Something the recent spate of discussions about the Bush veto of the SCHIP expansion has reminded me of, along with several other discussions in the political arena, is that we have a lot of problems in the U.S.A. with having the wrong incentives in place.
For example, any baby born in the U.S.A., even if the mother illegally snuck across the border just hours before the birth occured, results in that baby being granted U.S. citizenship. So, it would seem (and there is) that there's a huge incentive for illegals to risk life and limb and make every effort to get into the U.S.A. even if just for the crowning achievement, the birth of the child.
Then there are programs like SCHIP, and if we aren't careful, in the future there may be Hillary Care 2.0 which would serve as big incentives for people to possibly take the easy way out into getting medical coverage for themselves and their family members. Make too much money and you don't qualify, so just skate along at just below the poverty level making just enough to meet requirements to try to find employment, but not enough to actually make a comfortable living on.
If you are an employer, you look at SCHIP and possibly at Hillary Care (or whatever other health insurance related mandates may come to pass) you see that there are conflicting incentives there. If you give Hillary and her friends in the side that are pushing for national health care the benefit of the doubt, they are promising that employers won't be able to avoid providing coverage for their employees, but at the same time they are promising that they aren't going to cripple small business with overwhelming costs for mandated coverage. As an employer, you start looking at the idea that perhaps you are better off keeping your business smaller, so as to avoid requirements placed on businesses with greater than X number of employees, or $Y in yearly revenues, or whatever the limits are because if you don't, you realize quickly that the new requirements placed on your business are going to take hundreds of hours in additional management time to deal with, as well as many thousands of dollars in overhead costs.
We need to look very carefully at the carrots that we are dangling in front of us and make sure that we are providing proper incentives and not causing the masses to run off in the wrong direction. If we don't do that, we will surely fall victim to the same sort of morass that the Soviet Union fell to with the incentives NOT to work and not to produce outweighing the incentives to be a productive member of society that is helping to take care of one's self in addition to contributing to society.
