Tuesday, February 2, 2010

Why Do Voters Not Act in Their Self-Interest?

Since Scott Brown’s senatorial victory last week, there have been many questions from the left about why people don’t vote in their economic self-interest? In this case, the reasoning goes, the vote for the Republican makes it all the more difficult for President Obama and the Democrats to pass their version of health care reform, which some believe will help most voters. Such questions often arise after the Democrats lose important elections.

The author of one study wrote that the voters “do it because they resent having their interests decided for them by politicians who think they know best” [BBC]. This statement makes sense and is true to a point. The problem is that it doesn’t go far enough.

The bottom line is that voters and liberal politicians don’t always see eye-to-eye on what the self-interest of the voters actually is. Is it always in the self-interest of the voters to receive a government handout? The answer is a resounding “NO!”

In the most obvious sense, a government handout is not in the self-interest of voters when the voters must give up some of their freedoms to receive it. And this is often the case. Government money frequently comes with strings attached. In the case of the health care reform, the handout comes in the form of a loss of the freedom to choose your own insurance. It would eliminate the right to not have insurance and add numerous government mandates on what insurance policies would be required to cover.

If this legislation is only the first step toward a national single-payer health care system, as many Democrats hope, then ultimately we would all lose some of our freedom. We would lose the freedom to choose our own health insurance to a mandatory plan run by government bureaucrats. We would also lose economic freedom through the value of our time and money lost to higher taxes needed to pay for our “free” health care.

Under our current system, if you don’t like your health insurance company you can fire them and hire a new one. You can shop around for the best price, tailor coverage to suit your needs, or even choose to self-insure and not buy a policy at all. President Obama’s health care reform would place many of these rights at risk.

Voters also know that government policy is often a victim of the Law of Unintended Consequences. Rules and regulations designed to fix one problem often create a whole new set of other problems. A recent example was the ethanol mandate.

In 2007, high oil prices pushed congress to pass a renewable fuels standard that required more ethanol to be produced for biofuels in the United States. As more corn was diverted to ethanol production, the price of food increased sharply and there were food riots in poor countries around the world. At the same time, the price of oil remained high until the demand dropped [Heritage]. The only winners from the renewable fuel standard were corn farmers.

Voters, particularly those in Massachusetts, were probably aware of the unintended consequences of the Massachusetts experiment in government health reform as well. Massachusetts law, which is similar in many ways to President Obama’s proposed legislation, has not solved Massachusetts’ health care problems. According to the Wall Street Journal, even though the number of uninsureds fell by about half (which may be overstated), “costs have exploded.” Unsubsidized coverage fell as total coverage increased and health costs in Massachusetts have climbed faster than the rest of the US. Additionally, there have been reports of shortages of doctors as previously uninsured people rush to make appointments [NPR].

Voters probably also sense that much of what they have been told about the health cannot be true. They have been promised that coverage will be expanded to the whole country with adding to the deficit. They have been told that they can keep their current plans if they want, even as economic incentives are created for employers to dump their plans in favor of fines that are cheaper than coverage or a federally funded “public option.” They have been told to trust their health care to a government that just spent over $700 billion on a worthless stimulus package; a government that chose to carry out the negotiations for the proposed health care plan in secret, violating President Obama’s campaign promise to carry out government business in the open. Many of these statements were made by representatives who had not read the bill and did not know what was in it. The BS-detectors of many voters have probably been pegged for some time!

Finally, many voters likely realize that the dramatic increases in government spending cannot be paid for. They realize that the ballooning federal debt is a real danger to the future of our country. We are mortgaging the future of our children to pay for our doctor visits and prescriptions (not to mention worthless light rail projects, tattoo removal, and other boondoggles).

The voters implicitly realize, many from their own experience, that when you run up the balance on your credit card, the bills eventually come due. At this point, our national debt is at the highest peacetime level in our history. Much of the debt is owed to countries, such as China, that are not necessarily our friends. To owe a large portion of the value of your national economy to an unfriendly power is a frightening prospect.

Voters are not necessarily ignoring their self-interest in voting to stymie President Obama’s health care reform. In contrast, they are looking past the immediate handout. Voters are weighing what they are being told with what they believe to be true. They are voting in their long-term self-interest and in the interest of their country.

Villa Rica GA
February 2, 2010

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