So What Should We Do About Drug Addicts?

[dismalist]

Playing with definitions is unhelpful for analyzing anything. The precise technical distinction between public and private goods is useful  precisely for determining the best way of financing its provision, by taxation or by user fee [price]. They do constitute extremes, however. Between them are capacity constrained services. A classroom is a public good until it is full. Then it is a private good.

For combating poverty, we have a safety net that is far more generous than usually appreciated. Some people care more about this and some not at all. It is charity or forced charity, not a public good. I am for poverty alleviation not for what it does for me, but for what it does for the recipient. Hence, purely private good.

When the concept is bandied about with reckless abandon it seems that a public good is a good that I like, so I put the adjective public in front of it to justify the government paying for it. Well, it's public. All true by definition.

There's an interesting amount of behavioural economics in all this, illustrated by amenities. Simply put, are amenities "public goods" or "forced charity"?

In my building, the marketing materials identified amenities like a pool, gym, etc. This is pretty typical. Since I've lived here, from my observations only a small percentage of residents have actually used the pool or the gym. Developers build what will sell. So, if there were many people who didn't want to pay for amenities that they wouldn't use, there should be some buildings designed without these amenities. The reality is that the best-selling properties are the ones with the most extensive amenities. Why are people willing to shell out definite cash for access to services which they may use? In purely economic terms, people should opt for not buying into all of these communal benefits which they may not use, and instead just purchase their own gym  memberships and so on if and when they actually use them.

So, are amenities "public goods" or "forced charity"? And why do people choose those over only paying for things they themselves actually use?

Amenities? There's a good motto, addressed to professionals -- If you don't understand something about pricing, it's probably price discrimination! :-)

Here it take the form of bundling. Nothing special.

Then I'd say universal healthcare is just more "bundling". Everyone is going to need some form of healthcare periodically; it's just not easy to predict in advance.

No, unable to predict in advance is most usefully called uncertainty. Tomes have been written about that, too. To cope with uncertainty somebody invented insurance.

The thing to be careful about with respect to the term "universal health care" is that the "universal" hides as much as it reveals. The NHS [and the Swedish and Italian systems, and only those systems]  combines insurance for all [and payment by all, or almost all] with government production. This is the Bevanian system. The rest of the civilized world forces everyone, or almost everyone, to purchase private or public health insurance. There is some redistribution, of course. This is the Bismarckian system. Health care is not produced by the state, but the state helps finance it.

What is important is that though both systems look different what they have in common is that both systems require each person to be insured. There is good reason for that: Moral hazard! If I know that I will not be allowed to die, I will not voluntarily insure. Then everybody else pays to save me when I threaten suicide. The required schemes, both Bevanian and Bismarckian, prevent exploitation by moral hazardeurs.

So, compulsion is necessary for efficiency. Without compulsion such insurance degenerates toward pre-paid medicine.

Anyway, playing with definitions does not help us. 



 

[ciao_yall]

Playing with definitions is unhelpful for analyzing anything. The precise technical distinction between public and private goods is useful  precisely for determining the best way of financing its provision, by taxation or by user fee [price]. They do constitute extremes, however. Between them are capacity constrained services. A classroom is a public good until it is full. Then it is a private good.

For combating poverty, we have a safety net that is far more generous than usually appreciated. Some people care more about this and some not at all. It is charity or forced charity, not a public good. I am for poverty alleviation not for what it does for me, but for what it does for the recipient. Hence, purely private good.

When the concept is bandied about with reckless abandon it seems that a public good is a good that I like, so I put the adjective public in front of it to justify the government paying for it. Well, it's public. All true by definition.

There's an interesting amount of behavioural economics in all this, illustrated by amenities. Simply put, are amenities "public goods" or "forced charity"?

In my building, the marketing materials identified amenities like a pool, gym, etc. This is pretty typical. Since I've lived here, from my observations only a small percentage of residents have actually used the pool or the gym. Developers build what will sell. So, if there were many people who didn't want to pay for amenities that they wouldn't use, there should be some buildings designed without these amenities. The reality is that the best-selling properties are the ones with the most extensive amenities. Why are people willing to shell out definite cash for access to services which they may use? In purely economic terms, people should opt for not buying into all of these communal benefits which they may not use, and instead just purchase their own gym  memberships and so on if and when they actually use them.

So, are amenities "public goods" or "forced charity"? And why do people choose those over only paying for things they themselves actually use?

Amenities? There's a good motto, addressed to professionals -- If you don't understand something about pricing, it's probably price discrimination! :-)

Here it take the form of bundling. Nothing special.

