One of the things that makes it tough to figure out how much has to be charged for insurance is that people behave differently when they are insured from the way they behave when they are not insured. …
The same principle applies to government policies. When taxpayer-subsidized government insurance policies protect people against flood damage, more people are willing to live in places where there are greater dangers of flooding. Often these are luxury beach front homes with great views of the ocean. So what if they suffer flood damage once every decade or so, if Uncle Sam is picking up the tab for restoring everything?…
We hear a lot of talk about "safety nets" [entitlements – JS] from big-government liberals, who act as if there is a certain pre-destined amount of harm that people will suffer, so that it is just a question of the government helping those who are harmed. But we hear very little about "moral hazard" from big-government liberals. We all need safety nets. That is why we "save for a rainy day," instead of living it up to the limit of our income and beyond.
We also hear a lot of talk about "the uninsured," for whose benefit we are to drastically change the whole medical-care system. But income data show that many of those uninsured people have incomes from which they could easily afford insurance. But they can live it up instead, because the government has mandated that hospital emergency rooms treat everyone.
All of this is a large hazard to taxpayers. And it is not very moral.
Read it all … [ The clarity that Mr. Sowell brings to the table is always welcome and usually well to the point. Too bad that progressives don’t like the point, however visionary that it might be. –JS ]