The Wild West ... the outback ... The new world of the 1800s was a time of true liberty. People stood on their own merits. They won or they lost and they reaped the rewards or swallowed the consequences. There were no cubicle dwelling civil servants hell bent on saving you from yourself. No planning permits no licenses no permissions no heritage overlay no bylaw no regulators no inspectors. And guess what ... it worked

This site is set up to provide a forum for a number of like minded professional economists to post and comment on contemporary issues. There are a number of regular contributors whose bios are made available on the site. Most if not all of these contributors use a pseudonym for the simple reason that they are practicing economists who must take into consideration the commercial implications of posting their opinions.

While some may feel that this is a bit of a gutless approach it is the only way we can ensure free and open discussion without jeopardising our paycheques.

Friday, September 25, 2009

2020 Health Submission 2015 (Doc Holliday)

Dear reader, I have discovered on my hard drive a couple more health submissions from the book that never was. I will post them and the health over view over the forthcoming week. For those that are confused I suggest you reference the very earliest posts on this blogsite. Doc

Major medical problems in Australia due to obesity, smoking and alcohol need greater preventive campaigns and free behaviour change assistance for all people at risk.

This statement single handedly captures the ridiculousness of Australia’s Medicare system. What does ‘free behavioural change assistance’ really mean?

Medicare is compulsory national insurance: everyone contributes to it and is covered by it. However, contribution is based upon not the risk one poses to the national insurance pool, but by how much one can contribute. Thus a person’s lifestyle choice (how much they exercise, how much they eat, drink and smoke) has no bearing upon his or her financial contributions. Instead, he or she is covered, no matter what they do.

So unable to influence behaviour through the insurance system, governments instead focus on other ways to change behaviour. Government tend to lecture you (say, a multi-million dollar television campaign telling you that a glass of vino after work is the work of the devil). Governments can even get tough: ‘if we catch you drinking, or not exercising or smoking, then you are in really big trouble …’. But incentives are still important, so of course, there are many examples of governments turning to their own citizens to enforce is dictates.

So if you, Tim, plan to head off to the race track tomorrow to place a few bets, tug on a few ciggies, you better watch out. Somewhere there is a little boy scout ready to dob you into the re-education camp Stasi. Instead, treat the problem at its source, by fixing health insurance.

Back of the envelope

  • Cost --- Multi millions
  • Expected impact on average earnings --- Unchanged average weekly earnings except for public servants enforcing the law
  • Expected impact on economic growth --- Big decrease in GDP as everyone lives in fear of little boy scouts
  • Impact on incentives --- Don't do anything remotely fun, in case your neighbour thinks you're behaving suspiciously
  • Impact on government spending --- big increase
  • Impact on taxation --- big increase
  • Winners --- re education camp managers, stasi officials and scouts
  • Losers --- TAB Tim at the races


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