Remember this guy?

[dismalist]

Playing with definitions is unhelpful for analyzing anything. The precise technical distinction between public and private goods is useful  precisely for determining the best way of financing its provision, by taxation or by user fee [price]. They do constitute extremes, however. Between them are capacity constrained services. A classroom is a public good until it is full. Then it is a private good.

For combating poverty, we have a safety net that is far more generous than usually appreciated. Some people care more about this and some not at all. It is charity or forced charity, not a public good. I am for poverty alleviation not for what it does for me, but for what it does for the recipient. Hence, purely private good.

When the concept is bandied about with reckless abandon it seems that a public good is a good that I like, so I put the adjective public in front of it to justify the government paying for it. Well, it's public. All true by definition.

There's an interesting amount of behavioural economics in all this, illustrated by amenities. Simply put, are amenities "public goods" or "forced charity"?

In my building, the marketing materials identified amenities like a pool, gym, etc. This is pretty typical. Since I've lived here, from my observations only a small percentage of residents have actually used the pool or the gym. Developers build what will sell. So, if there were many people who didn't want to pay for amenities that they wouldn't use, there should be some buildings designed without these amenities. The reality is that the best-selling properties are the ones with the most extensive amenities. Why are people willing to shell out definite cash for access to services which they may use? In purely economic terms, people should opt for not buying into all of these communal benefits which they may not use, and instead just purchase their own gym  memberships and so on if and when they actually use them.

So, are amenities "public goods" or "forced charity"? And why do people choose those over only paying for things they themselves actually use?

Amenities? There's a good motto, addressed to professionals -- If you don't understand something about pricing, it's probably price discrimination! :-)

Here it take the form of bundling. Nothing special.

Remember this guy?

The congressman has a particular attitude dependent upon his opinion about sex. His position is not interesting.

I thought the article would be about the brilliant Steven Landsburg,  author of the great Armchair Economist and More Sex is Safer Sex, and germanely, the perpetrator of the Sandra Fluke controversy.

The issue illustrates the problem well. Preventing pregnancy is not an insurance problem because it is so certain to prevent pregnancy with current technology. Proof is that women routinely purchase birth control devices. Paying for health insurance to cover birth control cannot amount to less than pre-paid medicine. It's like having your car insurance cover oil changes. You can avoid the middleman -- the insurance company and its costs -- by paying out of pocket. It's stuff you need with certainty. There is no uncertainty involved, so it's not an insurance problem.

However, the question of who pays out of pocket for this medicine is perfectly legitimate on distributional grounds and can always be raised! For hook-ups the female will pay voluntarily, because she bears the costs of an unwanted pregnancy, but the male has no incentive to pay, and the female can't monitor. In long term relationships the cost of birth control is shared in some way.

It seems some States require birth control to be included in insurance plans. This is mere redistribution from some men who have insurance  to some women who have insurance. The redistribution is likely small, and it doesn't go to the women who would be much better off with birth control, uninsured young women. And it has nothing to do with insurance.

[Hegemony]

Surely medicine should not cover only uncertain things. Insulin is a certain need for type 1 diabetics, but it should not be omitted from insurance. Vaccines for childhood diseases are a foreseeable event. In the U.S., health insurance is also about making medical care affordable by distributing the costs, not merely about covering unforeseen medical events. If we had a more rational medical system, costs would be covered in other ways (eg by a single-payer system), but we do not, and so insurance has to perform the duty of making medical care affordable.

And if we are merely talking "paying out some money so insurance doesn't have to pay out more money later" — which is arguably why insurance covers childhood vaccines — paying for birth control now so as not to pay for expectant mother care, labor, delivery, and childhood medical care later is probably a pretty reliable savings.

[marshwiggle]

Playing with definitions is unhelpful for analyzing anything. The precise technical distinction between public and private goods is useful  precisely for determining the best way of financing its provision, by taxation or by user fee [price]. They do constitute extremes, however. Between them are capacity constrained services. A classroom is a public good until it is full. Then it is a private good.

For combating poverty, we have a safety net that is far more generous than usually appreciated. Some people care more about this and some not at all. It is charity or forced charity, not a public good. I am for poverty alleviation not for what it does for me, but for what it does for the recipient. Hence, purely private good.

When the concept is bandied about with reckless abandon it seems that a public good is a good that I like, so I put the adjective public in front of it to justify the government paying for it. Well, it's public. All true by definition.

There's an interesting amount of behavioural economics in all this, illustrated by amenities. Simply put, are amenities "public goods" or "forced charity"?

