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A Thought about the Effect of Government Subsidies

"Between 1960 and today, overhead costs as a share of health spending doubled to 8%. But the explosion in overhead costs is shown dramatically in the chart (see at bottom), which measures the relative growth in physicians and health care administrators from 1970 to 2009.

"ObamaCare has only added fuel to this health care paperwork fire. In 2014, insurance overhead costs jumped 12.4%, and the cost of administering government programs jumped more than 10%.

"ObamaCare has only added fuel to this health care paperwork fire. In 2014, insurance overhead costs jumped 12.4%, and the cost of administering government programs jumped more than 10%.

"This phenomenon is not limited to health care.

"Over the past several decades, the federal government has sharply increased the amount of college aid it provides students. According to The College Board, federal aid today is 134% higher than it was in 2000.

"But, as Paul Campos noted in the New York Times, that money simply fueled tuition inflation. “The astonishing rise in college tuition correlates closely with a huge increase in public subsidies for higher education. If over the past three decades car prices had gone up as fast as tuition, the average new car would cost more than $80,000.”

~ John Merline

Source: his Capital Hill article, "Government Subsidies Fuel Overhead Costs in Health Care, Education, posted May 4, 2016, at Investor's Business Daily.

As noted in the first paragraph above, here is the chart:

             

The op-ed reminds readers to remember this editorial whenever, "someone tries to sell you on a plan to have the government make something 'free.'"

HT to Isaac Morehouse for posting the chart above in an April 30, 2016 post entitled,"Every Industry Gets Worse When Government Gets Involved."

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