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On Reasoning from Truth to Error

Two men valiantly faced the public one day, armed with the truth, and came away with complete failure.

First man:

He also disputed the notion that adding a government-run insurance plan into a menu of options from which people could pick would drive private insurers out of business, in effect making the system single-payer by default.

As long as they have a good product and the government plan has to sustain itself through premiums and other non-tax revenue, private insurers should be able to compete with the government plan, Obama said.

“They do it all the time,” he said. “UPS and FedEx are doing just fine. … It’s the Post Office that’s always having problems.”

Second man:

I’m encouraging constitutional rights.  I’m encouraging constitutional rights by coming to Lebanon to talk to my constituents.  I could be somewhere else.  I don’t get any extra pay — I don’t have any requirement to be here.

Both men made true statements. The United States Postal Service does have trouble getting by without public funding, and the Senator did not have any requirement to be there.

The trouble is that the true statements, made under the stress of the moment, did not support the conclusion either man wished to reach.

The first man tried to say that like the USPS, a government insurance plan would not outcompete private insurers. Instead, it would go bankrupt. Therefore, it’s a good thing.

There are many problems with this reasoning. First, there is no chance that Congress would allow a government insurance issuer to run out of money. Once people have paid premiums, from that day forward the program would have assurance of bailout after expensive bailiout.So the unstated premise fails. and the conclusion along with it.

Secondly, if we know that the plan will be a failure, why bother doing it?

Third, but by no means exhausting the supply of problems, the success or failure of the program is not even the real issue. As is typical with the type of argument this man uses, he is attempting here to argue a question his opponents aren’t raising.

The policies set by the government plan will drive the market in several ways. It would be a strong influence on private insurance practice on the one hand, while removing downward price pressure on the other. Currently the insurance companies have to compete with a vacuum, since people can opt out of insurance altogether. With a mandatory plan in place, there will be no need to compete against the vacuum of opting out.

The second man? No, you don’t need to be there. Pat Toomey would agree.

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