Wednesday, June 17, 2009

A French Advice to President Obama.

Do not finance universal health insurance coverage by increasing taxes on labor. Make private buying of insurance compulsory instead - if necessary - for the current fraction of the uninsured that has not deliberatly and voluntarily chosen not to insure, and subsidize low income families - whenever necessary - with a health care complementary voucher.

In that way you can limit the job destruction effect of higher labor taxes. If you imitate the European pattern of universal tax-financed and publicly provided health insurance, you’ll obtain the same low and falling level of labor participation, and the reduced GDP per capita that comes with it: about minus 30% relative to U.S. level for France for instance.

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