In my building, the marketing materials identified amenities like a pool, gym, etc. This is pretty typical. Since I've lived here, from my observations only a small percentage of residents have actually used the pool or the gym. Developers build what will sell. So, if there were many people who didn't want to pay for amenities that they wouldn't use, there should be some buildings designed without these amenities. The reality is that the best-selling properties are the ones with the most extensive amenities. Why are people willing to shell out definite cash for access to services which they may use? In purely economic terms, people should opt for not buying into all of these communal benefits which they may not use, and instead just purchase their own gym  memberships and so on if and when they actually use them.

So, are amenities "public goods" or "forced charity"? And why do people choose those over only paying for things they themselves actually use?

Amenities? There's a good motto, addressed to professionals -- If you don't understand something about pricing, it's probably price discrimination! :-)

Here it take the form of bundling. Nothing special.

Then I'd say universal healthcare is just more "bundling". Everyone is going to need some form of healthcare periodically; it's just not easy to predict in advance.

No, unable to predict in advance is most usefully called uncertainty. Tomes have been written about that, too. To cope with uncertainty somebody invented insurance.

The thing to be careful about with respect to the term "universal health care" is that the "universal" hides as much as it reveals. The NHS [and the Swedish and Italian systems, and only those systems]  combines insurance for all [and payment by all, or almost all] with government production. This is the Bevanian system. The rest of the civilized world forces everyone, or almost everyone, to purchase private or public health insurance. There is some redistribution, of course. This is the Bismarckian system. Health care is not produced by the state, but the state helps finance it.

What is important is that though both systems look different what they have in common is that both systems require each person to be insured. There is good reason for that: Moral hazard! If I know that I will not be allowed to die, I will not voluntarily insure. Then everybody else pays to save me when I threaten suicide. The required schemes, both Bevanian and Bismarckian, prevent exploitation by moral hazardeurs.

So, compulsion is necessary for efficiency. Without compulsion such insurance degenerates toward pre-paid medicine.

 

What puzzles me is how this is different than other service like police and fire departments. I've never heard of any community choosing to forgo those services to lower everyones' taxes. (Although I have heard of the services contracted out, but still at community expense.)

Who (other than a billionaire) would choose to have no health insurance even if that meant potentially having to pay for things like cancer treatment out of pocket?

Remember this guy?

This article demonstrates how deeply entrenched this attitude is in the U.S.

A Republican in Congress said he takes issue with the Affordable Care Act because it forces men to pay for maternal insurance in order for pregnant women to be healthy. While at first blush it might seem like common sense that someone doesn't want to pay for something they won't use, the point unravels when you look even a little closer — mostly because paying for something you don't use is kind of how health insurance works.

The bolded part about "common sense" is what sets the U.S. apart in all kinds of discussions about the role of government.

[spork]

Surely medicine should not cover only uncertain things. Insulin is a certain need for type 1 diabetics, but it should not be omitted from insurance. Vaccines for childhood diseases are a foreseeable event. z

[. . .]

We basically agree, but risk of infection by a contagious disease is a probability, not a certainty. Same for efficacy of a vaccine. Or for that matter, risk of Type II diabetes. People who are sedentary and whose breakfasts consist of Cheetos and Coke are at higher risk than those who exercise and eat apples.

Risk of becoming a drug addict varies with family history, occupation, etc. Not everyone whose mom was a crackhead becomes a crackhead, and not every crackhead had a mom who was a crackhead. 

[ciao_yall]

Playing with definitions is unhelpful for analyzing anything. The precise technical distinction between public and private goods is useful  precisely for determining the best way of financing its provision, by taxation or by user fee [price]. They do constitute extremes, however. Between them are capacity constrained services. A classroom is a public good until it is full. Then it is a private good.

For combating poverty, we have a safety net that is far more generous than usually appreciated. Some people care more about this and some not at all. It is charity or forced charity, not a public good. I am for poverty alleviation not for what it does for me, but for what it does for the recipient. Hence, purely private good.

When the concept is bandied about with reckless abandon it seems that a public good is a good that I like, so I put the adjective public in front of it to justify the government paying for it. Well, it's public. All true by definition.

There's an interesting amount of behavioural economics in all this, illustrated by amenities. Simply put, are amenities "public goods" or "forced charity"?

