Tuesday, October 8, 2013

Lesson # 1: No Free Lunch

Economics exists because the human condition is one of economic scarcity. If every person on Earth could say "I want" and then freely get, then there would be very little need for economics (or economists). But that's not not state of the human condition. For every "I want" that is satisfied there is cost: both direct costs and/or "opportunity costs" (the foregone value of the next best use of the resources).

To say that "I want everyone to have access to a health insurance policy as good as mine" is to say that if the political system attempts (and I do mean attempts) to satisfy that want, then someone is going to have to pay for it. That can't can as a surprise to anyone who understands Principles of Economics 101. It may however be a surprise to learn that you are the one that is going to have to pay for it, "personally."  Why that may be surprising will be addressed in a subsequent post.

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