Economic Death Panels

And the battle's just begun
There's many lost, but tell me who has won
The trench is dug within our hearts
And mothers, children, brothers, sisters torn apart
--U2

As the health care debate has escalated, the spectre of 'death panels' has surfaced. Supporters of universial health care dismiss the notion as 'fear mongering.' President Obama has publically scoffed at the death panel notion.

While the concept may have received an unfortunate label, the notion of a central authority that must decide how to allocate scarce resources under a government run health care system is correct. Make no mistake, bureaucrats will be making life and death decisions--indeed, they already are under the Medicare, Medicaid, and other government sponsored health care programs, which in aggregate comprise nearly 50% of US health care spending.

Much more visible examples of life and death decisions made by bureaucrats can be observed in other economic spheres which have moved signicantly toward the central planning model of resource allocation over the past year or so. Bear Stearns? Death. Citigroup (C) Life. Lehman? Death. AIG? Life. Indy Mac? Death. General Motors? Life.

If economic resources were unlimited, then we wouldn't care because there would be no losses. Unfortunately, resources are scarce and they require an allocation mechanism.

When we take the resource allocation mechanism out of the hands of markets and put them into the hands of bureaucrats, then there are indeed panels of central planners making life and death decisions.

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