In my building, the marketing materials identified amenities like a pool, gym, etc. This is pretty typical. Since I've lived here, from my observations only a small percentage of residents have actually used the pool or the gym. Developers build what will sell. So, if there were many people who didn't want to pay for amenities that they wouldn't use, there should be some buildings designed without these amenities. The reality is that the best-selling properties are the ones with the most extensive amenities. Why are people willing to shell out definite cash for access to services which they may use? In purely economic terms, people should opt for not buying into all of these communal benefits which they may not use, and instead just purchase their own gym  memberships and so on if and when they actually use them.

So, are amenities "public goods" or "forced charity"? And why do people choose those over only paying for things they themselves actually use?

Amenities? There's a good motto, addressed to professionals -- If you don't understand something about pricing, it's probably price discrimination! :-)

Here it take the form of bundling. Nothing special.

Remember this guy?

The congressman has a particular attitude dependent upon his opinion about sex. His position is not interesting.

I thought the article would be about the brilliant Steven Landsburg,  author of the great Armchair Economist and More Sex is Safer Sex, and germanely, the perpetrator of the Sandra Fluke controversy.

The issue illustrates the problem well. Preventing pregnancy is not an insurance problem because it is so certain to prevent pregnancy with current technology. Proof is that women routinely purchase birth control devices. Paying for health insurance to cover birth control cannot amount to less than pre-paid medicine. It's like having your car insurance cover oil changes. You can avoid the middleman -- the insurance company and its costs -- by paying out of pocket. It's stuff you need with certainty. There is no uncertainty involved, so it's not an insurance problem.

However, the question of who pays out of pocket for this medicine is perfectly legitimate on distributional grounds and can always be raised! For hook-ups the female will pay voluntarily, because she bears the costs of an unwanted pregnancy, but the male has no incentive to pay, and the female can't monitor. In long term relationships the cost of birth control is shared in some way.

It seems some States require birth control to be included in insurance plans. This is mere redistribution from some men who have insurance  to some women who have insurance. The redistribution is likely small, and it doesn't go to the women who would be much better off with birth control, uninsured young women. And it has nothing to do with insurance.

Because men have nothing to do with pregnancy. /nothowgirlswork.

[dismalist]

...

What puzzles me is how this is different than other service like police and fire departments. I've never heard of any community choosing to forgo those services to lower everyones' taxes. (Although I have heard of the services contracted out, but still at community expense.)

Who (other than a billionaire) would choose to have no health insurance even if that meant potentially having to pay for things like cancer treatment out of pocket?

...

This article demonstrates how deeply entrenched this attitude is in the U.S.

A Republican in Congress said he takes issue with the Affordable Care Act because it forces men to pay for maternal insurance in order for pregnant women to be healthy. While at first blush it might seem like common sense that someone doesn't want to pay for something they won't use, the point unravels when you look even a little closer — mostly because paying for something you don't use is kind of how health insurance works.

The bolded part about "common sense" is what sets the U.S. apart in all kinds of discussions about the role of government.

One must distinguish rhetoric from reality. There is not much difference between the share of government expenditures in the US and other rich countries. The outliers are France and Italy, not the US, which is only a tad below the UK.

Government Share of GDP

It should also be kept in mind that 92% of US residents have health insurance, and most are quite happy with it.

...
Because men have nothing to do with pregnancy. /nothowgirlswork.

That misses the point. One can make arguments for forcing men to contribute to women's birth control costs, they just can't be an insurance argument.

[jimbogumbo]

Picking up on this, consider this:
Would you rather live in a mansion in a war zone, or in a small apartment in a peaceful city?

Interesting, since I have this same option in my meatpacking town.  This year I could have bought a 4500 s.f. home in the historic district for $280K, near the limits of what I can afford.  It is also close to some problematic homes based on published arrest reports.  The home today would cost $2M to build. 

Zoning laws today forbid affordable housing.  One example is New Lenox, Illinois where a single family home must be at least 1800 s.f.  There are many other factors involved with the federal government and lending practices.  In my cynical view, nothing substantial will change in our lifetimes.  Your only option is to live where housing is affordable and give up on the American obsession with owning the traditional single family home.

Here is a (non-paywalled!) article about LA issues. Not with homes, but residential hotels: https://www.propublica.org/article/meet-people-uprooted-by-american-hotel-los-angeles

[Kron3007]

...

What puzzles me is how this is different than other service like police and fire departments. I've never heard of any community choosing to forgo those services to lower everyones' taxes. (Although I have heard of the services contracted out, but still at community expense.)

Who (other than a billionaire) would choose to have no health insurance even if that meant potentially having to pay for things like cancer treatment out of pocket?

...

This article demonstrates how deeply entrenched this attitude is in the U.S.

