That’s the First Law of Thermodynamics—There Ain’t No Such Thing As A Free Lunch!

Of late, I’m seeing more references to the Obama Administration as “lawless,” and it certainly has a record of disobeying its own signature law as it tries to implement Obamacare. But no matter how hard they try to bend or break the fundamental Laws of Nature, there ain’t no such thing as free healthcare either.

Someone has to pay: hence, the various redistributive schemes to try to finance the program. Jonathan Cohn has a piece over at TNR titled Yes, Obamacare is Redistribution—But Republicans Are Wrong About Who Pays. He tries to show how the money to fund the scheme (more than $2 trillion over the next decade) will be raised. Most of the sources make little real-world economic sense. For example, Medicare providers will summarily be short-changed $415 billion on their compensation for the goods and service they provide. The logic behind this is that it gives providers with an incentive to become more efficient by being paid less rather than deciding to get a better paying job or start a more profitable business. Yeah, that’ll work.

The truly stupid ideas in the Obamacare financing scheme are the fees to be imposed on the healthcare industry such as the medical device tax. This adds a violation of Second Law of Thermodynamics which says that every system operates with some increase in entropy. The $165 billion dollars of increased cost to the system will never be recovered when the real world results of the program are viewed as a whole. Even an economy as large as ours won’t be able to hide the loss.

If your think healthcare is expensive now, just wait till it’s “free.”

Let it burn.

6 thoughts on “TANSTAASFL!

  1. Response of my liberal friends “but we have to do something. Think about the poor children”

    Me “I am. Both my children and your children. This will be an unmitigated disaster”

    Today, “We tried. Our intent was good. It just needs a little twerking. Why won’t those mean Republicans help.”

    Me “Let it burn”.

  2. The article doesn’t even mention either the flow of premium subsidies from the young who will overpay for medical insurance to the middle-aged who will underpay, or the similar flow of premium subsidies from the healthy to the sick.

    The structure of the subsidies makes government sense: the program advantages those that vote now. Older folks who paid actuarial rates when young will pay less now that they are older. While the young will pay more than actuarial rates today, when they are older they will be the immediate beneficiaries of the upcoming switch to single payer. Children, and those not yet born will grow up into a crap system. They don’t vote today.

  3. Not to mention what will happen when the employer mandate kicks in next year. Nice of them to delay that out past an election year no?

    Companies that are currently paying out millions in health insurance premiums will see they can reduce that to a couple hundred grand by dropping coverage and paying the penalty. Anyone wanna bet on what will be the outcome?

  4. In their mind it is free as long as they do not have to pay for it! Plus they think most folks won’t notice that they are funding their own subsidizes through these convoluted funding schemes. Then add in that Obama doesn’t care what happens after 2016 as he’ll be gone and he’ll blame the next president for screwing things up.

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