In the letter below, Don Boudreaux responds to an economically illiterate missive from a Canadian who contends that the reason why the Canadian economy is faring much better than ours is due to that country’s governmental system of health care.
To Don’s letter, I would only add that while government can shift costs, it cannot reduce them and almost always increases them.
Editor, The Wall Street Journal
1211 6th Ave.
New York, NY 10036
Dear Editor:
Leon Mitrani believes that Canada’s recent sound economic performance is chiefly the result of that country’s “universal, single-payer, government-run health-care system” (Letters, April 12). According to Mr. Mitrani, that system “frees up Canadian corporations from paying that employee expense and boosts their profits and economy.”
Splendid! But if Canada’s economy is boosted by government relieving Canadian employers from having to pay a portion of their workers’ earnings (that is, the portion that would otherwise be paid as employer-provided health-insurance premiums), wouldn’t Canada’s economy be boosted even further if Ottawa relieved Canadian employers also from having to pay wages and salaries? With governmentpicking up employers’ ENTIRE tab for hiring workers, the economic boost would be stupendous.
And why stop there? If Mr. Mitrani is correct, Canada’s economy would get a bigger boost yet if the government picked up not only the tab for hiring workers, but also the tab for any and all capital expenses. With government
relieving Canadian companies of the need to pay for their own factories, machines, IT, and all other costs of doing business, Canada’s economy would become the envy of the world!
Who knew that the secret of economic success is so simple?
Sincerely,
Donald J. Boudreaux
Professor of Economics
George Mason University