A Republican in Congress said he takes issue with the Affordable Care Act because it forces men to pay for maternal insurance in order for pregnant women to be healthy. While at first blush it might seem like common sense that someone doesn't want to pay for something they won't use, the point unravels when you look even a little closer — mostly because paying for something you don't use is kind of how health insurance works.

The bolded part about "common sense" is what sets the U.S. apart in all kinds of discussions about the role of government.

One must distinguish rhetoric from reality. There is not much difference between the share of government expenditures in the US and other rich countries. The outliers are France and Italy, not the US, which is only a tad below the UK.

Government Share of GDP

It should also be kept in mind that 92% of US residents have health insurance, and most are quite happy with it.

...
Because men have nothing to do with pregnancy. /nothowgirlswork.

That misses the point. One can make arguments for forcing men to contribute to women's birth control costs, they just can't be an insurance argument.

Interesting link, but if you add more developed countries to the list, it becomes clear that France and Italy are not actually outliers.  Many other European countries are in that range.

The USA is on the low end for developed countries.  They also spend a higher proportion on military, so teg government spending on social programs is likely  relatively low compared to other developed countries.

As for 92% of Americans having health insurance, that also means 8% don't.  That is nearly 1 in 10, and represents tens of millions of people. 

[dismalist]

Yes, but filthy rich Switzerland is pretty low on government share of GDP. The original question raised was about government as a whole, when we were talking about health care. But that broader question was interesting in the sense that much of government spending is for public goods, such as defense. The US of A is paying for an international public good, the West's safety!

To get back to health care, we can talk about ways of including the 8% not insured. But that's a far cry from what politicians actually talk about. That's an opposition of "you will get more free stuff" and "they are taking away your money". Rhetoric, not reality.

[Wahoo Redux]

It should also be kept in mind that 92% of US residents have health insurance, and most are quite happy with it.

Either Big-D leaves in a much, much different part of the country that I and everybody I know does...

or Big-D is falling into the hyperbole trap in an effort to win a debate.

I know which I think.

[Kron3007]

Yes, but filthy rich Switzerland is pretty low on government share of GDP. The original question raised was about government as a whole, when we were talking about health care. But that broader question was interesting in the sense that much of government spending is for public goods, such as defense. The US of A is paying for an international public good, the West's safety!

To get back to health care, we can talk about ways of including the 8% not insured. But that's a far cry from what politicians actually talk about. That's an opposition of "you will get more free stuff" and "they are taking away your money". Rhetoric, not reality.

The west's safety, American hegemony, a two for one deal I suppose.

Regardless, that was not my point.   My point was simply that America is on the low end of government spending as a % GDP, while also using a larger portion of this for military.  Mathematically, this means they have a lower % left for social programs.  Just because military spending is a public good, doesn't mean it fills the same role as other public goods.  This is one of the problems of binning services based on this.

[dismalist]

I don't want to say that any particular level of government spending is the correct. I have a more rhetorical aim than a substantive one.

Yes, of course the US is at the low end of government expenditure share, but it's a lot bigger than Switzerland's, and close to the UK's. The point here is that the share is not absurdly low. [I don't want to get into it, but what the hell are France and Italy spending their governments' money on?] Thus, one can't use "Americans are against government spending" or "against public goods" as an explanation of anything.

If one identified new services that are useful -- such as provision of needles -- one must argue the benefits and costs and not automatically claim "it's a public good" or "it's insurance", or even it's "social spending" as justification for more spending. It all too easily bogs down to "I want more."   

[Parasaurolophus]

I don't want to say that any particular level of government spending is the correct. I have a more rhetorical aim than a substantive one.

Yes, of course the US is at the low end of government expenditure share, but it's a lot bigger than Switzerland's, and close to the UK's. The point here is that the share is not absurdly low. [I don't want to get into it, but what the hell are France and Italy spending their governments' money on?] Thus, one can't use "Americans are against government spending" or "against public goods" as an explanation of anything.

If one identified new services that are useful -- such as provision of needles -- one must argue the benefits and costs and not automatically claim "it's a public good" or "it's insurance", or even it's "social spending" as justification for more spending. It all too easily bogs down to "I want more."   

The US spends nearly twice as much (~17% of GDP when I last looked) on healthcare as other OECD nations, with equal or worse outcomes. Channeling dismalist, I'd say that what one wants is effective or efficient spending. There's no point spending more on any given public measure if a significant portion of that spending is going to be wasted.

In that vein, it's worth asking whether that military spending is efficient. From where I stand, it looks like it diverts an awful lot of funds to (1) private profit, and (2) a large-scale but morally suspect work program with dubious returns.