I first read Thomas E. Woods in his book Meltdown, which I reviewed two years ago. Hi most recent book, Rollback, attempts to lay out a process by which America – and by extension many western countries, including Canada – can reduce the size of government and remove many of the ways the government interferes in the economy.
He covers the real crisis that America faces – that government is too big, and too invasive into the domain of business. He clearly explains why government is a cause of the problems and cannot be the solution. More government involvement in any part of the economy will only lead to more pain.
One of the first areas he focuses on is Health Care. The problems of “American-style” health care have nothing to do with the free market – because health care in America is very far from being a free market. More than 50% of health care costs in the US are borne by the federal government. The other problem is that government regulation of “private” health insurance has not helped anyone:
The shift to third-party payers (insurance companies) has made Americans largely insensitive to price, thereby pushing prices ever higher. A staggering regulatory apparatus, as well as significant barriers to entry into the medical field, keeps supply down and costs up.
He explains, and it its too long to quote here, why state imposed “mandates” on private health insurance (including those offered through employers), raise prices by forcing the plans to “insure” events that are certain to occur – like annual checkups. He points outs:
… research finds that high deductible, catastrophic plans put strong downward pressure on health care costs, lead consumers to be much more cost conscious, and still deliver the same amount of necessary care that people who hold more standard insurance policies receive.
Woods continues through the problems of: fiat money – the Federal Reserve “printing money” to stimulate the economy, when this will simply cause inflation; ”deregulation” that has been anything but; how the welfare state is self-fulfilling and destroys the work-ethic; the failure of the US Department of Education and the rise of bureaucracies that provide little value.
Finally, Woods covers a number of ideas on how the size and involvement of government in America can be reduced, such as:
- Opt-outs for Medicare and Social Security at age 65.
- Across the board cuts – a la Ron Paul. If you need to cut spending by 30%, cut every department by 30%.
- Currency options – taxes of precious metals should be revoked and contracts should be allowed to be payable in something other than the fiat money of government.
- State nullification – the states have the power to choose not to enforce federal law if they view it to be an infringement on their constitutional prerogatives. See my upcoming review on “The Original Argument” for more on this.
- A repeal amendment – the states could push through an amendment to the constitution allowing them to repeal federal laws if two-thirds of the states disagree.
I recommend Rollback to all of my readers – Canadian and American alike. His explanations of the overreach of government can be summed up in one quote, which he took from the great economist himself:
The Austrian economist Ludwig von Mises once described how government intervention tends to feed on itself: the first intervention causes problems that still further interventions are enacted to resolve, and so on, until the economy becomes a maze of regulation and control. Never considered is the mere repeal of the initial interventions.