By Dan Ferris in response to a reader in the S&A Digest:

"I go to the local VA. It is fine. It is free. Your concerns about government take over of health care (a misnomer) are nothing but fear, and, as you know, we have nothing to fear... We desperately need a public option to bring competition into the sickness care industry. It works in every other advanced country. We rank 28th in the world in performance and first in expenditure. The for-profit insurance industry with its billion-dollar payouts to executives is a layer of cost that is not needed. We need a one payer system like Medicare or the VA." - Paid-up subscriber George Cheney

Ferris comment: Public options don't create more competition. They eliminate competition by seizing scarce resources. What you propose will have the efficiency of the Post Office and the compassion of the IRS.

The local VA is not free. You and I both pay for it through taxes, and I promise you that payment is much higher than the value of the service rendered. If the billion-dollar payouts you mention existed (they don't), they wouldn't be nearly as expensive as the layers of bureaucratic waste that have been added to health care in the U.S. over the last few decades. How many bureaucrats per caregiver do we have now? Is it 20? 30? 50? I can't keep up with it.

Obama's system will make health care more scarce by artificially lowering the price. Health care is no different than TV sets or sugar or vacations. If you subsidize the market, everyone will demand more, while simultaneously giving suppliers incentives to supply less. Waiting rooms will overflow - just like they do in every other country that does this. Suddenly, everyone will need an MRI. People like me, who have degenerative disc disease, won't be able to get one when we're so crippled by pain we can't stand up. Doctors will be overwhelmed and underpaid, and I'll have to leave the country in a vain attempt to keep the system from killing me and my family.

You say it works in every other advanced country. That's false. Socialized medicine is a disaster everywhere it's tried. I recently heard the mobs in waiting rooms in Sweden sometimes get violent enough that armed guards are necessary. I've spoken with Canadians who tell me their system is horribly flawed and corrupt. They just come to the U.S. I wonder where they'll go after people like you are done with U.S. health care?

We don't need a "one-payer" system - all that means is " government-controlled." Health care is not special. You screw it up, and you'll ruin the quality and lower the quantity available.

Nothing is free. You can't change that. People didn't make it that way. They found it that way, and that's the way it'll always be.

Crux note: Dan Ferris is the editor of Extreme Value. For serious long-term investors, it's one of the most useful advisories you can buy for any price. Learn more about Extreme Value here...

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