The difference between command economy and market economy is that command economy employs a centralized system of economic governance, and a certain class of officials takes decisions about what to produce, how to produce and in which quantities. This class of people also sets prices for products. On the contrary, in the market economy, self-interested individuals enter in voluntary exchanges of factors of production, goods and services in order to maximize utility.
Prices are determined by supply and demand of a certain factor of production, good or service. As for the National Health Care Bill, there have been debates whether the United States Congress is a legitimate body to vote on such an important piece of legislation. However, U. S. citizens have agreed to delegate a part of their authority to the government, and their will is exercised, albeit indirectly, by means of parliamentary representation.
The United States Congress has in the past passed pieces of legislation that altered lives of Americans even more dramatically. There is no well-developed tradition of legislation by referendum or plebiscite in the U. S. , therefore the passage of the National Health Care Bill can be seen as legitimate, if we assume that democracy in the U. S. is functioning and the Congress reflects the will of the people. Having dealt with the question of legitimacy, it is now necessary to look at both short-term and long-term economic consequences of the bill.
Nick Pelster (2010) of the Daily Nebraskan believes that the bill is a failure, because the costs of health care will continue to increase, millions of people will still remain outside of insurance coverage, and it will have a cumulative effect of further exacerbation of the problem of balancing state and federal budgets. The Congressional Budget Office that has performed the analysis of the bill has taken money from Medicare and Social Security and failed to account for it anywhere else in the budget.
At the same time, these expenses might be offset by positive long-term social consequence, as more Americans will get access to adequate health care. The bill includes 16 million people into the Medicaid program, subsidizes private insurance for lower income citizens, and bans private insurance companies from denying care for pre-existing conditions (New York Times 2010). The U. S. government has a legitimate right to regulate how the money is spent on the Heath Care Bill.
All governments have a fiscal autonomy over their tax revenues and should allocate them to public programs in accordance with what they believe the goals of the society are. Decisions about public spending are not value-free; they often entail painful dilemmas. Therefore, the government, entitled to do so by citizens, should decide how public money is spent under the scenario of conflicting priorities. Such decisions are not only ethical but also political: for example, to get anti-abortion Democrats on board to pass the bill, President Obama had to promise that federal funds will not be used for abortion services (New York Times 2010).
Politics in most cases should be seen as reflecting the overall interests and orientations of a society. If values, orientations and priorities of society change, such change will be reflected in decisions about taxation and public expenditure because of electoral pressure. The opposition to the idea of universal health care coverage believes that individuals should take care of their health themselves, by means of taking out private insurance or in any other way. They believe that tax revenues should not be spent on financing pubic programs of such nature.
In their view, a society would be better off if taxes are lowered to the minimum, so businesses can prosper and their owners and employees can take care of themselves and their families. Such neo-liberal thinking is challenged by supporters of the idea of social democracy. The latter believe that not all members of society are able to support themselves or get help from their relatives. Therefore, guided by the principle of social solidarity, the government should help those people meet their basic needs. Even if people are able to work, they often remain in low-paid and low-skilled positions for their entire life.
If they are single parents, for example, they must rely on governmental support for livelihood. Many people find themselves in such a situation not because they are lazy or not intelligent enough, but because their families are trapped in the so-called “circles of poverty” with little access to education and no positive role models to follow (Shipler 2005). On the other hand, citizens born into affluent families are likely to receive good education and be socialized into circles that have access to resources and wield influence in society.
Thus, taxation is essentially a redistributionary tool that is aimed at ensuring greater equality among members of a particular community. Thus, it is legitimate to use tax revenues to support those members of society that are unable to get by alone. Applying the welfare logic to the analysis of the health care bill, the Daily News (2010) editorial staff argue that expanding coverage to the uninsured is necessary for both moral and practical reasoning. The moral reasons, such as justice and solidarity, have been explored above, but there are practical reasons as well.
First of all, illness always results in loss of productivity, so it is not in the interests of the society at large. The need to urgently find large sums of money to pay for treatment for the uninsured can wreck careers and families and even push people into crime. Finally, medical personnel is put into a very sensitive situation, since their professional ethos requires them to provide assistance to all patients regardless of their financial situation, yet because some of them do not have insurance, they might need to refuse treatment to some of them.
Indeed, the most problematic aspect of the insurance bill is the mandatory requirement that all Americans should obtain insurance, either from their employer or the marketplace (Grier 2010). Such an approach is at odds with the American tradition of individual liberty and self-reliance: individuals and not the government know better what is in their best interest. However, there is mounting evidence that individuals are short-term oriented and tend to neglect long-term consequences of their action or inaction.
The entire idea of pensions is based on understanding that individuals are not likely to save up for old age in a regular way, therefore the government mandates or encourages them to do so. Individuals also tend to underestimate risk. Here, the seat belt analogy comes in handy: drivers think that accident happen to someone else and do not fasten a seat belt unless required to do so by law. Similarly, many Americans do not take out insurance because they underestimate the risk of falling ill. However, if the government requires them to do so, they are more likely to do it.
Moreover, the government has pledged to support those low- and middle-income citizens who cannot afford heath insurance. However, it is of paramount importance to ensure that the welfare system is not abused. Each individual should be assesses with regard to whether he or she is entitled to subsidized health care or other benefits. While such assessment can be time consuming, it is necessary to maintain correct welfare ethos and ensure that public money is not squandered. In the longer run, a healthier nation is also a more productive nation, therefore the government will be able to collect more tax revenues when the economy recovers.
It is indeed to early to provide a comprehensive assessment of the heath care bill, yet it is possible to hope that social gains will eventually transform into economic gains. Works Cited Grier, P. “Health care reform bill 101: Who must buy insurance? ” The Christian Science Monitor. March 19, 2010. Web. May 13, 2010. <http://www. csmonitor. com/USA/Politics/2010/0319/Health-care-reform-bill-101-Who-must-buy-insurance> Pelster, N. “Health care bill hurts economy, nation. ” DailyNebraskan. March 28, 2010. Web. May 13, 2010. <http://www. dailynebraskan.
com/opinion/pelster-health-care-bill-hurts-economy-nation-1. 2204379> Shipler, D. K. The Working Poor: Invisible in America, Reprint ed. New York: Vintage, 2005. N/a. “Assessing failure or success of health care reform will take some time. ” Daily News. April 1, 2010. Web. May 13, 2010. <http://www. tdn. com/news/opinion/article_aafab368-3d11-11df-9d19-001cc4c002e0. html> N/a. “Health Care Reform. ” New York Times. March 26, 2010. Web. May 13, 2010. <http://topics. nytimes. com/top/news/health/diseasesconditionsandhealthtopics/health_insurance_and_managed_care/health_care_reform/index. html>