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THE GOVERNMENT OPTION

THE GOVERNMENT OPTION
THE CRC REVIEW

The proper role of government is a never-ending debate taking place in our political forum. For quite some time, the narrative was the depth of government’s involvement in our daily lives, legislating decision best made within the confines of one’s home. Now, the main point of contention is government’s role as a market participant in industries politicians deem of national importance. The main question remains whether government is the best provider for many of these goods and services. Historically, it proven unable to handle similar responsibilities.

The most proper approach in determining the qualifications or ability for a person or organization to handle tasks is their history. Sure, one must account for framework shifts or new abilities, but, for the most part, track records give insight into capabilities. Despite recent hysteria, nationalizing industries in not new to America. The market for student loans is one almost completely operated by government providers. The performance is telling when considering whether healthcare or energy should do the same.

Government entered the market for student loans to help improve access to funds needed by millions for attending college. The societal benefit of an educated society helps not only our economy, but the safety and well-being of our communities. Government not only set the rules shaping the industries, but served as a market participant. Currently, the government portfolio contains or backs the vast majority of student loans. Few people, if any, consider the market performance effective or efficient for borrowers, many of whom want to make it a political issue.

The rule setter should never serve as a market participant. The eventual result will undoubtedly be monopolistic markets, which many agree are not optimal. Government agencies have the ability to determine competitor pricing, then create perceivably favorable conditions for itself. Private sector participants will abandon the market space, leaving taxpayers to foot the bill and accept the full market risk. Additionally, the political lag in governments, both federal and state, make it extremely difficult for these agencies to be responsive to changing market needs. As much of the rules are codified, legislative action may be needed to address changes, which is difficult in politically charged environments.

Government operates best in providing public goods and services not efficiently or effectively assigned to individual payers. Services like national security, community law enforcement, and basic public education are provided to society as a whole. Equitably assigning cost is generally difficult, considering one cannot determine individual benefit. Cost is assigned equally across the population, which creates market inefficiency. For separable goods and services, the best approach is assigning cost with defined benefits, preventing overcharging one set of people for overconsumption by another.

Emotional decisions are never optimal economic decision. The push for nationalizing industries like healthcare is built on emotional appeals, not economic one. A healthy population is an appropriate societal goal. An additional obstacle in healthcare is those consuming it are typically not in the best position to afford it at the time. While Obamacare ineffectively sought to address the imbalance, the push for nationalization is still not the answer.

Government does have a role in improving the affordability and access to healthcare as well as ensuring innovation and technology still occur. Serving as single payer is not the role it can serve best. The idea of single payer healthcare can provide a standard coverage, but blocks many from getting coverage needed or desired. People should have access to the health coverage they desire, not limited to the choice of distant government actors. Choice and cost do not have to be exclusive.    

Government best serves society as protector of fair play and provider of inseparable goods and services. Politics will attempt to blur the line, but society must reject ineffective and inefficient policies that only empower and enrich those in government. Our free society needs to leverage the power, innovation, and ingenuity of our great people to solve our greatest needs. The majority of them are not employed in the bureaucratic red tape of government.