Public Options Kill Competition

 

If you’re following the news lately, you know that socialist Mayor Zohran Mamdani of New York City is opening five city-owned grocery stores across the five boroughs. The estimated initial cost of these five stores is $70 million.

According to the New York Post, the cost of these stores could be $206 million in just the first few years. This estimate is from the GOP State Comptroller Joseph Hernandez. He breaks down the cost into three major categories: $70 million for construction, $106 million in operating costs and an estimated $30 million in lost revenue from nearby bodegas and grocery stores over the next three years.

The impact on privately-owned grocery stores and bodegas is difficult to estimate, but Hernandez, a former Wall Street executive, warns up to 67 local stores could face closure due to the subsidized competition.

This is known as a “public option” in the vocabulary of politicians. It means a publicly financed (taxpayers) option will compete with the privately owned competition. Since the public option is backed by the taxpayers and doesn’t need to make a private, it is an unfair competition. The public option can undercut the prices of those private stores who must make a profit to stay in business. When the public option loses money, it simply looks to the taxpayers for more financing. It doesn’t have to worry about making a profit.

It won’t take long for the public option to win this competition and put the privately owned stores out of business.

I bring all this to your attention because the same scenario will play itself out in the healthcare industry if the government ever comes up with a “public option.” This is a very real possibility that was seriously considered by Democrats when they devised the Affordable Care Act (ObamaCare). Fortunately, this idea lost favor even with Democrats in 2010 when that legislation was passed. But don’t believe for a minute it has been rejected forever.

Medicare for All is a socialized medicine scheme first promoted by Vermont Senator Bernie Sanders. Although initially rejected, this bad idea has been resurrected by Sanders and those socialist politicians who have recently appeared on the campaign trail including Michigan Senate candidate Abdul El-Sayed, Maine Senate candidate Troy Jackson, and other established socialists like Alexandria Ocasio Cortez (AOC).

Medicare for All is essentially a “public option” proposal that will eventually put all private insurance companies out of business. When you eliminate the competition in any industry, grocery stores or healthcare, you will get less access to the product, poorer quality of the product, and higher costs to the taxpayers.

We cannot afford to let this happen in grocery stores, let alone in an industry as vital as healthcare. Don’t be fooled! There is no such thing as a free lunch. When you accept government control of grocery stores, or healthcare, you will pay dearly in the end.

School Choice for Everyone in Texas

 

Politicians often say things that just aren’t true. Texas Senate candidate James Talarico is actually quite good at that. One of his best examples is “God is non-binary.”

This blog is principally about healthcare but I am passionate about school choice so I’ll make an exception when that is the issue. Talarico has put his foot in his mouth once again on the subject of school choice. He said, “Vouchers are welfare for the wealthy.” Now that the new law on school choice in Texas has launched, we can see again how wrong Talarico can be.

The Editorial Board of The Wall Street Journal tells us more than 85,000 students from 895 school districts have confirmed they’ll use a state-funded scholarship toward private school or home-school expenses in the coming year, according to a report this month by Texas Comptroller Don Huffines. Some 68,000, or 80%, are in households making 200% or less of the federal poverty level. That’s $66,000 for a family of four.

Another 17,300 students are in households between 200% and 500% of the poverty threshold, meaning no more than $165,000 for a family of four. More than 20,000 students, or about 25%, also have a disability. This outcome is by design: The law gives priority to children with disabilities and lower incomes, and a $1 billion funding cap means the program won’t reach other tiers of applicants.

The figures are incomplete, since only about 70% of the students offered funding had finalized their participation by the report’s Aug. 1 deadline. Depending on how many families with lower incomes decide not to take a scholarship after all, more funds may flow to higher tiers. After the report’s release, Mr. Huffines said the state had offered money to another 15,000 students between 200% and 500% of poverty.

Still, the report is a helpful look at where the taxpayer’s money is going. Scholarship amounts are modest: $2,000 for home-schoolers or up to $10,474 to attend a private school, which is 85% of the usual per-pupil funding. Children with disabilities can qualify for more.

The Editors tell us that more than 100,000 names are on a wait list. While many have higher incomes, that’s no good reason to exclude them from a state program to give families more choice and better educational options. Even for parents who are making more than $165,000, private-school tuition, times two or more children, is a heavy lift.

School choice is the best way to level the playing field for all children to have the opportunity to get a good education. Our public schools are failing to provide the education needed in many cities as demonstrated by declining proficiency scores. The future of our country depends on educating our children adequately to meet the demands of our complex world. School choice makes this possible even for those with lower incomes.  We all should want what’s best for our children and our country. Talarico should want that, too.