Reply #6: OK, the first guy is kind of funny.

[Julien Sorel]

However, in this case I don't think it is. Lets make some assumptions here. Lets assume that for $10,000 per person we can cover all these people. Yes, I know Gephardt is saying it'll only cost around $300 billion, but c'mon we all know its going to cost more than that. Besides, $10,000 is easier to work with.

Now, the question is, what would these people do if they were given $10,000? Would they go out and buy such coverage for themselves? My guess is no, and this study tends to support this conclusion. That paper argues that the minimum tax subsidy necessary to get only those people without health care coverage, but whose employer offers it, to purchase health care coverage is $30,000 and the result was only a small percentage increase in those opting for health care coverage.

What this means is that if we were to give these people $10,000 they would spend it on other things. Now, economic theory says that individuals maximize welfare given various constraints, with one of these constraints being the budget constraint (i.e., how much money you have). The fact taht these people would probably not purchase health care coverage means there are other things they'd rather have than health care coverage. Further, that the decision to not have health care coverage is a rational decision.

This is a mis-application of economic theory. The problem here isn't the guy's economics, but his logic: just because a person would not, given the choice, make a certain decision, doesn't mean that decision is incorrect. To see how off he is, let's take this situation: if you gave someone $10,000, and gave them a choice to either A) pay for part of a highway to be built or; B) spend it on something else, what would that person be likely to do? Obviously, he or she would probably spend it on something else. That doesn't mean building the highway was the wrong choice -- I like the highway that gets me to and from work every day, and that allows trucks to deliver food to the local supermarket, and medicines and so on to the local hospital, and kids to school. What it does mean is that what is rational behavior for people acting as individuals is sometimes different from what is rational behavior for people acting in aggregate. This is another principle of economics, by the way, and this person's ill-use of logic in this instance illustrates the fallacy of composition, one of the cooler fallacies of logical rhetoric.

This guy added another post after this one that was a long attack on Krugman's analysis of Gephardt's health insurance plan; frankly, it doesn't interest me to the point where I care to invest the time necessary to figure out how valid the criticisms are. The part above is what I assume you were interested in, anyway, since it was what was up when you linked to it, and I had some things to do before I could post, thus I'm a little late in replying.

If the other two are like this one, by the way, it isn't really worth my time to go through them.