Streetwise Professor

March 29, 2010

The New Draft

Filed under: Economics,Military,Politics — The Professor @ 7:26 pm

One of the libertarian arguments against conscription is that it is a tax levied exclusively on the young (and young men particularly, back in the day).  The government uses its coercive powers to force the young to supply labor at below market rates.  This tax was rationalized using all sorts of high-sounding rhetoric.

The just passed health care legislation bears considerable similarity to conscription.  Here, the government uses its coercive powers to force the young to consume a service at an above market rate (in order to subsidize consumption by others).  We again hear the high-sounding rhetoric to cover this outright theft from one cohort of the population.  (One difference with conscription is that this tax hits young women harder than young men.  So much for the feminism of those who are among the law’s most fervent advocates.)  The indirect effects will also affect the young disproportionately; the inevitable tax burden will slow economic growth, dramatically reducing the lifetime incomes of those just entering the labor force.

When can we expect teens and twenty somethings to start burning their insurance cards?  Ironic, no, that this legislation was produced primarily by boomers who cut their political teeth on opposition to the draft?  What’s that old expression?  Never trust anybody over 30?  Methinks that saying might gain new currency once the implications of this law begin to be understood, especially by those who will pay the highest price.

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2 Comments »

  1. [...] Craig Pirrong, the econ prof who write The Streetwise Professor, ratchets up the rhetoric and compares the healthcare bill to the draft. [...]

    Pingback by Is The New Healthcare Bill Just The Vietnam War Draft All Over Again? | Bailout and Financial Crisis News — March 30, 2010 @ 6:17 am

  2. Not so fast … Current health system is far from ideal, and adding some kind of coverage for everybody is a good thing, like stated here: http://nihoncassandra.blogspot.com/2010/02/in-praise-of-free-lunches.html

    Also, the middle men (insurance companies) currently take ~50c out of each dollar spent on healthcare. With such huge overheads, it is likely that there are plenty of things that can be tried to reduce that and spend the money on the actual care itself and make more people covered along the way. I don’t personally care if the insurance people go out of work, just like was the case with travel agents, car salesmen, and real estate brokers (they want 6% for what?!?). Even if insurance companies don’t make any profit, they still exist as middle men and eat a lot of money for salaries, so making the system simpler would be helpful.

    Comment by hint — March 31, 2010 @ 9:57 am

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