The economic downturn and subsequent entry of the federal government in to a wide variety of private businesses left me searching for a way to think about this. I picked up my old copy of Ayn Rand’s “Atlas Shrugged” and began re-reading.

Ms. Rand treats capitalists as noble heroes and socialists as evildoers. In the book, socialists, such as Wesley Mouch, use government power to control the economy. She calls these people looters as they don’t  produce anything themselves yet they impose their will through the use of government power. Much of the book echoes the words we’re hearing today such as, “we’re doing this in the public interest”, “the poor deserve the same as the rich”, and “too big to fail”.

President Obama has literally suggested that government should compete with private enterprise to provide health insurance. His rationale is that private enterprise is not doing a good job insuring Americans. He draws the conclusion that only the government can provide low cost (to the consumer) health insurance

President Obama either has not read Ms Rand’s warnings about the slide to socialism or doesn’t care. I assume the man is well read, so I conclude he doesn’t care.

When he says government can compete with private business, what does he really mean?

There’s a fundamental difference between a private enterprise like Cigna and a government enterprise. Cigna’s investors choose to fund an enterprise that perpetuates itself by making money and delivering a return to shareholders. A private enterprise operates on a level playing field, kept level by both market forces and regulation.

A government business has taxpayers as investors who have no choice but to support the enterprise. The business does not need to return a profit. If a taxpayer decides the government business is a bad investment, he has no where to turn. He can be held at gun point until he pays his portion of tax that props up a failing government concern like Fannie Mae or Amtrak. In addition, government businesses can operate on an uneven playing field by the passage of regulations that favor its operation.

Cost savings are an illusion. There is no reason to think a government health insurance business will be any less costly than its private “competitor”. Certainly Blue Cross and Cigna have enough scale to push down costs today. A government business will not affect the fundamental cost of health care at all. Doctors, hospital, pharmaceutical companies and medical malpractice lawyers will still charge too much.

President Obama and his supporters are confusing the public on this issue. They aren’t proposing to change the cost of health care, rather they are proposing to force Americans who pay taxes to subsidize those who can’t afford it.

Why go to all this trouble? Instead why not be honest about it and add a line item on the tax bill called “subsidy for health insurance”.  As Ms. Rand predicts, President Obama and the looters won’t dare do this, for then they’ll be admitting that they are simply common criminals, stealing from tax paying Americans to give to the poor.