In government we trust?

The current debate on health care has been framed largely in terms of policy, with disagreements focusing mostly on whether the details of the Affordable Care Act (Obamacare) or the details of the American Health Care Act (the bill that was recently passed by Republicans in the House of Representatives) are bad or good. But these are secondary points. The primary (often deliberately overlooked) point is that, under the Constitution, the federal government does not have the power to adopt any law, bad or good, regarding this kind of health care.

Overall, the Constitution is structured in a way that protects the rights of the people from being violated by the federal government. And the rights of the people—since the beginning of U.S. history—have been defined as the natural rights to life, liberty, and property.

In the Founding Era, it was fully understood that governments deprive people of life, liberty, and property not only by taking life, liberty, and property, but also by controlling life, liberty, and property with laws and regulations. Consequently, the Constitution only provides the federal government with a small number of powers, and it does not provide the federal government with any power whatsoever in many areas.

The regulation of health care is a state issue. In short, if the people of any one state want the government to provide them with health insurance, they have the power to adopt a state law that does so; likewise, if the people of a different state favor a different policy, they have the power to implement the favored policy in that state.

However, for decades, the Supreme Court has been reinterpreting the Constitution, expanding federal power and enabling the federal government to impose Progressive-liberal ideology on the entire nation. The Court relied on its own previous reinterpretation of the Constitution’s taxing clause to uphold Obamacare, and the Court has reinterpreted many of the Constitution’s other clauses to, among other things, expand the federal government’s spending power, commerce power, and monetary power.

The federal government’s use of these expanded powers has repeatedly had a devastating impact on not only the rights of the people, but also the economy of the nation. Indeed, past events provide a clear picture of what the future holds regarding the federal government’s use of its expanded power over health care.

In particular, the Great Depression offers lessons that have been ignored (typically for ideological reasons) by politicians and government officials from every generation since. To review, government intervention caused a stock market crash in 1929, and government intervention following the crash not only caused an economic depression, but also impeded the economy’s recovery.

The distinguished economist Murray Rothbard explained that “any governmental interference with the depression process can only prolong it, thus making things worse from almost everyone’s point of view. Since the depression process is the recovery process, any halting or slowing down of the process impedes the advent of recovery.”

Moreover, as Rothbard also explained, a depression is not the cause of the economic trouble. Rather, distortions of the economy, accompanied by wasteful investments, are the causes of the economic trouble. And these distortions and wasteful investments both occur before a depression, during a boom stage of the economic cycle. Later, during the depression process (which, to repeat, is the recovery process), the distortions and wasteful investments are eliminated.

Basically, the federal government’s policies (most significantly, the Federal Reserve’s policy of increasing the money supply) distorted the economy and tempted people to make wasteful investments during the 1920s, “the Roaring Twenties” (a boom stage), which made the stock market crash inevitable. Next, the federal government’s increased control of economic activities (with massive amounts of taxing, spending, and regulation) following the crash made the depression inevitable. Finally, the federal government’s interference with the depression process, year after year, prolonged the misery for over a decade. Notably, both Republican and Democratic presidents held power, and engaged in government intervention, during this period.

More recently, the Recession of the late 2000s, also known as the Great Recession, showed that politicians and government officials have refused to learn from prior mistakes. The federal government’s policies (including, but not limited to, its “affordable housing” policy in the 1990s and 2000s that required financial institutions to accept risky mortgages) distorted the economy and tempted people to make wasteful investments, which made a financial crisis inevitable (when risky mortgages defaulted in large numbers and financial institutions suffered deep losses). And the federal government’s increased control of economic activities (with even more spending and even more regulation) during the crisis made a severe and prolonged recession inevitable. Once again, both Republican and Democratic presidents held power, and engaged in government intervention, during this period.

Now, in 2017, if the Republican-controlled Senate accepts the health care bill passed by the Republican-controlled House, or if the Senate and House (and president) agree to changes that do not fully repeal Obamacare, but still have the federal government involved with this kind of health care, the consequences will be profound.

The regulation of health care by the federal government will be further entrenched into law with the support of both major political parties. And health care spending represents a substantial part of the American economy; presently, 17 percent of the nation’s GDP. The damage to the economy that the federal government will (not might, but will) eventually inflict as it exercises increased control of health care realistically could make both the Great Depression of the 1930s and the Recession of the late 2000s appear trivial in comparison; the possible federal policies on health care that could radically distort the economy and tempt (or require) wasteful investments are innumerable.

Nevertheless, some conservatives have been arguing in favor of the House bill as the first step of an incremental approach to repealing Obamacare. However, while appropriate in some instances, an incremental approach to changing a law is not an adequate approach for Obamacare under the circumstances that exist today.

As one former president long ago said, “I know no method to secure the repeal of bad or obnoxious laws so effective as their stringent execution.” This would be a better approach (but without the “stringent” part) for conservatives in Congress to follow since there are not enough Republicans willing to fully repeal Obamacare; simply let the law continue to implode. At the very least, conservatives in Congress would be ensuring that opposition to federal regulation of health care remains constant from one of the major political parties.

The argument that Republicans have a duty to “fix” health care is a logical fallacy based on the demonstrably false assumption that health care is a federal responsibility. Under the Constitution, the correct “fix” would involve the federal government returning the regulation of health care (including health insurance) back to each state.

Yet the members of Congress are in the process of violating the Constitution and the nation’s fundamental principles. Again. For an encore, perhaps they will repeal and replace “In God We Trust” with a motto that seemingly reflects their personal beliefs more accurately, such as “In Government We Trust.”