But even if some conservative Republican critics are wrong about Section 1233, there is good reason to worry about Obama's nationalization scheme.
The reason can be found in Econ 101. Medical care doesn't grow on trees. It must be produced by human and physical capital, and those resources are limited. Therefore, if demand for health care services increases—which is Obama's point in extending health insurance—prices must go up. But somehow Obama also promises, "I won't sign a bill that doesn't reduce health care inflation."
This is magical thinking. Obama, talented as he is, can't repeal the laws of supply and demand. Costs are real. If they are incurred, someone has to pay them. But as economist Thomas Sowell points out, politicians can control costs—by refusing to pay for the services.
It's called rationing.
Advocates of nationalization hate that word because it forces them to face an ugly truth. If government pays for more people's health care and wants to control costs, it must limit what we buy.
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