July 6th, 2009

Why I'm for universal healthcare and against school vouchers...

I am for universal healthcare and against school vouchers.  Anyone who knows me knows that this is 180 degrees from my position of only a few years ago.  I was for vouchers and I was against universal healthcare.  I had a very libertarian stance that the government should butt out of anything that could be handled privately.  In my mind, healthcare and education are very comparable subjects.

The problem is that I now realize that when these things are handled privately, they reach an economic efficiency which limits access and quality for people without wealth.  Let's look, for example, at what vouchers would do to the public school system:

Let's say that we take the entire budget for all school children and divide that by the number of children.  The end result is the amount of money that is spent on that child in public education.  Instead of giving that money to a school, let's give that money to the child's guardians and tell them that they must spend it on their child's education.  No, wait.  We can't trust everyone with money.  Instead, let's trust them with a piece of paper which they must give to a school, and the school can then collect that money.  And that piece of paper is called a voucher.  So now we have a voucher system in place.

Now, let's just throw out some random numbers here.  Let's say a voucher is worth $6,000 a school year, and that this is roughly the amount that gets spent on each child in public schools.  Of course, private schools generally start in the $7,500 a year ballpark for religious schools, and they go up from there.  Some even cost $20,000 and up!  But now, a parent has a voucher worth $6,000 which they can give to a public school, or if they can wrangle $1,500 a year, they can give that cash and the voucher to the local Catholic school.  Wrangling $7,500 a year just wasn't possible, before, but now, $1,500... a lot of families will begin to be able to afford that.  So demand for lower-end private schools goes up significantly.  Immediately, the supply will remain the same, however, so people will get wait-listed.  In fact, people who used to wrangle $7,500 will get wait-listed just the same as those who only have to wrangle $1,500.  But it's no harder for them to wrangle $7,500 now, so maybe the kids who could previously only afford that $7,500 private school can go to that $13,500 school.  And just like the parochial school, the middle-grade private school now has increased demand, and begins to wait-list.  And, in the end, the high-end private schools will see an increase in demand without an increase in capacity.

Now, I know there are some folks out there reading this who actually studied economics.  So what happens when you increase the demand for a good or service without increasing the supply of that good or service?  Say it with me, now: "the price increases."  Suddenly, $20,000 a year private schools cost $25,000 a year, and why shouldn't they if the parents of their students are willing to pay.  And the same things goes for every level of private schools.  People have more money they're willing to spend, so the price goes up.  The parochial, non-profit schools probably won't jack up their prices much, though.  Anyway, the end result is that the cost of the vouchers will partially go straight to private schools in the form of tuition increases.

But we haven't looked at what happens in the public schools.  Suddenly, the public schools are full of two kinds of people: people who can't afford $1,500 a month for parochial school, and people who can but are wait-listed.  In all, there are fewer people in public school, now, so public schools don't take in as much money as they once did.  Sure, they have fewer students, but economies of scale came in to play when there was a huge student body.  Now, not so much.  Public schools start shedding teachers and facilities.  Public schools start to provide a somewhat lesser quality of education, as a result.  No more band.  Hell, no more PE.  The schools can only focus on the core subjects, now.  But wait!  The school shed qualified teachers and facilities!  Someone has a bright idea!  Form another private school, and take care of some of those kids who are wait-listed!  Brilliant!  Now, there are even fewer kids in public schools, so the public schools shed more jobs and more faciliies.  Eventually, most of the wait lists work themselves out (either by increased price or increased supply), and public school is attended _only_ by people who can't afford the small differential for private school.  These students don't get much of an education.

Vouchers lead to a pretty bleak future for public education.

A system for which there is universal need and by which there is a minimum standard, paid for by everyone regardless of use, benefits everyone.  It shouldn't be the only option, of course.  Those with wealth should be able to pay for a better quality or better access.  So it goes with healthcare; people should be able to purchase supplemental insurance for varying degrees of service.  I don't think public healthcare will be particularly good, but I do think that it will set a minimum threshold which is much, much higher than what is available to those who don't have much cash or benefits through their employer.  I think there are going to be lots of people who will want to purchase private insurance as well, resulting in shorter waits to receive treatment and, possibly, the ability to see a better class of doctors.  Mind you, there will be some fantastic doctors as part of the public plan, as well, just as there are some fantastic teachers in the public education system.

I haven't spent much time explaining how everyone benefits when everyone's basic needs are met with a guaranteed minimum.  This is a bit more challenging to explain, however let me try with education.  Because public schools exist, economically poor people have a place to send their children to get educated.  It's possible that one of these children has the will and the intelligence to do great things, and having the opportunity of an education is all they need to hit the ground running.  And with healthcare.  If a person has the ability to see a doctor, they might just do so, and get the antibiotic which prevents further transmission of their disease.  It's all a bunch of hypotheticals, really, however I'm positive, I have faith, that there's an alternate universe in which we are all worse off because someone who started off poor stayed uneducation, and I also have faith that there's an alternate universe in which enough people who got sick visited their doctor to prevent a major disease outbreak.

And now, to make everyone think I'm a _total_ socialist... I think I have to extend my belief to _all_ universal needs.  Basic food, basic housing, basic healthcare, and basic education should all be paid for by everyone.  Basic food, basic housing, basic healthcare, and basic education will all probably be pretty crappy, but if things go really, really wrong for any one of us, we can at least be assured that we're not going to have to die of starvation or freezing to death on a sidewalk while sleeping.

I don't think I'm a socialist, though.  I hope that having a net to catch the fallen enriches everyone, and that, with decreased demand, private systems begin to differentiate on quality, which is what happens when people don't want to lower their prices.

And for all the other things that we don't need but want, well, the government should keep their filthy paws out of it.