Greg Mankiw responding to Paul Krugman:
In my view, these comments are just off point. The Obama administration
says it wants a public insurance plan that will compete on a level
playing field with private plans (that is, without taxpayer subsidies).
Is there any cogent economic analysis that suggests that such a policy
addresses problems of adverse selection and moral hazard? None that I
know. If it has to stand on its own financially, the public plan has no
special advantage in addressing these issues.
In any event, it is not like the only alternatives available to us are a government-run health insurance plan or unregulated laissez faire. The most intriguing proposal in the current policy debate is the Wyden-Bennett bill (see this David Brooks column or this letter from CBO on the proposed legislation). That seems to be the best hope for truly bipartisan healthcare reform. At this point, given the legislative strategy of Congressional leadership, the hope is slim at best.
In any event, it is not like the only alternatives available to us are a government-run health insurance plan or unregulated laissez faire. The most intriguing proposal in the current policy debate is the Wyden-Bennett bill (see this David Brooks column or this letter from CBO on the proposed legislation). That seems to be the best hope for truly bipartisan healthcare reform. At this point, given the legislative strategy of Congressional leadership, the hope is slim at best.
Also note Mankiw's comments on the substance, or lack thereof, of public debate on important topics.
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