payments on its debt). Interest rates would spike, financial markets would get shaky, […]

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Least Surprising Headline of All Time

I periodically use “Least Surprising Headline” to call attention to articles citing very predictable outcomes. Pandemic spending being a magnet for fraud. European politicians finding another excuse to expand government. Bailouts not solving problems. Cost overruns on government infrastructure. I’m going to add to that list today, but first let’s refresh our understanding of how […]

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A Primer on So-Called Tax Expenditures

At the start of the year, I wrote that so-called tax expenditures  were a “boring but important issue.” Well, it’s time to once again put readers to sleep. Let’s start with a definition. A tax expenditure is basically a loophole in the tax code. And these loopholes are called tax expenditures because they are seen […]

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Part I: Does the United States Have Free-Market Health Care?

Does the United States have a market-based health care system or a socialist health care system? That’s not an easy question to answer. Because of Medicare, Medicaid, and other government programs, taxpayers directly finance about 50 percent of overall health expenditures. Does that mean we have a 50-percent socialist system? Once again, there’s no easy […]

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The Higher Education Racket, Part II

In Part I of this series, I shared a very amusing video from Bill Maher about how colleges and universities have become “luxury day-care centers.” I then added some of my analysis to show that government subsidies – such as student loans – were the underlying problem. Simply stated, colleges and universities increased tuition and […]

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Student Loan Humor

There are many serious objections to Biden’s unilateral student loan bailout (I included a poll with six potential answers in this column). And I’m sure I’ll write more serious columns about the issue, whether focused on the specific problem of the bailout or the broader issue of how student loans enable colleges to increase tuition […]

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The Scottish Version of Great Moments in Human Rights

Redistribution is a bad idea primarily because of economics. People getting handouts have less incentive to be productive and people paying taxes to finance that spending have less incentive to be productive. That translates into less economic output, which means lower living standards. But there’s another reason to be concerned about redistribution. I worry that […]

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Mitchell’s Law and Insulin Prices

The central message of “Mitchell’s law” is certainly not something I concocted. Economists and other policy experts have known for a couple of hundred years that politicians have a tendency to makes mistakes and then use the resulting damage as a justification for even more intervention. I simply gave this phenomenon a name so I […]

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A Helpful Correction for the New York Times

For years, I’ve been explaining that students have been hurt rather than helped by government programs to allegedly make higher education more affordable. How can this be true? For the simple reason that colleges and universities dramatically boosted tuition in response to all the government subsidies. Did students somehow benefit? Hardly. In addition to much […]

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The Deadly Impact of Government-Run Health, Part I

I’m not a fan of the government-distorted health system in the United States. Various laws and programs from Washington have created a massive problem with third-party payer, which makes America’s system very expensive and inefficient. But it’s possible to have a system that is even worse. Americans can look across the ocean at the United […]

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The Economics of Food vs. the Economics of Healthcare

The health care system in the United States is expensive and inefficient, and both of those problems are caused by government. More specifically, politicians have enacted laws (everything from the tax code’s exclusion of fringe benefits to programs such as Medicare and Medicaid) that have produced a system overwhelmingly based on third-party payer. And with […]

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Linda and Leo, Wards of the State

During his 2012 reelection campaign, Barack Obama created a fictional character named Julia and showed how she could mooch off taxpayers from cradle to grave. Given Biden’s reputation as a plagiarizer, I guess we shouldn’t be surprised that the White House has reincarnated Julia as part of a push to trap more people in government […]

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Cosmetic Surgery and the Economics of Healthcare

The healthcare sector is a tragic example of Mitchell’s Law in action, with politicians expanding the role of government in response to problems (rising prices and inefficiency) caused by previous expansions of government. The solution is free markets, and Hannah Cox points the way in this short video. Ms. Cox is definitely correct to use […]

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Free-Market Health Care

Programs such as Medicare and Medicaid, along with the tax code’s healthcare exclusion, have created a system where consumers directly pay for only about 10 percent of the care they receive. We think it’s normal and appropriate for either the government or an insurance company to foot the bill. Yet this system of “third-party payer” […]

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When “Catching Up” Means Lower Income

My approach during the Trump years was very simple. If he did good things, I applauded. If he did bad things, I criticized. Other people, however, muted their views on policy because of their partisan or personal feelings about Trump. I was very disappointed, for instance, that some Republicans abandoned (or at least downplayed) their […]

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